Abstract ‘The outstanding discovery of recent historical and anthropological research is that a man’s economy, as a rule, is submerged in his social relationships.’ (Karl Polanyi, 1944, p. 46) ‘...all the best business men want to get money, but many of them do not care about it much for its own sake; they want it chiefly as the most convincing proof to themselves and others that they have succeeded.’ (Alfred Marshall 1890, p. 635) ‘[T]he competitive order must be partly responsible for making emulation and rivalry the outstanding quality in the character of the Western peoples who have adopted and developed it.’ (Frank Knight, 1999, p. 39) Adam Smith and Thorstein Veblen, divided culturally and by over a century of capitalism’s differing degrees of maturation, analysed the basic institutions of capitalism in radically different manners and came to contrary views as to capitalism’s serviceability to human welfare. Yet, despite their differences, and that Veblen appears not to have read Smith’s principal treatise on human behaviour, The Theory of Moral Sentiments, they shared remarkably similar views as to why humans behave as they do. Both saw humans as seeking self-respect by acquiring approval or social certification from others, often pursued through conspicuous consumption. However, whereas Smith viewed the seeking of status through consumption as stimulating economic dynamism, Veblen viewed it as generating waste and impairing human welfare, claiming work as a socially superior channel for acquiring social and self-respect. Nevertheless, what is broadly common in their theories of human behaviour has great importance for social theory, and especially for addressing the contemporary mistake in wealthy societies of sacrificing important social goals to the pursuit of ever-more material wealth. In their depictions of society, Adam Smith and Thorstein Veblen painted broad canvases with broad brushes. The scope of their works far surpassed that of most contemporary economists. Both are celebrated: Smith as the father of modern economics, Veblen as the father of American institutionalism. But beyond their fame, they also shared remarkably similar theories of human behaviour. This is surprising given their separation of over a century in differing cultures, and the fact that Veblen does not reveal having read The Theory of Moral Sentiments, where Smith developed his theory of human behavior.1 Both Smith and Veblen viewed humans as naturally standing in need of the positive recognition of others. Such approval was understood as essential for social status and self-respect. Both viewed what Veblen termed conspicuous consumption as an important means by which social approval is sought. Much of the difference in how their theories of approbation unfold is traceable to differences in what they were meant to achieve and to the differing historical contexts in which they wrote. Smith’s primary goal in his Theory of Moral Sentiments was to develop a theory of morality. Indeed, when he took up economics proper in his Wealth of Nations, his powerful theory of approbation is related almost exclusively to wealth accumulation, the force driving the desire to better one’s condition (Paganelli, 2009). Veblen’s foremost goal, by contrast, was to deliver a stinging critique of modern capitalism and to suggest that society could be more rationally and humanely structured. Smith had been fairly happy, albeit critical, of the way the capitalism of his era was developing. Smith wrote in England in the second half of the eighteenth century when, although the conditions for the Industrial Revolution were forming, the nature and magnitude of what was in store were not apparent. Veblen, by contrast, wrote in America at the turn of the twentieth century when the consequences of the Industrial Revolution had become clearer and where massive waste in the form of conspicuous consumption was especially striking. The core of their theories of human behaviour—that humans seek the approval of others and that achieving this is essential for self-respect—has important lessons for social understanding. Prescriptively, it means that society should ideally be structured institutionally such that humans can most readily achieve their need for approval, and thereby happiness, in ways that further, or are at least consistent with, achieving other social goals such as material provisioning, equity, community and environmental sustainability. This article addresses similarities and differences in Smith’s and Veblen’s conceptions of the human need for social approval. It principally does so by exploring how both address attempts to fulfil this need through consumption and work. It concludes by noting the importance of their understanding for an adequate science of society. It unfolds as follows: The next section outlines the way Smith and Veblen viewed the need for approval as grounded in human nature, how it is socially channelled and the support for their claim. The third section examines their differing views as to the consequences of the pursuit of social recognition through consumption. The fourth section presents their understanding of the potential for social approval through work and moral virtue. The article concludes with reflections on the lessons that can be drawn from Smith’s and Veblen’s analysis of the need for approbation for our understanding of human behaviour, social science and the contemporary challenges facing humanity. 1. Humans as thoroughly social beings For both Smith and Veblen, humans are by nature social in the dual sense that they stand in need of the approval of others, and in that what predominantly achieves this approval is socially generated. Humans need the approval of others for their self-esteem. What gains that approval is to a substantial extent the consequence of education or socialization. Smith downplayed the extent to which human behaviour is rationally driven (Smith, 2004; Ashraf et al., 2005). So too did Veblen (Tilman, 2007; Camic and Hodgson, 2011). Distancing Smith from modern economic analysis and the pedestal on which reason was placed following Descartes and the French Enlightenment is his presumption that humans are ruled not so much by reason as by sentiments or feelings that are cultivated in a complex process of socialization. Following David Hume and his teacher Francis Hutcheson, Smith belonged to the ‘sentimentalist’ school that emphasized passions, dispositions, affections or propensities (Slote, 1995). Nevertheless, his humans are empowered with reason. It is at work, for instance, in the actions of an impartial spectator (‘implanted in the human breast’; the internalized norms of propriety) that serves as the basis of ‘self-denial, of self-government, of that command of the passions which subjects all the movements of our nature to what our own dignity and honour, and the propriety of our own conduct, require’ (1759, p. 70; I, 1, v). This internal spectator, although formed by education and social pressure, has the ability to become an independent judge. Thus, whereas the aim to be worthy of approval stems from our nature-given sentiments, it is in our interest to use reason to adjust the expression of this sentiment to best achieve our goals. Veblen also downplayed the importance of reason, especially in its logical or intellectual sense, in guiding human behaviour. He faulted the marginal utility school for conceiving and interpreting human conduct ‘as a rational response to the exigencies of the situation in which mankind is placed’ (1909, p. 243). He also took issue with Marxism because he interpreted it as assuming ‘a continuity of reason and consequently of logic. The facts were construed to take such a course as could be established by an appeal to reason between intelligent and fair-minded men’ (1919B, p. 436). He claimed that science should abide by Darwinian methods, and that ‘Under the Darwinian norm it must be held that men’s reasoning is largely controlled by other than logical, intellectual forces’ (Veblen, 1919B, p. 401).2 Even in science, ‘habits of thought are an outcome of habits of life’ (1961, p. 38). For the most part, human behaviour is the result of socialization which is carried out by institutions, the ‘settled habits of thought common to the generality of men’ (1909, p. 239). Humans do, of course, use reason, and they are clearly capable of doing so in highly complex manners, such as in the pursuit of intellectual questions, but their everyday behaviour is mostly driven by habits that have been instilled during socialization. As Rick Tilman puts it: ‘Veblen believed change was often blind drift in which human rationality played a small part…. Since people are dominated by ceremonially impregnated institutions, it is naïve to suppose that significant changes can usually be achieved through the exercise of human intelligence’ (2007, pp. 78, 79). Smith and Veblen essentially embraced what later social thinkers such as Pierre Bourdieu (1984) and Andrew Sayer (2005) refer to as a Pascalian view of human action, whereby rational deliberation is of lesser importance than socialization and habitualization. Thus, conspicuous consumption for both Smith and Veblen is not so much consciously pursued, but instead the ingrained practice of struggling to maintain respectability. As Veblen put it, For the great body of the people in any modern community, the proximate ground of expenditure in excess of what is required for physical comfort is not a conscious effort to excel in the expensiveness of their visible consumption, so much as it is a desire to live up to the conventional standard of decency in the amount and grade of goods consumed. (1899, p. 102) This section provides summaries of Smith’s and Veblen’s understanding of the need for social approval, followed by their views of human socialization, and concluding with reflection on the validity of their claims. 1.1 The quest for social approbation In The Theory of Moral Sentiments, Smith unfolded a theory of human behaviour in which humans are depicted as struggling first and foremost for self-esteem through acquiring social approbation, that principle ‘which Providence undoubtedly intended to be the governing principle of human nature’ (1759, p. 515; VII.3.3). Smith went on to note, however, that whether the ‘principle of approbation’ has its source in self-love, reason, or sentiment, ‘though of the greatest importance in speculation, is of none in practice. ... (It] is a mere matter of philosophical curiosity’ (1759, pp. 497–98; VII.3). This principle of approbation concerns ‘the faculty of the mind which renders certain characters agreeable or disagreeable to us, makes us prefer one tenour of conduct to another, denominate the one right and the other wrong, and consider the one as the object of approbation, honour, and reward; the other as that of blame, censure, and punishment’ (1759, p. 497: VII.3.1). Smith continued: Nature, when she formed man for society, endowed him with an original desire to please, and an original aversion to offend his brethren. She taught him to feel pleasure in their favourable, and pain in their unfavourable regard. She rendered their approbation most flattering and most agreeable to him for its own sake; and their disapprobation most mortifying and most offensive. (1759, p. 212; III.2) In this manner, social norms are enforced by both rewards and punishments, ‘two dimensions that’, according to evolutionary biologists David Sloan Wilson and John Gowdy, ‘go together because without the second, the first would be vulnerable to exploitation’ (2015, p. 42). Veblen equally saw humans as standing in need of the approval of others and the importance of its attainment for self-respect: ‘The usual basis of self-respect is the respect accorded by one’s neighbors. Only individuals with an aberrant temperament can in the long run retain their self-esteem in the face of the disesteem of their fellows’ (Veblen 1899, p. 39). However, whereas Smith addressed conspicuous consumption as one among many forms of behaviour acquiring the approval of others, Veblen, although also recognizing many behavioural expressions as obtaining the esteem of others, focused predominantly upon the role of conspicuous consumption. Veblen was equally insistent that the need for others’ approval was grounded in human nature: ‘With the exception of the instinct of self-preservation, the propensity for emulation is probably the strongest and most alert and persistent of the economic motives proper… [and] the propensity for emulation—for invidious comparison—is of ancient growth and is a pervading trait of human nature’ (1899, pp. 110, 109). And this motive of emulation is ‘the stimulus of an invidious comparison which prompts us to outdo those with whom we are in the habit of classing ourselves’ (Veblen, 1899, p. 103). 1.2 Human behaviour as socially channelled Although both Smith and Veblen held that humans stand naturally in need of the approval of others, just what might achieve that approval is to a substantial extent socially determined by the values that were generated in the evolution of the cultural or institutional structure of society. Humans are socialized to these values in varied manners. Smith, for instance, highlights the role of observation in this socialization process: Our continual observations upon the conduct of others insensibly lead us to form to ourselves certain general rules concerning what is fit and proper either to be done or to be avoided...We do not originally approve or condemn particular actions, because, upon examination, they appear to be agreeable or inconsistent with a certain general rule. The general rule, on the contrary, is formed by finding from experience that all actions of a certain kind, or circumstances in a certain manner, are approved or disapproved of. (1759, pp. 263–264; II.4.8) Equally, the nature of our own actions is only revealed by reference to how others perceive them. Society provides the mirror to assess our judgments. In this manner, moral rules are inductive generalizations, intersubjectively formed: ‘The general maxims of morality are formed, like all other general maxims, from experience and induction’ (1759, p. 505; VII.3.1). This inductive process occurs through enculturation. Smith wrote: ‘The great secret of education is to direct vanity to proper objects’ (1759, p. 417; VI.3.3). This instruction is, of course, highly complex. It begins shortly after birth, and only ends with death. Much of this instruction is institutionalized. As lessons are learned, they are internalized and generalized so as to become the individual’s conscience, providing these values a seeming independence of the view of others. Even some of what are understood to be the necessities of life are defined in terms of prevailing standards of social judgment: By necessaries I understand, not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without…. Under necessaries therefore, I comprehend, not only those things which nature, but those things which the established rules of decency have rendered necessary to the lowest rank of people. (1776, pp. 821, 822) Although Veblen viewed instincts as serving the function of propelling human behaviour, like Smith, he viewed social conditioning as that which guides the expression of the instincts. It does this through institutions, which are the changing aspect of society, not human nature itself. Driven by instincts, human decision-making would be complex and highly energy consuming, if it were not that habitual behaviour develops and becomes encrusted in institutions that simplify the process. These habitual elements of human life change unremittingly and cumulatively, resulting in a continued proliferous growth of institutions. Changes in the institutional structure are continually taking place in response to altered discipline of life under changing cultural conditions, but human nature remains specifically the same. (1914, p. 18) This social conditioning works such that …canons of taste are…acquired through a more or less protracted habituation to the approval or disapproval of the kind of things upon which a favourable or unfavourable judgment of taste is passed. Other things being equal, the longer and more unbroken the habituation, the more legitimate is the canon of taste in question. All this seems to be even truer of judgments regarding worth or honour than of judgments of taste generally. (1899, p. 392) * * * * Does the strong claim made by Smith and Veblen that humans naturally stand in need of the social approval of others hold validity? Is it as powerful in motivating human action as they claim? It strikes most people as correct, even if not given importance by most economists, even within the heterodox tradition. Yet beyond the realm of economics, many social thinkers have recognized the human need for others’ approval, and viewed it as founded upon the fact that social status is critically important to people and thus strongly affects their behaviour. Smith’s and Veblen’s conceptions of social status conform to Karl Polanyi’s later contention that an individual is motivated ‘to safeguard his social standing, his social claims, his social assets. He values material goods only in so far as they serve this end’ (1944, p. 46). How people are judged by others constitutes the foundation for self-esteem, which John Rawls claimed to be ‘perhaps the most important primary good’, such that without it nothing else has much value (1999, p. 440). At the time of Veblen, sociologist Charles Horton Cooley called the process whereby the individual struggles for self-esteem the ‘looking-glass self’ (1902). Contemporary sociologist Andrew Sayer writes: The vulnerability of individuals consists in their dependence on others and not only for material support but for ongoing recognition, respect, approval and trust. While this may be adequately provided by small numbers of others, its absence can cause severe distress, shame and self-contempt—indeed, sometimes individuals may value respect more than their own lives…. [Thus], recognition is not a luxury that ranks lower than the satisfaction of material needs, but is essential for well-being. (2005, p. 54) Seeking and receiving the approval of others has been recognized as underlying human friendship, which has been identified as critically important in human evolution. Freud wrote of the ‘dread of losing love [and if an individual] loses the love of others on whom he is dependent, he will forfeit also their protection against many dangers’. This dread of losing love is the source of social anxiety (1994, p. 52). Darwin addressed how the need for social approval evolved: In the first place, as the reasoning powers and foresight of the members became improved, each man would soon learn that if he aided his fellow-men, he would commonly receive aid in return. From this low motive, he might acquire the habit of aiding his fellows. And the habit of performing benevolent actions certainly strengthens the feelings of sympathy which gives first impulse to benevolent actions... But another and much more powerful stimulus to the development of the social virtues is afforded by the praise and blame of our fellow-men... and this instinct no doubt was originally acquired, like all other social instincts, through natural selection. (1871, pp. 146–147) The seeking of approbation and status is consistent with the dynamics of sexual selection that Darwin developed in his second book, The Descent of Man, and Selection in Relation to Sex (1871). Those who achieve the approval of others and high status are more successful in mating and thereby sending their unique genes into the future (Jones and Ratterman, 2009). 2. Consumption as a source of status Prior to the rise of civilization and the state around 5,500 years ago, hunter-gatherers and early agriculturalists sought the approbation of others through being good hunters and gatherers, brave warriors, and generous members of the community. They were discouraged from, and even punished for, seeking wealth or political power as a means for achieving social approbation (Diamond, 2012; Flannery and Marcus, 2012; Boix, 2015). This changed radically with the rise of states that protected the elites’ monopoly ownership of property. Wealth and its public display as conspicuous consumption became a fundamental means of gaining social approval and signalling status. Both Smith and Veblen addressed the way people consume in pursuit of status. However, whereas Smith viewed this pursuit as socially beneficial, Veblen viewed its consequences as socially wasteful. Their views will be addressed in turn. 2.1 Smith and the social utility of baubles and trinkets In Adam Smith’s world, the social institutions that had evolved to privilege the pursuit of approbation through wealth were viewed as natural, the way the world had always been. Yet Smith viewed the equation of happiness with wealth and the luxury consumption it permits to be a felicitous deception, one which rouses and keeps in continual motion the industry of mankind. It is this which first prompted them to cultivate the ground, to build houses, to found cities and commonwealths, and to invent and improve all the sciences and arts, which ennoble and embellish human life; which have entirely changed the whole face of the globe, have turned the rude forests of nature into agreeable and fertile plains, and made the trackless and barren ocean a new fund of subsistence, and the great high road of communication to the different nations of the earth. (1759, pp. 303–4; IV.1.10) But these material riches themselves bring little in the way of happiness: ‘To be observed, to be attended to, to be taken notice of with sympathy, complacency, and approbation, are all the advantages which we can propose to derive from [riches]. It is the vanity, not the ease, or the pleasure, which interests us’ (1759, pp. 112–13; I.3.2). In fact, ‘Humanity does not desire to be great, but to be beloved [and] ...it is chiefly from [the] regard to the sentiments of mankind that we pursue riches and avoid poverty. [Further] The rich man glories in his riches because he feels they naturally draw upon him the attention of the world...and he is fonder of his wealth on this account than for all the other advantages it procures him… The poor man, on the contrary, is ashamed of his poverty’ (1759, p. 276; III, 5; p. 112; III, 2; p. 113; III, 2).. To make it clear that that wealth is not the source of happiness, he wrote: In what constitutes the real happiness of human life, [the poor] are in no respect inferior to those who seem too much above them. In ease of body and peace of mind, all the different ranks of life are nearly upon a level, and the beggar who suns himself by the side of the highway, possesses that security which kings are fighting for...wealth and greatness are mere trinkets of frivolous utility. (1759, pp. 303–4; IV.1.10) Not only does wealth not deliver happiness, but it is corrupting as well because ‘We frequently see the respectful attentions of the world more strongly directed towards the rich and the great, than towards the wise and virtuous. We see frequently the vices and follies of the powerful much less despised than the poverty and weakness of the innocent . . ..[indeed] the fascination of greatness . . . is so powerful, that the rich and the great are too often preferred to the wise and the virtuous’ (1759, p. 126; I.3; p. 369; VI.2.1). Thus, although the pursuit of wealth and trinkets is natural and even necessary for economic progress, its moral consequences are unfortunate: It is from our disposition to admire, and consequently to imitate the rich and the great, that they are enabled to set, or to lead, what is called the fashion. Their dress is the fashionable dress; the language of their conversation, the fashionable style; their air and deportment, the fashionable behavior. Even their vices and follies are fashionable; and the greater part of men are proud to imitate and resemble them in the very qualities which dishonor and degrade them. (1759, p. 129; I.3.7) Indeed, ‘The external graces, the frivolous accomplishments of that impertinent and foolish thing called a man of fashion, are commonly more admired than the solid and masculine virtues of a warrior, a statesman, a philosopher, or a legislator’ (1759, p. 129; I.3). Consequently, ‘The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect, persons of poor and mean condition, through necessary both to establish and to maintain the distinction of ranks and the order of society, is, at the same time, the great and most universal cause of the corruption of our moral sentiments’ (1759, p. 126; I.3.1). Smith goes further and locates within the morally perverse proclivity to flash consumption, wealth and privilege, the economic dynamic that enabled evolution of the modern era, the transformation from feudalism to commercial society. This has been called his ‘trinkets and baubles thesis’ for the transition from feudalism to capitalism (Weingast, 2017; Jones, 1987, p. 85). With an acuity that much later marks the work of Veblen, Smith understood that the rich are always competing among themselves for the very pinnacle of status: ‘With the greater part of rich people, the chief enjoyment of riches consists in the parade of riches, which in their eye is never so complete as when they appear to possess those decisive marks of opulence which nobody can possess but themselves’ (1776, p. 172). Towards the end of the Middle Ages, expanding trade brought new luxury goods to the attention of feudal landlords, and their competition for status through the consumption of these goods had the consequence that ‘for the gratification of the most childish, the meanest and the most sordid of all vanities… [they] gradually bartered their whole power and authority’ (1776, p. 389). They squandered their wealth as they transferred it to an emerging and more enlightened commercial class. All of this took place without any intention on the part of the actors of bringing forth this happy transformation. Instead, it worked out as if guided by a beneficent ‘invisible hand’, producing progress that ‘all the violence of the feudal institutions could never have effected, the silent and insensible operation of foreign commerce and manufacturers gradually brought about’ (1776, p. 418). The dynamic worked as follows: To gratify the most childish vanity was the sole motive of the great proprietors. The merchants and artificers, much less ridiculous, acted merely from a view to their own interest, and in pursuit of their own pedlar principle of turning a penny wherever a penny was to be got. Neither of them had either knowledge or foresight of that great revolution which the folly of the one, and the industry of the other, was gradually bringing about. (1776, pp. 391–92) Smith’s sympathies were generally with the less well off and his celebration of commercial society was in good part because it was raising living standards generally. And because wealth itself does not bring happiness, he was not disturbed by considerable inequality: The rich only select from the heap what is most precious and agreeable. They consume little more than the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species. When Providence divided the earth among a few lordly masters, it neither forgot nor abandoned those who seemed to have been left out in the partition. These last too enjoy their share of all that it produces. (1759, p. 304; IV.1.10) The standard of living in the British Isles at the time of Smith was far lower than would be the case over a century later in Veblen’s America, and he was, Veblen noted, ‘like other men… a creature of his own time’ (1919A, p. 27). In Smith’s time, most lived barely above subsistence, where life was often rude. Smith’s concern was with the evolving commercial economy and the social dynamics it unleashed, which he viewed as lifting living standards, and under wise policy, promised to continue to do so until a nation attains ‘that full complement of riches which the nature of its soil and climate… [allows] it to acquire’ (Smith, 1776, p. 94). His world was one in which an aristocracy still dominated politics and constituted the super-rich. They competed amongst themselves for the very pinnacle of status, much as Veblen’s later captains of industry, through conspicuous consumption. In Smith’s world, the commercial and manufacturing class were more frugal and forced by competition to invest the better part of their incomes beyond their basic needs. Moreover, their frugality served in their quest to amass sufficient wealth to play in the aristocracy’s high-status club. As for the working masses, they had little income after meeting their most basic needs and therefore were mostly precluded from competing for status through consumption. Thus, although Smith appears to have held conspicuous consumption morally contemptible, he nonetheless viewed it as a spur to industry and as instrumental in transferring economic and political power from a parasitical landowning class to the dynamic growth-generating middle class. 2.2 Veblen and the social disutility of conspicuous consumption As noted above, Veblen, like Smith, viewed humans as naturally driven to attain the good judgment of others: ‘Man as we find him to-day has much regard to his good fame—to his standing in the esteem of his fellowmen. This characteristic he always has had, and no doubt always will have’ (1919C, p. 392). However, This regard for reputation may take the noble form of a striving after a good name; but the existing organization of society does not in any way preeminently foster that line of development. Regard for one’s reputation means, in the average of cases, emulation. It is a striving to be, and more immediately to be thought to be, better than one’s neighbor. (1919C, p. 392) Veblen characterized motivation prior to the institution of private property as follows: D uring that primitive phase of social development, when the community is still habitually peaceable, perhaps sedentary, and without a developed system of individual ownership, the efficiency of the individual can be shown chiefly and most consistently in some employment that goes to further the life of the group. What emulation of an economic kind there is between the members of such a group will be chiefly emulation in industrial serviceability. At the same time the incentive to emulation is not strong, nor is the scope for emulation large. (1899, p. 16) However, since the rise of the state and the institution of private property, wealth and its conspicuous display have been the foremost means by which humans have sought reputation and status. Participation in conspicuous consumption has become strongly socially compelled ‘though popular insistence on conformity to the accepted scale of expenditure as a matter of propriety, under pain of disesteem and ostracism’ (1899, p. 111). Whereas for Smith, the pursuit of ‘unmerited applause’ through luxury consumption had the felicitous consequence of ‘all the toil and bustle of this world’ (1759, p. 112; 3.2), Veblen did not view competition for status through wealth accumulation and conspicuous consumption as either natural or economically felicitous. Instead, it is an institutional pattern that results in a colossal waste of resources: ‘In order to be reputable [consumption] must be wasteful…. It is here called “waste” because this expenditure does not serve human life or human well-being on the whole’ (1899, pp. 96, 97). Instead, ‘Conspicuous waste and conspicuous leisure are reputable because they are evidence of pecuniary strength… it argues success and superior force’ (1899, p. 181). Ironically, in more modern times, increased social mobility and the decline of rigid class status only exacerbated this waste: In modern civilized communities, the lines of demarcation between social classes have grown vague and transient, and wherever this happens the norm of reputability imposed by the upper class extends its coercive influence with but slight hindrance down through the social structure to the lowest strata. The result is that the members of each stratum accept as their ideal of decency the scheme of life in vogue in the next higher stratum, and bend their energies to live up to that ideal. On pain of forfeiting their good name and their self-respect in case of failure, they must conform to the accepted code, at least in appearance.... No class of society, not even the most abjectly poor, foregoes all customary conspicuous consumption. (1899, pp. 84, 85) Continually, Veblen left little doubt as to the forcefulness of this need to seek status through conspicuous consumption: …[T]he disposable surplus left over after the more imperative physical needs are satisfied is not infrequently diverted to the purpose of a conspicuous decency, rather than to added physical comfort and fullness of life. Moreover, such surplus energy as is available is also likely to be expended in the acquisition of goods for conspicuous consumption or conspicuous hoarding. The result is that the requirements of pecuniary reputability tend (1) to leave but a scanty subsistence minimum available for other than conspicuous consumption, and (2) to absorb any surplus energy which may be available after the bare physical necessities of life have been provided for. (1899, p. 205) The specific institution that orients human behaviour toward conspicuous waste is private property: ‘Human nature being what it is, the struggle of each to possess more than his neighbor is inseparable from the institution of private property’ (1919C, p. 397), and under the modern regime of private property, the forcefulness of this wasteful compulsion to seek status through consumption is all-absorbing. …it presently becomes as hard to give up that part of one’s habitual ‘standard of living’ which is due to the struggle for respectability, as it is to give up many physical comforts. In a general way, the need of expenditure in this direction grows as fast as the means of satisfying it, and, in the long run, a large expenditure comes no nearer satisfying the desire than a smaller one. (1919C, pp. 394–95) Consequently, humans find themselves on a treadmill, working ever harder to wastefully spend ever more, but without any increase in happiness or even well-being. Veblen expresses this treadmill dynamic as follows: …it is extremely gratifying to possess something more than others. But as fast as a person makes new acquisitions, and becomes accustomed to the resulting new standard of wealth, the new standard forthwith ceases to afford appreciably greater satisfaction than the earlier standard did. The tendency in any case is constantly to make the present pecuniary standard the point of departure for a fresh increase in wealth. (1899, p. 31) The obvious solution, for Veblen, is the elimination of private property: ‘The ultimate ground of this struggle to keep up appearance by otherwise unnecessary expenditure, is the institution of private property… [and that] With the abolition of private property, the characteristic of human nature which now finds its exercise in this form of emulation, should logically find exercise in other, perhaps nobler and socially more serviceable, activities’ (1919C, p. 399). Indeed, he continued, ‘it is conceivable that labor might practically come to assume that character of nobility in the eyes of society at large, which it now sometimes assumes in the speculations of the well-to-do’ (1919C, p. 401). 3. Social approbation through work and virtue Both Smith and Veblen recognized that in the societies in which they lived, social approbation is sought through many other avenues than the pursuit of wealth and conspicuous consumption. This is especially true for Smith, due for the most part to the fact that there was a far lower standard of material well-being at his time and thus less potential for the democratization of conspicuous consumption. Thus, The Theory of Moral Sentiments is replete with descriptions of behaviour that is rewarded with approbation. For instance, ‘What reward is most proper for promoting the practice of truth, justice, and humanity? The confidence, the esteem, and love of those we live with’ (1759, p. 276; III.5.8). Or, ‘The man who, not from frivolous fancy, but from proper motives, has performed a generous action, when he looks forward to those whom he has served, feels himself to be the natural object of their love and gratitude, and, by sympathy with them, of the esteem and approbation of all mankind’ (1759, p. 165; II.2.14). He wrote of ‘that eminent esteem with which all men naturally regard a steady perseverance in the practice of frugality, industry, and application, though directed to no other purpose than the acquisition of fortune’ (1759, p. 312; IV.2.8). Smith embraced the Protestant virtues of hard work and self-restraint that characterized the bourgeoisie. Smith’s individuals at their best do not seek just any approval whatsoever. To be praised is not quite sufficient; the individual yearns to be praiseworthy as well. As Smith put it: ‘Man naturally desires, not only to be loved, but to be lovely; or to be that thing which is the natural and proper object of love’ (1759, p. 208; III. 2). Expressed differently: ‘It is not the love of our neighbour, it is not the love of mankind, which upon many occasions prompts us to the practice of those divine virtues [generosity, etc.]. It is a stronger love, a more powerful affection, which generally takes place upon such occasions; the love of what is honourable and noble, of the grandeur, and dignity, and superiority of our own characters’ (1759, p. 235; III. 3). Further, ‘The man who acts solely from a regard to what is right and fit to be done, from a regard to what is the proper object of esteem and approbation, though these sentiments should never be bestowed upon him, acts from the most sublime and godlike motive which human nature is even capable of conceiving’ (1759, p. VII.2). Matthew Watson notes that with seceding editions of The Theory of Moral Sentiments, Smith shifted ‘the centre-of-gravity of his work from how people have responsibilities to contribute to a functioning society to the more exacting moral standard of how they have responsibilities to become the best person it is possible for them to be’ (2012, p. 502). Veblen, by contrast, living in a far more affluent society, depicted conspicuous consumption as democratized. He found the forces compelling the pursuit of status through wealth and conspicuous consumption afflicting all classes and generally crowding out other means for social recognition. An interesting example is where he noted that there are other aesthetically more sophisticated means by which those successful in earning a good deal of money can demonstrate their virtue and status. However, the ‘cultivation of the aesthetic faculty requires time and application, and the demands made upon the gentleman in this direction therefore tend to change his life of leisure into a more or less arduous application to the business of learning how to live a life of ostensible leisure in a becoming way’ (1899, pp. 75–76). He also noted other, more culturally sophisticated means of attaining esteem. For instance, ‘Elegant diction, whether in writing or speaking, is an effective means of reputability’ (1899, p. 398). Veblen considers ‘waste’ to be expenditure that ‘does not serve human life or human well-being on the whole’, and ‘we frequently interpret as aesthetic or intellectual a difference which in substance is pecuniary only’ (1899, p. 97). But could not work provide reputation and status? Smith gave it little note as a source of social esteem. Although some historians (Mokyr, 1990, p. 83) identify 1760 as approximately the beginning of the Industrial Revolution in England, during Smith’s lifetime, factories were still few with small workforces. His famous ‘pin factory’ employed only ten people. The world he describes is mainly one of independent actors such as butchers, bakers and candlestick makers who are self-employed (Tokumitsu, 2017, p. 54). When The Wealth of Nations was published, three-quarters of the English population still lived in rural areas (Panchamukhi and Williamson, 1989, p. 92). He does not explicitly comment on the status or happiness their work provided. The most remarkable reflection Smith made concerning the quality of the workplace had to do with the manner in which under the regime of the division of labour, the worker ‘generally becomes as stupid and ignorant as it is possible for a human creature to become’ (1776, p. 734). Moreover, he also contended that ‘Consumption is the sole end and purpose of all production’ (1776, p. 625), suggesting that work is without value in and of itself. Smith wrote that among the poor, there is ‘the hatred of labour and the love of present ease and enjoyment… A person who can acquire no property, can have no other interest but to eat as much, and to labour as little as possible. Whatever work he does beyond what is sufficient to purchase his own maintenance can be squeezed out of him by violence only, and not by any interest of his own’ (1776, pp. 670, 365). But these are not the self-employed who hold control over the workplace, but instead those who ‘can acquire no property’, and therefore must take orders from others. Unlike Smith, for Veblen, work held special importance and promise. He claimed workmanship to be a principal human instinct, one that ‘…is present in all men, and asserts itself even under very adverse circumstances… [it] disposes men to look with favour upon productive efficiency and on whatever is of human use. It disposes them to deprecate waste of substance or effort… [it] is the court of final appeal in any question of economic truth or adequacy’ (1899, pp. 93, 95). For Veblen, ‘…in human behavior this disposition [to work] is effective in such consistent, ubiquitous and resilient fashion that students of human culture will have to count it as one of the integral hereditary traits of mankind’ (1914, p. 28). Workmanship is ‘an object of attention and sentiment in its own right’ (1914, p. 31). Further, ‘The only other instinctive factor of human nature that could with any likelihood dispute this primacy [of workmanship] would be the parental bent’ (1914, p. 25). The central importance and promise of the instinct of workmanship is that it is serviceable to others: ‘…the instinct of workmanship is in the main a propensity to work out the ends which the parental bent makes worth while’ (1914, p. 48). Veblen’s humans are not by nature idle or passive, and they do not naturally shun work: ‘In his economic life man is an agent, not an absorbent; he is an agent seeking in every act the accomplishment of some concrete, objective, impersonal end’ (1898, p. 188). Work is the foremost way to do just this. The progressive character of the instinct of workmanship is that it ‘occupies the interest with practical expedients, ways and means, devices and contrivances of efficiency and economy, proficiency, creative work and technological mastery of facts’ (1914, p. 33). However, ‘The parental bent and the instincts of workmanship and of curiosity will have been overborne by cumulative habituation to the rule of self-regarding proclivities that triumphed in the culture of predation…’ (1914, p. 182). The result is that ‘During the predatory culture labour comes to be associated in men’s habits of thought with weakness and subjection to a master. It is therefore a mark of inferiority, and therefore comes to be accounted unworthy of man in his best estate. By virtue of this tradition labour is felt to be debasing, and this tradition has never died out’ (1899, p. 36). Consequently, although there is a natural instinct of workmanship that could provide social and individual self-respect, under the regime of predatory culture, ‘the standard of respectability requires us to shun labor as well as to enjoy the fruits of it’ (1919C, p. 400). Further, …since the only authentic end of work under the pecuniary dispensation is the acquisition of wealth; since the possession of wealth in so far exempts its possessor from productive work; and since exemption is a mark of wealth and therefore of superiority over those who have nothing and therefore must work; it follows that addiction to work becomes a mark of inferiority and therefore discreditable. Thereby work becomes distasteful to all men instructed in the proprieties of the pecuniary culture. (1914, pp. 173–74) In their struggle for status, people aspire to appear above a need to work, to belong to the leisure class at the pinnacle of society. Although much conspicuous consumption serves to perform this signalling, Veblen dedicates a complete chapter in The Theory of the Leisure Class to unfolding the special role of dress in demonstrating its wearer to be above work. Expensive garments are especially revealing of their wearers’ wealth and leisure standing because ‘expenditure on dress has this advantage over most other methods, that our apparel is always in evidence and affords an indication of our pecuniary standing to all observers at the first glance’. Properly chosen, dress can signal that one does not work: ‘Elegant dress serves its purpose of elegance not only in that it is expensive, but also because it is the insignia of leisure. It not only shows that the wearer is able to consume a relatively large value, but it argues at the same time that he consumes without producing.’ Thus, for men, ‘the patent-leather shoe, the stainless linen, the lustrous cylindrical hat, and the walking-stick’. For women, the French heel, the skirt, excessively long hair, the corset (‘substantially a mutilation, undergone for the purpose of lowering the subject’s vitality and rendering her permanently and obviously unfit for work’), or the extreme example of China, where wealthy families bound the feet of their daughters to signal that they were not meant to work (1899, pp. 167, 170–72, 149). Only under differing social institutions might work again become ennobling, such as those that might exist with the nationalization of industry and property, whereby ‘it is conceivable that labor might practically come to assume that character of nobility in the eyes of society at large, which it now sometimes assumes in the speculations of the well-to-do’ (1919C, p. 401). After all, ‘Esteem is gained and dispraise is avoided by putting one’s efficiency in evidence. The result is that the instinct of workmanship works out in an emulative demonstration of force’ (1899, p. 16). In reference to the lower classes, in spite of the debased character of work, ‘since labour is their recognized and accepted mode of life, they take some emulative pride in a reputation for efficiency in their work, this being often the only line of emulation that is open to them’ (1899, p. 35). In contrast to Smith’s far-from-affluent world at the outset of industrialization, Veblen lived in relatively prosperous turn-of-the-twentieth-century America. This helps explain why he revealed little preoccupation with a problem of poverty, or even exploitation of workers.3 His concern, instead, was with the institution-driven perversion of values and the resulting massive waste of resources within predatory pecuniary culture. The massive waste in America which so concerned Veblen had for the most part only recently evolved. With perhaps the exception of slaves and the slave-owning plantation elite in the South, since colonial times, a strong Protestant ethic in hard work and frugality prevailed among Americans, along with a deeply held belief that vertical mobility was readily possible.4 Consequently, Americans generally felt responsible for their own social status. Through adequate dedication and effort, anyone can move up, even to the very highest rungs of social status. It is the individual’s responsibility; it depends upon the individual’s willingness to work hard. One’s social status is not given, but earned. Further, until the late nineteenth century, most Americans were self-employed, living in communities where everyone knew how hard everyone worked as well as the quality of their work. However, the industrialization that had taken off after the American Civil War was in full swing by Veblen’s day, and it had the effect of degrading the quality of work and making it increasingly unavailable for observation, as craft industries and independent farming declined and ever more workers entered industrial occupations where their skill and diligence were not clearly visible outside the factories. A critical source for social approval and self-respect was thereby weakened. As a result of the urbanization accompanying industrialization, traditional communities declined as the percent of Americans living in urban areas doubled from 23.2 percent to 46.3 percent between 1870 and 1910 (Gordon, 2016, p. 98). Consequently, communities within which the actual performance of work might be observed also declined, making it more difficult for others to know how hard or well someone worked. Thus, combined with the degraded quality of work, rising industrial urbanization made it more difficult to find social certification in community. Consequently, individuals increasingly sought social certification through consumption, which can serve as an observable consequence, or gauge, of hard work, since presumably, harder work permits greater consumption. Veblen expressed awareness that the resort to conspicuous consumption to signal status was in part a result of urbanization. He wrote that ‘Conspicuous consumption claims a relatively larger portion of the income of the urban than of the rural population, and the claim is also more imperative’ (1899, pp. 110, 109). In small communities, people generally know who is wealthier, who is more honourable and whose past actions have been most beneficial to their collective ends. It follows that small and relatively isolated communities are freer of the ostentatious consumption practices that characterized the industrial era. Veblen noted that in such small-scale communities, societies’ clothing fashions tend to be more stable and utilitarian (1899, pp. 175–76). It should be noted that compared to work, consumption is a more efficient way of showing success to large numbers of people, such as in an urban setting. While hard work is visible only to those who can see or know of one’s workplace, much consumption is visible to a great number of people with whom there is contact. Veblen wrote, ‘The means of communication and the mobility of the population now expose the individual to the observation of many persons who have no other means of judging of his reputability than the display of goods…which he is able to make while under their direct observation’ (1899, p. 86). The debasement of labour that accompanied industrialization (Marx, 1906; Braverman, 1998) was oddly absent from Veblen’s writing. In a very short passage in The Wealth of Nations, Smith launched what would become known as the economics of worker alienation with his comment, mentioned earlier, that the division of labour accompanying factory work rendered the worker ‘as stupid and ignorant as it is possible for a human creature to become’ (1776, p. 734). For French and Ricardian socialists, and Marx, the worker alienation and deskilling accompanying industrialization played significant roles in their condemnations of capitalism. Surprisingly, Veblen did not appear to have taken notice or make mention of worker alienation or the deskilling accompanying factory work. Unlike Marx and Engels, who claimed that ‘machinofacture’ reduces the worker to a mere ‘appendage of the machine’ (1848, p. 479), Veblen viewed the machine process as positive for both the worker and society. It improves the workman’s cognitive faculties (1899, pp. 282–84, 330). It inculcated a proclivity for inductive logic and ‘matter-of-fact’ reasoning, which through habituation, becomes embedded in their mental functioning: The workman’s office is becoming more and more exclusively that of discretion and supervision in a process of mechanical, dispassionate sequences…. under the…developed industrial processes, when the prime movers and the contrivances through which they work are of an impersonal, non-individual character, the grounds of generalization habitually present in the workman’s mind and the point of view from which he habitually apprehends phenomena is an enforced cognizance of matter-of-fact sequence. The result, so far as concerns the workman’s life of faith, is a proclivity to undevout skepticism. (1899, p. 330) Further, As industrial methods develop, the virtues of the handicraftsman count for less and less as an offset to scanty intelligence or a halting acceptance of the sequence of cause and effect. The industrial organization assumes more and more of the character of a mechanism, in which it is man’s office to discriminate and select what natural forces shall work out their effects in his service. The workman’s part in industry changes from that of a prime mover to that of discrimination and valuation of quantitative sequences and mechanical facts. (1899, p. 284) More generally, the machine process inculcates a scientific attitude within the population as a whole. What little optimism concerning the future that might be found in Veblen’s work is traceable to what he viewed as the positive consequences of this machine process: ‘It may even be said that in the modern industrial communities the average, dispassionate sense of man says that the ideal character is a character which makes for peace, good-will and economic efficiency, rather than for a life of self-seeking, force, fraud, and mastery’ (1899, pp. 361–62). Indeed, the role he here grants to reason is suggestive of Smith’s ‘impartial spectator’.5 Instead of viewing industrialization as debasing the worker, Veblen claimed that ‘The outcome of modern industrial development has been… to intensify emulation and the jealousy that goes with emulation, and to focus the emulation and the jealousy on the possession and enjoyment of material goods’ (1919C, p. 397). However, as noted above, the problem for Veblen was not to be found in industrialization per se, but with the regime of private property. During Veblen’s lifetime, there were forces directing people’s quest for social recognition and self-respect towards conspicuous consumption to which Veblen gave little or no attention. For instance, the soaring inequality that accompanied industrialization put pressure on households to consume more to maintain their relative social status or social respectability. As noted above, such consumption served as a proxy for how hard one works. Although the rise of consumerism during Veblen’s lifetime was in part due to the technologically driven durable goods revolution, this revolution was itself fuelled by the rising demand for such goods as a consequence of the degradation of work, declining community and rising inequality (Wisman and Davis, 2013). 4. Final reflections Both Smith and Veblen, in remarkably similar manners, claimed that what is of greatest importance to humans is their self-respect, and that this is achieved by meriting the approval of others. This insight is critical not only for rendering social thought more powerful, but also for addressing the challenges humanity currently faces. It is only in the past few centuries that sustainable economic growth became recognized as possible; that someone’s increase in wealth did not have to mean someone else’s decrease; that in principle, with the proper institutions, everyone could become wealthier. It is also only in the these last few centuries, as Willie Thompson points out, ‘that the project of deliberately and fundamentally transforming a culture has been entertained by a significant number of its members’ (2015, p. 102). Although the views of material progress and deliberate social transformation were slow in maturing,6 they did spread, and as they did so they generated a material progress vision, according to which it is economic growth that will generate progress and make possible the good and just society (Wisman, 2003). Therefore, society should consider economic growth as its highest priority. This has promoted a somewhat exclusive preoccupation with material progress as the key to improved human welfare, even in societies that produce far more output than is essential for physical well-being. Largely neglected have been such essential components of human well-being as more creative and fulfilling work; greater equality in the distribution of opportunity, income and wealth; richer and more supportive communities; a sustainable environment; and more time for family, friends and reflection, all of which are treated as subsidiary issues because maximum material progress is believed to hold the key to a better future. For the sake of maximum economic growth and the greatest potential for augmenting everyone’s consumption, capitalism’s creative destruction must be fully unleashed, even if this results in ever more intense competition, insecurity, stress and environmental destruction. The conceptions of human behaviour set forth by Smith and Veblen—that humans seek self-respect and that this is acquired by obtaining the approval of others—make clear that it is not wealth that is the end goal. Their conception suggests that the ideal would be a society that is institutionally structured such that humans stand the greatest potential for attaining the approbation of others in manners consistent with other social goals such as material provisioning, equity, community and environmental sustainability. And history reveals that this approval might come through institutions that privilege such diverse domains as work, self-determination, community or generosity. The view of Smith and Veblen that well-being is not obtained by the endless pursuit of ever more goods and services is supported by a substantial body of work in psychology, especially in what has come to be called ‘happiness research’. This research finds that above a fairly low threshold, subjective well-being does not correlate with higher incomes and thus higher levels of consumption. Although average levels of satisfaction are considerably lower in very poor countries than in rich ones, after a certain income level has been attained, further increases in income do not seem related to higher levels of subjective well-being (Veenhoven, 1993; Diener et al., 1995; Easterlin, 2001, 2002). In terms of income and consumption, what appears to be important is one’s relative position. This is strikingly supported in a study by Sara Solnick and David Hemenway (1998) that finds that when presented with the question of whether respondents would prefer to live less well off in a rich society or near the top in a poorer society, 50% claimed they would give up half their real income to live in a society where they were better off than most others. This research also finds that above a certain material threshold, it is in the realm of work that well-being is most readily achieved. Gunnar Myrdal, 1974 Nobel Laureate in Economics, wrote that ‘Most people who are reasonably well off derive more satisfaction in their capacity as producers than as consumers. Indeed, many would define the social ideal as a state in which as many people as possible can live in this way’ (1968, p. 136). More recently, Robert Lane reports that ‘It is in work, not in consumption and, as research reports show, not even in leisure, where most people engage in the activities that they find most satisfying, where they learn to cope with their human and natural environments, and where they learn about themselves’ (1991, p. 235). A World Values Survey found that ‘only 22 percent of respondents agreed that a job is just a way of earning money, and 63 percent said that they would enjoy having a paying job even if they did not need the money’ (Alesina et al., 2001, p. 239). Within good workplaces, work provides a ready medium in which self-esteem can flourish. In work, we contribute to society’s wealth (as opposed to drawing upon society’s wealth via consumption), and thus we have grounds for a sense that we are participating in achieving society’s well-being. If we are relatively autonomous and possess a degree of control over the work process, we achieve a sense of accomplishment. Lane maintains that ‘There is evidence that exercise of discretion on the job, which is not so much a right as a requirement of complex tasks, has more substantial effect on self-esteem than any exercise of familiar political rights has ever had’ (1991, p. 198). A national survey taken in 2012 revealed that ‘British workers were significantly happier if they had “more responsibility and control over their work, as well as higher incomes”…[further] employees with little control in the workplace have a 23 percent higher risk of heart attacks’ (cited in Priestland, 2012, p. 171). A similar study of American workers confirms the importance of their participation in control over the workplace in generating high levels of work satisfaction (Maestas et al., 2017). Moreover, in work we can aid our fellow workers and bask in their appreciation of our assistance and our skills. Work, then, need not be a source of disutility as generally depicted by economics, but instead, a principal source of utility where social recognition and self-respect can flourish. Modern economics is formulated upon, and legitimates, the material progress vision that blocks our understanding of the requisites for human flourishing. The conception of human behaviour developed by Smith and Veblen offers a foundation for reconstructing social theory such that it offers guidance for achieving greater human happiness through means for attaining social approval that privilege the quality of work, the importance of community and the need to arrest the severe environmental devastation that threats our species’ future existence (Wisman, 2011). Footnotes 1 Veblen was familiar with Smith’s Wealth of Nations, which he held in high esteem for its ‘comprehension and lucidity’ (1919A, p. 26). If Veblen failed to read The Theory of Moral Sentiments, he is hardly alone among economists, for whom Smith is generally associated with the narrow view of humans as motivated solely by economic self-interest. Interestingly, of his two major works, Smith believed The Theory of Moral Sentiments to be the more important (Ray, 1895, p. 436). Although The Theory of Moral Sentiments was first published 17 years before The Wealth of Nations, two revised editions were published after the latter (1778, 1790). Insofar as the last edition involved extensive revisions and substantial additions, but left the general argument the same, and that he spent the last years of his life on this revision, clearly Smith had not changed his mind. 2 Charles Camic and Geoffrey Hodgson view Veblen’s understanding as consistent with that of John Dewey and modern thinkers such as Henry Plotkin, whereby “instinct is prior to habit, habit is prior to belief, and belief is prior to reason. That is the order in which they have evolved in our human ancestry over millions of years. That too is the order in which they appear in the ontogenetic development of each human individual... instinct is not the antithesis of reason, but one of its preconditions” (2011, pp. 23, 19). 3 That Veblen did not give much attention to worker exploitation is remarkable insofar as between 1886 and 1894, when Veblen was maturing as a radical young scholar, repression of the American worker movement was extreme. As Sean Wilentz writes, ‘it is hard to avoid concluding that the major political reality in these years was the extraordinary repression visited upon organized workers by employers’ associations, with the cooperation of the courts, state legislatures, and, increasingly, the federal government’ (1984, p. 15). Indeed, more workers were killed during strikes in the USA than in any other country but Russia (Priestland, 2012, p. 91). 4 Until recently, this belief mirrored reality. In the nineteenth century, Alexis de Tocqueville noted an exceptionally high degree of vertical mobility in the USA. The extreme extent to which de Tocqueville believed this to be true is captured in the following passage from Democracy in America: ‘To tell the truth, though there are rich men, the class of rich men does not exist…the rich are constantly becoming poor’ (1990, p. 160). 5 Whereas Smith was caught up in the optimism of the Enlightenment, Veblen remained sceptical, if not pessimistic: ‘History records more frequent and more spectacular instances of the triumph of imbecile institutions over life and culture’ (1914, p. 25). 6 At the time when Adam Smith was envisioning rising living standards, Edward Gibbon, famous for his treatise on the fall of the Roman Empire, claimed that there was a limit to output, which would be obtained during peaceful and favourable climatic times, such that only a small surplus would be available to a few (2010). 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Cambridge Journal of Economics – Oxford University Press
Published: May 23, 2018
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