Thorstein Veblen as the first professor of marketing science
In this article, Hamilton explains another element common to all institutionalist thought. Institutionalists consider human behavior to be learned and to be instrumental. They reject the hedonistic maxims of human behavior worked out by Jeremy Bentham over two centuries ago and used to purge Marx and his application of the labor theory of value from economics. Hedonism is outmoded, but it still is the foundation of neoclassical consumer theory. In neoclassical theory, hedonism is rational because hedonistic consumers maximize their pleasure and minimize their pain. But actual consumers are not led around so cavalierly by their feelings of pleasure and pain, explains Hamilton. They are far more rational in their instrumental pursuit of ends-in-view than the mechanical calculator of pleasure and pain found in neoclassical theory. Hedonism is still the base of neoclassical theory, Hamilton explains, because it supports the myth of consumer sovereignty, which, in turn, supports “the sanctity of the free market.” Veblen is the first professor of marketing science because he rejected all this silliness and explained consumer behavior in a straightforward manner. Veblen did the theoretical work necessary for John Kenneth Galbraith’s revised sequence to replace consumer sovereignty. Consumers use goods and services to achieve some end-in-view and to display their status. They do so in a cultural context, including manipulation by commercial advertisements.