Transcript Value Difference - Cameron Economics

Cameron M. Weber
New School for Social Research
Dissertation Proposal Defense
for PhD in economics with minor in
historical studies
March 11, 2014
Thank you for serving on the committee !
Three Essays on the Political
Economy of Art
Outline of Presentation to Committee
1) Overview of three essays and how they hold
together as dissertation.
2) Specifics on each essay,
a) What is the original contribution to scholarship?
b) What is the methodological approach?
c) Preliminary findings
1939 World’s Fair, Queens NY
Three Essays on the Political Economy of Art
I.
The Value Difference in Art Economics
Art is seen by practitioners of cultural economics as having value beyond exchange and is therefore
pre-analytically different than other “economic goods”.
II. The Role of Museums in Utility-Enhancing Consumption
Fine art as experience or novelty goods, relative to normal goods, contains risk in consumption
although can offer higher value in consumption. Museums can help create preferences for fine art at
the margin through educational programs, increasing lifetime utility (human flourishing).
III. The Political Economy of New Deal Art (1933-1943) as Seen Through
the Lens of State Theory
Art might be used as propaganda by a self-interested state seeking an increase in discretionary
power. Public art which creates preferences in citizens for more state intervention might be seen as
“art statism”.
I. The Value Difference in Art Economics
Contributions:
Provides counter-claim to Mark Blaug (2001) that cultural economics
lacks a “single dominant paradigm”.
Methodology Approach:
Reviews canon in art economics and builds categories using Lakatos
Methodology of Scientific Research Programs (1978) to test counterclaim. The value difference “hard core” of the research program is
irrefutable due to the shared pre-analytic visions of cultural
economists.
I. The Value Difference in Art Economics
Literature review results in this classification
Research Program in Art Economics
Protective Belt
How do economics and culture
intersect?
Arguments for/against
government funding of arts
Supply side - economics of
creative process and property
rights
Demand side - preference and
price theory
Analysis of art markets and
institutions
Hard Core
There is a value
difference between
art and other
economic goods
I. The Value Difference in Art Economics
One example
Category: “How do economics and culture
intersect?”
Hutter in Klamer, ed., The Value of Culture
(1996). Art is “inexhaustible source event”
which provides the raw materials for the
economy’s “resource event”. The relationship
between art (culture) and the economy is
symbiotic. Human ingenuity is limitless, but
the creative depend on the economy for
support. Art and culture are a limitless source
of value (not scarcity or exchange value).
Exchange of Value Between Art and the Economy
Art
(Source Event)
Economy
(Resource Event)
Inexhaustible source of
scarce resources
Reservoir for support
(Constraint)
Adapted from
Hutter 1996
I. The Value Difference in Art Economics
Motivation:
The value difference in cultural economics is important because it
draws-upon and helps to clarify the role of art and culture in society,
value which makes-up and helps to explain our historical cultural
heritage.
Too as claimed the value difference helps to define “cultural
economics” as a body of knowledge, and as a research program with its
own unique characteristics.
II. The Role of Museums in Utility-Enhancing
Consumption
Contributions:
1. Creates heuristical model to illustrate risk hurdle of consuming the novel
(the finer things in life such as art which can lead to satisfaction) relative
to comfort goods (which can lead to dissatisfaction).
2. Creates common measure (unique to literature) for economic
performance of Not-for-Profit museums in the United States, which is
prioritization of educational programs to address risk hurdle for
consumption of novel goods.
3. Addresses tax benefits received by museums due to Not-for-Profit status
and compares to educational spending. This may of interest to cultural
economists working with museums at a time of fiscal austerity when taxexemptions are being reconsidered by policy-makers
II. The Role of Museums in Utility-Enhancing
Consumption
Methodology Approach:
i. Theoretical discussion on consumption theory and role of experience
goods which can lead to increasing marginal utility (the more someone
“consumes” modern art, the more they come to appreciate it) relative to
consumption of normal goods.
ii. Literature review on the economics of museums and how practitioners
measure museum performance.
iii. Empirical research into Not-for-Profit museums in the United States
including measurements for “top” museums and for prioritization of
education, both also unique to literature.
II. The Role of Museums in Utility-Enhancing
Consumption
average taste
and
utility of consumption
role for preferenceformation through
education
experience goods
normal goods
0
time
II. The Role of Museums in Utility-Enhancing
Consumption
Museums are “multiple output firms” (Towse 2010) whose goals
“cannot be reduced to one function, it’s three basic functions are
research, preservation and communication” (Paulus 2003).
Grampp (1989) finds that museums goals are defined by mission
statement, board of directors, and “by political representatives if it is a
public institution”.
My work focuses on Not-for-Profit museums as must compete in the
market, “Fashions and tastes change, unless a museum adapts through
time it is unlikely to maintain its visitor attractiveness” (Johnson and
Thomas 1978).
II. The Role of Museums in Utility-Enhancing
Consumption
“Top” art museums calculated from Art Newspaper ’s attendance
figures (2007) and Paulus (2003) “collectiveness index” concept of a
museum’s ability to attract foundation funding as disinterested relative
to paid attendance or memberships. (Foundation Center publishes
grants data).
So “Top” museums are those with largest attendance and/or largest
foundation grants in 2007.
II. The Role of Museums in Utility-Enhancing
Consumption
Not-for-Profit organizations are exempt from US income tax, which usually
results in exemption from state and local taxes.
Estimated real-estate taxes lost due to Not-for-Profit tax code is between $17
and $32 billion, or between 4% and 8% of real estate taxes in the USA
(Kenyon and Langley 2011).
Some of the best real estate in US cities is owned (tax-free) by universities,
religious orders and museums.
A review of the 501(c)3 tax code finds that the “educational” purpose for tax
exemption most highly correlates with museum’s “communication” purpose.
II. The Role of Museums in Utility-Enhancing
Consumption
It is not possible to calculate a return on assets for museums because
museums are not required to report the value of their collections, this
leads to “hoarding” of works. More than half of museum-owned art is
in storage (Gampp 1989, 1996).
I then determine that a measure to evaluate museum prioritization of
education could be percent of current revenues spent on educational
activities.
II. The Role of Museums in Utility-Enhancing
Consumption
Of the 27 top museums, only 17 self-report a separate line item in Financial Statements.
In 2007 prior to the financial crisis these 17 museums received $1.3 billion in revenues and
spent $68 million on self-reported educational activities. This is an equity creation payout of
5.3%.
In 2010 revenues were down 15% yet educational equity creation was up to 5.8%.
Equity here being defined as a transfer of utility from those already educated in the arts (e.g.,
exhibition expenditures) to those not yet educated (e.g., education expenditures).
Note that equity transfer payout of around 6% is half-way between the low and high estimates,
4% and 8%, for real estate taxes foregone.
III. The Political Economy of New Deal Art (1933-1943)
as Seen Through the Lens of State Theory
Contributions:
Creates using fiscal sociology (Wagner 2007) a model describing
precognitive taste creation and socially-formed preferences.
Develops concept of “art statism” following Frankel (2006) “print
statism” and Cohen (1990) “worker statism”.
Discovers primary sources from archives showing negotiations between
Roosevelt administration and artists employed by the state.
III. The Political Economy of New Deal Art (1933-1943)
as Seen Through the Lens of State Theory
Methodology:
Theoretical formulation and precise operational definitions of “propaganda”,
“government”, “state”, “tastes”, “preferences” and “self-interest”.
Historiography of critiques on relationship between New Deal Roosevelt
Administration and the art and public works created by New Deal.
Case study approach using artist Ben Shahn archival records with
Smithsonian as well as Federal Art Project records from National Archives.
III. The Political Economy of New Deal Art (1933-1943)
as Seen Through the Lens of State Theory
Harris Federal Art and National Culture: the Politics of Identity in New
Deal American (1995) claims the radio speeches of President Roosevelt
(FDR) and the public art created under the New Deal were, “’nationalpopular’ rhetoric supporting Roosevelt’s reformist policies”.
In final analysis, Harris finds that the New Deal supported monopoly
capital, where the state is seen as subservient to capital.
III. The Political Economy of New Deal Art (1933-1943)
as Seen Through the Lens of State Theory
My research takes different tack and assigns agency to a self-interested
state whose goal is to maximize its discretionary power (de Jasay 1998).
News items.
The “state” is the entity which has the monopoly power to tax, the
“government” is the form that represents this state (Wagner 2007).
In a democratic form of government the state must maintain its
perceived legitimacy (Weber 1919).
US federal government revenues doubled as a percentage of the
economy between 1933 and 1940 (US OMB President’s Budget 2013).
III. The Political Economy of New Deal Art (1933-1943)
as Seen Through the Lens of State Theory
We are defining propaganda as follows:
“Propaganda is the means by which charismatic leadership,
circumventing intermediary social and political institutions like
parliaments, parties and interest groups, gains direct hold upon the
masses.”
- Schivelbusch Three New Deals 2006
III. The Political Economy of New Deal Art (1933-1943)
as Seen Through the Lens of State Theory
If we find in archival research of the New Deal art-production that
there is intervention into the content of the public art in order to 1)
create more discretionary power on behalf of the state and/or 2) to
maintain perceived legitimacy we can call this art in service of the state
(“art statism”).
If both 1) and 2) are absent the art-production is not art-statism.
III. The Political Economy of New Deal Art (1933-1943)
as Seen Through the Lens of State Theory
Archives used,
Archives of American Art, Smithsonian Institution, Washington DC
US National Archives, College Park, MD
Stephen Lee Taller Ben Shahn Archive, Harvard University, Cambridge,
MA
New York Historical Society
III. The Political Economy of New Deal Art (1933-1943)
as Seen Through the Lens of State Theory
Case from the Ben Shahn papers at the Archives of American Art about
the Jersey Homesteads which was to resettle 200 families from the
garment district in a back-to- the land project. Shahn was to live there
and to create a mural for the Community Center.
Primary sources include the March 10, 1935 Press Release about the
project and letters to and from Shahn and New Deal administrators
from March 2, 1936 to February 21, 1938.
III. The Political Economy of New Deal Art (1933-1943)
as Seen Through the Lens of State Theory
Political Economy of the
New Deal Art
Letter to Shahn from
Adrian J. Dornbush,
Director of Special Skills
Office Resettlement
Administration,
dtd. 1/17/1938
III. The Political Economy of New Deal Art (1933-1943) as
Seen Through the Lens of State Theory
III. The Political Economy of New Deal Art (1933-1943)
as Seen Through the Lens of State Theory
Does “Re-elect Roosevelt” push the bounds of a legitimate message for public art in
a democracy? Is the International Workers of the World excluded from the timeline
because they are too radical for FDR electoral coalition? Does the AFL-CIO question
pertain to the fact that FDR needed both conservative southern white votes and
northern city labor votes? Relatedly is CIO leader John L. Lewis to be homogenized
because he built up the CIO with unskilled black labor?
It is plausible that the answer is yes to at least one of these questions.
III. The Political Economy of New Deal Art (1933-1943) as Seen
Through the Lens of State Theory
“The three panels of this 12 x 45 foot fresco mural depict the history of Roosevelt, from the eastern European origins
of its Jewish residents and arrival at Ellis Island to the planning of their cooperative community. As the mural
dramatizes, theirs was the story of escape from dark tenements and sweatshops in the city to simple but light-filled
homes, and a cooperative garment-factory, store, and farm in the country. Early supporters of the community, Albert
Einstein and the artist Raphael Soyer, are depicted in the mural along with many of the original residents of the town.”
http://music.columbia.edu/roosevelt/pop_mural.html
III. The Political Economy of New Deal Art (1933-1943) as Seen
Through the Lens of State Theory
Three Essays on the Political Economy of Art
Thank you.
Three Essays on the Political Economy of Art
The three panels of this 12 x 45 foot fresco mural depict a visual history of the New Jersey Homesteads, later known as
Roosevelt.
The first panel depicts the arrival of the mainly Jewish immigrants from Eastern Europe and Germany. Among the identifiable
immigrants are Shahn's own mother (Gittel Lieberman Shahn), Raphael Soyer, Albert Einstein, and Charles Steinmetz. In the
same panel we see them soon become part of the factory sweatshops and tenements of New York City, or, like Sacco and
Vanzetti, the victims of xenophic suspicion and hatred.
In the second panel, we see them transition from their sweatshops and tenements to an active involvement with the trade
union movement. Speaking to a crowd gathered before the infamous Triangle Shirt Waist factory, the prominently featured
union organizer is likely a composite of John L. Lewis (whose words are printed on the placard behind him) and David
Dubinsky, the head of the International Ladies Garment Workers Union. Several of the other figures in this panel are modeled
on Roosevelt residents, including Barry Leving, and Irving Plungian.
In the third panel we see the fruits of the evolution of the labor movement in the planning and development of Roosevelt
with its cooperative factory and farms. Among the men sitting before the blueprint of Roosevelt are Alfred Kastner, Heywood
Broun, Rexford Guy Tugwell, Senator Robert Wagner, Sidney Hillman, and John Brophy.