2017-11 Adam Smith and Thorstein Veblen on the quest for recognition

Adam Smith and Thorstein Veblen, divided culturally and by over a century of capitalism’s differing degrees of maturation, analyzed 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 behavior, 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. Nevertheless, what is broadly common in their theories of human behavior 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.