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Abstract

<jats:p>The late nineteenth and early twentieth centuries marked a period when America solidified its status as the world’s leading industrial power, an era often characterized by unchecked economic exploitation. This shifting societal structure gave rise to intense, passionate critique from "rebellious spirits" such as Theodore Dreiser and Thorstein Veblen. While Dreiser exposed the harsh social realities driven by America's new economic foundations, Veblen fundamentally reexamined the traditional understanding of underlying economic motives. Published at the turn of the century in 1899, Veblen’s The Theory of the Leisure Class challenged the hedonistic concept of the "economic man." Classical theory argued that individuals are driven purely by the principle of maximizing self-interest, operating under Jeremy Bentham’s strict arithmetic of utility. Veblen countered this by identifying the emergence of a "leisure class," driven primarily by materialistic display rather than rational utility. According to this theory, the more an individual consumes, the higher the status they achieve in the eyes of society. This "conspicuous consumption" is inherently wasteful and serves as a defining characteristic of the upper echelons of the social hierarchy. Through the mechanism now known as the "Veblen effect," society experiences a massive, unjustified waste of productive energy and social income, demonstrating that demand cannot be viewed as an absolute, rational regulator of the market. Consequently, Veblen argued that the concept of the "social man" requires expansion to account for complex, non-economic connections, thereby laying the groundwork for the school of institutionalism. His ideas deeply enriched the subsequent development of economic and social thought. Today, Veblen's theories remain highly relevant and are practically applied in modern economic sociology, particularly in analyzing the prominent behavioral manifestations of the Veblen effect within contemporary market economies.</jats:p>

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economic veblen social driven theory

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