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Wednesday, December 28, 2005

The Economics of Prestige

How do works of art become prized? Here's a shortened version of a review of James English's book “The Economy of Prestige,” an account "of the history and social function of cultural prizes and awards" and their relationship to the value of literary works from The New Yorker:

All That Glitters, by Louis Menand, The New Yorker: In 1987, “Paco’s Story,” by Larry Heinemann, won the National Book Award for Fiction. The acclaim that greeted this selection was less than universal, and the reason ... is that 1987 was also the year of Toni Morrison’s “Beloved.” Morrison’s novel ... had been widely regarded as the favorite. ...[Forty-eight] friends..., after “Beloved” also failed to win the National Book Critics Circle Award for Fiction...,  published a statement in the Times Book Review. “Despite the international stature of Toni Morrison,” they complained, “she has yet to receive the national recognition that her five major works of fiction entirely deserve... We, the undersigned black critics and black writers, here assert ourselves against such oversight and harmful whimsy...” A few months later, “Beloved” won the Pulitzer Prize for fiction. Five years after that, Morrison was awarded the Nobel Prize.

James English has a lot to say about this episode in “The Economy of Prestige” (Harvard; $29.95), his ingenious analysis of the history and social function of cultural prizes and awards. He thinks that Morrison’s champions crossed a tacitly accepted and well-established line when they printed their protest in the Times. The transgression was not the complaint that the award had been given to the wrong writer. ... When you have prizes for art, you will always have people complaining that prizes are just politics, or that they reward in-group popularity or commercial success, or that they are pointless and offensive because art is not a competition. English believes that ... when people make these objections to the nature of prizes they are helping to sustain a collective belief that true art has nothing to do with things like politics, money, in-group tastes, and beating out the other guy. As long as we want to believe that ... a work of art is not just one more commodity seeking to aggrandize itself in the marketplace at the expense of other works of art, we need prizes so that we can complain about how stupid they are. ...

Since the nineteen-seventies, English says, there has been an explosion of new cultural prizes and awards. There are now more movie awards given out every year—about nine thousand—than there are new movies, and the number of literary prizes is climbing much faster than the number of books published. ... This doesn’t mean that everyone gets a ribbon. In the awards economy, the rich tend to get richer. Michael Jackson has been given more than two hundred and forty awards in his career. Steven Spielberg has ninety. ... English estimates that among poets John Ashbery is the leader, with at least forty-five prizes and awards. John Updike sets the pace for novelists, with thirty-nine.

English interprets the rise of the prize as part of the “struggle for power to produce value, which means power to confer value on that which does not intrinsically possess it.” ... A work of art has to circulate through a sub-economy of exchange operated by a large and growing class of middlemen: publishers, curators, producers, publicists, philanthropists, foundation officers, critics, professors, and so on. ... [W]e like to think that the recognition of artistic excellence is intuitive. We don’t like to think of cultural value as something that requires middlemen ... in order to emerge. ...

English speculates that this willingness to speak without embarrassment about the significance of prizes and awards, and about the whole economy of   cultural production and consumption, may, paradoxically, signal the demise of   the prize system. ... In English’s view, therefore, Morrison’s friends and admirers violated the protocols of prize-bashing not because they publicly criticized the choice of the National Book Award judges but because they acknowledged that the award really matters, that it ... helps to validate a book and establish its author. Their statement pointed out, in the frankest terms, that there is a literary marketplace, and that power and authority—“cultural capital,” ... accrue to those who succeed in it. ...

“Caxtons are mechanical birds with many wings,” says the Martian, about books, in Craig Raine’s famous poem, “and some are treasured for their markings.” The Martian doesn’t know why the markings between the covers labelled “Beloved” are more treasured, or represent more cultural capital, than the markings inside the covers labelled “Paco’s Story.” The Martian sees only that human beings attach high value to some of these otherwise identical and interchangeable objects and low value to others, and he/she attempts, by analyzing the system in which the objects are produced, circulated, and consumed, to figure out how this happens. From the Martian point of view, it certainly looks like a competition, because the value of “Beloved” is determined by all the things that make it different from “Paco’s Story.” It’s a relational system: the value of a cultural good is relative to the value of every other cultural good. That most of us on planet Earth deny that competition has anything to do with the esteem that we, as individuals, confer on a particular book or painting or song or movie does not mean that the Martian is wrong. Our denial is just one more thing that needs to be explained. ...

Literature is conventionally taught as a person-to-person aesthetic experience: the writer (or the poem) addressing the reader. Teachers cut out English’s middlemen, the people who got the poem from the writer to us, apparently confirming his point that we have to deny the economics of cultural value in order to preserve the aesthetics. But, once we’re outside the classroom, how rigidly are these conventions adhered to? How many people today really imagine “art” as a privileged category, exempt from the machinations of the marketplace? The literary marketplace has always been a theme of literature: “Tristram Shandy” reflects on its own status as a cultural good; Aristophanes’ “The Clouds” is a satire on literary competition. Since the nineteen-sixties, the constructed nature of the art experience has been one of advanced art’s principal preoccupations. Andy Warhol’s Campbell’s-soup-can paintings are all about art as commodity. ...

As a Martian, or dry economist, this does not seem mysterious. Of course the value of literature - just another commodity - depends upon competition in the marketplace and the forces of supply and demand, and of course we all value things differently. I hate pickles, but some people love them. Who knows why or how that came to be? Fortunately Martians don't need to worry about that too much, though many of us work on these questions. A good is valuable because it yields utility. Why people like art is an interesting question, I don't mean to imply otherwise, just as why people like a particular wine and the role of experts, price, etc. in the signaling process for value is similarly interesting, but we don't need to know why a good yields utility to determine its price.  Martians do not need to know why "the markings between the covers labelled "Beloved” are more treasured, or represent more cultural capital, than the markings inside the covers labelled "Paco’s Story"" to determine their price in the marketplace. I have no idea why people like apples more or less than oranges or any other good, why one movie is a hit and another flops and the precise role of expert thumbs in the process, but I can still construct demand curves.

As a Martian, I see the decline in the value of awards from a different perspective. I think art is difficult to value, there is an information problem, and in such cases it pays to consult experts who can vouch for characteristics such as the artist, etc. that help to determine value. It's not as certain as, say, having gold assayed, but experts serve the same purpose. The proliferation of awards can be viewed as arising from the market failure due to imperfect information on quality. By creating false signals of quality - prizes and awards - there are gains to individuals in the short-run, but in the long-run this behavior across individuals undermines the value of the signal. However pure the motivations of suppliers in the artistic process are, and however demand is generated, once the good gets to market we have a pretty good idea about how the price will be set.

    Posted by on Wednesday, December 28, 2005 at 12:45 AM in Economics | Permalink  TrackBack (2)  Comments (2)

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    Listed below are links to weblogs that reference The Economics of Prestige:

    » Prize frenzy: the book from New Economist

    Everybody has won, and all must have prizes said the Dodo, in Lewis Carroll's Alice’s Adventures in Wonderland. Or so it seems. For those disappointed by their Christmas presents, one alternative is a fascinating new book by Jim English, who looks at ... [Read More]

    Tracked on Thursday, December 29, 2005 at 06:54 AM

    » The economics of prize-giving from Statistical Modeling, Causal Inference, and Social Science

    Louis Menand writes in the New Yorker about literary prizes: The Nobel Prize in Literature was the first of the major modern cultural prizes. It was soon followed by the Prix Goncourt (first awarded in 1903) and the Pulitzer Prizes... [Read More]

    Tracked on Friday, December 30, 2005 at 05:16 AM


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