Who determines market value? As previously noted, in standard eco-nomics, there are numerous independent players who determine price. In neo-cla.s.sical economics, so-called 'sovereign' consumers come .rst. Pro-ducers are relatively unimportant; they adapt their behavior to the wishes of consumers. Our argument as well is based on the notion that producers are relatively unimportant when it comes to directly in.uenc-ing the market value of art-products.23 (If they do manage to, it is usually via experts as co-producers. As we shall see, such experts in.uence market value via their opinion on aesthetic value.) Not all consumers in.uence market value. And when they do, they do so to varying degrees. In so-called deep-pocket markets, buyers need deep pockets (lots of money) to partic.i.p.ate and ultimately in.uence market value.24 Important paintings are sold in deep-pocket markets. I will .rst look at an individual transaction. When a speci.c painting is sold, it appears that one rich person's willingness to pay determines its market value. As noted earlier, however, other wealthy people operating in the background also help to determine market value. This becomes particularly clear in an auction setting. The more interested people with money attending the auction, the higher the price. (In a commercial gallery the mechanism is much the same, but more indirectly and with more constraints.25) If instead of noting the market value of a single painting, we look at the value of the entire body of work, for instance of a certain genre, its market value depends on the willingness of a group of buyers to pay. Suppose we compare the developments in the sales of new .gurative paint-ings and abstract expressionist paintings. And suppose we .nd that the sales of the .rst increase more than the latter's. In that case, it means that the relative willingness of rich consumers to pay for new .gurative art has increased. Metaphorically speaking, people who can afford such paintings can be said to have 'voted' for the goods on sale. Therefore, market value is not unlike the outcome of an electoral process where people with enough money 'vote' for products. In this example, new .g-urative art is the winner compared over abstract expressionism.

Not only deep-pocket markets but also so-called ma.s.s markets exist in the arts.26 For instance, cds and books are sold in ma.s.s markets. They are relatively cheap and therefore more people can afford them. Here as well market value depends on consumers' willingness to pay. But here willingness to pay is re.ected not in higher prices but in higher sales. In a ma.s.s market, the metaphor of an electoral process is even more apropos. Buying a cd by a popular composer or a book by a successful author immediately adds to sales. The fact that these purchases are often recorded in best-seller lists adds to the voting a.n.a.logy.

But not just technically reproduced art is sold in ma.s.s markets; art museums and cinemas also operate in ma.s.s markets. The live performing arts operate in an intermediate position, because attending a live per-formance is relatively more costly, but not as costly as buying paintings. Meanwhile, overly expensive performance art outings operas or small exclusive pop concerts tend to operate in deep-pocket markets.

In both ma.s.s and deep-pocket markets, the sine qua non of in.uence on market value is purchasing power. People must have suf.cient money and be prepared to spend it on the works concerned. The difference, then, between ma.s.s and deep-pocket markets is that low prices means more people are able to partic.i.p.ate in ma.s.s markets than in deep-pocket markets. Thus, market value in deep-pocket markets depends on the willingness of a small group of rich people to pay, while in ma.s.s markets it depends on the willingness of large groups of less wealthy consumers to pay.

In keeping with our electoral process metaphor, people can be said to vote for various products in the art market, and market value can be said to be the outcome of this process. It is not a democratic process however. The number of votes people can cast depends on their purchasing power.

In extreme deep-pocket markets, small groups or maybe even a single person can decisively in.uence market value. When one of the Saatchi brothers, from the London advertis.e.m.e.nt agency Saatchi and Saatchi, started buying Damian Hirst's artworks for their private collection, the pricetag for these works immediately increased. And when he then subsequently sold off the collection's Sandro Chia paintings, the monetary value of Chia's oeuvre decreased considerably.

Because the rich have large reserves of disposable income, their eco-nomic in.uence on market value is considerably larger than of the poor. But this only applies to individuals or to groups of the equal size. If prices are low enough and the group of 'poor' people is large enough, their col-lective economic power can be just as decisive. Social groups who in the past had little disposable income to spend on luxury goods have since gained a considerable degree of purchasing power. They tend to spend more and more on cheap, mainly technically reproduced, art products and thus they have a sizeable in.uence on the market value of these prod-ucts. Therefore, it's really not so surprising that, unlike art dealers, record companies prefer to target the tastes of these ma.s.ses instead of small wealthy groups of art consumers.

Thus, in ma.s.s markets large groups willing to spend money on art determine market value, while in deep-pocket markets a small group of rich people willing to spend their money on art determines market value.

If these groups, in fact, determine market value, who determines aes-thetic value? Given the de.nition of aesthetic value as formulated above, experts determine aesthetic value. Like buyers, experts can be compared to voters. And like market value, aesthetic value can be compared with the outcome of a voting process. In the case of aesthetic value however, it is not purchasing power, but the power of words or cultural power that determines the number of votes partic.i.p.ants have. An expert with a good reputation evidently has a larger say in the determination of aesthetic value than an unknown art historian who has just earned his or her mas-ters degree.

It must be noted that in our approach in this chapter, we do not pay separate attention to the in.uence of producers artists, record compa-nies, publishers, and other partic.i.p.ants in the art world. but this does-n't mean that producers are irrelevant in the determination of aesthetic and market value. For the sake of the argument however, I place 'produc-ers' in the category of 'experts'. In the words of Bourdieu, they produce belief.27 They in.uence aesthetic value and, if market value and aesthetic value are not independent of one another, they also indirectly in.uence market value. (In later chapters, speci.c attention will be paid to the power of producers and their inst.i.tutions.) Power Differences Rest on Economic, Cultural and Social Capital Is it possible that the powers of the social group that leading experts belong to are different from those of consumers? On average art con-sumers are part of a social group that has relatively more economic capi-tal (wealth) and income at its disposal and thus has more purchasing or economic power. When buying art they use their economic power to do so. Their spending in.uences the market or economic value of art. Mean-while, experts are part of a social group that has much cultural capital and therefore, more cultural power. The experts use their cultural power in the arts. Their cultural in.uence or cultural authority affects the aes-thetic value of art.

Economic capital consists of money and a.s.sets like real estate that can be quickly converted into cash. (As with the terms 'economic' sphere, 'economic' value and 'economic' power, the use of the term 'monetary' or '.nancial' capital instead of 'economic' capital would have been preferable, but by using 'economic capital' I do not deviate from common usage.28) Sociologists introduced the concepts of cultural capital and social cap-ital. Recently, an increasing number of economists have started to use these terms as well.29 Cultural capital refers primarily to incorporated abilities and dispositions. Cognitive abilities are part of cultural capi-tal.30 Social capital refers to present and potential resources that arise from a network of social relations. Reputations often symbolize the pos-session of social and cultural capital. Unlike economic capital, social and cultural capital cannot easily be exchanged or bought and sold.31 The differences are relative. On the one hand, the experts' social group not only has cultural capital, but also some economic capital. After all, most experts have more money to spend than average people. But each expert has less to spend than the average rich person who buys paintings; and as a group experts have also less to spend than the large group of buyers of books. On the other hand the 'money-people' buying visual art not only have economic capital but also some cultural capital. They certainly have more than average cultural capital, but nevertheless their cultural capital is less valuable than the experts' cultural capital.

Economic capital is important in the market; it enables spending. Col-lective spending determines the market value of a group of art products. In determining aesthetic value, cultural capital is the most important. With their capital, experts in.uence aesthetic value. They do so within a discourse among themselves and within larger social groups of which they are part. Collectively, they select and weigh the factors that deter-mine aesthetic value. Social scientists have written extensively about this selection and weighing process.32 In the establishment of aesthetic value, the possession of cultural capital is decisive and in the establishment of market value, it is the posses sion of economic capital that matters (thesis 17). If the social group accommodating important buyers and the social group accommodating leading experts differ in their composition of capital and, consequently, in their tastes as well, this explains that economic and aesthetic value do not always correspond.33 They may even have a negative relationship as some artists and art lovers insist.

In Ma.s.s Markets Quality and Sales Easily Diverge Why does the art that experts judge as inferior often sell so well in ma.s.s markets? In fact, it sells better than 'quality art'. This is a common phe-nomenon in the ma.s.s markets of books, cds, .lms, and videos. For instance, the market value of Steven Spielberg .lms is much higher than the market value of Werner Herzog .lms. The same applies to the books of Allistair McClean in comparison to those of William Golding. Never-theless, most experts would agree that Herzog and Golding offer higher aesthetic value.

Unlike deep-pocket markets, it is unlikely that this phenomenon is caused by the variance in the composition of capital between average experts and average buyers. (Experts are likely to have both more money and more cultural capital than average buyers, but not necessarily in dif-ferent proportions.) It is caused by differences in the collective purchas-ing power that determines market value. Average buyers with average tastes enter ma.s.s markets in large numbers and so boost the market value of art that experts have deemed to have little aesthetic value. Therefore, the difference in purchasing power between large groups with little cul-tural power and small groups with a lot of cultural power offers a rather obvious, but easily ignored, reason for the occurrence of deviations between ma.s.s market aesthetic and market values.

In ma.s.s markets, the general rule is that aesthetic value deviates from market value. This is shown in the cases of the two directors and the two authors. In ma.s.s markets, large groups of consumers buy works of art, such as books and cds or tickets to live performances and .lms. Even though individual people may have little disposable income, collectively they have a great deal of money to spend and they spend it on numerous cheap works of art, thus boosting their market value.

Whereas, the collective in.uence of ma.s.s consumers on market value increases in proportion to their numbers, the same does not apply to their in.uence of aesthetic value, however. It is true that they have their own experts who share their various tastes. These experts tell their stories on popular television programs and in the daily newspapers. Nevertheless, despite their large numbers, the overall in.uence of these experts in terms of determining aesthetic value is relatively small. They have little cultural power or in.uence, especially compared to the group of high culture experts. And because these high culture experts tend to belong to differ-ent social groups, their cultural preferences differ and they attach little aesthetic value to the art preferred by the average consumer. (In this case, although collective spending is the sum of individual spending, the col-lective cultural in.uence is not the sum of the individual cultural in.u-ences. Unlike money, cultural capital is embodied and is thus dif.cult to transfer from one person to another. Numbers do not necessarily add up to cultural power.) The lack of correspondence between aesthetic and market value in ma.s.s markets is related to the phenomenon of cultural asymmetry, which was discussed in Chapter 1. The argument was that as long as there is social strati.cation and as long as art products are used for designating one's position in social s.p.a.ce, judgments about art will remain asymmet-rical. People from the upper echelons of society 'naturally' look down on the art of those below them, while the latter 'naturally' look up to the art of the former. Although the lower cla.s.ses of consumers are not wealthy, c.u.mulatively they have a lot of money to spend. And even though they may admire their social superiors, they do not spend their money accord-ingly. And so here is where market value deviates from aesthetic value.

Because high culture experts come from the upper echelons of society, their tastes are necessarily different from the average consumer. There-fore, economic value and aesthetic value tend to systematically deviate in ma.s.s markets (thesis 18). This proves that both the economist and the artist are sometimes right and sometimes wrong. High aesthetic value and low market value can go together, but not necessarily. The devia-tions in value reveal differences in power. It took quite an effort to reach this rather obvious conclusion. But this will make it easier to explain deviations in economic and aesthetic value in deep-pocket markets.

The Strife for Cultural Superiority in the Visual Arts (An Example) The visual art market is a deep-pocket market. It offers a good opportu-nity for us to discuss the possible deviations between aesthetic and market value. In numerous countries over the last decades, a divergence between market and aesthetic value has developed in two important styles in the visual arts. In comparing these styles, a refutation of the economist's notion that quality and sales correspond seems to emerge.

The two style groups are not always called by the same names. I follow Nathalie Heinich who uses the relatively neutral terms 'modern art' versus 'contemporary art'.34 Within brackets I shall however, also use the more commonly used terms 'traditional art' versus 'avant-garde art'.35 The styles involved are dif.cult to describe. They are probably best understood in connection with the names of well-known artists a.s.soci-ated with the two groups. In Britain for instance, Damian Hirst repre-sents contemporary (avant-garde) art, while Freud, Auerbach, and Kitaj represents modern (traditional) art. It must be emphasized that in this book the term 'avant-garde' refers to a group of related and established styles and not to avant-garde in a literal sense. (After all, art cannot be established and avant-garde at the same time. Currently, 'cutting edge art' sometimes replaces the terms 'contemporary art' and 'avant-garde art'. In Britain, 'traditional art' or 'modern art' is also called 'serious art'.) Modern (traditional) artists develop their art from within an existing long-standing artistic tradition. The motto is continuation with modi.-cation. Another characteristic is the emphasis on authenticity. The per-sonal touch of the artist is easily recognizable. Contemporary (avant-garde) art, on the other hand, tries to offer an alternative to earlier art movements, such as realism and impressionism, in particular. Sometimes visible references are made to these earlier styles, but more as a comment, than as an extension of the already established tradition. Authenticity is not altogether absent, but also not over-emphasized. This kind of art tends to be self-referential. That is particularly true in conceptual art and in installations.

The market value of modern (traditional) art is as high or higher than the market value of contemporary (avant-garde) art. Top incomes are higher in the modern (traditional) area than in the contemporary area. For instance, Lucian Freud earns considerably more than Damian Hirst. Nevertheless, the main difference has less to do with extremely high incomes, than with the number of artists who earn attractive to fairly high incomes. That number is also thought to be higher in the modern (traditional) area.

In the Netherlands, these two markets could be separated reasonably well until quite recently. Because most important critics tend to ignore traditional art, people tend to think that the market is small. But judging from art fairs, and artists I know, a different picture begins to emerge. Modern (traditional) visual art by living artists probably has at least as large a share (if not a larger share) of the total market than avant-garde art does.36 But when it comes to aesthetic value, a different picture begins to develop. Whereas the market value of modern (traditional) art tends to be higher, its aesthetic value is lower than that of contemporary (avant-garde) art. Most of the acknowledged leading experts tend to favor avant-garde art. It should be noted, however, that both modern (traditional) art and contemporary (avant-garde) art have their own cir-cles of experts. For instance, in Britain in the nineties, Damian Hirst was the darling of the avant-garde experts and his work was considered of the highest aesthetic value. Traditionalist experts meanwhile, preferred the work of Freud and Auerbach.

At present, in most countries the contemporary (avant-garde) art experts are more in.uential. They don't value modern (traditional) works of art. That is why the aesthetic value of traditional visual art is considered less than that of avant-garde art despite its higher market value. The in.uence of traditionalist experts, then, is obviously much less, but not altogether absent either. This varies from country to coun-try. Dutch traditionalist experts .nd themselves more and more in the shadows of the avant-garde experts. In Britain however, the two aesthetic camps continue to compete. There traditionalist experts and artists do not submit to the dominance of the avant-garde and still .ght for a return of their past supremacy.

The Power of Words Challenges the Power of Money Why do the contemporary (avant-garde) visual art experts have more cultural authority than the modern (traditional) visual art experts? Apparently the avant-garde's cultural capital is more valuable than the traditionalists. The avant-garde experts belong to the so-called 'new cul-tural elite', which challenges the traditionalist 'economic elite'. The tra-ditionalists are connected with the economic elite that has most eco-nomic capital.37 Thus we can say that the two groups differ in the composition of their capital.

These elites are obviously made up of different types of people. The economic elite can buy art; sometimes art that costs millions. The cul-tural elite meanwhile is made up mostly of well-educated wage earners with less money to spend and thus buy fewer and cheaper artworks. These elites have different social histories and thus, different tastes.38 The cultural elite tends to prefer avant-garde art, while the economic elite prefers more traditional visual art.

Nevertheless, one elite does not exclusively determine market value while the other does not exclusively determine aesthetic value. Indirectly, the economic elite in.uences aesthetic value while the cultural elite in.u-ences market value. On the one hand, experts, such as art historians, who are part of the cultural elite, advise collectors with a lot of economic capital. On the other hand, price and revenue .uctuations from sales in.uence the decisions of experts whether they are aware of it or not. Therefore, values are not independent of one another and most likely over time they tend to converge.

Nevertheless, this convergence can be disturbed by future events that come from outside. The very emergence of a cultural elite itself can be seen as an important convulsion. The phenomenon of people with much cultural capital and little economic capital is new. (It could be a tempo-rary phenomenon.) The present-day cultural elite did not exist a century ago. This new elite both depends on the old economic elite, and chal-lenges its power.

No area is better suited for opposition than that of artistic values, the area where the cultural elite feels most at home and where its cultural capabilities or capital serve it well. In order to challenge the economic elite, the cultural elite embraces the avant-garde, especially in the visual arts. It tries to legitimize its emergence by a.s.sociating itself with modern, innovative, and often intellectual art. The economic elite, with stronger roots in the past, naturally prefers serious or traditional art, which tends to legitimize its long-term existence.39 Successful challengers move from a position of social inferiority to one of equal status, and .nally to a situation of social superiority. In all of these situations different kinds of deviation in aesthetic and market value may occur. And so, the artist is often correct because aesthetic and market value can have a negative relationship. Nevertheless, in deep-pocket markets deviations tend to be temporary, because money and cul-tural authority tend to coincide over time. In this case the economist is right. It follows that the deviation of aesthetic and market value in deep-pocket markets stems from strife for social superiority (thesis 19).

10 The Government Transforms Cultural Power into Purchasing Power How can in.uential experts with little money but with an opinion that deviates from the established market 'opinion' make themselves heard in deep-pocket markets? Why are the artworks these experts prefer made at all if most wealthy art buyers express no interest in it? After all, experts are powerless unless their opinion circulates and their choice of art is exhibited. Who .nances their art and dissertations?

Even though the old economic elite primarily buys modern (tradi-tional) art, a considerable market for contemporary art also exists. Four circ.u.mstances should be taken into consideration regarding this situa-tion.

1A major portion of contemporary artworks are produced by young artists and are sold for relatively low prices. Almost anyone with an above-average income, from teachers to civil servants, can afford to buy contemporary art, even though it might not be every month. And small sums multiplied by large numbers of sales begin to add up. (Especially at the bottom end of deep-pocket markets large numbers are not irrelevant.) 2Although the economic elite in general has a more traditional taste, considerable deviations do exist. Different subgroups within the elite have different social histories. For instance, some families have been rich for a long time; they earned their money in industry, others in trade. While other families, the so-called 'nouveau riche' only more recently became wealthy. Given these differences, it is sometimes advantageous for certain groups within the economic elite to side with the new cultural elite. Therefore, it should not be surprising that a (growing) minority of private collectors buys contemporary art.

3The same argument applies to corporations. The minority of corpora-tions that collect contemporary art continues to grow. Collections, such as the Peter Stuyvesant collection, for instance, draw its share of attention. Shareholders may not always agree with the choices of the art purchased, but shareholders' in.uence is limited. Within these cor-porations the higher-ups, primarily a new well-educated cultural elite, have a considerable amount of leeway when it comes to purchasing art more to their tastes.

4Most importantly, however, is the fact that in many countries, govern-mental bodies and inst.i.tutions (partly) .nanced by the government, purchase contemporary art or subsidize contemporary art.

This means that governments with their large art budgets can certainly harm the economic hegemony of the wealthy. If government spending on visual art is added to private and corporate spending, the average taste of art consumers shifts considerably. This way governments, willingly or unwillingly, are also players in the arena of cultural strife.

In the Netherlands, this latter phenomenon is of particular impor-tance. In 1996, between one quarter and one third of all sales in the visual art market were .nanced with public money.40 The money came from the central government, local governments, museums and other inst.i.tutions that spent public money buying visual art. Not much tradi-tional (modern) art was bought and commissioned with this government money. Therefore, if it is true that the traditional (modern) art market is about the same size as the contemporary (avant-garde) art market, gov-ernment spending accounts for sixty percent or more of the sales of con- temporary art. This implies that in the Netherlands, not unlike in other mainland Western European countries, the avant-garde visual art market is above all a government market (thesis 20).41 Extensive government involvement in mainland Western Europe has become possible with the emergence of the new cultural elite in and around government bureaucracies. Its members occupy important posi-tions in the various government administrations. Therefore, it is only natural that in the con.ict between avant-garde and traditional visual art, governments in a number of European countries have sided with the cultural elite.

Atthesametime,mostgovernmentsarenotsupposedtohaveatasteof their own. They are only supposed to be promoting 'quality' in the arts. Thequestionofwhatqualityis,isleftuptotheexperts.Nevertheless, most government-appointed experts come from the new cultural elite. Therefore,byspendingmoneyoncontemporaryart,thegovernmentnot only follows in the footsteps of the new cultural elite, it also gives cre-dence to the cultural elite's notion of quality. In this manner, govern-ments increase the value of the new cultural elite's cultural capital.

Because of government intervention, contemporary art has emerged as the only relevant area in the visual arts in the Netherlands. The victory of contemporary art is almost complete. In the market, traditional (modern) art is still important, but the aesthetic value battle has been lost. Those working in the traditional (modern) sphere tend to implicitly acknowledge the superiority of contemporary (avant-garde) art. The deviations between market value and aesthetic value has not quite disap-peared yet, but the social strife is largely over.

Compared to mainland Western Europe, British government involve-ment is quite modest. That is why the struggle in Britain is still largely undecided. It is tempting to compare the British situation with that of mainland Western Europe with respect to the effects of government involvement on the development of the visual arts. It is my personal opin-ion that because there is less governmental intervention and because tra-ditional (modern) art is still militant in Britain, the artistic level in both the traditional and the contemporary art worlds is higher in Britain than in mainland Western Europe.

Viewing the works of artists like Freud, Auerbach, and Kitaj, or the modern portraits featured in the National Portrait Gallery in London, it is not dif.cult to see that the artistic level is high in the modern (tradi-tional) arena. In my view, contemporary (avant-garde) art in Britain is also far livelier and more inventive than mainland Western Europe's. Contemporary art in for instance the Netherlands and even more in France suffers under its easy victory: it is complacent.42 Because the British avant-garde is still being challenged, it remains compet.i.tive and alert; it observes its opponents and appropriates the most interesting aspects of its opponents' art. Unlike in the Netherlands, this results in an exiting and interesting cultural climat in Britain's visual arts.43 It is inevitable that even despite the paucity of government intervention, con-temporary art will ultimately triumph in Britain as well, but the resulting cultural climate will be enriched rather than impoverished.

To return to the main issue of this paragraph: in buying art and giving to art, governments use their economic power to increase the market value of art which the reigning experts have judged to be of high aes-thetic value (thesis 21).

11 Donors and Governments Know Best Why is the gift sphere in the arts relatively large? Is it because govern-ments and donors side with the new cultural elite and subsidize its art? If this is true, it cannot be the whole story. After all, the government and donors also fund cla.s.sical music, which is a favorite of the economic elite. Moreover, the market value of cla.s.sical music would go down with-out subsidies and donations, while the market value of contemporary visual art continues to rise regardless. A broader argument may apply here. Whenever market value is lower than aesthetic value according to leading experts, governments and donors tend to step in. They use their economic power through purchases and gifts to protect 'quality'. By giving, they support 'quality' and so they bring the market value closer to the aesthetic value.

As noted in the beginning of the chapter, governments generally subsi-dize arts activities that experts believe to be aesthetically valuable and could not thrive or perhaps even survive without government support. This applies to young unknown visual artists receiving grants as well as to prestigious orchestras and opera companies.

In the case of ma.s.s markets books or .lms, for instance govern-ment and funding organization intervention is limited. They give 'qual-ity' a chance to survive, but any attempt to substantially increase the rel-ative share of 'quality art' in these markets is too costly. But on the other hand, in the intermediate markets of say live music and theatre, for instance, and in the deep-pocket visual art market, donors and govern-ments often manage to increase the relative market value of 'quality art'. (In the case of the visual arts they do this not only through subsidies and donations but also through purchases.) Government subsidies to the arts can be explained in more than one way, as will be shown in the course of this book. One explanation, sug-gested above, has been that leading experts and the social groups they belong to have an in.uence on the government. (This would be a form of so-called rent seeking.) But when you hear the arguments of govern-ments and donors, another explanation comes to the fore. Donors and governments care about people and therefore they worry about 'high quality' art. They believe average people show too little interest in 'qual-ity art' and buy less 'quality art' to their own detriment. They believe that average consumers underestimate the bene.ts of 'quality art'. Therefore, they use their economic resources to buy art and support the arts. This is certainly one possible reason why the gift sphere is so large. It is a so-called merit good argument. Art has special merits that people are insuf.ciently aware of and therefore donors and governments sup-port art. Donors and governments know what is 'best' for two reasons: they know what art is 'best' and they know what is 'best' for the people.44 This chapter's provisionary thesis on the recurring issue of the large size of the gift sphere reads as follows: The gift sphere in the arts is large because governments and donors believe people underestimate the value of 'quality art'. Therefore, they protect and stimulate 'quality art' through donations and subsidies (thesis 22). Their support helps bridge the gap between high aesthetic value and low market value.

12 Market Value and Aesthetic Value Tend to Converge in the Long Run When the government and donors bridge this gap between aesthetic and market value, the correspondence between these values increases. And as the con.ict between modern and contemporary visual art groups gradu-ally disappears, the correspondence between aesthetic value and market value in the visual arts also increases. Is there a long-term tendency towards convergence then? If that is indeed the case then the economist is correct after all. A number of factors point in that direction. 1 Consumers care about the opinions of experts, while experts are in.u- enced by consumer behavior, whether they are aware of it or not.

When the Saatchi brothers boosted the prices of Damian Hirst's work and devalued Sandro Chia's work, experts largely heeded the Saatchi's behavior and changed their aesthetic judgments. On the other hand, art collectors heed expert opinion, for instance by consulting publi cized ratings, which show that the prices of the works of certain artists are out of line with the experts' a.s.sessments. This is how they discover whose work is on the rise and whose value is collapsing. By buying or selling the works of these artists they consequently draw the market value closer to that of aesthetic value.45 2As noted above, government tastes can be at odds with those of the average consumer. This implies that government subsidies and pur-chases bend market value towards aesthetic value, which is the case in the Netherlands. Government subsidies and purchases can also indi-rectly bend market value towards aesthetic value because they have a signaling effect. They alert buyers that what they support is 'high quality art' and consequently consumers start to purchase more of it.

3In the long run, artworks with much aesthetic value can earn artists high symbolic rewards as well as market income. Bourdieu observed that publishers of serious literature and dealers of avant-garde visual art are less interested in immediate returns than their 'lower'-end col-leagues are.46 They make long-term investments. And when, perhaps decades later, it turns out that they were instrumental in launching important artists, they and the artists may be rewarded with everlast-ing recognition, fame, and money.

4As noted, in the long run the two social groups one with economic capital and the other with cultural capital47 will probably begin to resemble one another more and more until they fuse and aesthetic and market value correspond.

Although these forces may bring aesthetic and economic values together in the long run, they can just as easily be thrown off balance again. When the higher echelons become more alike, chances are that new social groups will emerge in the struggle for social supremacy. They are bound to bring along new forms of cultural capital that will in.uence aesthetic value and thus lead to fresh offshoots. If this is a cyclical process, long-term convergence is doubtful.

All these forces also apply to ma.s.s markets but less .rmly. For instance, in the case of .lms, it is possible that in one hundred years, Herzog may be better remembered and more honored than Spielberg. But even then, it is unlikely that over that period of time, his movies would have earned more money than Spielberg's. (This does not contradict Bourdieu's argument, because his approach is based on symbolic rewards. Therefore, in Bourdieu's view, Herzog's work could, in the long run, generate most symbolic returns, but not necessarily more monetary rewards.) Donations and government spending probably can't bridge the gap between aesthetic and market value in the ma.s.s markets because it would just be too costly.

Another difference between ma.s.s and deep-pocket markets is that the gap in values in deep-pocket markets disappears when large artistic areas are set apart. If one looks only at traditional or only at contemporary visual art, for instance, the gap all but disappears. Both areas have lead-ing experts whose judgment on aesthetic value does not deviate much from the market value. On the other hand, agreement between market value and expert judgment exists only in small artistic areas, or subcul-tures when we are dealing with technically reproduced pop music. Because of the ever-decreasing price of the technical reproduction of sound, images, and words on cd, video, cd-rom and dvd, the purchas-ing power of large subgroups breeds all sorts of subcultures with separate aesthetics of their own.

Are pop music and new media art forms the precursors of a postmod-ern era in which many different values with relatively little coherence coexist? And will the other arts follow suit? Asymmetrical a.s.sessment wouldthenbecomeathingofthepast.Formulateddifferently:isitpossi-blethatovertimetheartswillsplinterintomoreandmoresubcultures, whichpeacefullycoexist?Willthethesisofconvergencebreakdownalto-getherina postmodern era? The Epilogue will deal with these questions.

13 Conclusion Why do Alex's colleagues, in the ill.u.s.tration earlier in this chapter, pub-licly ridicule market values, and yet, appear to be fascinated by them? And why to Alex's relief is it that on average an artwork's aesthetic value doesn't remain constant, but diminishes over time, as well as market value?

Apparently, artists are aware that market value and aesthetic value sometimes correspond. Publicly they nevertheless reject market value because they want to believe in the independence of aesthetic value or in a negative relationship between quality and price. But aesthetic value cannot be independent; it cannot rest on the intrinsic qualities of a work of art. Instead aesthetic value is a social value, that is in.uenced by social circ.u.mstances including market value. Because aesthetic value is a social value, it can diminish when works of art gradually become less useful.

Economic and aesthetic value are interdependent. However, this inter-dependence does not necessarily imply the correspondence the economist predicted; nor does it necessarily imply a negative relationship like the artist predicted. In this respect, both artist and economist are wrong. When the power to buy and the power to tell what is good and what is bad art rests with one group, market and aesthetic value may correspond. When these powers are in the hands of different social groups, low qual-ity can have a high market value as well as vice versa.

In markets where expensive art products are sold, like paintings, the latter situation is relatively rare. If it does occur, it is a sign of social strife: groups moving up the social ladder challenge the groups above them. When, however, art products are cheap, like books, a negative relation-ship is more often the rule than the exception. Social strati.cation a.s.sures that the purchasing power of large groups is not related to the cultural power of experts who point out good and bad art.

Both artist and economist are wrong about the relationship between price and quality. General statements about the relationship between market value and quality are not possible. However, it appears that the economist's view is more often right when it comes to a.n.a.lyzing deep-pocket markets, while the artist's view is more often right when it comes to ma.s.s markets.

Donors and governments interfere in the development of market and aesthetic value. For instance, in the recent strife for supremacy between traditional and avant-garde visual art, governments in most mainland Western European countries have sided with the avant-garde favored by the new cultural elite.

The general interference via donations and subsidies in the arts increases the size of the gift sphere. The answer to the recurring question of why the gift sphere is so large in the arts, lies with the desire by donors and governments to protect 'quality art' from the market, because of its special merits, even if other interests lie hidden behind this desire.

Artists, art lovers and donors want to believe that economic value devalues and corrupts art and that only aesthetic value should matter. Whether or not deliberately they side with one form of power, the cul-tural power of the well educated, while dismissing the economic power of not only the well-to-do but also the general ma.s.ses. But both values are revealing. While many people consider it a struggle between art and money, between aesthetic and economic value, between good and evil, the sacred and the worldly, the spiritual and the vulgar, it is basically the .ght between different forms of power. The power to tell what is good and what is bad in the arts competes with purchasing power.

Discussion 1 Is it true that aesthetic value cannot rest on the intrinsic qualities of art alone? 2 Can you provide some arguments against the thesis that aesthetic value and economic value tend to converge over time? 3 Can you provide some examples that show your own appreciation of art having been in.uenced by price or market success?

Chapter 4

The Sel.essly Devoted Artist

Are Artists Reward-Oriented?

Former Teachers and Experts Looking over the Artist's Shoulder Alex considers himself a sel.ess and autonomous .ne artist, but some years ago something happened that made him rethink his position. Alex always works with a model. He asks the model to look him in the eyes while the model is sitting. This is an intense experience for both of them. Alex does his best to record the experience in his drawings. While he is drawing, the model's feelings and judgments seem to be re.ected in the model's eyes. However, Alex gradually discovered that he was also pro-jecting his own feelings onto his model. The model's eyes can turn into the eyes of people Alex has known. Quite often, it's his father looking at him through the model's eyes. What is brought into the drawing is a mixture of the model, Alex and the people Alex carries inside him. In this short-term symbiotic relationship the model and Alex fuse. There is nothing peculiar about this symbiosis. It is Alex's little artistic trick; other artists have their own tricks. However, a few years ago, while Alex was drawing in this way, he had a unique experience that relates to the present topic. Alex was drawing a model who was also an art student. Before they began, they chatted awhile and it turned out that the model knew a lot about drawing. Alex also got the impression that this model was not pleased with Alex's intuitive drawing style. His interests were more conceptual. Alex started to draw him. The model's eyes gradually changed into those of Alex's condemning father. And then something unexpected happened. Alex realized that it was no longer his father looking at him but Rudi Fuchs, the director of the Stedelijk, the most prestigious museum of modern art in the Netherlands. His eyes certainly were not approving of what Alex had drawn thus far. (Alex cannot remember what became of this particular drawing, which probably means it did not turn out to his liking.) This was a shock to Alex. It gave him an uncanny awareness of his limited autonomy. Since then he has come to the realization that all the time he thought he was alone in his studio with his model, there were actually many people present looking over his shoulder. Apart from Mr. Fuchs, there were colleagues, critics, several art school teachers, a few of Alex's students, some important buyers and some members of committees who decided on Alex's applications for government subsidies. For about a year after this experience, his studio actually felt like a crowded place. After a year, these same people were still around, but Alex's awareness of their presence had been reduced to what it had been before. Nevertheless, Alex was sure that they were continuing to in.uence him just as much. Or maybe they in.u-enced him even more, because he was less aware of their power. Once again, Alex had internalized these in.uences.

Concessions in Order to Guard One's reputation Shortly after leaving art school, Alex began concentrating on drawing heads using live models. At the same time, he was doing commissions for portraits as well. These portraits were like his heads, except that Alex thought the commissioned work never reached the quality level of the autonomous artwork. The portraits were in his own style, but consistently less bold. Alex sometimes wished the two sides of his work were more dis-tinct from one another, so as not to confuse people and potentially damage his young reputation as a draughtsman with a distinctive style. So he began to reduce the number of commissions and Alex currently does not accept commissions anymore. This was not a conscious choice of his. Alex just began to realize that he enjoyed commissioned work less and less. But he was sure that his displeasure was due to worries about his reputation. By just about cutting out commissions altogether Alex lost some income, but his reputation began developing the way he wanted it to. Recently Alex started to apply more energy to his photography at the expense of his drawing. This was a conscious choice he made. He just wants to be an avant-garde artist. Even though his drawings are not consid-ered traditional, they never really earned him an established position in the avant-garde. Alex expects that his photography has more of a chance of gaining some recognition in the avant-garde. If that happens it is much easier to have his drawings considered as avant-garde as well. Therefore, although Alex enjoys drawing more and considers his drawings as artisti-cally interesting, he spends most of his time on photography now.

No Bargaining with Autonomy The Audi Deal Recently the German car manufacturer Audi offered the most important modern art museum in the Netherlands, Amsterdam's Stedelijk Museum, an interest-free loan to .nance the building of a new wing. In return, Audi put one of its cars on display in a s.p.a.ce next to the new restaurant. In another adjoining s.p.a.ce, separate from the general exhibition halls, exhibi-tions that refer indirectly to Dutch-German relations would occasionally be organized. Audi would possibly serve in an advisory capacity for these exhi-bitions. A squabble developed, .rst in the daily newspapers and later in the city council. Critics thought that the director of the museum, Rudi Fuchs, was compromising their museum's autonomy. They also thought that, issues of autonomy aside, it was a bad deal Audi was getting too much for too little. This kind of deal is unique and there is no set price. And so it is only natural that city council and other interested parties evaluate the deal. One evening Alex went to a forum about the proposed deal at the Erasmus University. The main faculties here are business administration and economics. So, Alex expected the members on the panel and the audience to have few objections based on principle against the deal. This turned out to be true, as three out of four members of the panel were fervently in favor of this kind of deal. 'If museums can sell attractive tie-in products to .rms, like adver-tis.e.m.e.nt s.p.a.ce or by letting .rms connect their brand name to the name of the museum, it would be stupid not to seize the opportunity.' What amazed Alex however was that these business-minded panel mem-bers and many member of the audience all had one condition. 'The director of the museum must maintain his autonomy.' They were adamant, this was an all or nothing affair. If Audi gets even the least bit of say in the curating process, the deal cannot go through. 'You can't bargain autonomy.' Alex proposed that the director could have 'more or less' autonomy and that his autonomy could also increase by the extra funds he would have at his dis-posal after the deal. However, Alex's notion did not appeal to them. In fact, it was members of the university business department who were the most adamant about the notion that autonomy is all-or-nothing and that money should have no in.uence in the matter. Alex could not help thinking that the resolve of these 'money-people' clearly demonstrated the importance of the denial of the economy in the arts. The Audi deal fell through. It failed at a point in time when there was increased public discussion in the Netherlands about the autonomy of the arts. It was during this time that the State Secretary for Culture proposed to .nancially reward performing art companies if they would actively work toward increasing the attendance .gures among the young. The rest would be penalized by having their subsidies cutback. Parliament blocked the proposed legislation, even going so far as to pa.s.s a resolution ordering the minister to respect the autonomy of art inst.i.tutions. This example as well, proved that autonomy is considered an all-or-nothing affair.

Artists are supposed to be sel.essly devoted to their art. Are artistsimmune to rewards? How immune is Alex when he feels people gazingover his shoulder, who either praise his work or condemn it? And when Alex decides to concentrate more on his photography, is it for the praise or is it merely to 'serve art'? A similar question can be posed to the museum director who is seeking to close a sponsorship deal with the Audi automobile manufacturer. Does he in turn lose his autonomy?

As an artist, I believe that artists are sel.essly devoted to art. They serve art, not Mammon. If artists should emphasize anything, it should be the artwork, not pro.ts. I see myself as a sel.ess and autonomous .ne artist. My friends also see me that way. They note how I stubbornly do my own thing year after year, ignoring customers and the art world at large. (However, I must admit, that on occasion, I catch myself showing off this sel.ess devotion when I'm among friends. Why do I do it? It wor-ries me, but I try not to think about it.) As an economist, I believe that artists, like everybody else, are sel.sh; they try to 'better themselves', whether they are conscious of it or not. This is the only way that I can explain the behavior of artists. Alex, for instance, admitted that he now concentrates on photography in order to be more successful. Therefore, I see no reason to make an exception for artists.

The Sel.ess Artist is Intrinsically Motivated Why is this total dedication to one's art so important for artists and the art world? Why are the demands placed on artists so much higher than for the rest of society (save perhaps those who join the church)? This is because art is sacred. This high status must be protected. If artists were not totally dedicated to art and would make commercial compromises, as ordinary mortals do, it would diminish the status of art. The mythol-ogy surrounding the arts is at stake. Therefore artists, the art world and society must condemn 'self-interested' or 'commercial' artists, or rather, artists they judge to be 'self-interested' or 'commercial'.

The question, however, should be whether artists are really all that sel.essly devoted to art or whether it's not part self-interest that moti-vates them. Is making art an aim in itself or is it a means of achieving per-sonal gain? Are artists then 'sel.ess' or 'self-interested'? The most common interpretation of the term 'commercial' is that 'commercial' artists are 'self-interested' in the sense that they choose the most prof-itable activities inside and outside the art world, not for the sake of art but for their own sake. If, at some stage, photography offers higher gains than drawing, the 'commercial' artist competent in both .elds, will give up drawing for photography or acting to consultancy. The attraction can be monetary as well as non-monetary. Other than pure monetary gain, the commercial artist can also be seeking rewards like recognition and fame. (Although the artist who seeks monetary gain is usually much more likely to be labeled 'commercial' than the artist who seeks recogni-tion, I prefer to use the term in a broader sense.) The well-being of a commercial artist depends on external rewards like money, recognition, fame and not on the 'making of art'. A non-commercial artist, one 'sel.essly' devoted to art, on the other hand, is only concerned with the 'making of art'. There are no external rewards. Some will argue that the sel.ess artist does not exist. (In standard eco-nomic theory, people are sel.sh by de.nition.1) It seems that even totally 'sel.ess' artists pro.t from (derive 'utility' from) their 'sel.ess' behavior. They receive 'internal rewards' or 'self-rewards' in the form of 'private satisfaction', as economists say.2 Their behavior, in fact, betrays that they seek internal rewards. Therefore artists can be said to be intrinsi-cally motivated, and in the strictest sense, there is no such thing as a self-less artist. Nevertheless, I prefer to interpret sel.essness as being exclu-sively intrinsically motivated, and therefore artists can be 'sel.ess'. Because I prefer a broader interpretation, I place the term 'sel.ess' in quotations. The commercial artist, on the other hand, is exclusively extrinsically motivated and therefore 'self-interested'.

Economists seldom pay much attention to inner grati.cation or pri-vate satisfaction through internal rewards. (An exception is Bruno Frey, who recently introduced the concept of intrinsic motivation in econom-ics. He uses the concept in broader sense than I do.3) Intrinsic motivation can play a role in any profession. However, it is very likely that internal rewards are even more important for artists than for other professionals.4 This would mean that artists are relatively more 'sel.ess' in the sense that artists are more intrinsically motivated than other pro-fessionals (thesis 23). If this is true, it implies that external rewards are less important for artists. They are more likely to be byproducts of making art than ends.5 This does not mean that the executive and the commercial artist, who are both in it for the money, don't receive any pri-vate satisfaction, but it is more likely to be less important and more of a byproduct.

Most of the time artists are viewed as either sel.ess or commercial. It appears to be an all-or-nothing affair. This is the way society and the art world tend to employ these concepts. One false step and the artist becomes once and for all a commercial artist. Nevertheless, it is more appropriate to see these concepts as extreme positions on a scale with many positions in between. Being devoted or commercial is a matter of degree. For instance, Alex's choice to concentrate more on photography than on drawing was probably more of a compromise: this choice partly 'serves art' and internal rewards and partly 'serves money and recogni-tion'.6 Either way, it adds to the artist's state of well-being. Most artists are constantly making compromises; their actions simultaneously serv-ing both purposes, although some of these actions primarily serve 'art' while others primarily serve 'money and recognition'. It follows that most artists are situated in-between; they are neither totally commercial nor totally sel.ess. Nevertheless, I shall continue to confront the notion of the totally 'sel.ess' artist with the totally 'commercial' or 'self-inter-ested' artist, not because I think these extremes exist but because the con-frontation tells us something about the intermediate positions.

It should be noted that usually only behavior counts in the economic approach; intentions are irrelevant.7 In practice, the common a.s.sump-tion in the economist's approach is that people are 'self-interested', not by de.nition but because their behavior shows it: they apparently try to become better off. Therefore the next a.s.sumption is that people are after external rewards like money and status. I go along with the .rst a.s.sump-tion, but in this chapter I am trying to demonstrate that when it comes to the arts, internal rewards also matter. The chapter explores the border between intrinsic and extrinsic motivation.

Economists often further narrow down these a.s.sumptions by a.s.sum-ing that 'self-interested' people are only interested in money, i.e., their well-being depends solely on monetary gain. For economists this is a 'shortcut'. They don't deny that recognition and other forms of non-monetary rewards can matter to people, but in terms of explaining behavior, they think money can represent and therefore replace other forms of rewards. In the next chapter, I shall demonstrate that they are wrong when it comes to the arts. Non-monetary rewards play a signi.-cant role and cannot be ignored.

Rewards Serve as Inputs When I observe young artists, I am tempted to think that economists are right in a.s.suming that artists seek monetary gain. Young artists are often obsessed with money. Take the models I work with; most of them are young dancers and I notice that money is extremely important to them far more than others their age. This is the last thing you'd expect from artists who are supposedly devoted to art. However, the instant my models earn some money dancing, they are suddenly unavailable for modeling not even if I offer them far above the normal wage. This implies that the pursuit of money does not necessarily negate one's devo-tion to art. On the contrary, young artists are moneygrubbers precisely because they want to 'serve art'. In general, they earn very little as artists. The only way to survive as an artist is to have a second job. These jobs are often non-arts related jobs such as cleaning, waiting tables, modeling, etc. But sometimes they are indeed arts-related jobs such as teaching or producing minor forms of art, such as portrait painting or acting in com-mercials.

For the economist this is an example of roundabout production. In order to cut down a tree one .rst has to produce an axe. Waiting tables in a restaurant and modeling are both means toward the end of 'serving art'. The incomes these types of indirect employment produce serve as inputs in a production process, the production of a contribution to art. Rewards can be means.

Not all of an artist's rewards are necessarily employed as a means towards artistic ends. These rewards can also lead to personal advance-ment. For instance, when an actor over acts, she's probably doing so more because she loves applause than the fact that it suits the play. Nev-ertheless, it is often dif.cult, if not impossible, to determine whether cer-tain types of behavior serve art, the artist, or both.

In the ill.u.s.tration above, Alex considered the aesthetic value of his photography to be less than that of his drawing, but nevertheless began to spend more time on his photography. He .gured this move would help his reputation and that people would eventually come around to pay more attention to his drawings. Or was Alex just disguising his quest for praise? Or is it precisely the other way around so that his well-being does not dependent on praise but only on his contribution to art? In order to contribute to art, his works of art must be seen. And Alex could be right in believing that to make people notice his drawings he needs to enhance his artistic career and reputation via a detour into photography. It is most likely, however, that 'serving art' and receiving praise both con-tribute to Alex's well-being. Money and recognition serve both as input and as end.8 The same probably applies to artists with teaching jobs. These kinds of jobs offer artists the means to go on producing art, while at the same time they usually offer some form of immediate private satis-faction as well.

In theory, if one were privy to an artist's alternatives, one could then determine which alternatives best serve art and which lead to the most personal gain. Depending on the circ.u.mstances, these alternatives may coincide, but that is probably rare. One could then tell whether artist's behavior is sel.ess or commercial. In reality however, it's never possible to know the full range of possibilities artists have and how they serve art and artist. The conclusion then, is that it is often impossible to distin-guish 'sel.ess' devotion to art from personal advancement and to distin- guish artists who are primarily sel.ess from artists who are primarily commercial (thesis 24).

Artists are Faced with a Survival Constraint Why is it that when my models earn some money, they suddenly quit modeling and lose further interest in earning money? The answer is that for them money is not an end but a means. As soon as they earn enough money to survive, they prefer to 'serve art' by spending more time making art instead of earning money through modeling. (This could be proof of 'sel.ess' devotion, as was the case in the previous section. And, like in the previous section, a cynic could very well argue the opposite; that these youngsters don't care about art at all, and are only interested in wealth and fame. It is probably a combination of both scenarios. In this section however, for the sake of the argument, I a.s.sume they're only after non-monetary rewards.) The economist would characterize the choice these youngsters face as a maximization problem. What combination of time spent on art versus time spent earning an income outside the arts serves their artistic goals best? Time and money are not in.nite and they are dependent on one another. More artistic time means less income; and more income means less time for art.9 Usually there are many choices and alternatives. Take, for example, a visual artist who has received a considerable raise at her second job and now earns more than she needs to just get by. She can now either reduce her work hours to spend more time on her art, or she can continue to work the same hours in order to save money so she can pur-chase the video equipment she needs to make the videos she wants to use in her installations. There are obviously an in.nite number of possibili-ties.

So we see how individual artists who increase their incomes beyond what they need for mere survival can still be devoted to art, as long as they put extra income toward artistic aims. However, empirical evidence reveals that when artists' incomes increase, artists generally prefer to spend more time making art, and less time working in a second job.10 In the trade-off between more money for art and more time for art, the choice is usually time for art.11 This is certainly true for performers, like actors and musicians, who need relatively less money for equipment.

When artists start earning less, they have little choice. They are usu-ally forced to .nd a second job or increase their hours at a second job, in order to live and survive as artists. A survival constraint, as Throsby has coined it, exists for artists.12 These kinds of constraints can vary with time and can also vary between artists and between nations. First of all, artists are never totally devoted to art; and so there are varying degrees to which they forsake money. There is no speci.c income level where an artist suddenly loses interest in money, but there is a range. Second, artists have different monetary needs when it comes to the purchase of art supplies. And third, the notion of what const.i.tutes a decent minimum income varies from community to community. In Europe, having a subscription to a daily newspaper is generally regarded as necessary for a decent lifestyle, while in the us, owning a car is essential. It thus follows that the survival con-straint is an average that varies between countries. Generally, the sur-vival constraint for artists can best be interpreted as a minimum income zone, an area in which money rapidly loses its importance.13 The ph