Invidious Distinction and Economies

by Zdravka Todorova
post # 5

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Design for Deer Hunting Mural in the Cabaret Theatre Club, 1912, by Spencer Frederick Gore (1878–1914), oil & chalk on paper, Yale Center for British Art [Public Domain].

Invidious distinction is a highly relevant concept when studying economies and addressing economic problems. “Invidious Distinction” is a term used by American economist Thorstein Veblen (1857-1929) to describe the concept of social stratification and economic hierarchy that can apply to economic activities, including consumption, leisure, and labor, as well as to politics, interpersonal relations, and social norms and beliefs.

Examples of invidious distinctions include the subordinate-master signification in socio-economic relations and the treatment of nature; the organization of institutions to uphold and protect supremacy, and the exercise of domination; ownership based on exploitation and force, as well as seemingly harmless status-driven practices like conspicuous consumption, conspicuous leisure, and conspicuous waste of time and resources.

All of these social processes involve intentional individual actions, and form and sustain oppressive institutions that harm and exploit people over extended periods. Invidious distinction is not solely about individual psychological tendencies and behaviors, although it includes them.

Rather than being exceptions, processes of invidious distinction are embedded in the development and functioning of economies, strengthening existing vested interests. Invidious distinction also leads to public persuasion and mobilization for politics, aggression, and authoritarian rule. 

Invidious distinction involves dehumanization, aggression, violence, and exploitation. Slavery, racism, sexism, misogyny, aggressive or superiority nationalism, ableism, ageism, public austerity, and other cumulative and systemic outcomes are rooted in processes of invidious distinction. Each involves socially shared and cultivated notions of superiority and domination, may be based on the exploitation of groups, and justifies forms of exploitation, marginalization, dehumanization, and/or aggression.

Invidious distinctions have serious consequences for those who are exploited and marginalized. Moreover, these effects worsen during crises.

All of this makes invidious distinction a key, even central, topic when examining the evolution of economies and addressing economic issues.
 
Hierarchical Division of Labor and Ownership

One layer of invidious distinction, discussed here, is the hierarchy between “exploit” and “drudgery” work, which carries social respectability or low status. This distinction is fundamental to the hierarchical division of labor, the evolution of ownership, and the distribution of wealth.

Necessary drudgery work may be essential, but it is socially undervalued. Historically, it has been assigned to slaves, servants, later to low-income workers, marginalized groups, and unpaid labor. Most of this work is organized with little or no individual autonomy and is subject to significant surveillance and direction. The advancement of machine processes, from assembly lines to computerization and AI, tends to expand the range of occupations subject to this treatment.

Exploit, on the other hand, is defined as "getting something for nothing” (as Veblen simply calls it) and occurs through predation and domination. This ultimately affects the social division of labor and many occupations, sectors, and behaviors that are governed by these goals gain higher status.

Activities and relations of exploit and acquisitiveness ensure the growth of vested interests, including intangible assets and absentee ownership that claim a portion of the socially produced surplus of output and knowledge pool.

Current distribution of wealth exhibits trends that cannot realistically be explained by work effort, thriftiness, prudence, productivity, education, virtue, belief, or discipline. Further, factoring in historical social stratification, such as racial disparities in home ownership wealth, makes it impossible to ignore the impacts of invidious distinction over time.

At the same time, exploitation is reinforced by and fosters social persuasion about the inevitability of current wealth distribution, the usefulness of dominant classes, and the public virtue of hierarchical economies. This includes folklore and theories about how competitive markets work, which are more relevant to the handicraft commerce era and small modern enterprises than to today's largely concentrated economy.

Today’s Technology, Workers, and Top Classes 

The status aspect of division of labor influences occupational structures, wages, work conditions, and work autonomy.

Today, technological changes aim to automate more high-status jobs that involve abstract and creative tasks, along with repetitive or fully automatable work. Refer to the Anthropic report on early evidence of AI effects on labor markets. The report discusses gaps in AI's theoretical occupational scope, actual implementation, and occupational displacement.

Despite theoretical and practical gaps in AI implementation and job displacement, we can expect competitive attitudes in business and invidious distinctions in organizational management to lead to disruptions and job reorganization in that direction.  Some of these disruptions aim at cost-cutting, with an industrial plan to continue the going concern. Yet others are myopic and ceremonial, seemingly driven by emulation and self-interest among managers, casting doubt on the going concern.  Both of these types of disruptions entail an invidious distinction.

Perhaps, as a result, the hierarchical occupational stratification described above could be shifting toward a downward flattening of most workers’ socio-economic positions. At the same time, the wealth gap between all workers and the wealth class will be preserved and most likely widened, with the flatter working class being socially and economically further down the ladder, experiencing a greater distinction from the dominant classes.

One of these dominant classes includes the top managerial-capitalist and absentee owners' class. Their role involves overseeing and directing production to some extent, though in a centralized way and driven by financial motives that compromise various aspects of production's serviceability (in terms of quality and quantity).

The second upper class is a new form of moneyed leisure class, whose economic position is useless for producing goods, except indirectly by supporting and guiding social activities through philanthropy. Many of these activities are socially progressive, forward-thinking, and life-saving. Others may aim to maintain existing inequalities. Incidentally, at their core, these socially oriented functions are linked to concentrated wealth only through the social arrangements of vested interests and are ultimately grounded in invidious distinction. With a different distribution of wealth, such socially oriented activities can be carried out (as they are, though on a smaller scale) in a decentralized manner by communities without the conspicuous machinations of a leisure class.

 
Invidious Comparison, Emulation, and Conservatism 

The position of exploit not only ensures the avoidance of necessary, low-status drudgery but also enables conspicuous consumption and leisure on a significantly larger scale than most.  Such activities offer higher levels of socially exclusive engagement, consumption, and leisure, as well as the ability to control and direct resources or command others.

Activities and behaviors related to exploitation are emulated throughout the economic hierarchy on a smaller scale and in different kinds, influenced by affordability and comparisons with closer social groups. Therefore, pecuniary emulation also involves those who cannot participate in economic exploitation, which is the majority of the population.

Regarding this point, two things should be considered, all of which relate to conservatism.

First, given a limited social position for engaging in economic exploitation, attention and energy can be directed toward social control and the blaming of social groups. This supports an invidious distinction in society and the hierarchical economic order. The means include demagogy not concerned with truth at all, and political propaganda that distorts the truth, neither of which addresses real economies and wealth distribution. Social media enables demagogy and propaganda significantly by amplifying inaccuracies and hate, isolating people, and creating echo chambers.

Second, exploit can happen outside of market interactions. Therefore, predation, invidious distinction, and oppression occur within various economic relations, such as non-market obligations, gifts, tribute, and sacrifice. These can be aimed at: 1) gaining income streams by exploiting unequal personal relationships; 2) lowering costs and reducing monetary commitments through unpaid labor driven by social norms of duty; or 3) obtaining non-monetary control through paternalistic, subordinate, and patriarchal relationships at work, home, and in communities. These provide false avenues for coping with economic subordination while harming people.

Consequently, emulation based on invidious comparison entails not only consumption habits but also social beliefs and attitudes. The process of emulation tends to encourage conservatism - the desire to preserve hierarchies and exploitation, even when people themselves are subjected to those invidious processes and inequities.
 
 Non-Invidious Processes 

Nonetheless, the history of humanity is a record of collective processes that support the survival of interests, behaviors, and social activities not based on invidious distinctions. These are aimed at sustaining the life process, promoting democratization, fostering solidarity toward non-invidious goals, cultivating empathy, and reducing ceremonial hierarchies and challenging the ideologies that reinforce them.

Examples of common non-invidious processes include progress in widespread literacy, human and labor rights, women’s legal, political, and social freedoms, abolitionist and civil rights movements, consumer protection, social security, public education, and anti-discrimination laws in lending and housing. These are among many historical processes that have expanded equity, increased public participation, and reduced marginalization, thereby promoting human development for everyone.

To the extent that non-invidious processes and institutions are restricted, attacked, or co-opted to pursue invidious distinctions, there exists a deeper “enduring tension” between the public interest of the “common man” and “vested interests” governed by the top wealth classes. This tension is misconstrued as something else, with no explanatory power for the real issues within economies.


Cite this Blog:
Zdravka Todorova. March 14, 2026. “Invidious Distinction and Economies.” www.ztodorova.net
 
 
Recommended Used Readings
 
Distributional Financial Accounts, “Shares of Wealth, by Wealth Percentile Groups,” Release Tables, FRED, Federal Reserve Bank of St. Louis
 
"Position and Possessions: Stratification Economics and Intergroup Inequality." By William A. Darity, Jr. Journal of Economic Literature, vol. 60, no. 2: pp. 400-26, 2022. DOI:10.1257/jel.20211690

“Labor Market Impacts of AI: A New Measure and Early Evidence” by Maxim Massenkoff and Peter McCrory. Anthropic (March 5, 2026)

“We’ve been Here before, and we know what Comes Next: White Supremacy has Always been Used to Usher in Massive Economic Inequality.” By Kyle K. Moore, Economic Policy Institute, Working Economics Blog (Feb 24, 2026).
 
Ch 8: “Class Theory, Income and Wealth Distribution,”  Institutional Economics: Theory & Practice by James Sturgeon. Polity. 2025
 
“Social Processes of Oppression in the Stratified Economy and Veblenian Feminist post Keynesian Connections," by Zdravka Todorova. Journal of Post Keynesian Economics, vol. 47, no. 1, pp. 25-54, 2024. https://doi.org/10.1080/01603477.2023.2254504
 
Relevant Books by Thorstein Veblen:
The Theory of the Leisure Class: An Economic Study of Institutions. 1899.
The Vested Interests and the Common Man. 1919.
The Absentee Ownership and Business Enterprise in Recent Times: The Case of America. 1923.

University of Chicago Library, Special Collections Research Center. Portrait (photograph copy) of Thorstein Veblen (1857-1929) by the artist Edwin Burrage Child (1868-1937) [Public Domain]