Why Are Artists Poor? Part 13

10 Grampp (1989) 35.

11 It should be noted that if this chapter were to prove that aesthetic and market value do not have to correspond, this does not necessarily refute the thesis the way Grampp (1989) uses it. First, Grampp applied the thesis only to the visual art market, whereas I shall also try it out on ma.s.s markets as the market of liter-ature. Second and more fundamental, for Grampp, divergence in aesthetic and market value seems to be impossible almost by de.nition. Reading Grampp's text carefully, it turns out that the way he implicitly de.nes aesthetic value, any-thing that enters the price also enters aesthetic value. In his de.nition of aesthet-ic value, there doesn't appear to be a place for selection by experts. However, Grampp is not consistent, because he still .nds it necessary to con.rm his theo-ry by showing that the judgments of experts broadly correspond with the prices of art.

12 Cowen (1998). Frank and Cook (1995) 189211 on the other hand emphasize circ.u.mstances that make it likely that free markets in media and culture harm quality.

13 This is also the opinion of Frey and Pommerehne (1989) 93. Like Grampp (1989) and Cowen (1998) they compared auction prices and reputations and came to the conclusion that price and aesthetic value basically correspond. Ac-cording to them, taking into account different styles adds to the explanation of discrepancies.

14 Utility functions are interdependent. (Some economists, like Becker (1996) 7-18, try to stick to the traditional approach by compromising; they a.s.sume that basic preferences are given, while many day-to-day preferences depend on so-cial factors.) 15 Cf. Blaug (1980) 49.

16 Bourdieu (1992), Elias (1981, ed princ 1970), Goudsblom (1977), Janssen (2001) 348 and Luhmann (1995 ed. princip. 1984 in German).

17 In the a.n.a.lysis of government behavior in Chapter 10 I shall, however, depart from methodological individualism.

18 Extensive literature exists on value concepts. Cf. Smith (1988), Anderson (1993), Klamer (1996) and Throsby (2000).

19 The economist Sen (1982) in his well-known chapter on Rational Fools used the related notion of meta-ranking. The notion of values of different orders is used, among others, by the literary theorist Smith (1988).

20 This example I borrow from Plattner (1996) 18.

21 Experts may argue that the Rembrandt example is of a different order, because the new techniques only bring forward what was already there. This argument, however, applies as much to the Monroe portraits, the provenance or corporate purchases. All of these are social events that make viewers look anew, see things they hadn't seen before and thus have a new aesthetic experience.

22 Smith (1988) 32. Speaking about the role of interpretation, the philosopher Danto (1986) 26-43 comes to a similar conclusion.

23 I .nd this an acceptable approximation. In spite of the uniqueness of art prod-ucts and in spite of the strong effects of fame, art markets are relatively competi-tive from top to bottom. However, unlike in neo-cla.s.sical economics, I do not a.s.sume that consumer preferences are independent.

24 Frank and Cook (1995) 26.

25 In a commercial gallery, consumers do not in.uence the price in the short run, because prices are given. The .rst willing to pay the price gets the painting. However, when many consumers are interested, prices increase over the long run. On the other hand, when consumers are basically uninterested, prices sel-dom go down. Cf.Velthuis (2002). Nevertheless, in the latter case, artists sell fewer paintings and the market value of their oeuvre rather than of single works of art goes down. It is a matter of quant.i.ty not price. (Although Rengers and Velthuis (2002) use their data for other purposes, as noted before, their data con.rm this .nding.) 26 Frank and Cook (1995) 26.

27 Bourdieu (1977).

28 The work of Bourdieu, for instance Bourdieu (1986) 241-258, contributed to the narrow use of the term 'economic' as in 'economic capital'.

29 So far, not one de.nition exists of cultural and social capital. In economics, there is a tendency to start all over again and to ignore de.nitions developed earlier in sociology. Cf. Becker (1996) 7-18, Throsby (1999) and Throsby (2000) 45-50. Whereas Throsby uses the term 'cultural capital', Becker uses the term 'personal capital' instead. Both use the term 'social capital'. Both have evi-dently been in.uenced by Bourdieu who was the .rst to present a differential capital theory; among others in Bourdieu (1986) 241-258. His theory directly and indirectly had an enormous impact in sociology as well as economics. For the purpose of this book, a precise de.nition of the various forms of capital is not necessary. However, in order to prevent too many parallel approaches, I pre-fer to stay close to the way Bourdieu handles the capital categories. His ap-proach is subtle and versatile. A large variety of problems can be handled by it.

30 According to Bourdieu (1986) 241-258 cultural capital can also take inst.i.tu-tionalized forms like a diploma, or objecti.ed forms like books and paintings.

31 If social and cultural capital was easy to transfer into monetary capital and vice versa, there would be no need to distinguish them. It is only because of the con-version problem that a differential capital theory is necessary. It should be not-ed that economic, cultural and social capital add to symbolic capital. Bourdieu (1986) 241-258. Not to complicate matters, I do not treat symbolic capital.

32 For instance Crane (1976), Janssen (1998), Nooy (1993), Peterson (1994), White and White (1995) and sections in Albrecht, Barnett et al. (1970) and Fos-ter and Blau (1989).

33 See note 11.

34 Heinich (1998).

35 Some people in the 'established' avant-garde or contemporary circle do not use the term 'avant-garde' any more. ('The avant-garde is dead', or 'everything is avant-garde.') 36 This estimate and the earlier statement about the lower prices in the top of the avant-garde is based on interviews with dealers, employees of auction-houses in Britain and the Netherlands and on my own observations at art fairs in the Netherlands, Germany and Belgium.

37 The term 'cultural elite' stems from Bourdieu (1979). Swaan (1986) introduced the term in the Netherlands. As in the case of economic capital, the term 'eco-nomic' in combination with elite is used in the limited sense of '.nancial'.The term 'cultural elite' stems from introduced the term in the Netherlands. As in the case of 'economic capital', the term 'economic' in combination with elite is used in the limited sense of '.nancial'.

38 The differences between the two groups in personnel and taste is demonstrated at length in Bourdieu (1979) 260-317.

39 Bourdieu (1979) 11-63 attaches speci.c characteristics of art not only visual art to the different preferences of these elite's. He states that the members of the new elite prefer art in which the emphasis is on formal qualities, while the older elite prefers works of art, which are more descriptive and expressive. This latter preference can also be found among common people. In a broad sense, the distinction probably holds some truth. Traditional modern art is often expres-sive and otherwise its realism is of a story-telling nature, while avant-garde art is more self-referential. And in its formality, avant-garde art invites to the kind of intellectual activity that the cultural elite particularly enjoys. Nevertheless, in my view these preferences are not .xed. It is hard to predict how they will devel-op. Bourdieu (1979) and Swaan (1986) 30-32 tend to interpret the preference of the new cultural elite for formality at the cost of description and emotion as a logical step in a civilizing process. However, it could well be that they misinter-pret the role of the arts in the civilizing process. In my view, it is not impossible that, for instance, in the future description and expression will become more im-portant in elite art, while the 'common man' will prefer abstraction. (For in-stance, popular strips and animation series' on television are already very ab-stract.

40 According to Meulenbeek, Brouwer et al. (2000) 41 this percentage is 25%. Meulenbeek et al. underestimate this percentage, because they attribute the money that foundations ('stichtingen' and 'instellingen') spend in the art market to the private sector (p.10-2), while part of it is public money. Because it is im-possible to determine how much money comes indirectly from the government through these inst.i.tutions, it is safe to say that the government share in the visu-al art market lies somewhere between a quarter and a third. (However, the pres-ent growth of the visual art market in the Netherlands comes exclusive on ac-count of private buyers. Therefore, the large government share is becoming a lit-tle smaller.) 41 Although government spending on visual art per capita is high in the Nether-lands, it is not much higher than in most other mainland Western European countries. Cf. Ernst (1999).

42 An investigation, commissioned by the French Foreign Ministry and reported on by Charles Bremner in the internet edition of The Times of June 132001, em-phasizes the negative effects of state patronage on contemporary French visual art. 'French contemporary artists are being pushed out of the world market be-cause of sti.ing state patronage...', '...neglecting the visual for the sake of philo-sophical texts'.

43 Colleagues and experts I know, who are familiar with the present situation of the visual arts in both countries, basically agree. Nevertheless this view can be disputed, and the differences between the countries can also be explained in oth-er ways.

44 The merit good argument and rent seeking are treated more extensively in Chapter 9.

45 Among others, this type of rating can be found in the German magazine Capital.

46 Bourdieu (1977).

47 Symbolic gains can be made by gradually converting the form of capital that is redundant into forms of capital, which are relatively failing. For instance in families, which have been successful in industry and commerce, their children's cultural education is likely to be emphasized. On the other hand, members of the cultural elite manage, often with the a.s.sistance of the government, to .nd increasingly well-paid jobs for themselves and their offspring and so their mone-tary capital increases.

The Sel.essly Devoted Artist

1 People by de.nition maximize utility under constraints.

2 Private satisfaction is not the same as utility; it is an internal reward that offers utility.

3 Frey (1997) is not speci.c about the line between intrinsic and extrinsic motiva-tion, but he tends to limit extrinsic motivation primarily to being motivated by money. Therefore in his view somebody who is motivated by recognition is in-trinsically motivated. Towse (2001) follows Frey and only refers to extrinsic motivation in the case of an orientation towards monetary rewards. I think their distinction is confusing. Almost anybody would say that, for instance, an actor who tries to please the audience is extrinsically motivated. Therefore to denote the distinction Frey examines it would have been preferable to use terms like 'monetary' versus 'non-monetary motivation' in stead of 'extrinsic' versus 'intrinsic motivation'. The precise distinction, however, is not that important for Frey (p.14), as he primarily investigates the implications of non-monetary motivation in the economy generally. The notion of non-monetary motivation is important for the evaluation of the reward-systems that exist in .rms or that follow from government subsidy-schemes. Frey (1999) applies his theory to government involvement in the arts. He demonstrates that monetary motivation can easily run against non-monetary motivation.

4 Frey (1997) not only speaks of intrinsic motivation but also uses the term 'intrin-sic rewards'. I prefer to speak of 'internal rewards'. As in the case of intrinsic value treated in the previous chapter rewards can never be altogether intrinsic because they have a social origin. Moreover the term 'intrinsic reward' would unjustly distract attention away from the actor and point to a rewarding object or activity. (I see no problem in using the term 'intrinsic (or extrinsic) motiva-tion', because 'motivation' clearly points to both an actor and an activity.) 5 In the welfare function of artists, internal rewards have a relatively high elastici-ty, while external rewards have a relatively low elasticity.

6 The expression 'serving art' (or serving money and recognition) is used in a metaphorical sense here and elsewhere. (Ultimately 'art' is not an ent.i.ty that artists can serve.) 7 It does not matter whether artists are deliberately 'sel.ess' or deliberately try to better themselves. All that matters is whether it can be observed that artists are indeed 'sel.ess' or that artists are only trying to improve their position. Most economists a.s.sume that people unconsciously pursue rewards in order to be-come better off. In this approach, asking artists about their intentions serves no purpose. And when artists are asked about their intentions, the outcomes are likely to be biased. Because artists deny the importance of the economy, artists will almost certainly stress their devotion and deny that they are in it for person-al gain.

8 In the case of average artists, income enters in the welfare function and also as in-put in the production function.

9 Throsby (1994a).

10 Towse (2001) 485, Rengers and Madden (2000) 347, Throsby (1996) 233 and Throsby (1996a).

11 If artists have an inheritance, this money can be spent on making art without re-ducing the time available for making art. Therefore, rich artists, whether they are talented or not, can be seen buying the most expensive paint, the best musi-cal instruments, etc., things that more talented artists might be jealous of.

12 Throsby (1994a) 74.

13 On average, artists who earn more than the minimum income constraint are mainly interested in non-monetary rewards, but are not totally immune to extra .nancial income. Therefore, it should be stressed that the conclusion broadly applies to large groups of artists and not necessarily to speci.c groups. In dis-cussing the response to money Rengers and Madden (2000) 339 distinguish various groups of artists. They argue that a group of 'regular' artists exists that is just as responsive to money as other professionals are. These are primarily ap-plied artists, who therefore fall outside the scope of this book. Generally the marginal returns of more money is said to diminish quickly. In a graphic representation, the curve representing the returns corresponding with increasing income will, at the survival level for artists, show a sudden change in direction. In cases of other types of rewards such as private satisfaction or recognition, marginal returns are likely to diminish as well but less abruptly. See the .gures mentioned in the notes 44 and 48 of Chapter 5.

14 For a general philosophical approach to 'autonomy' see for instance Blokland (1997 ed. princ. in Dutch 1991).

15 A binary ordering replaces a continuous ordering.

16 Cf. Berg (1994). Bevers (1992) 77 emphasizes that autonomy does not exclude the possibility of a convergence of the cultural, political, and business spheres in technical and instrumental aspects.

17 Cowen and Grier (1996) 5.

18 These phrases stem from Freidson (1990) and Jeffri and Throsby (1994) respec-tively. Both are cited by Menger (1999) 554. In a.n.a.lyzing incentives and re-wards Towse (2001) 477 states that artists are motivated by an intrinsic inner drive, and that therefore, in her view, incentive and reward diverge. Because in my approach artists can reward themselves, I do not stress the divergence.

19 Cf. Gogh (1980).

20 Although Frey (1997) 14 uses another distinction between internal and exter-nal rewards and motivation (see note 3), he also acknowledges interdependence.

21 Cf. Finney (1995).

22 Cf. Janssen (2001) 342.

23 This approach to learning rests on the primacy of rewards: within a stimulus-re-sponse approach past rewards (and punishments) govern future behavior. Pre-sent day learning theories are not that simple. Other learning princ.i.p.als like imi-tation supplement the older approach based on stimulus-response. Cf. Kohlberg (1984).

24 Cf. Abbing (1996).

25 Klamer, Mignosa et al. (2000) 26 Jenkins (1992) and Jong (1997) present useful introductory texts on the habi-tus-.eld theory of Bourdieu.

27 Bourdieu uses lengthy descriptions to give meaning to the concept of the habi-tus. He refuses to develop immanent 'de.nitions' of the habitus and related con-cepts. Cf.Bourdieu (1990) 66-69 and Bourdieu (1992).

28 Cf. Jong (1997).

29 In my view, the habitus-.eld theory can be of special interest for economists. I give four examples: (1) this theory reminds the economist that there is more un-der the sun than just preferences, rewards, and calculation. Human beings are neither puppets, which can be moved at will by pulling a string or offering them a reward, nor are they fully independent, rational, and calculating individuals. In their habitus they are linked to their social surroundings in ways, which go beyond a simple motivation by rewards. (2) Economics has problems in explain-ing behavior that apparently goes against its own interests. For instance, a doc-tor leaves his house in the middle of the night to voluntarily help a patient with-out anybody noticing. Given the habitus, this is the 'natural' way to behave. (3) Because of the free rider problem, economists expect voluntary groups pursuing a common cause to be unstable, because it is advantageous to leave the group. Given the habitus and its dispositions, short-term advantages of leaving are not even perceived. The 'culture' is such, that leaving simply does not come to most people's minds. (4) The notion of the habitus contributes to a better under-standing of informal monopolization Chapter 11.

30 Bourdieu (1992) 121-128 uses the expression 'sense of the game' ('sens de jeux').

31 A sense of the game does not imply that accidents do not occur and that chance is unimportant. Moreover, some initial choices can predetermine future actions such as the case of so-called path dependence. See also note 33.

32 I doubt the usefulness of a fully interdisciplinary approach compared to a multi-disciplinary approach. I think that the latter should precede the former and that it may not always be wise to aim for interdisciplinarity.

33 Laermans (1996) criticizes Bourdieu's habitus-.eld theory because it puts too much emphasis on the a.s.sumed strategic behavior of people in the art world. It follows that this criticism a fortiori applies to the approach of this book. Laer-mans tries to offer an alternative based on the system-theoretical constructivism of Luhmann (1995 ed. princip. 1984 in German). According to Laermans, choices in the arts are not that strategic. Initially there is often plenty of choice and in that situation, chance is sometimes more important than strategy. More-over, once the initial choice is made, there is often little left to choose. Because of what economists call path dependency, future choices are broadly predeter-mined and can therefore no longer be strategic. Laermans seems to present this theory or approach both as a subst.i.tute for Bourdieu's habitus-.eld theory and as a supplement. It certainly is a useful addition, but in my view, especially when more than just individual artistic decisions are studied, it cannot replace the habitus-.eld theory. In this context, it should be noted that most theories do not try to explain individual decisions in detail. They try to explain the average behavior of small or large groups, and such behavior can very often best be ex-plained by a.s.suming strategic behavior.

34 Cf. Finney (1995).

35 Cf. Janssen (2001) 342.

36 Bourdieu (1983) 349.

37 Rengers and Plug (2001) 11 discovered that a relatively large proportion of self-taught .ne artists receive no money from the government, and depend solely on market income, which implies that art colleges form part of the 'of.cial', gov-ernment-oriented art world.

38 Products can be practices. According to Finney (1995) 27 artists are naturally attracted to that particular style or game judged most likely to lead to success.

39 Artists themselves can also be a source of reward, because of internal subsidiza-tion and because they 'offer' personal satisfaction to themselves.

40 Cf. Rengers and Plug (2001) 4. They write "An artist, who is working on a gov-ernment a.s.signment, cannot produce for the market. Artists now compete for subsidies, and the requirements for receiving these may very well be different from the criteria for receiving market recognition."

41 Bourdieu (1992) rejects any a.s.sociation between his approach and Neocla.s.sical Economics or the Rational Action Theory.

42 Only a small portion of these paintings is made in factory-like conditions.

43 Rengers and Plug (2001) 13-5 also found path dependency in the careers of Dutch visual artists.

44 Rengers and Plug (2001) 14, who examined data on Dutch visual artists, con-.rm this .nding. On pages 8 and 9 they ask whether it is a specialized market, a winner-take-all market or an independent market that is typical for the struc-ture of the visual arts market in the Netherlands. In my view, these are not mutu-ally exclusive structures. Specialization for younger artists can evolve into a winner-take-all situation for some older artists.

45 Bourdieu (1977) uses this example.

46 As noted in the previous chapter, if there was an exchange rate and capital could be exchanged easily, it would not have been necessary to distinguish different kinds of reward and capital. A conversion problem exists: it is hard to transform monetary capital into cultural capital or social capital and vice versa. This phe-nomenon is central in the work of Bourdieu (1992).

47 Presently in some areas in the performing arts, the government tries to stimulate the underdeveloped orientation towards the market by matching its funding to market performance. Such schemes are confusing for companies, because in the short-term, more orientation towards the market can lead to more income from the government, but this is bound to cause a reduction of income from the gov-ernment in the long-term.

48 Meulenbeek, Brouwer et al. (2000) 15 and 41. Adding social security bene.ts it is 55%. Because it was especially true in those days that social security bene.ts served as an indirect form of subsidization, the latter percentage is not irrele-vant.

49 For instance, during this period at the Amsterdam Rietveld Academy, a painter like Herman Gordijn and many of his less well-known colleagues were in fact forced to leave.

50 This particular subsidy scheme will be discussed in more detail in section 6.5.

51 Not all of the duped artists left the .eld. Unsurprisingly, some of them found their way to the new but reduced levels of subsidies. Only a small number of artists managed to adopt new att.i.tudes and turned successfully to the private market for their incomes. Dun, Muskens et al. (1997)

Money for the Artist

1 In 1999, Lannoye (2000) interviewed mostly .ne arts students at a Dutch art school. Among them .rst-born male students were under-represented. (The fact that according to Getzels and Czikszentmihalyi (1976) famous artists are often eldest sons does not necessarily contradict Lannoye's .nding.) 2 This a.n.a.lysis of the family and of the position of the artist is similar to Bourdieu's a.n.a.lyses of cla.s.s in relation to the position of the artist. Bourdieu (1979).

3 See also note 3 of Chapter 4.

4 Forbes (1998-1999) These and the following data stem from the lists 'Forbes Celebrity Hundred', 'Forbes Top 40 athletes', 'Forbes Top 40 Entertainers', 'Corporate America's Most Powerful People' and 'Top Executive Incomes Out-side the us' published in issues between September 1998 and September 1999. Updated versions of these lists can be found at: http:// www.forbes.com. Own-ers and entrepreneurs, who sometimes earn more than top artists and athletes, are not really professionals. It is debatable whether politicians and administra-tors are really professionals. Nevertheless, if managers are considered profes-sionals, the average income among the Top 40 managers in the us is less than the average income of the Top 40 entertainers including the aforementioned artists. Forbes excludes politicians in of.ce from its annual study, but the ex-politician, George Bush Sr., appears at the bottom of the Celebrity 100 list, as does Colin Powell. At that time, both were active on the lecture circuit.

5 Most professionals with extremely high incomes are really also entrepreneurs. The income earned from their companies' activities exceeds their income earned from their professional functions; moreover, they often earn money trading stocks. This certainly applies to many successful artists like Michael Jackson, John Irving, and Steven Spielberg. In theory, their income from general entre-preneurial activities should be subtracted when discussing professional in-comes, but in practice this is impossible. Because almost every professional with a high income develops this kind of activities, the effects broadly offset one an-other and rough comparisons can still be made.

6 Wa.s.sall and Alper (1992) show that the incomes of .ne artists are more unequal-ly distributed than usual.

7 Frank and Cook (1995).

8 Frank and Cook (1995) 24. Not to confuse readers I shall use the phrase winner-takes-all and not winner-take-all as Frank and Cook do.

9 Frank and Cook (1995) 24; Rosen (1981).

10 Rosen (1981). Depending on one' notion of talent, major income differences can also arise when there is no difference in talent. This is the thesis of Adler (1985). MacDonald (1988) again offers a slightly different explanation of the skewed income distribution in the arts. Towse (1992) 209-217 a.s.sesses and complements the models of Rosen (1981), Adler and MacDonald. Moreover, Towse (1992) 211 shows that difference in talent matters and is often larger than the other authors tend to think. Hamlen (1991) also concludes that the large income differences of pop singers correspond with substantial differences in voice quality.

11 Relative differences can vary over time. In the case of paintings made by Ver-meer and 'Vermeer paintings' made by Van Meegeren experts have had prob-lems in the past telling the difference, while nowadays almost anybody can tell the difference.

12 Frank and Cook (1995) 32.

13 Frank and Cook (1995) 38-39. They mention a total of nine sources for the emergence of winner-takes-all markets.