Arthur: "Young graduates are in debt, out of work and on their parents'
couches.
People in their 30s and 40s can't afford to buy homes or have children.
Retirees are earning near-zero interest on their savings."
Ah the same problem artists have had since 1929 and no one gave a shit.
Thought they chose it and deserved what they chose. Of course science has
a few recent things to say about that and it seems that economists in
Holland don't believe in the American model and that's why I've known
talented Americans who gave up their US citizenship to become Dutch
citizens. Is neo-classic economics an ethnic folk tale? How interesting
that both Smith and Marx began their writings talking about the necessity
for a moral base to political economy. Once America won the "Cold War"
it seems the politics of self interest became the morality and chairs became
more pleasurable than symphonies. (Jevons, was he English or Scot?)
As for the sale of children that Klamer claims we've outgrown, in the US we
have the term "cost effective" and like the Spanish at the Potosi silver
mine that took 7 million Quechua men, women and children's lives, the market
decides whether they will pay for a mistake that cripples people or recall
it. The market morality is usually to "settle" and buy off the damaged
lives. "Objects" not people. The reason Indian people call these market
folks yonegas rather than ayvwiyah. "Two leggeds" as opposed to "real
people."
You can find this speech in Klamer's book at:
books.google.com/books?isbn=9053562184
There are additions to the speech as well as charts and illustrations. I
have decided to teach the book in my class because it shows that there are
other ways of thinking than the Anglo way and the Art of the Europe which
makes so much of the terribleness of colonialism, at least forgivable over
time. Their Art makes one believe that they are human beings after all or
maybe at least "Proto".
REH
THE VALUE OF CULTURE
ARJO KLAMER
"After 17 years at American universities, many conversations with economists
and research into the rhetoric of economics, I moved to the Erasmus
University in the Netherlands to occupy the new chair in the Economy of Art
and Culture, the only such chair in the world. Apart from the challenge of
entering a new field of inquiry I had to cope with a culture from which I
had become somewhat estranged. That got me to the subject of the value of
culture. But how to make the connection between culture in the sense of
the arts and culture in the anthropological sense? In the following talk,
which I delivered as the inaugural for the chair, I try to deal with this
and a few other related problems." Arjo Klamer
THE TOPIC of the value of culture is a strange one for an economist, since
culture as a concept has been virtually banned from academic economics. I
have always been uncomfortable about that verdict. The culture of a group of
people, as it is usually understood, stands for the values and beliefs the
people share. So by banning culture from our conversations we economists
deprive ourselves from any insight into the role that values play in the
economy. That cannot be right.
When we want to understand the strength of the Dutch economy, for example,
we need to take into account the values that inform so much of what the
Dutch do, such as the value of solidarity and the value that gets expressed
in the typically Dutch expression "Act normal, then you're already crazy
enough." Such values make for a society that is quite different from the
American one with its veneration of ambition and self-actualization
expressed in slogans like "Be all you can be" which the American army uses
effectively - and the "Go!, go!, go!" with which coaches and managers
inspire their troops. Such a contrast in values must have important economic
consequences, as I found out for myself. If you want a favor from the Dutch,
such as a job or their money, get their sympathy, make them feel bad by
exaggerating your hardships and they will want to solve your problem just to
get rid of their bad feelings. But don't do that in the United States. There
you earn your money by making yourself seem better, more impressive, more
desirable than you really are.
An inquiry into the economic role of values calls for the restoration of a
rich tradition within economics starting from Aristotle, including Adam
Smith, in particular his Theory of Moral Sentiments, with a modern
continuation in the work of Max Weber, Karl Polanyi, E.P. Thompson, and most
recently Deirdre McCloskey and her treatises on bourgeois virtues. This is
the tradition that defines economics as a moral science and ultimately
concerns the conditions for and characteristics of a good and meaningful
life. This concern is on my mind in the subsequent discussion of culture
in the more narrow meaning of the arts.
The Economics of Art
Take a good look at a famous picture from an economists' perspective. The
Portrait of Dr Gachet by Van Gogh, reproduced on the cover of this book, is
the highest priced painting ever. In May 1990 it was hammered at the price
of 75 million dollars by Christie's in New York to Rioei Sato (a Japanese
paper manufacturer, who had to pay an additional 7.5 million dollar for the
buyer's premium). Van Gogh was unable to sell the painting himself. Should
we conclude either that the contemporaries of Van Gogh were blind to the
value of this painting or that Mr Sato was out of his mind?
Not so, the economist in me responds. There is a reason for everything,
including the paying of ridiculous sums for a painting. One reason is that
Van Gogh paintings are currently hot and very much in demand while their
supply is fixed. When the quantity demanded exceeds the quantity supplied,
the price goes up; when the difference is ridiculously large, the price will
skyrocket. Many would have wanted this painting - the directors of the Van
Gogh Museum and the Kroller Muller Museum might have committed murder for it
- but they could not afford it. A painting like this is an investment. Mr
Sato may even have liked it, but the only justification for laying out such
a large sum for paint on canvas is that it is an asset that will maintain
its value, more or less, so that he can sell it again. It is elementary -
elementary economics, that is. (As it turns out, Sato really wanted to be
cremated with the Van Gogh. Fortunately, although he has died, the painting
is still alive.)
Elementary economics tells us to see things like paintings as commodities
that are costly to produce and have their value determined in the interplay
between demand and supply in the marketplace. Economists presume that people
are reasonable enough, that they never pay more for a work of art than they
consider it worth. People pay nothing for art that they do not value and
they do not pay infinite amounts for priceless art. William Gramp, an
economist, concludes from this that price is the best indicator of the
aesthetic value.' It is a shocking perspective if you care about the value
of art. But try to prove him wrong.
Another issue that an economist of art and culture has to confront is the
economic significance of the cultural sector. It is a popular issue
nowadays. Economic arguments are fashionable, so advocates of subsidies for
the arts would like to be able to argue that their arts make sizeable
economic contributions. If a subsidy to a museum or a festival translates
into jobs and income for the local economy they would have a good additional
reason for awarding it. Economists are the immediate beneficiaries of this
development because they are asked to make the calculations.
Famous is the one billion guilder study of the Foundation for Economic
Research of the University of Amsterdam, which calculated that the cultural
sector in Amsterdam contributes more than one billion guilders to the
Amsterdam economy. It sounds like a lot; the number is used left and
right in the art world. Unfortunately, the economic perspective seriously
pursued is sobering. In this study the problem is that total sales have been
added up and not added value so that there is some serious double counting.
In other studies researchers have been able to produce even larger numbers
by using the so-called multiplier method. Made famous in Keynesian
macro-economic models it boils down to the idea that a guilder spent on an
artist will not only generate an extra guilder of spending by that artist
but also additional spending by those receiving that guilder and so on.
Sounds like a great idea, doesn't it?
Let us agree that all readers hand me one hundred guilders. I will promise
you that I will spend the money well so that it will generate plenty of
additional spending with a large multiplier effect. I might even promise you
to subsidize the arts. Great, you will say, the Dutch economy will get a big
injection. There is only one little problem: you will all have one hundred
guilders less to spend. It is the same with every guilder that gets injected
into the arts sector; it has to be withdrawn first, by means of a voluntary
transfer as in our case or by means of obligatory tax payments. The
withdrawal is responsible for a negative multiplier process, leaving the
total effect undetermined. A positive net effect on the Dutch economy is
assured only when the guilders come from foreigners who would not have spent
their money in the Dutch economy otherwise. Even in that case we would
probably do better in terms of jobs luring foreign spending by exporting
more tulips and pork.
Spending on the Arts
The reason that we should not expect great economic feats from the cultural
sector is that the sector is small, very small. The next figure shows how
small. Arts and culture here include the visual and performing arts, but not
pop and rock concerts; it also includes museums, but excludes the media,
libraries, the book, movie, cd and other cultural industries. Total spending
on arts and culture thus defined amounts to one third of one percent of
total economic activity (as measured by GDP) in the Netherlands and less in
the US) The Dutch and Americans spend quite a bit more on shoes and the
Dutch obviously prefer to spend more time and money in cafes than in
theaters and museums. In short, the arts are not big, economically speaking.
Another story is how people pay for their arts. Take the theater. Good
theater is costly to produce anywhere but in a country like the Netherlands
those who enjoy it pay only a small portion of the costs. According to the
CBS, the Dutch statistical bureau, each visitor to a subsidized play pays on
average eleven guilders, with the government contributing ten times that
amount, that is, iio guilders. Local governments add to that amount about
another 65 guilders for the upkeep and operation of the theaters.
Accordingly, those who like plays of Euripides and Kushner get generous
treatment, in contrast to enthusiasts for commercial musicals, who pay
virtually the full costs of what they see, with maybe a small government
subsidy for the building in which they see it. (Those who like to go to the
opera in the Netherlands do even better with a subsidy of about 500 guilders
per visit).
As you may expect the Dutch government is quite generous, certainly if
compared to the direct support that the American government gives to the
arts. The American government awards for each American only $ 3 to the arts
whereas the Dutch government puts in $ 27 per Dutchman. The Swedish
government does best with $ 33 per Swede.6 The American government, however,
contributes indirectly by giving a tax break to those who donate their money
to cultural activities and institutions. It forsakes a revenue, as it were,
to benefit the arts. Still, even with this correction the official
commitment of the US to the arts lags far behind the public commitments in
Europe.
Public Support of the Arts
The government subsidies are not only small, they also become suspect when
subjected to the economists' perspective. As a matter of fact, conventional
economics does not produce a convincing economic rationale for the public
support of the arts. Some economists are therefore unequivocally opposed.
Their position has gained political force in the US where the Republicans
under the leadership of Newt Gingrich passionately rally against the
National Endowment for the Arts, the main public funding agency for the
arts, and in particular against its subsidies to public television. Those
subsidies are unfair, Newt Gingrich argues, because they force everybody to
pay for the enjoyment of a selected and usually well-endowed few. He has a
point. And there is no good defense against it, at least not from the
conventional economic perspective. The literature on this issue is, as you
may expect, extensive and the arguments varied.? I summarize at the expense
of nuance.
Economists prefer efficiency arguments, that is, arguments that demonstrate
that with public support of the arts some people would be better and none
worse off. That would be the case if art is a public good, that is, a good
which can only be collectively enjoyed, or if there are positive external
effects, that is, spillover effects of cultural production that are enjoyed
by the entire community. The arguments in the present case are hard to
sustain.8 It is not clear, for example, how my enjoyment of subsidized
theater is shared by other Dutchmen. There may be some spillover effects on
my environment - although I would not know which ones and, who knows, on
future generations, but they remain undetermined.
Politicians and the inhabitants of the art worlds tend to favor equity
arguments. They want us to believe that a policy of low prices for cultural
events and products lowers the threshold for low income groups. The
intention is noble but like many noble intentions this one produces
unintended consequences. In reality low prices for cultural products mainly
benefit those who already enjoy them and seduce only a few of the target
group. Watch the crowd that attends the heavily subsidized Concertgebouw
concerts and you will look in vain for people in need of public support of
their pleasure. Australian research has indicated that if you balance taxes
paid versus subsidies received, public funds for the arts benefits the
well-to-do at the expense of low income people. So the realized result is
the opposite of the intended one.
The trickiest argument refers to the merit of cultural goods. Culture is
impor¬tant, the advocates say, and even though not everybody recognizes it,
we should all make sacrifices to guarantee high-quality cultural products
and their distribution throughout the nation. It is a
culture-is-good-for-you-whether-you-want-to-know it-or-not argument. An
economist like Jan Pen has no trouble with this argument but it is
incongruent with the dominant economic perspective." It implies that some
people have better taste than others - in accordance with the old
aristocratic idea - and violates the modern principles of individual
sovereignty and equality.
According to good anti-aristocratic and democratic values no one, not even a
government, can tell an individual what to like. If my neighbors prefer
musicals over serious theater and do not care for art programs on
television, I cannot tell them they should, and still expect them to
contribute, without any contribution to their musicals and soaps in return.
Such a position is justifiable only if I recognize it for what it is:
aristocracy in a modern disguise. Yet, it might be the only convincing
argument.
Finally, an interesting argument for public support of the arts evokes the
significance of the cultural inheritance. The French seem to have a patent
on this argument. They nearly prevented the GATT agreement by insisting on
an exclusionary clause for cultural products. They wanted to be able to
protect their film industry because of its importance for the sustenance of
French culture. Even the self-effac¬ing Dutch can get excited about their
cultural possessions, as the city hall of Hilversum experienced recently.
In 1932 the city received a Mondrian, Composition with two black lines, as
a present from a now defunct institution for its monumental city hall. The
city officials never knew what to do with the painting and allegedly used it
even as a partition for some time before it was stashed away in the attic.
In 1951 it was given on loan to the Stedelijk Museum of Amsterdam.
During the eighties the city experienced serious financial difficulties and
so its officials re-discovered their prized possession. After some wavering
the city council decided in 1987 to sell the painting to the highest bidder.
Thus the market was given its chance. To ward off the anticipated criticism,
it was stipulated that the seller guaranteed public access to the painting
and that the estimated 30 million guilders in revenues would be allocated to
the renovation of the former Hotel Gooiland, an architectural monument, to
serve as a cultural center.I2 Accordingly the intended deal would be
entirely cultural.
A public uproar followed, questions were asked in parliament and the
Minister of Culture ended up blocking the sale on the ground that the
Mondrian was part of the Dutch cultural heritance. The Mondrian was not to
be lost to the Dutch community. In a compromise arrangement the city of
Hilversum received a payment of 2.5 million guilders after transfer of
ownership to the Stedelijk Museum. The amount was far below what it would
have received on the market and proved to be insufficient for the renovation
of Gooiland, which was subsequently sold for one guilder to a businessman
who made it into a grand cafe and a Japanese restaurant. The Mondrian was
saved for Holland at the price of a new cultural center for Hilversum and
the lost opportunity to experience Dutch pride while viewing the Composition
with two black lines in the Paul Getty Museum or some other well-endowed
foreign museum.I3 It is the price of cultural heritage. The irony can't
escape anyone even a little economically minded.
Need for Correction
As you have noticed by now, the economists' perspective is not very
inspiring when applied to the world of arts. Viewed through economists'
glasses the cultural sector looks small and otherwise similar to any other
sector. Paintings and performances are reduced to commodities, their values
to prices. Reasons for public support dissolve before your eyes. Before you
know it you have turned into Oscar Wilde's cynic who knows the price of
everything and the value of nothing.
I will show you how we can alter the economic glasses to get a more
interesting but also more truthful picture of reality. But before you
conclude that I'm about to debunk the economists' perspective wholesale, I
will affirm here that it gets some things right. When politicians demand
that if the government cannot pay the full costs of health care or the arts,
businesses should (by means of mandatory contributions or sponsorship), you
need economists to point out that businesses never pay, their customers do.
When a bank spends generously on the arts, its customers should wonder why
they are not the beneficiaries.
However, the sobering effects of the economists' perspective to the world of
arts shows that something has to be amiss with that perspective. The
insights gained are limited and do not seem to do justice to the phenomena
studied. The pernicious effects of the economic way of thinking become
especially clear when it takes over everyday life. When everywhere people
turn to economic calculations as their guide to action and believe that
"management' and "marketing" will solve all their problems, we economists
must have done something wrong. Calculation, management, and marketing
cannot pave the way to a good life. It is not the way to deal with friends,
children, spirituality, and yes, the arts. Even our former Prime Minister
Ruud Lubbers, who is identified with this economizing trend, admitted as
much recently and feared moral decay because of it. It may seem that by
saying this I am cutting the legs from under my chair. The opposite is
rather the case. For the encounter with the world of art and culture
reaffirms the need to correct the economists's perspective.
Two Worlds
The argument begins with the observation of differences between the worlds
of economics and the arts. Differences tend to reveal themselves in
discursive situations. Try to raise problems, as we academics are used to
do, and the non-academic will just want to know your solution. The
difference is that we want to keep the conversation going, and for that you
need problems and issues, whereas they want closure. I will try to meet that
demand in the conclusion but that does not put an end to what I am doing.
Radical differences also occur in the interaction with artists, as I had to
discover. In every audience of artists that I have addressed there will
inevitably be someone who stands up to say something like "bullshit". Each
time I am at a loss for words. The person may be quite right, at least from
her point of view. The lifeworlds of artists and academics are simply too
far apart. Both are quite abstract, incidentally, but we do it with words
which happen to be suspect in their lifeworld. This difference that I
experience, points at a really significant difference, that is, the contrast
between the world of money and that of the arts.
Art is different. The illustration on the previous page is a still taken
from a video and shows a performance of an Australian body artist named
Stelarc at the opening of the Vz building in Rotterdam in September 1994.14
The artist is connected to medical equipment which transforms the various
stimuli of his body into movements of the robot and various sounds. If you
are wondering what this means, why this must be called art, or if you simply
were fascinated with the technical wizardry and the effects displayed here,
you got it. If you are worried about the costs of this performance, on the
other hand, you did not get it.
This was commissioned work and the artist was at liberty to do what his
artistic spirit inspired him to do. I did not quite get it, just as I did
not quite get the video of Vz, and that is just the point. For if you and I
understood perfectly what just happened it would not be art. Art has to be
experienced as such; the experience might be an aesthetic one but is not
necessarily that. Art also happens in the sensation of a problem, that is, a
problem of meaning. In either case art exists not in the physical form of a
painting or performance but in the moment of wonderment, of the question
mark that the physical form evokes in our mind.
Admittedly I have no authority to speak about art. Everything I am saying
here is based on what students of the arts have said, and is tested in
conversations with them. You can decide whom to hold responsible. After an
incisive survey of theories of art, Antoon Van den Braembussche dares to
conclude that mimesis is what art is about; only the subject of the mimesis
is left wide open.15 A Mondrian painting represents, but what it represents
is subject for interpretation. And who knows what the Vz video represents.
It might be about human technology - a human steering inhuman machines -,
about technological innovation, human loss and technical gain, or whatever
else you want to suggest. The producers appear not to care as long as their
work is talked about. Art critics are allowed to make sugges¬tions and
explore the variety of meanings that the art piece allows, without solving
the problem, because that would destroy the art.
Barend van Heusden, a semiotician, argues that a text constitutes art
insofar as it succeeds in representing problems of meaning without solving
them. His argument is complicated and requires a semiotic background.16 This
is how I understand it. You, the reader, are experiencing a problem of
representation; you are reading something you have not read before. Some of
you will quickly solve your problem by subsuming my text in what you already
know, after a few adjustments. When it does not fit into what you already
know you have basically two options. Either you ignore what you do not
comprehend, or you have the artistic response and represent in some fashion
or another the problem that you are experiencing without solving it. Art
requires ambiguity to allow the experience of wonderment.
Measuring in Money
Money is not art; it is in its modern use even antithetical to it. To
many people money has a magical force that needs to be venerated and
worshipped. Most of my students are mystified by its creation. Kids are
less so. Ask them how to make money and they say: "Oh easy, you get it
out of the wall." How sobering economics has to be once again, with its
story of fractional reserve banking and its insistence that money does
little more than pay, measure, and hold value. Our sobering wisdom dates
back at least to Aristotle. After noting in the Nicomachean ethics that
to allow for exchange the things exchanged must be comparable, he
characterizes money as a mere convention.7 It is by agreement that
certain assets are designated as means of exchange; it is by agreement, or
convention, that here in Holland we measure things in guilders and that the
Americans measure in dollars.
A measurement is an intervention. In modern times we have grown accustomed
to measure with great precision. We now measure time to the second with
our watches and distances to the millimeter. Not so long ago, however,
people were still content to keep track of time by measuring the length of
shadows; distances they measured with their feet and stone's throws. As
Witold Kula in his study Measures and men observes: "The attitude of
today's civilized man towards measures reveals a highly developed capacity
for abstract quantitative thinking. Of the many features exhibited by
every object in a variety of contexts, we abstract one, and consequently,
objects as qualitatively diverse as, say, a man's pace, a suit of clothing,
a stretch of road, or the height of a tree, acquire a commensurability in
our eyes, for we view them from but a single perspective, that of their
length."18 Or price, when the measurement of the thing is in terms of
money.
The point is that any measurement, whether in time, length, or value units,
intervenes in the nature of the thing. What would happen if a friend
were to measure a conversation with you with a stopwatch? First you
would wonder why he did it and when he tells you he just wanted to know, see
whether you are as comfortable talking as you were before the introduction
of the stopwatch.
Karl Marx, the most cited economist ever and still relevant, made a big
issue of the mystifying effect that a measurement in money terms has on the
thing mea¬sured. Use value, so he argues in Das Kapital, is particular to
the thing valued and depends on the need it meets. The imposition of an
exchange value forces the thing into the straightjacket of the monetary
form; the thing becomes a commodity to be compared with other commodities
in order to make exchange possible. By commodity fetishism Marx means the
preoccupation with the commodity form of a thing so that you turn a blind
eye to its distinctive characteristics as well as the social relations that
underlie is production. It may happen when you look at van Gogh's
Portrait of Dr Gachet now you know that it carries a price of 75 million
dollars. That fact, which highlights its characteristic as a commodity
and makes it comparable with, say, a large office building, distracts from
the experience of its art. The money measurement usually intervenes in
the art form and devalues the experience.19 ("Are you an art or are you a
commodity?" REH)
Measurement versus Reciprocity
Money measurements also intervene in human relationships. Their
intervention resembles the intervention of the stopwatch in a friendly
conversation. Just imagine we would start to price friendly exchanges:
"Let's see, I listened to your sob story for ten minutes, that makes ten
guilders, I still owe you five for the compliment you paid me so five will
do." The monetary intervention would alter the relationship. There may
be friends who would appreciate the elimination of ambiguity, but most
friends will be turned off by the intervention. Sense the violence of the
reduction of the value of transactions to prices and you may understand why
Aristotle considered commercial transactions unnatural and therefore
immoral, and could exonerate them only if they served the sustenance of
households. His verdict was common in pre-modern times and caused
merchants great trouble everywhere. The trade in goods such as land,
labor and money was a taboo. With the development of commercial society
this taboo became untenable. The moral philosopher Adam Smith wrote the
Wealth of Nations partly to address the outdated moral sentiments of his
time: "In civilized society [man] stands at all times in need of cooperation
and assistance of great multitudes, while his whole life is scarce
sufficient to gain the friendship of a few persons." In such
circumstances, it "is not from the benevolence of the butcher, the brewer,
or the baker, that we expect our dinner, but from their regard to their own
interest."
The commercial transaction implies a contract. The deal is that both
parties exchange equivalents, that is, two goods of the same value. The
deal is possible only when the two goods can be measured. That's where
money enters. It serves as a unit of account and facilitates the
exchange. Christie's and Mr Sato agreed that Dr Gachet would go for 75
million dollars. It was understood to be a quid pro quo. As soon as
the two measured equivalents changed hands, the deal was done, the story was
over, and each could go on with their business without any remaining
obligations.
However, most transactions are not like that. When we exchange favors with
friends, make deals with our spouses, and trade niceties with business
relations we do so on the basis of reciprocity. The difference with
commercial transactions is that these are not measured and are not well
defined. When I help out a friend in a big way, I do not expect an
equivalent favor in return. More poignantly even, if my friend would make
the offer, he would devalue my gesture of friendship. Even a mere "thank
you" might be too much. This does not mean that my assistance was a pure
gift. There is always the expectation that something will come in return.
Even the selfless work of Mother Theresa has rewards in the form of
admiration and ultimately God's blessings of course. Friendships, like
all relationships, are based on reciprocity.
We do favors, hand over gifts, pay compliments, and extend our love with the
expectation that something will come in return. Only the what, how, and
when of the reciprocal deal are undetermined. A relationship demands a
give and take but their equivalence is a matter of interpretation and hence
the cause of a great deal of trouble. Because of their built-in time element
and the complicated mutual obligations, these exchanges make it difficult to
walk away from the relationship, finish the deal and end the story.
Reciprocity is the basis of each relationship as long as the values to be
exchanged are left open for interpretation. Measurement is enforced only
when relations break up. Just think of divorce proceedings.
Accordingly, measurement can not only devalue the good measured, but also a
relationship. You may think this is obvious but conventional economics
glasses, with their focus on individuals and prices, prevented me from
seeing this. Economic theory does not account for relationships and does not
recognize a value that is beyond measure. It was through my engrossment with
the subject of the value of culture that I hit upon this oversight in my
discipline. I subsequently had to discover that sociologists and
anthropologists have been preoccupied with relations all along.
Direct and Indirect Payments
Incorporation of relationships and values beyond measure will require a
shift in focus and most likely in method. We will for example, have to do
more interpretative work and rely less on our analytical models.
I would like to open the chase with the following theses:
1. A commercial transaction devalues a good whose value is beyond measure;
2. When direct payments devalue the good traded, the parties have an
incentive to establish roundabout ways of financing the costs of producing
the good.
The evidence is already pouring in. Consider the good called a child.
Not so long ago, parents considered a child a commodity whose value was to
be measured in terms of the income and the old-age pension it could provide.
In our world, we do not allow each other to think about children that way
anymore. Even though children cost their parents a great deal, don't
generate economic benefits, and have emotional benefits that are dubious,
their value is beyond measure. The mere suggestion that a child has a
price, would devalue the parent-child relationship.
In the US parents customarily place congratulatory advertisements in the
graduation newspaper of their child's university. An advertisement in the
George Washington University newspaper of a few years ago read: "Congrats
Pete, Love your parents. By the way, you owe us $ 2.13,000." The joke - I
presume it is one - brings out the anomaly of parents presenting their
children with the bill of their upbringing. That is what the transaction
is in a strictly economic reading. The better the upbringing, the greater
the rate of return. We, who all have been children, owe our parents - some
more than others - yet it is a modern value to disallow the explicit
specification of that debt. And so the burden to provide for the parents
when they grow dependent is shifted to the community as a whole.
The practice of indirect payments is pronounced when it comes to religious
transactions. Last year the Rode Hoed, a church in Amsterdam, expected an
overflowing crowd for its Christmas Eve services. The economists'
solution would be to charge an entry fee and have discounts and free tickets
for people of low means. But a church service cannot be priced. Even
though the production of church services is very expensive, pricing them
would devalue the experience. Therefore, de Rode Hoed requested that
people make reservations and, as usual, asked for voluntary contributions
during the church service. Thus the appearance of a commercial
transaction was avoided.
The problem in regard to my first thesis is the ubiquity of commercial
transactions in the world of the arts. Artists sell their products outright
and some do so at very high prices; we pay for art performances, the
Americans more than the Dutch. It is all quite commercial, you would say.
Some artists, like Jeff Koons and Marko Kostabi, are blatantly commercial
and like to speak about their art as if it were a business. Servaas, a Dutch
artist, sells herrings and by calling it art has been able to get the
special tariff of the value added tax for art transactions, to the great
annoyance of commercial herring salesmen. It is business, he says, yet art.
All this does not square with the thesis.
However, indirect payments are ubiquitous as well in the world of the arts.
They certainly are in the government-oriented Dutch arts world. They are
paramount even in the market-oriented US. Take the Metropolitan Opera
with its budget of over one hundred million dollars. [now it's 350
million, the rest is still true. REH] Less than 50 percent of its
income is in the form of direct payments for services rendered, that is,
tickets and sponsorships. The remainder gets financed indirectly.
Government subsidies make up about 7 percent of the total amount, the rest
is collected by means of individual and corporate donations.
Activity and Experience or Product
The reason for the mixture of direct and indirect payments for the arts lies
in its nature. In accordance with the views of philosophers of art like
John Dewey and economists like Michael Hutter, my first step is to
distinguish the product of art from art as activity and art as experience.
Art as activity and as experience has a value that is beyond measure and
therefore clashes with the form of money. In this respect the romantics
are right with statements such as "Where any view of money exists, art
cannot be carried on" (William Blake) and "High Heaven rejects the lore //
Of nicely calculated less and more" (William Wordsworth). That some artists
exploit this conflict only attests to the possibilities for artistic
activities, but does not resolve it.
The story for art as a product is different. As the economist Lancaster has
theorized, products have a variety of characteristics and hence can have
several (use) values. One characteristic of a painting as a product is its
potential to give an artistic experience. But it also can serve as an
investment, as decoration, or as a prestige object. In the seventeenth
century painting did well as wallpaper. Each of these characteristics
does not have the tenderness of art as experience and therefore lends itself
to measurement. That's why they usually will be paid for directly.
The same tension occurs in the case of theater. On one hand a performance is
a product with qualities for which people will be willing to pay directly.
Think of its entertainment value but also of the additions to one's social
value and "cultural capital" (Bourdieu's term for one's cultural knowledge
and experience). On the other side of the scale are the uncertainties
about the values that watching the play generates there is no guarantee
that you will be inspired and stimulated so why pay a hundred guilders.
Moreover, commercialization of the play as expressed in high prices and
slick marketing techniques, will devalue the art in the play. For the
latter two reasons theater producers who want to keep up the claim to art,
are constrained in their attempts to join the market for entertainment and
will have to be inventive in the financing of their work.
And so the exploration of the value of art has lead me into the realm of
values. To sustain the values that are communicated by means of art
products, people have through all ages been inventive to circumvent the quid
pro quo of commercial transactions for the very good reasons that their
requirement of measurement devalues the art experience but also that a
strictly commercial transaction ends the relation-ship. For the very
same reason that we avoid commercial deals with friends and children, we
avoid the intrusion of the commercial world on the world of arts. The
values that are communicated in that world are tender and defenseless
against calculation, and can be sustained only in the relationships that
people form with each other and in the ongoing conversations among them.
The same applies to scientific values. To sustain the values of critical
thinking, questioning, abstract argument, and intellectual engagement, we
scientists have to fight the encroachment of commercial and political values
(Please, hand me your solution) to sustain the conversation among each
other and keep those values alive.
I am not worried that this insight will get lost, all the observations of
moral decay and the penetration of the commercial spirit notwithstanding.
The trend has already been reversed in the business world where a
reevaluation of business relations and the significance of values and
culture is underway. The same trend towards a reevaluation of values is
occurring in political discussions. A study of the ways in which values are
changed and affirmed in the world of the arts, indicates the importance of
relationships that are not purely commercial and rely on reciprocity.
Government Subsidies
There is enough to the subject of the economics of art and culture to
sustain the conversation with students, colleagues, and anyone interested in
economics and arts. We can have a conversation, but scientific inquiry
cannot tell politicians what to do. The task of critical inquiry is to
highlight problems, not to solve them. Politicians are for the solutions.
Accordingly, with respect to the much-discussed system of government
subsidies in the Netherlands, my inquiry points at a series of problems. Let
me name a few:
"Every system contains the seeds of its own destruction," warned Marx.
Well, government subsidies which are meant to stimulate the arts and enhance
their value, are currently in danger of stifling new initiatives and
impoverish the world of arts, that is, they are about to realize the
opposite of the intended objectives.
Gradually, the system starts to resemble the commercial circuit with its
emphasis on calculations as the basis for the allocation of scarce means.
As many have pointed out, the other danger is that interests are getting
entrenched, and more and more time, energy and money is expended to increase
one's stake in the subsidy pot at the expense of investments in the artistic
process itself.
Connected to the above is the problem that the system frees the art
producers from the responsibility to communicate with those who seek art as
an experience. Interactions are basically non-committal. All these factors
impede the valuation of the arts. Appreciation of the arts, especially of
the art that is ambiguous and difficult, relies on ongoing relationships
between the producers and seekers of the art experience. One way to
intensify such relationships is to make them reciprocal. If we want people
to be committed to the value of art, we want to get them to con¬tribute and
invest in it. When the government does it all for them, one good reason
for that committal is absent.
Commercialization is only an alternative insofar as art products produce
values that can be measured and paid for directly. Sponsorships are not
the alternative either, because they are just another form of a commercial
transaction. The only conceivable alternative is that the art producers
recover their inventiveness and explore arrangements that bring them in
closer relationship with art seekers. Expansion of the still modest
friendship organizations is one possibility. The building up of capital
funds for the support of the arts is another, but then the financing should
not occur by means of national lotteries, but by national campaigns with the
express purpose to support the arts. When the government decreases its
support, the Dutch are put in the position to demonstrate what the arts are
worth to them. The likely result would be a more active participation and
a reevaluation of the arts. [more art in Amsterdam, less for the rest.
REH]
Epilogue
The last remarks I added to cater to practical concerns of those listening.
They triggered mostly responses from the world outside. Cultural policy is
all but sacred among the art establishment in the Netherlands. To suggest
that the government retreat is a blasphemy, even if such action would be
good for the arts in the Netherlands, as is my claim.
What people hear me arguing is that markets should value the arts because
they are thinking either in terms of government or market. But I am
pointing at the possibility of a third way where parties form partnerships
for the production and enjoyment of art with indirect ways of financing by
means of dona-tions, for example. The intent is to avoid the impersonal
and objectifying relationships that characterize transactions with the
government and in markets. The key is to generate relationships that
stimulate ongoing interactions that are needed to sustain and develop the
values of art.
In the meantime, I had a chance to practice what I preach through
involvement in a theater project that starts from the principle of
partnership. The objective of Het Toneel Speelt (The Theatre Plays) is to
produce quality Dutch plays with a minimum of subsidies and sponsorship and
a maximum participation of so-called share holders. The idea is to persuade
people to buy shares in the company which give them a say. The hope is that
this will give the company a sound financial basis independent of the
government (in itself a startling feat given that all major theater
companies relie on subsidies to cover more than 8o percent of their
expenses) and at the same time makes for intense and productive interactions
among directors, actors and the partners. Such interactions might very well
add to the value of producing and experiencing the plays.
Much criticism has also come from fellow academics.26 Several criticized my
characterization of the artistic experience for being romantic. Another
criticism is that in my eagerness to call attention to the non-economic
dimension of the realm of the arts, I overlook the economics. Bruno Frey,
for example, pointed to the possibility that measurement in money terms
increases the value of an art work - the crowding-in effect he calls this.
He furthermore suggested that I do injustice to work that has been done in
cultural economics. Ruth Towse, editor of the Journal of Cultural Economics,
will amplify this criticism in her contribution to the ensuing conversation.
What separates me from these critics is that whereas they are intent to
determine the commonalities between art and other economic activities and
thus to demystify art as something special, I want to find out what
distinguishes art. To that end I position myself as an anthropologist would
and take seriously what the "natives" think and say. When they tell me that
art is different - and they do in many ways - I wonder why. In a sense this
entire speech might be considered in the light of this wonderment. Arjo
Klamer
-----Original Message-----
From: [email protected]
[mailto:[email protected]] On Behalf Of Arthur Cordell
Sent: Thursday, February 07, 2013 10:38 AM
To: 'RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION';
[email protected]
Subject: [Futurework] Americans Closest to Retirement Were Hardest Hit by
Recession - NYTimes.com
Young graduates are in debt, out of work and on their parents' couches.
People in their 30s and 40s can't afford to buy homes or have children.
Retirees are earning near-zero interest on their savings.
In the current listless economy, every generation has a claim to having been
most injured. But the Labor Department's latest jobs snapshot and other
recent data reports present a strong case for crowning baby boomers as the
greatest victims of the recession and its grim aftermath.
http://tinyurl.com/avyj536
http://www.nytimes.com/2013/02/03/business/americans-closest-to-retirement-w
ere-hardest-hit-by-recession.html?nl=todaysheadlines&emc=edit_th_20130203
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