Leisure Class

ECONOMIC theory holds that growth is driven by needs and desires. In modern capitalism, desire often contributes the largest share of the growth cycle. From this emerges what Thorstein Veblen calls the “leisure class,” a social group that does not engage in productive work but lives off rents, asset investments, and status.

The Theory of the Leisure Class is a sharp critique by the Norwegian-American economist of neoclassical logic that assumes the economy is driven by human rationality. Published in 1899, the book effectively shows that the economy is often propelled by status display, prestige, and social symbols. Physical labor is deemed inferior, while not working becomes a mark of prestige.

People then race to circulate money through investments and live off rents to finance vacations, social activities, and expensive hobbies. When this leisure class becomes the backbone of the economy, growth turns inefficient because productivity is low and it tends to give rise to mass consumerism.

That mass consumerism imitates other social classes seeking to emulate it. Commodification follows, spreading a distorted way of thinking. Education is no longer considered as the pursuit of knowledge but as a path to higher social status; fashion and lifestyle trigger endless shopping cycles; and art is not meant to cultivate the mind but is reduced to a matter of status.

In short, consumption detached from real needs underpins the modern economy. In today’s age of social media, “Veblen goods”—a term for pleasure commodities—take shape in conspicuous luxury, flexing through branded goods and costly holidays, and fuel the fear of missing out, or FOMO.

Veblen’s critique from more than a century ago grows ever more relevant in understanding contemporary capitalism. In Indonesia, consumption becomes the main engine of the economy. In its stagnation, this leisure class props up growth over the past year.

Economic growth of 5.03 percent rests on consumption that largely comes from this pleasure economy. Tourism, hotels, and spending on costly hobbies drive expansion. Meanwhile, exports and investment stagnate, leaving the economy sluggish, purchasing power weakened, and urban unemployment rising.

In other words, the beneficiaries of this leisure economy form only a small segment of the upper-middle class. The economy becomes less inclusive and more unequal because the circulation of wealth fails to reach all social classes. This urban bias is dangerous if prolonged, as it risks triggering social segregation.

The South Korean philosopher Byung-Chul Han, who teaches in Germany, analyzes the impact of this “leisure class” further into the psychological condition of modern society. He argues that capitalism transforms a disciplined society shaped by the agricultural revolution into an achievement society. Prestige breeds relentless individual competition, trapping us in what he calls a “burnout society,” or a fatigue society.

That fatigue can spread everywhere. Democracy loses meaning as political participation becomes little more than symbolic representation in general elections. Social movements lose appeal because people are busy chasing personal dreams. The Slovenian philosopher Alenka Zupančič calls this phenomenon fetishistic disavowal—a lack of empathy not because of ignorance, but because of indifference to awareness.

Worse still, through emulation and commodification, other social classes are provoked to imitate the leisure class without adequate financial capacity. On social media, a short video circulates of an older sibling scolding a younger one who mortgages their parents’ house to treat friends to a holiday in Lombok, West Nusa Tenggara. In their exchange, the younger sibling feels no guilt about pawning the house, driven by the desire to celebrate a joyful birthday, as so many do on social media.

The data show this vulnerability. Consumer credit surges, and the value of online loans hits a new record, accompanied by a rise in bad debt. This week’s cover story examines the leisure economy that underpins growth this year. The economy becomes unproductive because its foundation is fragile.