The Theory of the Leisure Class

The Theory of the Leisure Class: An Economic Study of Institutions (1899) presents the evolutionary development of human institutions (social and economic) that shape society, such as how the citizens earn their livelihoods, wherein technology and the industrial arts are the creative forces of economic production. That such production of goods and services was not merely the means of meeting the material needs of society, but of earning profits for the owners of the means of production. That the industrial production system required the workers (men and women) to be diligent, efficient, and co-operative, whilst the owners (businessmen and businesswomen) concerned themselves with making money and with the public display of their accumulated wealth; and that such behaviours (conspicuous consumption and conspicuous leisure) survived from the predatory, barbarian past of the tribal stage of modern society.[2]

The sociology and economics applied by Veblen show the dynamic, intellectual influences of Charles Darwin and Karl Marx, Adam Smith and Herbert Spencer;[3] thus, his theories of socio-economics emphasize evolution and development as characteristics of human institutions.[4] Therefore, Veblen criticised contemporary (19th-century) economic theories as intellectually static and hedonistic, and said that economists should take accounts of how people behave, socially and culturally, rather than rely upon the abstractions of theoretic deduction to explain the economic behaviours of society.[3] Whereas neoclassical economics define people as rational agents who seek utility and maximal pleasure from their economic activities, Veblen perceived people as irrational, economic agents who pursue social status and the prestige inherent to a place in society (class and economic stratum) with little regard to their own happiness. That conspicuous consumption did not constitute social progress, because American economic development was unduly influenced by the static economics of the British aristocracy; therefore, conspicuous consumption was an un-American activity contrary to the country's dynamic culture of individualism.[4]

Originally published as The Theory of the Leisure Class: An Economic Study in the Evolution of Institutions (1899), the book arose from three articles that Veblen published in the American Journal of Sociology: (i) “The Beginning of Ownership” (ii) “The Barbarian Status of Women”, and (iii) “The Instinct of Workmanship and the Irksomeness of Labour” (1898–99),[5] which presented the major themes of economics and sociology that he later developed in works such as: The Theory of Business Enterprise (1904), about how incompatible are the pursuit of profit and the making of useful goods; and The Instinct of Workmanship and the State of the Industrial Arts (1914), about the fundamental conflict between the human predisposition to useful production and the societal institutions that waste the useful products of human effort.[6][7]

Moreover, The Theory of the Leisure Class is a socio-economic treatise that resulted from Veblen's observation and perception of the United States as a society of rapidly developing economic and social institutions.[4] Critics of his reportage about the sociology and economics of the consumer society that is the U.S. especially disliked the satiric tone of his literary style, and said that Thorstein Veblen's cultural perspective had been negatively influenced by his boyhood in a Norwegian American community of practical, thrifty, and utilitarian people who endured anti-immigrant prejudices in the course of integration to American society.[8][9]

In a stratified society, the profession of arms (military officer) is a leisure-class occupation.

Manufacturing is an economically productive occupation for skilled-labour worker in a stratified society. (Un patron, by Jean-Eugène Buland.)

Conspicuous leisure: The devout observance of religious ritual is an activity for the leisure-class woman. (L'offrande, by Jean-Eugène Buland, 1885.)

The stratified society

In the late 19th century, The Theory of the Leisure Class: An Economic Study in the Evolution of Institutions (1899) established that the economic life of a modern society is based upon the social stratification of tribal and feudal societies, rather than upon merit, that is to say, upon social and economic utility. Thorstein Veblen's anthropological examples indicate that many economic behaviours of contemporary society derive from corresponding tribal-society behaviors, wherein men and women practiced the division of labour according to their status group; high-status people practiced hunting and warfare, which are economically unproductive occupations, whilst low-status people practiced farming and manufacturing, which are economically productive occupations.

(i) Occupation

In a stratified society, the division of labour inherent to the barbarian culture of conquest, domination, and exploitation featured labour-intensive occupations for the conquered people, and light-labour occupations for the conquerors, who thus became the leisure class. Moreover, it was socially unimportant that low-status, productive occupations (tinker, tailor, chandler) were of greater economic value to society than were high-status, unproductive occupations (the profession of arms, the clergy, banking, etc.); nonetheless, for the sake of social cohesion, the leisure class occasionally performed productive work that contributed to the functioning of society, yet, such work was more symbolic participation in the economy, than it was practical economic production.

(ii) Economic utility

In exercising political control, the leisure class retained their high social-status by direct and indirect coercion, by reserving for themselves the profession of arms, and so withheld weapons and military skills from the lower social classes. Such a division of labour (economic utility) rendered the lower classes dependent upon the leisure class, and so established, justified, and perpetuated the role of the leisure class as the defenders of society against natural and supernatural enemies, because the clergy also belonged to the leisure class.

In the event, contemporary society did not psychologically supersede the tribal-stage division of labour, but merely evolved different forms of said division-of-labour-by-status. During the Mediæval period (5th c. – 15th c.) only land-owning noblemen had the right to hunt and to bear arms as soldiers; status and income were parallel. Likewise, in contemporary society, skilled labourers of the working class usually are paid an income, in wages, that is inferior to the income paid, in salary, to the educated professionals whose economic importance (as engineers, managers, salesmen, personnel clerks, et al.) is indirectly productive for the whole of society; income and status are parallel.

(iii) Pecuniary emulation

To attain, retain, and gain greater social status within their social class, low-status people emulate the respected, high-status members of their socio-economic class, by consuming over-priced brands of goods and services perceived to be products of better quality, and thus of a higher social-class. In striving for greater social status, people buy high-status products (goods and services) which they cannot afford, despite the availability of affordable products that are perceived as of lower quality and lesser social-prestige, and thus of a lower social-class. In a consumer society, the businessman was the latest member of the leisure class, a barbarian who used his prowess (business acumen) and competitive skills (marketing) to increase profits, by manipulating the supply and the demand among the social classes and their strata, for the same products at different prices.

Contemporary practices of barbarian-tribe consumerism

• The subjugation of women: Because women were spoils of war captured by raiding barbarians, in contemporary society, the unemployed housewife is an economic trophy that attests to a man's socio-economic prowess. In having a wife without an independent economic life (a profession, a trade, a job) a man can display her unemployed status as a form of his conspicuous leisure and as an object of his conspicuous consumption.
• The popularity of sport: In the case of American football, practicing the sport is socially and psychologically advantageous to community cohesion; yet, in itself, sport is an economic side effect of conspicuous leisure that wastes material resources.
• Devout observances: Organised religion is a type of conspicuous leisure (wasted time) and of conspicuous consumption (wasted resources); a social activity of no economic consequence, because a church is an unproductive use of land and resources, and clergy (men and women) do unproductive work.
• Social formalities: In contemporary society, social manners are remnants of the barbarian's formal, social practice of "paying respect" to one's socially powerful betters. In itself, etiquette has little value (practical or economic), but is of much cultural value in identifying, establishing, and enforcing distinctions of place (social stratum) within a social class; thus the practice of "Hail to the chief!" establishes a place for everyone, and establishes everyone in his and her place.

Socially-conspicuous economic behaviours

In the late 19th century, with The Theory of the Leisure Class: An Economic Study in the Evolution of Institutions (1899), Thorstein Veblen introduced, described, and explained the concepts of “conspicuous consumption” and of “conspicuous leisure” to the nascent, academic discipline of sociology. Conspicuous consumption is the application of money and material resources towards the display of a higher social-status (e.g. silver flatware, custom-made clothes, an over-sized house); and conspicuous leisure is the application of extended time to the pursuit of pleasure (physical and intellectual), such as sport and the fine arts. Therefore, such physical and intellectual pursuits display the freedom of the rich man and woman from having to work in an economically productive occupation.[10]

Moreover, from the conspicuous consumption of necessary, useful goods (food, shelter, clothing, etc.) that satisfied the requirements of physical survival, there emerged the conspicuous consumption of "Veblen goods", which, as defined by the pecuniary canons of taste of the leisure class, are consumer goods valued for being expensive to make, sell, and buy; ownership of Veblen goods communicates a superior socio-economic status, either of class or of stratum, or both.

In order to gain and to hold the esteem of men it is not sufficient merely to possess wealth or power. The wealth or power must be put in evidence, for esteem is awarded only on evidence.

— Thorstein Veblen, The Theory of the Leisure Class (1934 ed.), p. 36.[11]

The theses of The Theory of the Leisure Class across its fourteen chapters

• Chapter I: Introductory

The modern industrial society developed from the barbarian tribal society, which featured a leisure class supported by subordinated working classes employed in economically productive occupations. The leisure class is composed of people exempted from manual work and from practicing economically productive occupations, because they belong to the leisure class.

• Chapter II: Pecuniary Emulation

“The emergence of a leisure class coincides with the beginning of ownership” initially based upon marriage as a form of ownership – of women and their property – as evidence of prowess. As such, the material consumption of the leisure class has little to do with either comfort or subsistence, and much to do with social esteem from the community, and thus with self-respect.

The pecuniary canons of taste of the leisure class ascribe monetary and æsthetic value to an objet d'art, such as The Cross of Mathilde (ca. AD 1000), which realises conspicuous leisure and conspicuous consumption in one object.

• Chapter III: Conspicuous Leisure

Among the lower social-classes, a man’s reputation as a diligent, efficient, and productive worker is the highest form of pecuniary emulation of the leisure class available to him in society. Yet, among the social strata of the leisure class, manual labour is perceived as a sign of social and economic weakness; thus, the defining, social characteristics of the leisure class are the “exemption from useful employment” and the practice of conspicuous leisure as a “non-productive consumption of time”.

• Chapter IV: Conspicuous Consumption

Theoretically, the consumption of luxury products (goods and services) is limited to the leisure class, because the working classes have other, more important, things and activities on which to spend their limited income, their wages. Yet, such is not the case, because the lower classes consume expensive alcoholic beverages and narcotic drugs. In doing so, the working classes seek to emulate the standards of life and play of the leisure class, because they are the people "at the head of the social structure in point of reputability". In that emulation of the leisure class, social manners are a result of the non-productive, consumption of time by the upper social classes; thus the social utility of conspicuous consumption and of conspicuous leisure lies in their wastefulness of time and resources.

• Chapter V: The Pecuniary Standard of Living

In a society of industrialised production (of goods and services), the habitual consumption of products establishes a person's standard of living; therefore, it is more difficult to do without products than it is to continually add products to one's way of life. Moreover, upon achieving self-preservation (food and shelter), "the needs of conspicuous waste" determine the economic and industrial improvements of society.

• Chapter VI: Pecuniary Canons of Taste

To the leisure class, a material object becomes a product of conspicuous consumption when it is integrated to “the canon of honorific waste”, by being regarded either as beautiful or worthy of possession for itself. Consequently, to the lower classes, possessing such an object becomes an exercise in the pecuniary emulation of the leisure class. Therefore, an objet d’art made of precious metal and gemstones is a more popular possession than is an object of art made of equally beautiful, but less expensive materials, because a high price can masquerade as beauty that appeals to the sense of social prestige of the possessor-consumer.

• Chapter VII: Dress as an Expression of the Pecuniary Culture

In a consumer society, the function of clothes is to define the wearer as a man or a woman who belongs to a given social class, not for protection from the environment. Clothing also indicates that the wearer’s livelihood does not depend upon economically productive labour, such as farming and manufacturing, which activities require protective clothing. Moreover, the symbolic function of clothes indicates that the wearer belongs to the leisure class, and can afford to buy new clothes when the fashion changes.

• Chapter VIII: Industrial Exemption and Conservatism

A society develops through the establishment of institutions (social, governmental, economic, etc.) modified only in accordance with ideas from the past, in order to maintain societal stability. Politically, the leisure class maintain their societal dominance, by retaining out-dated aspects of the political economy; thus, their opposition to socio-economic progressivism to the degree that they consider political conservatism and political reaction as honorific features of the leisure class.

• Chapter IX: The Conservation of Archaic Traits

The existence of the leisure class influences the behaviour of the individual man and woman, by way of social ambition. To rise in society, a person from a lower class emulates the characteristics of the desired upper class; he or she assumes the habits of economic consumption and social attitudes (archaic traits of demeanour in speech, dress, and manners). In pursuit of social advancement, and concomitant social prestige, the man and the woman who rid themselves of scruple and honesty will more readily rise into a stratum of the leisure class.

• Chapter X: Modern Survivals of Prowess

As owners of the means of production, the leisure class benefit from, but do not work in, the industrial community, and do not materially contribute to the commonweal (the welfare of the public) but do consume the goods and services produced by the working classes. As such, the individual success (social and economic) of a person derives from his or her astuteness and ferocity, which are character traits nurtured by the pecuniary culture of the consumer society.

The leisure-class woman as subject and object of conspicuous consumption and conspicuous leisure: (Idleness, by John William Godward, ca. 1900)

• Chapter XI: The Belief in Luck

The belief in the concept of “luck” (Fortuna) is one reason why people gamble; likewise follows the belief that luck is a part of achieving socio-economic success, rather than the likelier reason of social connections derived from a person's social class and social stratum. Within the social strata of the leisure class, the belief in luck is greater in the matter of sport (wherein physical prowess does matter) because of personal pride, and the concomitant social prestige; hence, gambling is a display of conspicuous consumption and of conspicuous leisure. Nonetheless, gambling (the belief in luck) is a social practice common to every social class of society.

• Chapter XII: Devout Observances

The existence, function, and practice of religion in a socially-stratified society, is a form of abstract conspicuous consumption for and among the members of the person’s community, of devotion to the value system that justifies the existence of his or her social class. As such, attending church services, participating in religious rites, and paying tithes, are a form of conspicuous leisure.

• Chapter XIII: Survivals of the Non-invidious Interest

The clergy and the women who are members of the leisure class function as objects of vicarious leisure, thus, it is morally impossible for them to work and productively contribute to society. As such, maintaining a high social-class is more important for a woman of the leisure class, than it is for a man of the leisure class. Women, therefore, are the greatest indicators of a man’s socio-economic standing in his respective community. In a consumer society, how a woman spends her time and what activities she does with her time communicate the social standing of her husband, her family, and her social class.

• Chapter XIV: The Higher Learning as an Expression of the Pecuniary Culture

Education (academic, technical, religious) is a form of conspicuous leisure, because it does not directly contribute to the economy of society. Therefore, high-status, ceremonial symbols of book-learning, such as the gown and mortar-board-cap of the university graduate educated in abstract subjects (science, mathematics, philosophy, etc.) are greatly respected, whereas certificates, low-status, ceremonial symbols of practical schooling (technology, manufacturing, etc.) are not greatly respected to the same degree, because the contemporary university is a leisure-class institution.

In The Theory of the Leisure Class: An Economic Study of Institutions (1899), Thorstein Veblen used idiosyncratic and satirical language to present the consumerist mores of modern American society; about the impracticality of etiquette, as a form of conspicuous leisure, Veblen said that:

A better illustration [of conspicuous leisure], or at least a more unmistakable one, is afforded by a certain King of France who was said to have lost his life in the observance of good form. In the absence of the functionary whose office it was to shift his master's seat, the King sat uncomplaining before the fire, and suffered his royal person to be toasted beyond recovery. But, in so doing, he saved his Most Christian Majesty from menial contamination.

— Thorstein Veblen, The Theory of the Leisure Class, p. 33[12]

In contrast, Veblen used objective language in The Theory of Business Enterprise (1904), which analyses the business-cycle behaviours of businessmen; yet, in the Introduction to the 1967 edition of The Theory of the Leisure Class, the economist Robert Lekachman said that Thorstein Veblen was a misanthrope, that:

As a child, Veblen was a notorious tease, and an inveterate inventor of malicious nicknames. As an adult, Veblen developed this aptitude into the abusive category and the cutting analogy. In this volume [The Theory of the Leisure Class] the most striking categories are four in number: [i] Conspicuous Consumption, [ii] Vicarious Consumption, [iii] Conspicuous Leisure, and [iv] Conspicuous Waste. It is amazing what a very large proportion of social activity, higher education, devout observance, and upper-class consumer goods seemed to fit snugly into one, or another, of these classifications.

— Robert Lekachman, Introduction to The Theory of the Leisure Class (1967 ed.)

Concurring with Lekachman, the economist John Kenneth Galbraith, in his Introduction to the 1973 edition, said that The Theory of the Leisure Class is Veblen's intellectual put-down of American society. That Veblen spoke satirically in order to soften the negative implications of his socio-economic analyses of the U.S., which are more psychologically threatening to the American ego and status quo, than the negative implications of Karl Marx's analyses. That, unlike Marx, who recognised capitalism as superior to feudalism in providing products (goods and services) for mass consumption, Veblen did not recognise that distinction, because capitalism was economic barbarism, and that goods and services produced for conspicuous consumption are fundamentally worthless.

The 19th century

The publishing success of The Theory of the Leisure Class: An Economic Study in the Evolution of Institutions (1899) derived from the fidelity, accuracy, and veracity of Thorstein Veblen's reportage of the social and economic behavior of American society; yet, some contemporaries considered that Veblen's intellectualism made him an iconoclast who was "more than a little mad".[13] In that vein, despite the success (financial, academic, social) accrued to him by the book, another contemporary social scientist told Veblen that the sociology of gross consumerism cataloged in The Theory of the Leisure Class had much "fluttered the dovecotes of the East", especially in the Ivy League academic Establishment.[14]

In the contemporary (19th-century) book review '"The Theory of the Leisure Class" (September 1899), John Cummings wrote:

As a contribution to the general theory of sociology, Dr. Veblen's The Theory of the Leisure Class requires no other commendation for its scholarly performance than that which a casual reading of the work readily inspires. Its highly original character makes any abridgement of it exceedingly difficult and inadequate, and such an abridgement cannot be even attempted here . . . The following pages, however, are devoted to a discussion of certain points of view in which the author seems, to the writer [Cummings], to have taken an incomplete survey of the facts, or to have allowed his interpretation of facts to be influenced by personal animus.

— John Cummings, "The Theory of the Leisure Class", The Journal of Political Economy, September – 1899, p. 425.[15]

In the two-part book review "An Opportunity for American Fiction" (April–May 1899), the critic William Dean Howells made Veblen's treatise the handbook of sociology and economics for the American intelligentsia of the early 20th century.[14] He reviewed first the economics and then the social satire in The Theory of the Leisure Class: An Economic Study in the Evolution of Institutions; and reported that class anxiety impels American society to wasteful consumerism, especially the pursuit of social prestige by owning consumer goods. That, despite social classes being alike in most stratified societies, the novelty of the American social-class system was that the leisure class had only recently appeared in U.S. history.[16]

Howells concluded the book review by calling upon a novelist to translate into fiction the message reported by the social-scientist Veblen, because a novel of manners was an opportunity for American fiction to accessibly communicate the satire in The Theory of the Leisure Class:

It would be easy to burlesque [the American leisure class], but to burlesque it would be intolerable, and the witness [Veblen] who did this would be bearing false testimony where the whole truth and nothing but the truth is desirable. A democracy, the proudest, the most sincere, the most ardent that history has ever known, has evolved here a leisure class which has all the distinguishing traits of a patriciate, and which by the chemistry of intermarriage with European aristocracies is rapidly acquiring antiquity. Is not this a phenomenon worthy the highest fiction? Mr. Veblen has brought to its study the methods and habits of scientific inquiry. To translate these into dramatic terms would form the unequalled triumph of the novelist who had the seeing eye and the thinking mind, not to mention the feeling heart. That such a thing has not been done hitherto is all the stranger, because fiction, in other countries, has always employed itself with the leisure class, with the aristocracy; and our own leisure class now offers not only as high an opportunity as any which fiction has elsewhere enjoyed, but by its ultimation in the English leisure class, it invites the American imagination abroad on conditions of unparalleled advantage.

— William Dean Howells, "An Opportunity for American Fiction"Literature: An International Gazette of Criticism, No. 17, 5 May 1899. pp. 361–62.

The 20th century

Twenty years later, in the book review “Professor Veblen” (1919), about the author and the thesis of The Theory of the Leisure Class (1899) the American intellectual and journalist H. L. Mencken asked:

Do I enjoy a decent bath because I know that John Smith cannot afford one – or because I delight in being clean? Do I admire Beethoven's Fifth Symphony because it is incomprehensible to Congressmen and Methodists – or because I genuinely love music? Do I prefer terrapin à la Maryland to fried liver, because plowhands must put up with the liver – or because the terrapin is intrinsically a more charming dose?

— Henry Louis Mencken, "Professor Veblen", Prejudices: First Series, 1919.[17]

In the review "Dr. Thorstein Veblen Gets the Crown of Deadly Nightshade" (1919), The Theory of the Leisure Class was featured as The Dullest Book of the Month, wherein the satirist Robert Benchley said and asked:

In The Theory of the Leisure Class: An Economic Study in the Evolution of Institutions (1899), Thorstein Veblen said that the U.S. was imitating the socially static monarchy of the United Kingdom.

The Doctor has made one big mistake, however. He has presupposed, in writing this book, the existence of a class with much more leisure than any class in the world ever possessed – for, has he not counted on a certain number of readers?

— Robert Benchley, "Dr. Thorstein Veblen Gets the Crown of Deadly Nightshade",Vanity Fair magazine, 1919.[18]

Assessments – professional and personal

Thirty years later, during which time the academic establishment of the US slowly accepted the socioeconomic facts reported in The Theory of the Leisure Class, Veblen was vindicated as a social scientist, by the two Middletown studies (Middletown: A Study in Modern American Culture [1929] and Middletown in Transition: A Study in Cultural Conflicts [1937]) which presented empirical evidence that working-class families practiced conspicuous consumption and did without necessities (adequate food and clothing, etc.) in order to present and maintain the public appearance of being in a higher social-class.

In the Introduction to the 1934 edition of the book, the economist Stuart Chase said that the Great Depression (ca. 1929–41) had vindicated Veblen as an economist, because The Theory of the Leisure Class had unified "the outstanding economists of the world."[19] In the Foreword to the 1953 edition, the sociologist C. Wright Mills said that Veblen was "the best critic of America that America has ever produced".[20] In the Introduction to the 1973 edition of the book, the economist John Kenneth Galbraith addressed the author as subject, and said that Veblen was a man of his time, and that The Theory of the Leisure Class – published in 1899 – reflected Veblen's 19th-century world view. That in his person and personality, the social scientist Thorstein Veblen was neglectful of his grooming and tended to be disheveled; that he suffered social intolerance for being an intellectual and an agnostic in a society of superstitious and anti-intellectual people, and so tended to curtness with less intelligent folk.[21]

Contemporary advocates of the 18th-century school of classical economics (free markets and individual pursuit of self-interest ) have presented opinions against the cultural relevance of the socioeconomic theories of Thorstein Veblen (conspicuous consumption and conspicuous leisure, etc.) and for their relegation to the margin of modern economics.[22] Among the arguments are Veblen's dismissal of the rational-expectation theories that predominate classical economics, and that the American leisure-class risk becoming irrelevant to the economy if they do not work.[23] The historian of economics Robert Heilbroner said that Veblen's social and economic theories were valid for the American Gilded Age (ca. 1870–1900) of gross materialism and political corruption, in the late 19th century, but are invalid for the economy of the 21st-century world, because The Theory of the Leisure Class is historically specific to U.S. society, in general, and to the society of Chicago, in particular;[24] thus, in the essay "No Rest for the Wealthy" (2009), the financial journalist Daniel Gross said:

In the book, Veblen – whom C. Wright Mills called "the best critic of America that America has ever produced" – dissected the habits and mores of a privileged group that was exempt from industrial toil and distinguished by lavish expenditures. His famous phrase "conspicuous consumption" referred to spending that satisfies no need other than to build prestige, a cultural signifier intended to intimidate and impress. In this age of repossessed yachts, half-finished McMansions and broken-down leveraged buyouts, Veblen proves that a 110-year-old sociological vivisection of the financial overclass can still be au courant. Yet, while Veblen frequently reads as still 100 percent right on the foibles of the rich, when it comes to an actual theory of the contemporary leisure class, he now comes off as about 90 percent wrong.

— Daniel Gross, "No Rest for the Wealthy", The New York Times, 5 July 2009.[4]

Yet, the "economy-as-organism" theory of Butterfly Economics have vindicated Thorstein Veblen as an insightful and foresighted economist, because his empirical observations have been re-stated by contemporary economists, such as Robert H. Frank, who applied socioeconomic analyses to the economy of the 21st century. The analytical application of the conspicuous-consumption construct to the business and economic functions of advertising explains why the lower social-classes do not experience social upward mobility in their societies, despite being the productive classes of their economies. About the limited social-utility and economic non-productivity of the business social-class, the American business entrepreneur Warren Buffett said that non-productive financial activities, such as day trading (speculative buying-and-selling of financial securities) and arbitrage (manipulation of price-differentials among markets) have vindicated The Theory of the Leisure Class: An Economic Study of Institutions (1899), because such activities only produce capital, but do not produce useful goods and services for people.[25]

Notes

Bibliography

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