Appropriation, beliefs, and inculcation: Some other connections between American Pragmatism and Veblen’s conspicuous consumer^*

Apropriação, crenças e inculcação: algumas outras conexões entre o pragmatismo americano e o consumidor conspícuo de Veblen

ABSTRACT

Thorstein Veblen was a founding father of the original institutional economics. Veblen’s first book, The Theory of the Leisure Class (1899), introduced to economists an interdisciplinary perspective to understand consumers’ decision-making. This perspective relied on the processual nature of instincts, habits, and institutions. Veblen’s ideas on human behavior were not completely original, and it has been widely recognized that some of his insights clearly reference the teachings of the American pragmatic school of philosophy. In light of this, our study offers an interpretation of Veblen’s ideas on consumer behavior through the viewpoints of the main thinkers of the pragmatist school of his time. This study explores some important themes within pragmatism, such as William James’s concept of appropriation, Charles Peirce’s understanding of belief and social impulse, and John Dewey’s ideas on socialization and the inculcation of habits. Based on these references, we seek to generate new insights into Veblen’s perspective on consumers’ decision-making in broader terms and at the same time preserve his main philosophical references.

KEYWORDS:
Thorstein Veblen; conspicuous consumption; pragmatism; pragmatic philosophy; institutional economics

RESUMO

Thorstein Veblen foi um dos fundadores da economia institucional original. O primeiro livro de Veblen, The Theory of the Leisure Class (1899), apresentou aos economistas uma perspectiva interdisciplinar para compreender a tomada de decisão dos consumidores. Essa perspectiva dependia da natureza processual dos instintos, hábitos e instituições. As ideias de Veblen sobre o comportamento humano não eram completamente originais e foi amplamente reconhecido que alguns de seus insights claramente fazem referência aos ensinamentos da escola americana de filosofia pragmática. Diante disso, nosso estudo oferece uma interpretação das ideias de Veblen sobre o comportamento do consumidor por meio dos pontos de vista dos principais pensadores da escola pragmática de sua época. Este estudo explora alguns temas importantes dentro do pragmatismo, como o conceito de apropriação de William James, a compreensão de Charles Peirce sobre a crença e o impulso social e as ideias de John Dewey sobre socialização e a inculcamento de hábitos. Com base nessas referências, buscamos gerar novos insights sobre a perspectiva de Veblen em relação a tomada de decisão dos consumidores em termos mais amplos e, ao mesmo tempo, preservar suas principais referências filosóficas.

PALAVRAS-CHAVE:
Thorstein Veblen; consumo conspícuo; pragmatismo; filosofia pragmática; economia institucional

1. INTRODUCTION

One of the most important features of Thorstein Veblen’s evolutionary economics is the concept of “conspicuous consumption.” Much different from the neoclassical end-driven behavior, Veblen’s understanding of consumer behavior is culturally grounded.¹ For Veblen (1889) emulative behavior is a product of human history that became institutionally stable within western society in the form of conspicuous consumption. Following this, conspicuous consumption is a specific kind of consumption because it is addressed to display wealth to others, it is a massive behavior since it is “[t]he basis on which good repute in any highly organized industrial community ultimately rests” (1884). In this sense, for Veblen - and for all radical institutionalists - consumption must be seen as an interpersonal issue that moves around reputation and social hierarchy. Consequently, Veblen’s conspicuous consumer can be defined as the person who buy goods emulatively, looking for a -not necessarily consciously-wasteful monetary expenditure motivated by social esteem.

Veblen’s perspective on consumption reflects his profound interdisciplinarity since he connects the cutting edge of several disciplines of his time as psychology, philosophy, economics and social theory. From these foundations Veblen concluded that evolutionary economists must understand consumer behavior as the result of a historical process based on the dynamics grounded on instincts, habits, and institutions. The innovative nature of Veblen’s perspective might be explained by Joseph Dorfman, his first well-known biographer, through Dorfman’s “outsider thesis” (1934), which explains Veblen’s approach as the result of Veblen’s being a non-participant researcher of American socio-economic practices. Nevertheless, in the last decades, efforts have been made within Original Institutional Economics (OIE) to understand the theoretical and philosophical roots of Veblen’s thought and his connection with other thinkers of his time (Camic, 2012). Thus, several works have shown that important insights of Veblen’s social theory rely-among other areas-on the teachings of the American pragmatic school of philosophy (Edgell and Tilman, 1989; Twomey, 1998; Tilman, 2007).

Regarding the centrality of “conspicuous consumer” on Veblen’s theoretical framework and the need to understand Veblen as a thinker connected to the ideas of his time, this paper seeks to offer some insights on the possible connections between Veblen’s “conspicuous consumer” and selected themes of American pragmatism. In this sense, the reassessment of Veblen’s “conspicuous consumer” under the lights of Peirce, Dewey and James may show the deepness and breadth of Veblen’s perspective on cognition, consumption, and institutions.

When Veblen was a student at John Hopkins University, he attended Charles Peirce’s lectures for the course “Elementary Logic” during the fall of 1881² (Griffin, 1998; Liebhafsky, 1993; Camic, 2012). Exposure to Peirce’s lectures deeply influenced Veblen’s strong identification with evolutionary description (Dyer, 1986; Liebhafsky, 1993). Peirce was a source for Veblen’s theory, and several Veblenian ideas have a strong association with Peirce’s pragmaticism³, such as Veblen’s concept of “idle curiosity” with Peirce’s “musement” (Dyer, 1986; Liebhafsky, 1993) as well as the famous concept of “cumulative causation” with Peirce’s “synechism” (Hall and Whybrow, 2008). The presence of Peirce’s ideas in Veblen’s studies can be found in Kant’s Critique of Judgment (Veblen, 1884), The Instinct of Workmanship and the State of the Industrial Arts (Veblen, 1914), and in “Economic Theory in the Calculable Future” (Veblen, 1925)⁴ (Dyer, 1986; Griffin, 1998).

Despite the importance of Peirce’s writings on Veblen’s theory, Mirowski (1987) stresses that Veblen was more influenced by John Dewey than by Peirce. When Veblen attended Peirce’s lectures in the “Elementary Logic” course, he did so along with Dewey (Griffin, 1998; Liebhafsky, 1993). Peirce influenced both Veblen’s and Dewey’s philosophy and the logic of scientific thought; however, neither Veblen nor Dewey shared Peirce’s “evolutionary metaphysics,” which he developed at the beginning of the 20th century. Thereafter, from 1894 to 1904, Veblen and Dewey were colleagues at the University of Chicago; Veblen was a member of the Political Economy Department during 1892-1906, and Dewey was a member of the Philosophy Department during 1894-1904 (Rutherford, 2011). It is unquestionable that Dewey heavily influenced Veblen’s concept of habits and evolutionary perspective. In addition, completing the pragmatist “holy trinity,” William James is well known in OIE as an important influence in Veblen’s notion of instincts (see Hodgson, 1998b; Jennings and Waller, 1998), which is unusual (Almeida, 2014). According to Hodgson (1998b), Veblen followed James in his approach to instincts, which he explained in terms of both biological and socio-economical processes of evolution (see also Almeida, 2014). Following these efforts to ground Veblen’s ideas on earthly philosophical foundations, this study seeks to understand the connections between Veblen’s “conspicuous consumer” and the pragmatist conceptions of human behavior. Thus, we highlight and analyze possible theoretical bridges regarding these connections. Our study focuses on three common themes among the previously mentioned thinkers: (i) the process of habit acquisition, (ii) the nature and meaning of instincts, and (iii) the roots of human action and satisfaction. More specifically, to offer a pragmatist reference to qualify Veblen’s “conspicuous consumer” within pragmatist philosophy, our study delves into James’s appropriation, Peirce’s belief and doubt logic, and Dewey’s socialization and inculcation of habits.

The following section considers how the conspicuous consumer perceives habits and the relationship between habits and instincts. It highlights how the conspicuous consumer deals with the inner impulse to consume and the meaning of Veblen’s notion of instincts. It is argued that James’s appropriation-complemented by Dewey’s perspective on habits and socialization-plays a central role in how consumers perceive the way goods are acquired in social decision-making environments. Section 3 highlights how Peirce’s logic regarding doubts as well as beliefs in learning how to behave assist the habit-building aspect of Veblen’s conspicuous consumer. Section 4 introduces the notion of institutions in the analysis. This section explores the role of the leisure class institution in building the social concepts of goods and their relationship with habits as well as Veblen’s notion of conspicuousness. Some concluding remarks are presented in Section 5.

2. THE ROLE OF WILLIAM JAMES’S APPROPRIATION

Considering the place Veblen gave to habits in his writings, it is impossible to begin an analysis of Veblenian decision-making without mentioning Veblen’s concept of habits. The importance of habits in Veblen’s institutionalism is reinforced when we observe that two of the most quoted definitions of institutions, provided by Veblen, rely on habits: institutions as “settled habits of thought common to the generality of men” (Veblen, 1909, p. 626) and institutions as outgrowths of habits (Veblen, 1909, 1919). Hodgson (1998a) understands the Veblenian concept of habit as a largely non-deliberative and self-actuating propensity to engage in a previously adopted pattern. A key issue in understanding conspicuous consumers’ decision-making is to comprehend how that pattern is recognized, learned, and adopted. To this end, to fully understand this subject, a reference to William James’s and John Dewey’s writings might be useful.

In The Theory of the Leisure Class (Veblen, 1899), Veblen analyzed the impact of socially shared habits on conspicuous consumer decision-making. Here, we retreat a few steps, examining how Veblen’s conspicuous consumer acquires such habits. Thus, it is important to understand how to handle the concept of habit. Here, we differentiate between “being aware of what a habit is” and “what a habit means.” The former relies on knowing how to put a habit in practice, such as knowing what the usual meal in a specific country is and how to have access to this meal. “What a habit means” is about understanding what the habit expresses, such as comprehending the cultural content of the usual meal in a specific country. Veblen’s conspicuous consumer theory is about “being aware of what a habit is” and about “what a habit means.” Initially, we focus on the former in this section, whereas Section 4 considers the meaning of a habit.

It may be argued that the conspicuous consumer is aware of a habit when she/he notices its behavioral results. Following this logic, a habit is perceived when it is implied by one’s behavior. However, from a Veblenian perspective, a habit does not refer to repetitive behavior. A habit can be seen as a potential behavior that can be triggered by an appropriate stimulus or context (Hodgson, 2002, 2004b). In addition, a habit is not necessarily implied by one’s behavior because a habit can also be associated with the absence of a behavior⁵. However, when the subject matter is “being aware of what a habit is,” a habit’s behavioral result plays a key role, even when this behavioral result is the absence of a behavior. As the analysis of habits that are implied or not implied by behavior is similar, we will henceforth focus on habits that culminate in behavior.

The concept of being aware of a habit’s behavioral results guides our discussion toward the reasons why consumers engage in certain behaviors. There are certainly several reasons that motivate a consumer to behave in a certain way. If we focus on basic motivation for behavior, philosophers and psychologists usually indicate instincts as behavioral incentives. Veblen introduces his own perspective of an instinctive approach, which is central to comprehending the logic of his conspicuous consumer. A key issue in Veblen’s approach to instinct is the unusual perspective he adopted. For Veblen (1914), inner impulses to action are tropisms or reflexes; philosophers and psychologists usually use the term instinct for what Veblen called tropism or reflex. In addition, Veblen used the term instinct differently from its usual sense. According to Veblen, cognitive abilities, particular perceptions, and even intelligence are part of instincts (Cordes, 2005). Consequently, the Veblenian perspective of instincts takes into account the relationship between consumers and the external world around them, which differs from the common-sense or usual conceptualization. For Veblen, what is learned in one’s interaction with the external world can create an instinct. To avoid a conceptual confusion, the term “instinct” is used here as defined by Veblen. The usual meaning of conceptualization is termed “inner impulse.” Notably, William James’s writings, particularly his notion of appropriation, are central to an in-depth analysis of Veblen’s concept of instinct and its relation with habits.

James’s notion of appropriation is interrelated with other important elements of his thought. First, we consider that, although James’s notion of habit is compatible with Veblen’s, James’s is a more encompassing concept. As understood by James, the concept of habit is well beyond human phenomena since according to him, “[t]he laws of Nature are nothing but the immutable habits, which the different elementary sorts of matter follow in their actions and reactions upon each other” (James 1890a, p. 104). In line with his concept of habit, James dealt with another concept named plasticity: “[p]lasticity, […], in the wide sense of the word, means the possession of a structure weak enough to yield to an influence but strong enough not to yield all at once. Each relatively stable phase of equilibrium in such a structure is marked by what we may call a new set of habits” (James, 1890a, p. 105).

In this sense, we may assume that plasticity and habits are different but related phenomena, as habits refer to a stable set of known behaviors and plasticity means the flexibility that allows a new set of behaviors to be learned. Taking decision-making into account, being aware of a habit means knowing its behavioral results and plasticity means the learning process of how to behave. However, this learning process, despite creating new habits, may also reinforce the existing ones. When a reinforcement takes place, the reinforced habit becomes a stronger structure that, through the same process, can become strong enough to have the same impact on the conspicuous consumer as an inner impulse. For James, a habit that is strong enough to work as an inner impulse is an instinct. In James’s words, “[t]he habits to which there is an innate tendency are called instincts” (James 1890a, p. 104). Hence, we can assume that James understood that inner impulses could be subsumed within habits. This is very close to Veblen’s perspective on instincts as a category that encompasses inner impulses and elements of the external world, which in Veblenian theory are expressed as habits.

If we understand a habit as the procedure determining how one behaves and plasticity as the learning process, then we need a theory of change that links both concepts. James offered this theory while exploring the concept of “appropriation.” In our view, James’s appropriation is central to understanding Veblen’s conspicuous consumer decision-making. To introduce the appropriation process, James (1904, 1905) presents consciousness as a function of “pure experience.” In this sense, for James, knowing becomes a result of “pure experience” since “[there is] only one primal stuff or material in the world, a stuff of which everything is composed, and if we call that stuff ‘pure experience,’ the knowing can easily be explained as a particular sort of relation towards one another, into which portions of pure experience may enter” (James, 1904, p. 478).

Any content of “pure experience”-such as consuming a good-must be classed as a physical entity and as a perception of the mind so it must assume both functions. The differences between these two functions are radical. We can illustrate this by associating “pure experience” with a simple good, such as a pen, an example provided by James himself: “[s]o far as [a pen] in the world is a stable feature, holds ink, marks paper, and obeys the guidance of a hand, it is a physical pen. That is what we mean by being ‘physical, ’ in a pen. So far, it is instable, on the contrary, coming and going with the movements of my eyes, altering with what I call my fancy, continuous with subsequent experiences of its ‘having been’ (in the past tense), it is the precept of a pen in my mind. Those peculiarities are what we mean by being ‘conscious,’ in a pen” (1905, p. 177).

The perception of “pure experience” in our mind occurs through appropriation, that is, a process where earlier experiences that are already in decision-makers’ minds accommodate new experiences. Hence, “pure experience” is accommodated in decision-making through plasticity, therefore, defining plasticity as a part of the appropriation process. Regarding Veblen’s understanding of the conspicuous consumer, we might say that the habits of the external world already internalized by the conspicuous consumer-which can be instincts-constitute the plasticity of new habits to come. The difference between internalized habits or instincts and “pure experiences” that have not (yet) been lived creates the separation between what is the decision-maker’s mind and what is part of the external world. It is an anti-cartesian perspective because it is not an ontological separation. Instead, it is a perceptive separation: what the consumer perceives that is a part of her/his decision-making vs. what she/he perceives as not being a part of her/his decision-making.

There is a key subject related to habits and inner impulses that should be given significant attention in the analysis of consumption, namely, an inner impulse generates a robust motivation to behave and, by behaving, consumers must interact with what allows behavior to take place. An inner impulse is an internal and personal force but to behave in line with this force, consumers should deal with goods-which work as “pure experience.” Simply by consuming goods, consumers can make inner impulses stop pressuring them to behave in a certain way. Removing the pressure to consume is the basis for consumer satisfaction.⁶

As we can extrapolate from James (1890b, 1904, 1905), relationships between inner impulses and goods are built according to an appropriation process. Through this process, consumers learn how to connect goods to inner impulses so they can attend the latter and alleviate pressure. As we saw above, appropriation is not related to the essence of inner impulses. Appropriation, in the consumer’s case, is the process of connecting inner impulses and goods. It is a way to secure the satisfaction generated by eliminating an impulse to behave in a certain way by behaving in that way (James, 1890b, p. 423). Hence, it is possible to argue that appropriation means that there is an impulse-good connection. This connection does not exist from the beginning and can change over time or can be rigidly fixed because it is mediated by plasticity. It is a matter of how consumers learn to put their inner impulses into practice-it is a matter of a habit.⁷

For Dewey (1921), the blindness of inner impulses does not create a problem with decision-making because inner impulses become organized into almost any behavioral disposition. As stated above, this organization of inner impulses into disposition takes place through the appropriation process. Hence, such dispositions are learned through the interactions of the consumer with the world around her/him (see Dewey, 1910a, 1921). Indeed, James (1890b) stresses that appropriation is associated with the habitualization of how one puts impulses into practice, that is, how one creates or supports an impulse-good connection. James (1890b) adds a key idea to follow this logic, namely, that habits can inhibit inner impulses: “[a] habit, once grafted on an instinctive tendency, restricts the range of the tendency itself, and keeps us from reacting on any but the habitual object […]” (James, 1890b, p. 395) and “[i]n civilized life the impulse to own is usually checked by a variety of considerations, and only passes over into action under circumstances legitimated by habit and common consent” (James, 1890b, p. 422).

Dewey (1921, p. 125) contributes to this discussion by affirming that: “Man is a creature of habit, not of reason nor yet of instinct [inner impulse].” This relationship between inner impulses and habits reinforces the idea in Veblen’s approach, that there are no “pure impulses” but rather habits built under the influence of one’s association with others who already hold habits (the evolution of habits in a society relies on this logic). The use of such a concept of habits is a strong influence of Dewey on Veblen. Dewey is emphatic in his definition of habit: “[…] we must protest against the tendency in psychological literature to limit its meaning to repetition” (Dewey, 1921, p. 41).⁸

Regarding Veblen’s notion of instincts, it is important to highlight that appropriation is already part of instincts. From Veblen’s perspective, instincts are composed not only of inner impulses but also of impulse-good connections.⁹ An essential point regarding Veblen’s conspicuous consumer is that impulse-good connections are social issues. Consequently, satisfaction is also a social issue in Veblen’s analysis. Dewey (1921, p. 89) highlights this logic, affirming that “[i]mpulses although first in time are never primary in fact; they are secondary and dependent,” as other people show consumers how to deal with the external world. “The meaning of native activities is not native; it is acquired” (Dewey, 1921, p. 90). At the end of this process, they are socially created habits.

The pragmatist philosophical foundation offers interesting insights into how socially created habits generate the logic of the conspicuous consumer. Among pragmatist contributions, Peirce’s logic of doubt-belief constitutes an important reference for this discussion, which will be explored in the next section.

3. CHARLES PEIRCE’S BELIEFS AND DOUBTS

The continuity or even the compatibility between James and Dewey’s version of pragmatism and Charles Peirce’s perspective is highly disputed. Although James indicated Peirce as the founder of pragmatism, the last developments of Peirce’s thought, encompassed by his evolutionary metaphysics, were very different from James and Dewey’s philosophy. Two of Peirce’s papers, “The Fixation of Belief” (1877) and “How to Make Our Ideas Clear” (1878), are known, as James (1898) indicated, as the works that founded pragmatism.¹⁰ Conversely, in a series of three papers published in The Monist in 1905, Peirce explicitly separated his ideas from those of other pragmatists and even created a new name for his philosophical standpoint (Apel, 1967, pp. 81-83). From the perspective of the history of ideas, we must emphasize that any work aiming to offer a pragmatist perspective on a specific subject, as ours, needs to clarify this late separation between Peirce’s pragmatism and the ideas propagated through the works of James and Dewey.¹¹

In Peirce (1877), we find two central concepts of his theory of inquiry: belief and doubt. The belief-doubt theory was first created by the psychologist Alexander Bain (1818-1930), whose ideas were initially propagated within the Metaphysical Club and its members by the jurist Nicolas St. John Green¹². According to Bain (1859), belief is defined as “essentially related to Action, that is, volition […] Preparedness to act upon what we affirm is admitted on all hands to be the sole, the genuine, the unmistakable criterion of belief.” Peirce (1877) absorbed this definition and expressed belief as a disposition to behave according to a conviction in the results that a specific belief entails. On the other hand, genuine doubt arises from the interruption of belief and the emergence of a sensation of irritation of the mind. According to Bain (1859), doubt is a state of mind “of discomfort in most cases, and sometimes of the most aggravated wretchedness.”

Influenced by Darwin’s discussion on social feelings in animals and humans (Darwin, 1872), Peirce indicated that human beings naturally tend to search for an agreement with the widest possible community. As social animals, humans are naturally inclined to resolve the disagreements among them, to move from fragmentation and conflict toward conformity, a behavior that he termed “social impulse.”¹³ Social impulse explains the social character of belief from Peirce’s perspective.¹⁴ Human beings share beliefs as a way to handle doubt; it is an evolutionary feature that connects the psychological perspective of human behavior to a social conception of logic (Fitzgerald, 1968).¹⁵

Based on this short description of the connection between Peirce’s concepts of belief and doubt, we can already establish some insights to understand conspicuous consumers’ decision-making. In Section 2, we stressed that, to achieve the satisfaction of being free from an inner impulse to behave in a certain way, a consumer acquires goods. The procedure through which consumers build their acquisition of goods relies on appropriation. Appropriation connects inner impulses to goods, assisted by habits, and building instincts (in a Veblenian sense). We can find a missing link in our analysis, which this section intends to clarify. For Veblen, institutions are matters of the decision-making environment, composed of established “habits of thought common to the generality of men” (Veblen, 1909, p. 626). Our missing link is an explanation of how elements of the external world become part of conspicuous consumer decision-making, that is, how conspicuous consumers, in fact, acquire habits.

To clarify the missing link, we must consider that a decision-making environment is composed of generalized habits. This decision-making environment is perceived by consumers through the behavior of others. People learn how to put their inner impulses into practice by understanding others’ behavioral disposition since there is a social impulse that promotes conformity. Thus, when one experiences some difficulty in decision-making, observation is the first step to deal with this difficulty (see Dewey, 1910a). Other people introduce consumers to possible paths of behavior by offering up for observation their appropriation and consequent impulse-goods connections. Through observation, goods are introduced, directly or indirectly, by people other than the consumer, who deal with the same or a similar impulse to behave in a certain way. Extrapolating Peirce’s perspective on human logic, we can say that consumers observe others in the same decision-making environment and can associate beliefs and doubts with observed behavior (Peirce, 1877). For Peirce (1877), the possibilities to learn how to behave rely on one’s beliefs or doubts associated with what is observed.

When a consumer observes a behavior and comprehends it as one which should be adopted for her/him to be free from the impulse to consume, a belief is established-relating the consumer’s impulse to behave in a certain way to the good consumed by the person being observed. A belief can be understood as the first step in the appropriation process, which culminates in the establishment of an impulse-good connection. Consequently, the core of a belief is the notion that an inner impulse to consume would be satisfied by the consumption of a specific good. If a belief is established, the observed person becomes a model of behavior. However, beliefs are not the only result of observing the consumption of others; a consumer can also end up finding doubts through the same process.

A doubt occurs if the consumer perceives that there is no connection between what is observed and what she/he understands as the good that frees her/him from the impulse to consume. Hence, from the consumer’s perspective, a doubt means it is not possible to establish the instinct-good connection of appropriation¹⁶. No belief or doubt remains strictly firm over time, due to plasticity. Hence, through time, a belief can become a doubt¹⁷. On the other hand, if a potential belief is found, the consumer may adopt it. Doubts generate irritation and beliefs imply satisfaction (this satisfaction relies on the establishment of the appropriation, an impulse-good connection). According to Peirce (1877, p. 113), “[o]ur beliefs guide our desires and shape our actions.” The irritation of doubt relies on ignorance regarding how to channelize inner impulses to behave in a certain way; in other words, there is no impulse-good connection. This irritation generates a struggle to establish beliefs (Peirce, 1877)¹⁸. The disturbance generated by doubts culminates in the tendency of decision-makers to be attached to beliefs (Peirce, 1877).

The irritation of doubts motivates the fixation of beliefs. Through interaction with others, a potential belief can not only be found but also reviewed. During the observation process, through which consumers adopt beliefs, beliefs can be replaced, reviewed, or reinforced¹⁹. Any belief that does not result in satisfaction is questioned by a doubt and can be later rejected. The rejection of a belief takes place because a doubt is created in its place. The doubt ends when another belief is established (Peirce, 1877). The result of such a process is the continuation of the doubt or the creation of a new belief. A belief may remain for a long time; however, in this case, the belief offers satisfaction to the consumer over time, reinforced by plasticity. The continuous satisfaction implies a reinforcement of the belief. When a belief is reinforced, the relevant behavior is more likely to recur. According to James (1890a), any sequence of behavior that is frequently repeated tends to be preserved. Hence, a reinforced belief implies a behavior that is widespread in a society. In this case, models of behavior that inhabit the social environment establish a reference for consumers, who seek to behave accordingly. In this process, some consumers succeed in establishing a belief and their behavior becomes a model itself. As a consequence, there is a tendency of existing models to be reinforced in a snowball effect.

This snowball effect of models means that beliefs are disseminated in a society and establish the logic of a behavior in a consumer’s decision-making, which is the basis of habits. According to Peirce (1877, 1878), a belief is the nature of a habit, and the establishment of a habit is the essence of a belief. As a belief is introduced by others, this explicitly reveals that the habitualization of a belief is a social issue. The habitualization of a belief functions as a guiding principle for behavior (Peirce, 1877): once it works, it may work again in the same or a very similar scenario. Peirce (1877) reinforces this argument by highlighting that the logic of individualistic trial and error is not the procedure through which a consumer learns how to behave; it is social learning. A behavior that occurs in a society is always shared (Dewey, 1910b). In Dewey’s words: “[i]t is not an ethical ‘ought’ that conduct should be social. It is social, whether bad or good” (Dewey, 1921, p. 17, emphasis in the original).

In summary, in our analysis, inner impulses are converted to behavior through consumers’ socialization. Such behavior relies on the observation of others’ behavior, which, in turn, becomes a belief. A belief is the first step for the consumer to build an appropriation or a relationship between an inner impulse-an internal motivation to consume-and a good. The generalization of beliefs in a society culminates in habits spreading socially in the form of institutions.

The role of beliefs and the appropriation process based on this logic is a pragmatic philosophical reading of Veblen’s conspicuous consumer. Here, beliefs are inserted in the analysis to better comprehend the logic of conspicuous consumers and, consequently, the emergence of institutions. Veblen himself theorizes about instincts, habits, and institutions. Section 2 emphasized the discussion on instincts, and this section highlighted how social habits become part of consumers’ logic. Institutions are the focus of Section 4, which explains the larger role of the Veblenian notion of conspicuous consumption in the analysis and presents Dewey’s notion of inculcation.

4. HABITS, INSTITUTIONS, THE CONCEPT OF GOODS, AND INCULCATION

The connection between instincts, habits and institutions is the central feature of institutionalist and pragmatist perspective on human behavior. Moreover, putting emphasis on the plasticity of instincts, our perspective on consumer behavior offers a different perspective on the biological importance of instincts (as inner impulse). The Pragmatist and Institutionalist reading of consumer behavior is much more grounded on the habitual and institutional nature of inner impulse when compared to perspectives the highlights “tropisms” or “reflexes” as a stable instinctive foundation.²⁰ Dewey (1921) reinforces the arguments addressed above by stressing that the necessity for cooperation between the consumer’s inner elements and the environment is central to understanding the place of habits in decision-making. This cooperation is successful when the inner impulses to consume are satisfied. However, Dewey (1921) also offers additional contributions to our analysis by affirming that habits not only assist the satisfaction of inner impulses-in the sense used in this study-but also create other impulses to behave in a certain way (to consume in our analysis). Hence, there are inner impulses and social (habitual) impulses to consume. A key issue for Veblen, as previously highlighted, is that social impulses and inner impulses overlap. Habits, as stated by Veblen, manifest themselves through the association of the environment with inner impulses, but habits are not reduced to this association alone. Habits hold motivators of behavior that are not related to inner impulse motivations. In short, because of inner impulses, consumers acquire socially generalized habits, and by acquiring those habits, they also acquire new motivations to consume.

Following this standpoint, Dewey (1910a) affirms that habits are interactions of elements in the make-up of a decision-maker with elements from the biased traditions of the external world. Habits are influence of past knowledge on current knowledge in such a manner that the past is a condition, but it does not determine the present decision-making. However, habits inculcate in decision-makers’ minds a way to understand the external world, and concepts are inculcated in decision-making by habits (Dewey, 1910a). It is not a repressive process but a learning process which relies on appropriation and plasticity. Socially established ideas, including the ideas regarding goods and their execution (i.e., acquiring a specific kind of good), rely on habits and what they can inculcate (see Peirce, 1878; Dewey, 1921). Biased tradition and past knowledge manifest themselves in institutions, and their association with habits relies on the habit-institution relationship (as stated in Veblen’s social theory). Consequently, the fixation of a belief by habitualization occurs when the standard tradition contained in an institution is accepted by the thoughts of the decision-maker (Peirce, 1877).

A key issue concerning habits is that they demand a certain kind of behavior, but behavior can be associated with certain kinds of interests that are inculcated in consumers’ decision-making (Peirce, 1877). According to Veblen, these interests differ from the necessity of the consumer to satisfy inner impulses. Such necessities are social and presented by institutions (put into practice by conspicuous consumers through behavior according to habits). Habits and institutions carry images, feelings, conceptions, or other representations that can be used as a sign by the decision-maker. Taking consumption into account, attachments are usually associated with the concepts of goods. In an institutionalized world, appropriation is not objectively associated with the connection between an inner impulse to consume and a good to satisfy this impulse. The association relies on a socially built meaning of a good, an institutionalized concept of a good.

In a decision-making environment composed of institutions, the result of a search to satisfy inner impulses occurs through the role of institutionalized procedures in consumers’ decision-making. Consequently, appropriation relies on a connection between inner impulses and the concepts of goods. The latter are shared and learned collectively through habits and institutions; any good present in a modern society is attached to an institutionally shared meaning. That is why habits and institutions are stronger than inner impulses in Veblen’s decision-making approach. For Peirce (1868), a conceptualization is a state of mind that carries a meaning and logical understanding. This understanding must be consistent regarding the concept of a good and what this concept generates for the consumer, namely, satisfaction-social satisfaction.

Veblen (1899) stresses a particular type of institution as extremely important in the inculcation of the concepts of goods, namely, the leisure class, which is an upper socioeconomic class, particularly in material terms. As highlighted by Veblen (1899), leisure classes are by custom exempt or excluded from practicing industrial occupations. Members of the leisure class are employed in tasks associated with a degree of honor. Status is an intrinsic part of the leisure class. Not only tasks but also situations and goods that are characteristic of the leisure class become powerful signs of status. According to Dewey (1934), status relies on a “long history of unquestionable admiration,” which is implied in institutionalized concepts. A good that achieves status signifies that this good reflects an esthetic that has been established socially and evolutionarily (see Dewey, 1934).

As stressed by Veblen (1899), the leisure class can be found in its best development in modern societies because, in these societies, distinctions between classes and the classification of groups are clearly observed as a result of employment differences. Dewey (1921) reinforces Veblen’s argument by affirming that it is possible to find the influence of social factors in creating personal characters in everyday life. One of these factors, Dewey stresses, is the habit of making social classifications, such as features attributed to the rich and poor and membership to a specific group. For Veblen (1899), the evolution of culture generates a leisure class and a related social classification at approximately the same time as the beginning of the private ownership of goods. The private ownership of goods is the result of conventional beliefs perpetuated within the social structure. The central point is that the leisure class and ownership of goods emerge simultaneously. Both arise from the desire of successful people to exhibit their prowess. Hence, the ownership of goods is not simply about property or personal consumption; it is also about convention and demonstrating the use of these goods. Consistent with this idea, the property system is installed gradually (Veblen, 1899). In Veblen’s social theory, it is the biased tradition of private ownership that inculcates notions of honor and status based on goods.

According to Veblen (1899), wherever there is private property, people are distinguished by the possession of goods, which is an efficient way to express wealth socially. Veblen (1899) stresses that in a society in which almost all goods are private property, the necessity for members of the poorer class to earn their livelihoods is a powerful and constant incentive. As soon as their subsistence is guaranteed, emulation becomes a key guideline for their behavior (Veblen, 1899). Consequently, the existence of the leisure class, in Veblen’s theory, pertains less to collective classification and more to social selection. This social selection occurs based on one’s capacity to emulate the way of life of the leisure class. Dewey (1939b) reinforces this point by stressing that there is satisfaction stemming from the sense of union with others. This satisfaction comes from what is communicated to others. The reward of this satisfaction is associated with an institutionalized sense of social fulfillment (Dewey, 1930).

For Veblen (1899), this social fulfillment relies on the consumption of goods because of their status, which, in turn, is guided by the emulation of the leisure class. Dewey (1910a) emphasizes this point by stressing that social status, which is associated with the position that people think they occupy in a society, plays a key role in their decisions. Goods regarded as objects acquired by the leisure class become a strong signal of success. Consequently, in Veblen’s view (1899), social selection occurs based on people’s capacity to emulate behavior based on the way of life of the leisure class. According to this logic, Veblen’s conspicuous consumer seeks to consume like the higher social class wherever possible.

By emphasizing a social emulative logic of consumption mediated by the leisure class, Veblen’s approach regarding consumption relies strictly on its feature of conspicuousness. Conspicuous consumption can be understood as wasteful monetary expenditure motivated by social esteem. According to Trigg (2001), Veblen’s conspicuous consumption means spending money on goods to display wealth to other members of society. Shipman (2004) emphasizes that the central aspect of Veblen’s conspicuous consumption is the connection of goods to the impulse to “waste” despite exhibiting “taste.” The impulse to waste can be understood as a taste that involves social learning through the institution of the leisure class (Ramstad, 1998). The conspicuous consumer buys goods for the status they represent, based on wastefulness, and, thus, pays for particular features of these products. By this logic, there exists an understanding of how one can seek status, which can be expressed in concrete, objective ways: emulating the behavior of the leisure class by buying the goods its members buy (Veblen, 1899).

According to this logic, satisfaction is institutionally established and inculcated in consumers’ decision-making through habits. By emulation, consumers learn which goods should be included in their decision-making and how to acquire them. According to Veblen’s theory, in societies in which subsistence is guaranteed, there is a tendency for consumption to be a result, not so much of physical demands, but social demands. Thus, satisfaction and its absence are not physical outcomes. Dissatisfaction is a mental phenomenon; it is the result of failing to follow emulative logic, and in this case, the consumer can understand the institutionally evolved concepts of goods but cannot satisfy her/his impulse with the relevant goods (for example, because of a lack of financial resources). Through her/his capacity to put habits in practice, the conspicuous consumer shows her/his power, which is a social power.

5. FINAL COMMENTS

Veblen’s understanding of conspicuous consumption relies on the significance of habits and institutions in consumer decision-making. Veblen’s approach has offered an innovative alternative for understanding human behavior, replacing the marginalist rational calculator with a biological, cultural, and historical being. Moreover, Veblen’s perspective was related to his pragmatist philosophical references. Given this background, our study addressed selected elements of Veblen’s philosophical background to revisit his understanding of conspicuous consumption. Our starting subject was the process through which a conspicuous consumer perceives a habit. This analysis guided our discussion of the Veblenian notion of instinct with the assistance of William James’s concept of appropriation. Veblen’s understanding of the conspicuous consumer considered appropriation-the connection between an inner impulse to consume and a good-as a part of instinct. Conversely, the appropriation process is not an individual one; it is necessarily social.

According to Peirce’s perspective on social impulse, by observing others, a conspicuous consumer can associate beliefs or doubts with the behavior of others. The result of a belief is the satisfaction of being free from the pressure to consume, whereas the result of a doubt is irritation at continuing to experience such pressure. Hence, consumers tend to establish beliefs by observing others. A conspicuous consumer can replace, review, or reinforce her/his beliefs. A reinforcement of one’s beliefs culminates in habits that inhibit and change one’s inner impulses to consume. As they are based on observation, habits are social phenomena that rely on generalized behavioral results.

Such habits occur within a community, and its institutions are outgrowths of those habits. Veblen stressed a key institution that is responsible for social classification and selection of people, namely, the leisure class-the higher social class in material terms. Consumption similar to that of the leisure class confers status and achievement of social esteem. The result is that satisfaction from consumption is a social product instead of the satisfaction of an inner impulse to consume. In this approach, Dewey’s notion of socialization and the inculcation of concepts by habits play a key role. Despite relying on some pragmatist thinkers’ relevant ideas in an attempt to reassess a key subject of Veblen’s theory-namely, his conspicuous consumer concept-this study does not exhaust all possible connections between Veblen’s social theory and pragmatism on this subject. We understand that pragmatist philosophy offers a rich theoretical and methodological reference to the researcher concerned with the nature and role of institutions and institutional dynamics. Pragmatism is historically and philosophically connected to Original Institutionalism, especially when used as a reference to the pioneer ideas of Thorstein Veblen.

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• 1
  We must remember that Veblen (1900) coined the word “neoclassical” mainly to refer to the ideas spread by the Marginalist Revolution.
• 2
  Peirce was a temporary lecturer at John Hopkins University from 1879 to 1884 (Liebhafsky, 1993).
• 3
  From his 1905 paper, “What Pragmatism is?”, Peirce began to call his philosophical perspective as “pragmaticism.” This was a reaction to the bad use of the term “pragmatism,” as Peirce (1905, p. 165) states: “at present, the word begins to be met with occasionally in the literary journals, where it gets abused in the merciless way that words have to expect when they fall into literary clutches [...] So then, the writer, finding his bantling ‘pragmatism’ so promoted, feels that it is time to kiss his child good-by and relinquish it to its higher destiny; while to serve the precise purpose of expressing the original definition, he begs to announce the birth of the word ‘pragmaticism,’ which is ugly enough to be safe from kidnappers.”
• 4
  Veblen (1884) is essential for one to perceive Peirce’s influence on Veblen’s writings as it describes precisely Peirce’s three fundamental principles of logic: (i) the supremacy of inductive reasoning, (ii) the mediating role of human apprehension, and (iii) the power of judgment of the human mind. These principles, through which Veblen describes Kant’s work, constitute evidence toward the affinity between Peirce and Kant regarding the elaboration of scientific hypotheses. The idea that such hypotheses are the result of the mediating role of the human mind must be highlighted here as a starting point to trace the connections between Veblen’s understanding of scientific inquiry and Peirce’s conception of human logic.
• 5
  For example, to acquire the habit of a healthy life suggests denying several types of behaviors, such as smoking, eating greasy food, and drinking beer on a daily basis. However, the habit of a healthy life also suggests participating in sports, eating fruit and vegetables, and drinking water regularly as desirable types of behavior. The habit of a healthy life as described here offers an illustration of behaviors that can and cannot imply a habit. This example does not illustrate Veblenian habits in a general sense, because not necessarily being implied by a behavior is only one feature of Veblenian habits. Later on, we consider the other features of habits according to Veblen.
• 6
  This sentence may suggest that the only source of satisfaction for a consumer is the end of her/his inner impulses’ pressure to consume but this is quite wrong from Veblen’s perspective. According to Veblen (1899), institutional pressures are important pressures a consumer must attend to so as to be satisfied. This issue is introduced later in this section and further emphasized in subsequent sections. In addition, since this study references satisfaction as a result of an inner impulse, it is important to highlight that Veblen rejects the utilitarian pleasure-pain decision-making logic (Argyrous and Sethi, 1996; Veblen, 1898, 1909). The passage below is usually quoted in the context of strong disapproval of the traditional economics-based approach to decision-making: “The hedonistic conception of man is that of a lightning calculator of pleasures and pains, who oscillates like a homogeneous globule of desire of happiness under the impulse of stimuli that shift him about the area but leave him intact. He has neither antecedent nor consequent. He is an isolated, definitive human datum, in stable equilibrium except for the buffets of the impinging forces that displace him in one direction or another … The later psychology, re-enforced by modern anthropological research, gives a different conception of human nature. According to this conception, it is the characteristic of man to do something, not simply to suffer pleasures and pains through the impact of suitable forces. He is not simply a bundle of desires that are to be saturated by being placed in the path of the forces of the environment, but rather a coherent structure of propensities and habits which seeks realization and expression in an unfolding activity” (Veblen, 1898, pp. 389-390).Veblen believed that an individualistic pleasure-pain reading of human behavior is not enough. From a Veblenian perspective, the socialization process adds other layers to decision-making. This study further clarifies this point.
• 7
  James (1890b) emphasizes that human beings’ motivation to behave in a certain way is like that of any other creature, and human beings’ inner impulses are as “blind” as those of other creatures.
• 8
  For Dewey (1921), repetition is not even the essence of habit. However, repetition can be an incident of many habits. An individual looking for a healthier life provides an example of a habit that is not associated with repetition. Foregoing sugar, fatty food, and smoking can be habits acquired by the individual. These habits do not imply repetitive behavior. For Dewey (1921), the essence of a habit is a predisposition to ways or modes of behavior. A habit means special sensitivity or accessibility to certain classes of stimuli.
• 9
  Veblen stresses some types of instinct. The main types are the instinct of workmanship, parental bent, and idle curiosity. However, given the goal of this study, Veblen’s specific types of instinct are not central to the analysis. The central issue is Veblen’s perspective on instincts and the manner in which they can influence consumer decision-making. For more information about the instinct of workmanship, parental bent, and idle curiosity, see Latsis (2009).
• 10
  Apel (1967, p. 54) indicates that Peirce (1877, 1878) expressed the ideas of Peirce’s earlier works: “Peirce had in fact already rather distinctly formulated the point that he later, for clarification, termed the ‘pragmatic maxim,’ before the discussions in the Metaphysical Club (winter 1871 to winter 1872). He did this, for example, in a passage in the 1869 essay, but the point was particularly unmistakable in the Berkeley review of 1871.”
• 11
  Our reference to Peirce’s ideas reflects this complicated relation with James and Dewey’s perspective. From a complementary viewpoint, our main references are exactly the foundational writings of the pragmatist school, that is, Peirce (1877) and Peirce (1878). Subsequently, we will restrict our analysis to the ideas of the “young Peirce.”
• 12
  The Metaphysical Club was a conversational group from 1871 to 1872, formed in Cambridge, Massachusetts, by Oliver Wendell Holmes Jr., William James, Charles Sanders Peirce, Chauncey Wright, John Fiske, Francis Ellingwood Abbot, Nicholas St. John Green, and Joseph Bangs Warner.
• 13
  It is important to note that Peirce’s perspective is rooted in Chauncey Wright’s philosophy, which combined positivist ideas with evolutionary Darwinism. In “Evolution of Self-Consciousness” (1873), Wright established a continuity line between animal instincts and human intelligence based on the role of adaptive behavior throughout history (see also Apel, 1967, pp. 56-57).
• 14
  It is important to indicate that the belief-doubt theory establishes the behavioral support of Peirce’s evolutionary philosophy. Peirce (1877) presents and criticizes three different methods that the human mind appeals to for fixing a belief. The first method is called “the method of tenacity” and refers to how the human mind is inclined to keep the beliefs it already has established, or defend these beliefs as a “steady and immovable faith,” and reject whatever beliefs it has already rejected. The second method is called “the method of authority” and refers to the moment when organizations and their institutions establish beliefs in human minds, as has happened in several moments in human history: “[t]his method has, from the earliest times, been more of the chief means of upholding correct theological and political doctrines, and of preserving their universal or catholic character […] Wherever there is an aristocracy, or a guild, or any association of a class of men whose interests depend, or are supposed to depend, on certain propositions, there will be inevitably some traces of this natural product of social feeling.” The third method is the Cartesian “a priori method,” where beliefs become firm because the propositions in question are guaranteed by the light of reason (implanted by God in our minds), which is independent of individual perspective or the institutional environment. For Peirce (1877), these three methods for forming a belief all have the same problem: they ignore an important evolutionary trace in human nature, “social impulse.”
• 15
  This behavioral disposition is the main support for Peirce’s “fallibilist” understanding of the logic of science. For more information, we refer the reader to Margolis (1998).
• 16
  Returning to our example of healthy life habits, a consumer may identify a bodybuilder as someone whose behavior should be classified as healthy. Hence, the bodybuilder is identified as a model of behavior and a belief is established. On the other hand, a consumer looking to establish healthy habits may view bodybuilders as athletes. Therefore, a bodybuilder would not be a model of behavior because the consumer does not desire to be an athlete but simply wants to be healthy. Consequently, doubts occur through non-identification with a model of behavior.
• 17
  Let us suppose that a consumer identifies a bodybuilder as a model of behavior associated with healthy habits. Hence, the consumer builds beliefs that rely on impulse-good connections, such as a carbohydrate-rich diet. However, when the consumer starts such a diet, she/he may perceive that it is not as healthy as she/he believed. Consequently, the belief becomes a doubt.
• 18
  In our example, the consumer continues to search for behaviors associated with healthy habits but becomes irritated by the failure to find such behaviors.
• 19
  Dewey (1910a) introduces consumers’ thoughts into this logic. For Dewey (1910a), thought is usually associated with beliefs, which rely on some evidence or testimony. Thoughts constitute beliefs that rely on some basis, usually an observational one (Dewey, 1910a). A thought can be a supposition that can establish a belief, transform a belief into a doubt, or reinforce a belief. According to Peirce (1878, p. 132), “[…] the production of belief is the sole function of thought.” According to Peirce (1892), there are three sources of one’s developing thoughts: (1) the formation of habits based on beliefs, (2) the abandonment up of habits due to doubts, and (3) the combination of different beliefs resulting in a new variation. The combination of different beliefs develop according to Darwinian evolution (Peirce, 1892, p. 257). The combination of (1) and (2) implies that beliefs are changed by doubts. When a belief is questionable, there is a struggle between the belief and the doubt about it. James (1906) reinforces this point by highlighting that consumers’ experiences offer ways to build a behavioral process that generates the possibility for substituting a belief.
• 20
  See Hodgson (1998b) and Hodgson (2004b) for an alternative perspective.
• *
  Note: A previous version of this paper was presented at the 46th ANPEC meeting, Rio de Janeiro, December 2018. The authors thank the participants in this event. This research has been supported by the Conselho Nacional de Desenvolvimento Científico e Tecnológico (CNPq).

• 21
  JEL Classification: B15; B52.

Publication Dates

• Publication in this collection
  20 Feb 2023
• Date of issue
  Jan-Mar 2023

History

• Received
  22 Apr 2021
• Accepted
  16 Dec 2021