Part 3 (1/2)

Who determines market value? As previously noted, in standard eco-nomics, there are numerous independent players who detern' consumers come rst Pro-ducers are relatively unimportant; they adapt their behavior to the wishes of consuument as well is based on the notion that producers are relatively uni the e to, it is usually via experts as co-producers As we shall see, such experts inuence market value via their opinion on aesthetic value) Not all consumers inuence rees In so-called deep-pocket markets, buyers need deep pockets (lots of money) to participate and ultis are sold in deep-pocket markets I will rst look at an individual transaction When a specic 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 beco Thethe auction, the higher the price (In a coallery the mechanism is much the same, but more indirectly and withthe , we look at the value of the entire body of work, for instance of a certain genre, its roup of buyers to pay Suppose we cos and abstract expressionist paintings And suppose we nd that the sales of the rst increase more than the latter's In that case, it ness of rich consuurative 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 outcoh -urative art is the winner compared over abstract expressionism

Not only deep-pocket markets but also so-called mass markets exist in the arts26 For instance, cds and books are sold in mass markets They are relatively cheap and therefore more people can afford theness to pay But here willingness to pay is reected not in higher prices but in higher sales In a mass market, thea 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 analogy

But not just technically reproduced art is sold in mass markets; art museums and cine arts operate in an inter a live per-for paintings Meanwhile, overly expensive perfors operas or small exclusive pop concerts tend to operate in deep-pocket markets

In both mass and deep-pocket markets, the sine qua non of inuence onpower People must have sufcient money and be prepared to spend it on the works concerned The difference, then, between mass and deep-pocket markets is that low prices means more people are able to participate in mass markets than in deep-pocket markets Thus, ness of a sroup of rich people to pay, while in roups of less wealthy consu 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 nu power

In extrele person can decisively inuence market value When one of the Saatchi brothers, froency 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-noer 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 econoroups who in the past had little disposable incoained 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 inuence on the market value of these prod-ucts Therefore, it's really not so surprising that, unlike art dealers, record coet the tastes of these roups of art consu to spend money on art deterroup of rich people willing to spend their roups, in fact, determine market value, who determines aes-thetic value? Given the denition 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 co process In the case of aesthetic value however, it is not purchasing power, but the power of words or cultural power that determines the nuood reputation evidently has a larger say in the determination of aesthetic value than an unknown art historian who has just earned his or her ree

It must be noted that in our approach in this chapter, we do not pay separate attention to the inuence of producers artists, record compa-nies, publishers, and other participants in the art world but this does-n't mean that producers are irrelevant in the determination of aesthetic and uory of 'experts' In the words of Bourdieu, they produce belief27 They inuence aesthetic value and, if market value and aesthetic value are not independent of one another, they also indirectly inuence market value (In later chapters, specic attention will be paid to the power of producers and their institutions) 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 froe art con-suroup that has relatively more economic capi-tal (wealth) and inco or econo art they use their econo inuences the market or econoroup that has much cultural capital and therefore, more cultural power The experts use their cultural power in the arts Their cultural inuence or cultural authority affects the aes-thetic value of art

Economic capital consists of money and assets 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 'econo 'econoists introduced the concepts of cultural capital and social cap-ital Recently, an increasing number of economists have started to use these terms as well29 Cultural capital refers prinitive abilities are part of cultural capi-tal30 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 sold31 The differences are relative On the one hand, the experts' social group not only has cultural capital, but also some economic capital After all, e 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 ' visual art not only have economic capital but also soe cultural capital, but nevertheless their cultural capital is less valuable than the experts' cultural capital

Econo Col-lective spending deterroup of art products In deter aesthetic value, cultural capital is the most important With their capital, experts inuence aesthetic value They do so within a discourse aroups 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 process32 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 econoroup acco 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 correspond33 They ative relationshi+p as some artists and art lovers insist

In Mass Markets Quality and Sales Easily Diverge Why does the art that experts judge as inferior often sell so well in mass markets? In fact, it sells better than 'quality art' This is a common phe-nomenon in the mass markets of books, cds, lms, and videos For instance, the her than thelms The same applies to the books of Allistair McClean in co Never-theless, her aesthetic value

Unlike deep-pocket markets, it is unlikely that this phenomenon is caused by the variance in the coe buyers (Experts are likely to have both e buyers, but not necessarily in dif-ferent proportions) It is caused by differences in the collective purchas-ing power that detere tastes enter e 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 sroups with a lot of cultural power offers a rather obvious, but easily ignored, reason for the occurrence of deviations between mass market aesthetic and eneral rule is that aesthetic value deviates from market value This is shown in the cases of the two directors and the two authors In roups of consumers buy works of art, such as books and cds or tickets to live perforh individual people reat deal of money to spend and they spend it on nu their market value

Whereas, the collective inuence of mass consumers on market value increases in proportion to their numbers, the same does not apply to their inuence 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 inuence of these experts in ter aesthetic value is relatively small They have little cultural power or inuence, especially coh 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 consu is the su, the col-lective cultural inuence is not the sum of the individual cultural inu-ences Unlike money, cultural capital is embodied and is thus difcult 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 mass markets is related to the phenomenon of cultural asyu as there is social stratication and as long as art products are used for designating one's position in social space, 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 forh the lower classes of consumers are not wealthy, cuh they may admire their social superiors, they do not spend their ly And so here is where market value deviates froh culture experts come from the upper echelons of society, their tastes are necessarily different froe consumer There-fore, economic value and aesthetic value tend to systematically deviate in mass markets (thesis 18) This proves that both the econo High aesthetic value and low ether, 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 ood opportu-nity for us to discuss the possible deviations between aesthetic and market value In nuence between market and aesthetic value has developed in two i these styles, a refutation of the econoe

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 arde art'35 The styles involved are difcult to describe They are probably best understood in connection with the naroups In Britain for instance, Daarde) art, while Freud, Auerbach, and Kitaj represents modern (traditional) art It arde' 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 sae art' soarde art' In Britain, 'traditional art' or 'modern art' is also called 'serious art') Modern (traditional) artists develop their art fro 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 Contearde) 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 her than the arde) art Top incoher in the modern (traditional) area than in the contemporary area For instance, Lucian Freud earns considerably more than Damian Hirst Nevertheless, the h incomes, than with the nuh incoher in the modern (traditional) area

In the Netherlands, these two markets could be separated reasonably well until quite recently Because nore traditional art, people tend to think that thefroins to e artists probably has at least as large a share (if not a larger share) of the total arde art does36 But when it coins to develop Whereas the her, its aesthetic value is lower than that of conte experts tend to favor avant-garde art It should be noted, however, that both arde) art have their own cir-cles of experts For instance, in Britain in the nineties, Daarde experts and his as considered of the highest aesthetic value Traditionalist experts meanwhile, preferred the work of Freud and Auerbach

At present, in arde) art experts are more inuential 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 inuence of traditionalist experts, then, is obviously ether absent either This varies from country to coun-try Dutch traditionalist experts nd thearde experts In Britain however, the two aesthetic camps continue to compete There traditionalist experts and artists do not subht for a return of their past suprees the Power of Money Why do the contearde) visual art experts have more cultural authority than the modern (traditional) visual art experts? Apparently the avant-garde's cultural capital is arde 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 roups 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 e earners with less money to spend and thus buy fewer and cheaper artworks These elites have different social histories and thus, different tastes38 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 inuences aesthetic value while the cultural elite inu-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 inuence the decisions of experts whether they are aware of it or not Therefore, values are not independent of one another and e

Nevertheless, this convergence can be disturbed by future events that coence 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 econoes 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 econoarde, especially in the visual arts It tries to legiti itself with modern, innovative, and often intellectual art The econoer roots in the past, naturally prefers serious or traditional art, which tends to legitiers 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 ative relationshi+p Nevertheless, in deep-pocket markets deviations tend to be temporary, because money and cul-tural authority tend to coincide over tiht It follows that the deviation of aesthetic and market value in deep-pocket markets stems from strife for social superiority (thesis 19)

10 The Govern Power How can inuential 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 circu this situa-tion

1Aartists and are sold for relatively low prices Ale income, from teachers to civil servants, can afford to buy conteht not be every in to add up (Especially at the bottoe nueneral has a more traditional taste, considerable deviations do exist Different subgroups within the elite have different social histories For instance, so time; they earned their money in industry, others in trade While other families, the so-called 'nouveau riche' only more recently becaeous 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 conteument applies to corporations The minority of corpora-tions that collect conterow Collections, such as the Peter Stuyvesant collection, for instance, draw its share of attention Shareholders ree with the choices of the art purchased, but shareholders' inuence is liher-ups, primarily a neell-educated cultural elite, have a considerable a art more to their tastes

4Most iovern-overnment, purchase contemporary art or subsidize conteovernets can certainly har on visual art is added to private and corporate spending, the average taste of art consuly 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 overnments, museu visual art Not ht and coovernment money Therefore, if it is true that the traditional (modern) art arde) artaccounts for sixty percent or more of the sales of con- temporary art This implies that in the Netherlands, not unlike in other arde visual art overnovernment involvement in ence of the new cultural elite in and around government bureaucracies Its overnment administrations Therefore, it is only natural that in the conict between avant-garde and traditional visual art, governments in a number of European countries have sided with the cultural elite

Atthesaovernmentsarenotsupposedtohaveatasteof their own They are only supposed to be pro 'quality' in the arts Thequestionofwhatqualityis,isleftuptotheexpertsNevertheless, overnment-appointed experts coovernmentnot 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 overn-ments increase the value of the new cultural elite's cultural capital

Because of governed 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 (e the superiority of contearde) art The deviations between market value and aesthetic value has not quite disap-peared yet, but the social strife is largely over

Coovernle in Britain is still largely undecided It is te to compare the British situation with that of overnment involvement on the development of the visual arts It is overnmental intervention and because tra-ditional (modern) art is still militant in Britain, the artistic level in both the traditional and the conteher in Britain than inthe works of artists like Freud, Auerbach, and Kitaj, or the modern portraits featured in the National Portrait Gallery in London, it is not difcult to see that the artistic level is high in the arde) 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 co challenged, it remains competitive and alert; it observes its opponents and appropriates theaspects of its opponents' art Unlike in the Netherlands, this results in an exiting and interesting cultural climat in Britain's visual arts43 It is inevitable that even despite the paucity of government intervention, con-temporary art will ulti cultural climate will be enriched rather than impoverished

To return to theto art, governments use their econoning experts have judged to be of high aes-thetic value (thesis 21)

11 Donors and Governift 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 classical music, which is a favorite of the economic elite Moreover, the o doith-out subsidies and donations, while the ardless A broader argument may apply here Wheneverto leading experts, governments and donors tend to step in They use their econoifts 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, governenerally subsi-dize arts activities that experts believe to be aesthetically valuable and could not thrive or perhaps even survive without govern unknown visual artists receiving grants as well as to prestigious orchestras and opera companies

In the case of overn-ive '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 e 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 inuence on the govern) But when you hear the arguovern-ments and donors, another explanation coovernh quality' art They believe average people show too little interest in 'qual-ity art' and buy less 'quality art' to their own detrie consumers underestimate the benets 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 ument Art has special merits that people are insufciently aware of and therefore donors and governovernments knohat is 'best' for two reasons: they knohat art is 'best' and they knohat is 'best' for the people44 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 stih donations and subsidies (thesis 22) Their support helps bridge the gap between high aesthetic value and low market value