Inspiration story

Leisure class, conspicuous consumption and emulation: relevance for R. Moldova.

I will present this subject that was developed by Thorstein Veblen (1857-1929) the founder of
institutionalism. The main opera of Veblen is The Theory of the Leisure Class that lit the fire in
institutionalism and held his way of protest in that time.
What is the purpose of his economic activity? The right answer is satisfying of the instincts.
Veblen criticized the concept of classics and neoclassics that in the middle of doctrine have to be the
homo economicus, and they sustain that the man is guided in the fact, to reach a bigger profit; but he
says that in real life no one is guided such as they described the humanity in the economic activity,
arguing that an entrepreneur has as motivation not only increasing profit, but line of instincts like:
fatherhood instinct, curiosity instinct, predatory instinct, producing instinct, and other such less
important such as traditions. Veblen reject the notion of eternal economic laws applied by classics,
and implemented the Darwinism in his economic activity, remarking that in the evolution of the
social structure it is only one process of natural selection of institutions.
The Leisure Class (Conspicuous Leisure) this is the original theory, Veblen says that the leisure
class (the main institution from the capitalist society) lead a parasitic way of life, in this way
reducing the efficiency of industrialization of population. He adds that this class is unproductive and
harmful, made from speculators, swindlers, businessmen, rentiers that obtain lots of money in a dirty
way. The biggest problem is that people reacts positive to this phenomena, and to be at the higher
level, man has to be a liar, to rob, to materialize the egoism.
The Conspicuous consumption Veblen support the idea that the consumer is not supreme in his
choice, and its obliged to support great pressure, where is imposed, that in the moment he choose
goods and services, he/she will present an irrational behavior, vulnerable. So, rich people consume
usually not for satisfying need but so impress the neighbors and to cause envy from others. In this
way this persons are addicted to satisfy their vanity irrationally, to have the latest and original goods
and so on. At the end consumer becomes a slave of fashion, of advertisement, of ambitions, but not a
king like neoclassic says.
The Pecuniary Emulation The need of subsistence and of an increase of physical comfort may
for a time be the dominant motive of acquisition for those classes who are habitually employed at
manual labour, whose subsistence is on a precarious footing, who possess little and ordinarily
accumulate little; but it will appear in the course of the discussion that even in the case of these poor
classes the predominance of the motive of physical want is not so decided as has sometimes been
assumed. On the other hand, so far as regards those members and classes of the community who are
chiefly concerned in the accumulation of wealth, the incentive of subsistence or of physical comfort
never plays a considerable part. Ownership began and grew into a human institution on grounds
unrelated to the subsistence minimum. The dominant incentive was from the outset the invidious
distinction attaching to wealth, and, save temporarily and by exception, no other motive has usurped
the primacy at any later stage of the development.

Conclusion: will refer to our country, a good example of existing such classes in R.M. will serve
some information about imported goods and services that 30% from there are imported for
consumption goods ( luxury vehicles and goods aproximatly 10%; fruits and vegetables
aproximatly 13,5%; and other) and only 11% from 100% are used for capital goods , 48% are for
Intermediary goods, and rest for non classified ones. From these dates we can conclude many things
that the nation of can be easily compared with the classification from Veblen, because we can
conclude that people dependent of fashion and higher level comfort and the presence of a harmful
leisure class, made from speculators, swindlers and so on.