The Anti-Veblen

It is curious that both Thorstein Veblen and Tyler Cowen were/are economists. Judged by their interests, they might have been psychologists, sociologists, or anthropologists, especially the last. The Theory of the Leisure Class was pure anthropology. Tyler’s new book Discover Your Inner Economist is a blend of psychology and anthropology. Veblen wrote a whole book arguing what Tyler (rightly) takes as needing little support. “Cookbooks by famous chefs . . . seek to impress rather than respect our limits,” writes Tyler. Straight out of Theory of the Leisure Class except better written.

In book after book, Veblen criticized mainstream economics. The mainstream economists of his time liked to assume that everyone “maximized utility”; the point of Theory of the Leisure Class was how wrong this was — all that conspicuous waste and consumption and impracticality done to signal one’s wealth. Whereas Tyler’s theme is essentially the opposite: mainstream economic ideas, which now include Veblen’s, explain a lot about everyday life, such as which countries have the best restaurants. U. N. troops were “very good for the people who sell lobster,” a Haitian taxi driver told him.

Whereas Veblen expressed his dissatisfaction in the usual academic way — he wrote a book saying this is bad, that is bad (very creatively and thematically) — Tyler did something far less predictable and probably far more powerful: With Alex Tabarrok, he started a blog. The main theme of Marginal Revolution, as far as I can tell, is to praise stuff (usually academic economic stuff) that Tyler believes is or is likely to be under-appreciated. Greg Clark’s new book is an example. Stories teach values, and MR is a long-running serial with “recurring characters” (to quote Tyler). To criticize by creating is as old as Michaelangelo but requires a willingness to start small and deal with small things (such as a tiny restaurant) that doesn’t come easily to academics in prestigious positions.