In my experience, most mainstream economists have never heard of much less read a word written by Thorstein Veblen, the author of “the most considerable and creative body of social thought that America has produced.”
Why is Veblen relevant today? Certainly because of his analysis and critique of conspicuous consumption, which is precisely one of the effects of the obscene levels of inequality we’re witnessing.
Veblen is also relevant because, as Adam Davidson explains, Bernie Sanders’s economic ideas are, like Veblen’s, both ruthlessly critical of the mainstream and profoundly optimistic:
Sanders believes that raising the minimum wage, spending a trillion dollars on infrastructure and offering free college will fundamentally shift the structure of our economy toward the poor and middle class. It will inspire such enthusiasm and determination that more people will work harder and invest more, and the country will easily generate the tax income to pay for it. Hence, Sanders’s plans won’t cost money; they’llraise money. Like Veblen, Sanders spends much of his time denouncing the excesses of others, but at heart he is one of the world’s greatest optimists. Sanders obviously understands that his vision of the economy is at odds with the existing way of seeing things. His website and his stump speeches ask his followers whether they’re ready to start a “revolution.”. . .
Of course, for many people who support Sanders, the fact that his ideas run counter to decades of established economics is exactly the point. Some economists, like Dean Baker and Robert Reich, told me they like Sanders not because of his take on any technical debate but because he has forced the profession — and everybody else — to take his issues seriously. No matter what happens in this election, Sanders’s idealism has sent a clear message to traditional economists on the left: They are taking too long to develop answers to the problems of inequality and the corrosive effects of concentrated wealth. It’s a message that institutionalists have been screaming for more than a century. Now, it seems, they are being heard.
Today, Veblen’s most famous book might be reissued (with a foreword by Sanders, certainly one of Vermont’s most controversial figures) and retitled “Theory of the 1 Percent.”