Infinite surprises: on the stabilization of value in the creative industries, M Hutter

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Content: Infinite Surprises: On the Stabilization of Value in the Creative Industries Michael Hutter Introduction There is a category of goods that are desired for their ability to generate surprises. The category is old-as old as drama, epics, pictures, and songs. Such goods were part of societies before the rise of markets, but they became the products of crafts and industries once they could be sold. The sector producing and distributing such goods has only recently been expressly identified as the "creative industries." Besides markets for theater performances, books, paintings, and works of music, the sector includes goods like museum visits, video and computer games, fashion, and even advertising services. All the experiences enabled by these products are, to at least a small degree, novel. There is surprise in rediscovering traditional weaving patterns, going on city tours, listening to piano recitals, reading the news, playing against programmed monsters, seeing next year's fashion collection, or being unexpectedly captivated by an advertising campaign. Novel products can be described, and so can the excitement or dismay experienced during a tour, a concert, an exhibition, or a video game. But the descriptions are difficult to compare with each other or among different speakers, and they are even more difficult to compare over long spans of time. And yet, in all the product categories of the creative industries, from works of music and art to design objects and television series, there exist stable ranges of valuation. Some of the goods have gained reputations that make their reproduction, variation, or simply the access to them particularly valuable. Even among new goods, there exist large differences in value. How is such value established when the "utility" of the goods lies in the uncertain effects of a subjective, mental experience, in feelings of unexpected elation and disappointment? How do such valuations gain stability even though the goods are singular and vary widely in their composition? The first section of this chapter analyzes the characteristics of surprisegenerating products. The second section discusses two mechanisms for anchoring valuations: the infinity relation of "praise value" and the equivalence of
202 "price value." The third section examines evidence on the use of "infinity operators" in the contributions of creators, producers, amateurs, and critics along the value chain of creative industries' products. The Surprise Economy: Features of an Emerging Sector CONSTRUCTING THE CREATIVE INDUSTRIES The notion of the creative industries has a fairly precise origin in the documents of a governmental agency.l In 1998, the British Department for Culture, Media and Sport (DCMS) published the Creative Industries Mapping Document (1998: 9), which delineated a sector called the "creative industries." The delineation had administrative and economic consequences because it rearranged the statistical account of the country's economic product, measured in market prices. The new structure combined the classic branches of cultural production, from the performing arts to literature, with commercial branches like advertising and video game software.2 These statistical indicators have been used to demonstrate that the creative industries sector is not only the third-largest economic sector in the United Kingdom but holds equal economic importance in other industrially developed countries as well, such as Germany (Sondermann et al. 2009). A recent study by THE UNITED NATIONS Conference on Trade and Development (UNCTAD), using a more systematic definition of the creative industries, demonstrated that the share of creative industries' products in the trade balances of developing countries is growing at rates far above the average (UNCTAD 2008).3 The reasons for the rearrangement are clearly political. Products that contribute some degree of novelty seem to playa prominent role in contemporary economies. Their value is not primarily dependent on physical characteristics but is self-generated by those who invent, make, and use the products. When, as is the actual global situation, the diffusion of major technological innovations drives the cost of processing and storing information down, the perceived gain is even more pronounced. Goods in the creative industries may well become a major driver of economic growth. Some authors attribute an even larger, "systemic" role to the sector: it distributes "new knowledge" which then increases the value of production in 1 See Schlesinger (2009: 17). 2 The branches included in the DCMS definition are the markets for art, music, performing arts, books, film, broadcasting, design, architecture, print, advertising, and video game software. 3 The report distinguishes four major sectors: Heritage, Arts, Media, and Creative Services. Creative services include design, fashion, architecture, and advertising. See UNCT AD (2008).
203 all branches of an economy, thus turning it into a "creative economy.,,4 The argument resembles the positive externality argument for education and research: dissemination of knowledge generates increases in productivity that cannot be attributed to single factors of production. But there is a twist to the externality argument, because the "new knowledge" diffused by creative industries products is clearly of a different kind than that generated by, say, new chemical products-it is less definitive, more playful, less certain, more contingent. This particular kind of "information" is contained in Shakespeare plays as well as in Tarantino movies, in Versace suits, and in Lucky Strike advertisements. What kind of information is it? INFORMATION AND SURPRISE The common characteristic of creative industries' products lies in being different, in being new. The experience of newness comes with the emotion of surprise: expectations are not met; they are either exceeded or disappointed. Surprise overwhelms expected certainties.s Spontaneous, involuntary utterances are indicative. Surprise happens only in a world of uncertainty. But the goods and devices that respond to the uncertainty are not intended to reduce it, as in the case of surveillance or of scientific research that uncovers hidden certainties. "Surprise goods" generate positive uncertainty, a kind of uncertainty that is desired by users because of the strong and positive emotions it generates in each of them. The notion of surprise seems close to the notion of Erlebnis, or experience, which Gerhard Schulze identified as paradigmatic for the orientation of contemporary Western societies. Schulze points out that experiences connect organic body and mental consciousness. In fact, "the subject consists of experiences" (Schulze 1992: 735). Reflection about experiences constitutes a further desired type of experience. Schulze recognizes that expectations about experiences can be disappointed, but he does not recognize the positive sensation of surprise. Beckert (in Section 1 of his chapter in this volume) develops a distinction between the physical, positional, and imaginative value of goods. Certain goods, ranging from old wine to fashionable handbags, "arouse images that alter the state of consciousness of the owner.,,6 Beckert is interested in the cultural and social context that allows the owner to ascribe symbolic meaning to a good. One can now add that new meaning always contains surprise-the surprise of something that has never been said, shown, or performed in quite the same way.7 4 See Potts and Cunningham (2008). Other authors apply the term "creative economy" to the particular sector rather than to the entire economy. See Howkins (2001). 5 The French and Middle English roots of "surprise" refer to being overwhelmed; the German "Oberraschung" has the same meaning, with reference to being overtaken at great speed. 6 Beckert points to the work of Campbell (1987) who demonstrated the relevance of imaginative value for commercial goods during the romantic movement. 7 For Niklas Luhmann, any new information, when it is understood by some consciousness for the first time, takes the form of a surprise (Luhmann 1997).
204 The semantics of creative industry (Smith 1998), creative economy (Howkins 2001), and creative class (Florida 2004) deal with the property of surprise in a roundabout way: they attribute it to the intentional action of a particular type of actor who is capable of making goods that generate surprises. The "creative act" is an event in time during which the design of a music score, a cartoon episode, or a software patch is conceived by an individual or a team. The creative idea then needs a long production chain before it can surprise users. Recently, however, some authors have moved surprise to the opposite end of the chain. For these authors, surprise emerges within the experience of the user: unless the user attributes meaning to an event, no experience takes place. The delineation of a sector of "experience goods" adds a few branches to the creative industries sector: it suggests that the creativity of users in generating their own surprises turns many activities such as gambling or sport fishing into potential experience goods.8 The two approaches actually complement each other: both try to grasp a phenomenon that is not individual but happens between those who create and those who experience. Creators and producers offer performances and commodities9 that they hope will appear novel to users. The creators who offer new experiences are themselves users of such experiences, turning the conventional value chain into a value spiral, where each successful surprise product leads to a successive generation of new surprise goods.10 Surprises that are fit for commercial products are carefully calibrated in their deviation from user expectations. The user must not be bored by evident repetitions or shocked by danger and provocation. Familiar surprises, combining thrill with comfort,. are the most frequent and successful commercial variety. Surprises establish strong links between individual emotion and social expression. When surprises are experienced in groups and collectives-as in games or artistic performances-these expressions become part or even the center of the performance. As the excitement of others is experienced on top of one's own experience, the total effect is enhanced. Durkheim (1995) called this effect "collective effervescence" and attributed a central cohesive function to such performances, particularly to religious rituals. The proposed conception extends Durkheim's contribution: effervescence is not limited to types of experiences molded by immutable tradition but is generated within experiences that can be designed and sold to a variety of audiences. 11 Since surprise 8 The notion of experience goods was first used in economic theory to designate goods whose uncertainty of performance could be reduced by using or experiencing them. Pine and Gilmore (1999) were the first to use the term in its positive connotation. Recent cultural policy suggestions have been based on the distinction of an experience goods sector. See Power (2009) and Bille (2009). For a more detailed account of the transition in the meaning of the term, see Hutter (2011). 9 The term "product" covers both varieties. 10 See Hutter (2006) for an elaboration of the "value spiral." 11 The success of "mega churches" suggests that even religious rituals are not immune to innovation introduced by faith entrepreneurs. See Stark (2008), and the concluding chapter of this volume.
205 experiences, like Durkheim's rituals, fade in individual memory and as a topic in social communication, they are replaced by new waves of products in daily, monthly, or yearly rhythms. Familiar surprises should flow constantly and yet not lose their characteristic irregularity-this is the innovation challenge in the creative/novel experience industries. A broad arsenal of modes for generating surprises is available. At least five modes can be identified: (1) competitions with unpredictable outcomes, as in sports; (2) gambling events, where money or other assets can be bet against the odds of probability; (3) toys, games, and trips that generate mild variations; (4) oscillations in the specifications of goods that have specific functions, as in the length and color of skirts or in the size and shape of automobiles; and (5) the generation of amazement. This fifth mode will be the focus of the discussion, since it is the most versatile of the five. Amazement is the richest mode because it can be built on any kind of expectation. Some particular practice of communication by word, image, sound, or bodily movement meets with specific, usually subconscious expectations. In amazement, such expectations are exceeded. A performance may be funny, skillful, or sublime, or all three at the same time, as in a Woody Allen movie. It may demonstrate courage, or virtuosity, or ingenuity-in all cases, the spectator or user goes through an experience of amazement. Amazement is a strong, albeit transitory, emotion. If the performance leading to the experience of amazement relates to a narrow bodily skill, as in a circus trick, the product has to keep changing. If the experience integrates a wide range of amazement features, as in an opera production, additional performances in a different setting and with a new audience can be enough to generate renewed amazement. Amazement may be accompanied by the shock of unexpected novelty or of provocation. These additional features increase amazement but are rarely appreciated without that deeper, more complex dimension. Artworks, whether novels or rap songs or films, are particularly valued as sources of amazement. The artistic performance of an instrument amazes. So does the artistic liberty of employing pigments in a certain way, or the artistic skill of shaping language into verse. Attention to the effects of artworks can help to discover and understand features that are just as relevant for the success of less singular creative industries' goods. Although many artworks have the potential for amazement, only a few out of the total number of works offered are successful in finding an audience. All others are ignored, dismissed, merely glanced at, or explicitly rejected. If amazement is a subjective mental experience, if feelings of elation and disappointment can be described but not transferred to others, then how have these works attained and, in even fewer cases, maintained and increased their value? Artworks will be used as an instructive case because the most finely calibrated social valuation practices have evolved around them.
206 Two Value Anchors: Praise Value and Price Value PRAISE AND PRICE VALUATION ALONG THE VALUE CHAIN How are stable values reached for specific artworks?12 There seem to be two distinct mechanisms at work. One of them operates through judgments of praise: those who have come into contact with the product's performance talk about their experience and try to describe their feelings of elation or disappointment by comparing the work or the performance to other, older works that the person listening to the judgment might know or have heard about. The second mechanism operates through prices on art markets. As a growing number of persons want to share the experience they have heard praised, prices for the original or for copies go up and often stay at a stable level for long periods of time. The second mechanism is certainly the more transparent one, and it seems to dominate in most branches of the creative industries. But even the success of particular video games or pop songs depends on judgments of praise and the comparisons that such praise employs. While there may be polar cases when only price counts, the majority of cases will feature both mechanisms. Before examining the logical properties of these mechanisms in greater depth, we will take a closer look at four stages of the value chain. Surprise is part of an event in which people create and perform something in order to amaze those who see it, hear it, or read it. Together, performance and audience response constitute the event. The performance emerges in two stages: a first stage in which a new work is conceived or created, and a second stage in which the novel work is produced and disseminated. Audience response also emerges in two stages: in a first stage, the members of the audience react to the performance, applaud during the event, and talk about their experience after the event. In a second stage, amateur surprise is distilled into the judgment of critics. These judgments are themselves available as novel goods in the shape of news media: they are experience goods in their own right. The critical judgments happen before the next round of performances and thus generate an ongoing sequence of communication events that alternate between performance actionlreaction and audience reaction/ new action.13 Judgments of praise are part of the communication between all four stages of this valuation chain. Artists find words of praise for their own work as compared to that of other artists, producers praise the works they have selected for performance, amateurs praise the amazing experiences they have gone through, and critics evaluate works according to more general 12 For accounts of the historical value debates in the economic and the aesthetic field, see Hutter and Shusterman (2006) and the introduction in Hutter and Throsby (2008). 13 The distinctions introduced are highly stylized. They refer to types of communication and do not reflect the much more complex personal patterns in reality. In fashion photography, for instance, photographers (creators) communicate as producers and advertisers, editors are producers and critics, and art directors also fulfill various roles. See Aspers (2001).
207 qualities of amazement. Prices are also used along the chain: artists pay for their training, producers buy rights to selected works, amateurs pay for access tickets and for ownership rights, and critics receive pay in return for their praise valuations. The praise value generated by critics is of a particular nature. Artists are biased through their own creations, producers are assumed to speak in favor of their selection, and amateurs are swayed by their momentary emotions. All groups may be experts given their long history of experiences, but they are weak in expressing value in ways that are stable over long periods of time. The skill of the critics seems to lie in applying external criteria of valuation to a body of work, and to each single performance within an oeuvre, a style, or a career. In the genre of painting, for instance, the artistic valuations have been so stable that Old Master paintings are considered more secure assets than state-issued annuities. In the genre of film, critics' choices are frequently ignored by amateur audiences but tend to be accepted in the long run. The misjudgment of critics, perhaps most prominently in the case of Impressionist painting, shows that while short-term errors may be made, these are then corrected by the next generation of critics. Praise value, it seems, is more than just cheap talk that accompanies price valuation in markets. Praise value has an autonomy of its own that can, and frequently does, deviate from price value. What is it that makes rankings along scales of valuation so stable when the objects of the evaluations are internal experiences of amazement, highly dependent on individual cognition and social milieu? THE NOTION OF VALUE ANCHORS The quality ranking of events on any scale poses problems of comprehension. The ranking is inevitably relative because it is an ordinal sequence: regarding quality x, A is better than B, which is better than C, etc. Natural numbers that would add up to a sum expressible in absolute terms do not exist.14 When positions are without a commonly shared point of reference, evaluations are difficult to compare between critics, and even between different judgments from the same critic. There is no external rule that determines which kind of work is more or less valuable, but comparisons need a common point of reference in order to make sense. I call such a common point of reference a "value anchor."ls The anchor successfullyprovides the fiction that, in a pool of relative judgments, there is a 14 There were, however, quite serious attempts by writers like Roger de Piles or Jonathan Richardson to use natural numbers for determining the quality of the body of work by certain painters. See De Marchi (2008). A current quantitative approach uses data on reproductions to determine the "greatest artists" (Galenson 2001). 15 The term "anchoring effects" has been used in the literature on market anomalies to express the bias that subjects in experiments display in their estimates toward a number they were originally given. In art auctions, an anchoring effect based on previous prices has been shown. See Beggs and Graddy (2009: 1027).
208
fixed point evident to all those who participate in the discussions surrounding
a particular kind of private surprising experience.
To illustrate the nature and the effect of a value anchor, consider the case of
the vanishing point as it is used in constructing the illusion of three-dimen-
sional space in a picture plane: the vanishing point is a point like all the others
in a painting, yet it is perceived with a second interpretation-it is assumed to
be at an infinite distance. The double meaning of the point turns it from a sign
into a sort of metasign. The point constructed to be the furthest from the
picture plane is at the same time a statement about the spatial position of all other points on that painted surface.16The notion of infinity thus is able to
serve as an absolute anchor from which to calculate all other spatial relations
on the surface.
The use of infinity as a metasign follows formal logic. There are exactly
three
possibilities of constructing
a metasign:
00,
0, and
17 _00.
None
of the
three is a natural number like 1, 2, 3, etc. They are positioned at the "end" of
numbers, positive and negative, and "between" the two series, respectively. All
three points are expressed as symbols, not as numbers. Two of them are
vanishing points-points that are describable yet are positioned at an infinite
distance. The third point, 0, signifies "nothing." All three symbols are success-
fully used in scientific and in commercial computation, although they have no
counterpart in physical reality. Can they provide the absolute anchor needed
for relative quality comparisons of singular works?18
I will argue that these anchor values are indeed used: "00" is operationalized
as the ideal of infinite praise; "-00" operationalizes negative praise or
reproach. The symbol "0" signifies equality in value, expressed as price. All
three value anchors find their application in the valuation of artworks and
other surprise goods.
USING INFINITY TO ANCHOR QUALITY JUDGMENTS The central claim of this chapter is that a particular anchor of absolute value stabilizes relative praise judgments. Praise experts might be artists in their own right, producers, collectors, or critics, whether this last group comprises scholars or independent writers. In speaking as experts, they all are, in Bourdieu's terms, priests rather than sorcerers, auctoritates rather than autores (1969: 105). It is not the competition between them that is under scrutiny but a feature that is common to all of them and makes them effectivejudges in the first place.
16 See Rotman (1987) for a detailed argument on the use of zero, the vanishing point, and paper money as metasigns. 17 A first attempt to interpret the three points is Hutter (2007a). 18 This research question is very close to that of a study by Karpik on the "economics of singularities." Karpik turns to the examination of "judgment devices ... as gUideposts for individual and collective action" (2010: 57). Karpik interprets these judgment devices as a means to reduce the uncertainty introduced by the singular goods. He is not concerned with issues of scale stabilization.
209 The degree to which a performance exceeds the social and mental expectations of its own stylistic program is expressed in words which take as their reference an ideal point of infinite quality.19 Like the vanishing point, an ideal of excellence is a metacommunication, a statement about statements. That is what makes it an anchor. The anchor of excellence serves a function analogous to the vanishing point that generates spatial illusion.2o The quality in which a performance excels-the "originality" of movies directed by Quentin Tarantino, the "brilliance" of arias sung by Cecilia Bartoli-these qualities are a current standard against which other action films or aria performances are valued.21 Like the vanishing point in a painting, the infinity illusion of the anchor need only work for a limited section of reality. During most of the eighteenth century, the infinity anchor for the visual arts was situated in classical art. Ancient Greek marble sculpture marked the ideal of excellence (Haskell and Nicholas 1981). Since then, the periods of stable anchoring have shortened, and canons have been dismantled and reconstructed. In recent history, anchors of excellence have been attributed to the works of particular artists. Since 1900, the oeuvres of Claude Monet, Paul Cezanne, Pablo Picasso, Marcel Duchamp, Jackson Pollock, Andy Warhol, and Gerhard Richter have served that function. To indicate infinite quality, the separate estimations of a work's features along various quality scales are related. The result is a set of judgments that address very fine points of deviation from expected performance and yet succeed in conveying an opinion on the degree of excellence of a particular performance or a body of work, thus ranking it in relation to other objects of artistic valuation. Critics' judgments typically relate the accomplishments of a single work to the context of an artist's complete oeuvre and to the context of the style to which the work is attributable. Even in art worlds that have no clear leading figure, praise value finds its anchor in a small number of works by an even smaller number of creators. Across genres and styles, there is a remarkable consensus with respect to those artists that are closest to infinite praise,z2 A second logical possibility remains: -00 could serve as a vanishing point for negative judgments, for rejecting a work, or for protesting against its performance. Expressions of protest playa prominent role in political discourse when no characterization of the enemy seems radical enough (Hutter 2007a). In the case of surprise goods, disappointments are formulated in less drastic terms. There are expressions of reproach or even expressions of rejection when the experience violates established criteria of quality or decency. But while 19 The frequent use of adjectives like "perfect," "ideal," and "pure" may serve as an indication for this claim. 20 Attempts at isolating the essential qualities of artworks tend to include "excellence." An example is Kane (1997). 21 Beckert (in this volume) recognizes the relevance of such standards when he suggests that the imaginary value of objects lies in their symbolic representation of "espoused ideals." 22 See Galenson (2001), who uses bibliometric evidence to prove A-list status. Becker's "art worlds" are based on the consensual valuations of different qualities and genres (Becker 1982).
210 there are many ways to idealize beauty, there seem to be no corresponding ideals of ugliness. USING ZERO TO ANCHOR PRICE VALUATIONS The second type of value scale operates with "0" as its absolute point. Pricing uses the equivalence of two compared goods, or a difference of zero, as a value anchor. When two parties exchange goods, the action leads to the actual, observable loss of property, with the right to use the good just given away. The loss precedes the gain of access to a new experience. Something is given in exchange; it is traded.23 All the words surrounding the transaction are peripheral; decisive is the value of the item given up. Historically, the search for items of equal value improved immensely when value became expressible in a common medium for such exchanges. That medium has taken shape as money, whether in the form of metal or paper or as book entries. Money volumes operate with their own anchor. They stabilize their value through a set of institutions that has grown over centuries. Since the late nineteenth century, the money anchor has been grounded in the fiction that the value of a volume of fiat-money in circulation is guaranteed by a "lender oflast resort," a national or supranational reserve bank.24 This construction has functioned effectively as a vanishing point for the trust of agents until recent years (Ferguson 2009). The world of market exchange-used as a term for the sum of all the active, interconnected arenas in which sellers perform and buyers reward-has grown so differentiated and subtle that all events with potential scarcity get price offers, even if they are declared "priceless" or "not for sale" (Grampp 1989). Still, price valuation does not always take place. Music can be performed and applauded, stories can be written and quoted, and sketches can be drawn and commented on, thus establishing their praise value throughout an audience without the operation of markets. But when such performances are provided by for-profit firms, their price valuation is inevitable. Price valuation also becomes inescapable when some works reach a level of evident and visible scarcity at which they are inevitably compared with the exChange Value of other products?5 There are, it is argued, two ways of anchoring the value of products: one is through the attribution of exchange equivalence, as in price; the other is 23 Simmel (1978: 78) develops his theory of value on the basis of this mutual valuation: "By being exchanged, each object acquires a practical realization and measure of its value through the other object." 24 The act of Parliament establishing the hitherto private Bank of England as the solitary issue bank of Great Britain did not take place until 1844, but the Bank had effectively assumed that role in the previous decades. See John Clapham (1944) and Hutter (2007b). 25 In the market for visual artworks, gallerists have developed sophisticated ways of Signaling quality through the use of specific "pricing scripts" (Velthuis 2005). In addition, however, gallerists engage heavily in praise judgments and in narratives linking their artists to other, already established artists.
211 through the comparison with a standard of infinite value, as in praise. For products that have internal, mental effects, such as works in the visual arts or in music, theater, and literature, the second anchor should have particular relevance. Expressions of praise value determine the willingness to pay for such goods, hence their economic value and the value added to total economic product. Over the course of time-measured in years or decades-a correspondence of praise value and price value develops. But the many discrepancies between quality judgments and market prices are an indication of the different social processes at work around the two valuation mechanisms (Hutter and Frey 2010). The interpretation of the two metasigns is at this point merely a theoretical proposition. Logically,there exists the possibility of using both "0" and "00" as reference points. If long-term stability of value rankings is a desirable goal, then the combination of the two symbolic references has obvious advantages. But can such communication practices actually be observed in the scenes around creative industries' products? Is "infinity" really a category of relevance in the countless relative comparisons made to express the qualities of novel experiences? Evidence for "Infinity Operators" along the Value Chain The attempt to identify the use of the "infinity anchor" in the communication around creative industries is guided by the following consideration: as surprise goods are created, performed, used, and critiqued, the different stages of the value chain are accompanied by a stream of quality judgments. Such judgments employ comparisons with other goods, but how and to what extent do they employ comparisons with ideals of various qualities? Presumably, the different stages have different means of expressing such ultimate references. In consequence, the operationalization of the "infinity anchor" in praise value will differ between the stages. A number of rhetoric practices along the value chain are identified below that point to the use of such infinity operators. EXPERIENCE CREATORS AND PROFOUND EMOTIONS Creators are clearly compromised in ranking their own works along scales of quality. Yet there is great interest in the judgment of artists, because their experience in making the work-writing a novel or composing a song-is different from that of the rest of the protagonists. As creators praise the works of others, their judgment is linked to the authority and reputation of their own work. That authority, in turn, is based on the pursuit of some kind of ethos, some internal ideal that guides all the creators' collective quality distinctions.
212 The ideal may be verbalized in reference to the profound emotions that guide creators' judgments. Such references should be expected not only among composers and painters but also among more applied creators, such as fashion designers, architects, and cartoonists. Because creators have an existential involvement in a particular type of creative process, it is credible that even small, surprising features of novel works will trigger in them an emotional response of profound depth. It is also credible for creators to express emotions of rejection and reproach in exaggerated terms. The exaggeration is part of the attempt to Signal the particular position of the speaker toward the work in question. An example of "zeal" as an infinity operator can be seen in the following quote by T. S. Eliot, who criticized Milton's poetry in a famous essay early in his career and defended his harsh reproach in a later statement: "Poets ... will exalt the virtues of those poets of the past who offer them example and stimulation, and cry down the merits of those poets who do not stand for qualities they are zealous to realize. This is not only inevitable, it is right.,,26 Furthermore, creators often express a strong desire to keep price value and praise value separate. They fear that praise value is compromised by the factors that influence prices in exchanges (Bourdieu 1993: 75-6; Velthuis 2005; Zelizer 1994). Independent artists might succeed in maintaining such a separation even if the prices paid for their works are the basis of their independence. Creators who are employed by commercial companies do not have that opportunity. The companies measure their success in terms of revenues, or profits after taxes, and the collective focus on price value strengthens the firms' ability to coordinate actions. On the other hand, the companies producing novel goods benefit if there is a discussion within the organization around the qualities of the works produced. One should observe, therefore, that companies find ways to work with varieties of praise values.27 EXPERIENCE PRODUCERS AND THEIR EXALTED PRAISE After the first stage, in which a novel artwork or any other surprise good is created either by an individual or by a collaborative circle, there is a second stage, in which the event is prepared and actually performed. Such events are often recorded, and copies of these recordings are distributed to audiences that have access to reproducing media, such as cinemas, CDs, or televisions. Those who accomplish these tasks are called producers. Producers have enough experience to make quality judgments; in fact, they would fail commercially if their judgments were inaccurate. Producers have to make selections, since only a fraction of the works suggested by creators can be transformed into performances and recordings. The selective choice is a clear, transparent 26 Quoted in Hutter and Shusterman (2006: 203). 27 This type of heterodoxy even makes sense outside the creative sector, since firms generally rely on internal change to come up with innovations sooner than their competitors (Stark 2009).
213 indicator of value, but it is accompanied by massive, often expensive expressions of praise for the works selected, either through the producers themselves or through hired specialists.28 Producers in creative industries come in two varieties: executive producers shape the work, live or recorded, through their intervention, while "distributive" producers have to master the logistics of and the communication around the dissemination of copies. Producers also come in two sizes: large, globally active companies, with high economies of scope and scale in the production and distribution of recorded copies, and small local or regional firms. In every branch, not more than half a dozen "majors" and thousands of "independents" operate.29 The observations below refer to both groups, even if their means and tools are vastly different. Goods that are new are inevitably unknown, so the potential audience has to be informed. Announcing the advent of a new film, a television series, or a video game is a skill of its own. Advertising and promotion budgets take up 30-60% of total production expenditures in most creative industries (Hutter 2006: 101Ј.). A large part of these sums pays for the privilege of placing messages into a mass medium, be it print, broadcast, or the Web. Advertising messages typically operate with exaggerated claims to excellence. They select quotes from the most positive judgments of supposedly neutral critics. As well as using the authority of these quotations of exalted praise by critics, advertising messages attempt to be novel and surprising in their own way. The inventiveness of a message serves as an indicator for the inventiveness of the actual good that the message advertises.3o Another avenue of action operates through direct engagements with audiences, amateurs, as well as critics in order to influence their quality judgments. Direct engagements with amateurs take place through live performances such as concerts or readings, or film screenings attended by the director and the main actors. The events are usually priced low enough to generate excess demand, which can then be reported as a sign of attention. For some genres, 28 Aspers (2001: 105f.) reports the prominent role of selection in the case of fashion magazine editors. He observes the crucial role that status plays when value is assigned to the work of certain magazines, artists, or advertising studios. Status hierarchies and contexts could be seen as a complementary strategy for value stabilization. 29 A number of effects accumulate to generate this sharply asymmetric distribution. There are technical network effects, the effects of distributing a public good, and the effects of "preferential attachment": users prefer experiences that they can share with many others and communicate about. In consequence, some network nodes develop into central hubs while all the others remain peripheral (Barabasi 200l). Further amplification of the asymmetry takes place through the mass media. Massmedia products are experience goods as well: the surprise lies in the observation of any kind of new information. Since unexpected changes in nature, apart from the weather forecast and occasional earthquakes, are fairly rare, most of the news refers to social events, preferably those whose protagonists are already linked to their audiences: in this way, a fraction of the marketable works is brought to even greater prominence. 30 A third way to attract audiences to something unknown is by providing access to selected fragments of the new work. It is easy to create limited demo versions of works that have been programmed or recorded in digital media in order to grant users access to their potential performance.
214 regular direct contact with "hardcore fans" at festivals is part of the long-term production program.31 Winning affection from amateurs for certain performers stabilizes these fans' responses to new performances and decreases the danger that they will switch to other arenas. Another direct engagement with amateurs takes place through market research. Audience reactions to surprise goods are surprises in themselves. "Nobody knows" is still the iron law of the movie industry, as well as other creative industries' branches.32 Word -of-mouth publicity is considered the most powerful medium for passing on recommendations to other users. Yet the producers have a keen interest in forecasting the reactions as accurately as possible. One way to deal with this predicament is to make products that are similar to versions that were successful in the past, whether this is done through content, performers involved, or some other dimension. But there is a limit to copying old successes, and the danger of producing a "flop" remains. Market research is intended to reduce the danger, but this research is hampered by the surprise feature. How can people be asked about their interest in something when they cannot be exposed to it on a test basis because the surprise would be leaked to the general audience? The contingency of amateur audience reaction is crucial for maintaining the process of creative destruction that selects new variations of goods and withdraws attention from last season's items. While direct engagements with amateurs show little evidence of the use of infinity operators, engagements with critics do involve ideal quality judgments. The producers, be they museum directors, opera impresarios, or fashion designers, need the judgments of critics to validate their selections. These producers find ways of gaining critics' attention in the first place by providing them with the opportunities to publish their opinions in appropriate media like exhibition catalogues or fashion journals. The producers then select the most exalted quotes, the ones which relate most openly to pure qualities or ideals.33 To sketch in more detail the kind of empirical work needed to explore this claim, I have selected a short text on an artwork that was published in the catalogue for an auction at Christie's in 2005.34 The work is one canvas from Andy Warhol's Flowers series. These works, when first exhibited in 1965, actually did overwhelm their first viewers with surprise. Bright fluorescent colors dazzled the eye, and the subject matter disappointed expectations of social critique. The text is a one-page entry praising the work that is up for sale. The writing first sets out the work's pedigree in terms of previous owners, 31 See Keith Negus (1999) on audience relationships in country music. 32 See Richard Caves (2000) and his identification of the essentials defining the creative industries. 33 For a parallel development in the communication of qualities in scientific writing, see Franck (1999). 34 See Invaluable.com (2005).
215 public exhibitions, and literary treatments, and then adds prose that contains the following selected phrases: The present work is one of only seven monumental-scale paintings from Andy Warhol's famous Flowers series ... Warhol was at the height of his creative powers and international fame ... the pictures belong to a long art historical tradition of stilllife painting ... Warhol's updated version is consciously banal, superficial, synthetic and enchantingly beautiful. Quintessentially sixties Dealer Ivan Karp recalls, " ... they were totally successful and we sold them all! That's it. That's one of those immortal images ... " ... While the Flowers can be seen as the vacuous flip-side of ... horror and violence, there are some critics who believe that they are still permeated by Warhol's deep obsession with death. " ... No matter how much one wishes these flowers to remain beautiful they perish under one's gaze, as if haunted by death." 0. Coplans, "Andy Warhol: The Art", Andy Warhol, exh. cat., Pasadena Art Museum, 1970, 52) Scarcity ("one of only seven"), the peak of creative powers, art historical tradition, enchanting beauty, and quintessence are invoked. A prominent art dealer is cited who connects the commercial success with the quality of immortality. The association with death is attributed to "some critics" and supported by a quote from a text written 40 years earlier by a critic for one of the first public exhibitions of the work. Such are the strategies for implementing infinity operators in producer-generated praise judgments. EXPERIENCE AMATEURS AND THEIR SPONTANEOUS PRAISE Those who perform a surprise good-creators and producers-may have had their own experience when the performance originated. But the good will not be successful unless novelty and amazement are experienced by a large and attentive audience. The statements providing the evidence above on the impact of such performances were attributed either to "amateurs" or to "critics." Both kinds of statements come from "users" of the experience. Amateurs' statements refer to an internal reaction that needs no further legitimation for its valuation; they react, to use a phrase suggested by Dewey, with "ejaculations"35 of applause. Their expressions and judgments are powered by their "love" for a genre. The internal sensations during their experiences provide them with the criteria to express their approval or disapproval during and after a given performance. Intensity and length of applause or whistling are prime indicators for the quality of a performance. In a few cases, the emotion boils to collective frenzy, with expressions that signal the extraordinariness of the experience through collectively altered behavior. 36 A second way of expressing the love for specific experiences operates through ownership and thus through price value: the collector pays for 35 The term is used in Dewey (1939: 6f). 36 Here, the similarity to Durkheim's "effervescence" is particularly striking.
216 possession; the museum or concert visitor pays for access to the object or the performance that triggered amazement and enthusiasm. Collectors in particular can strongly influence the reputation of specific works. A similar effect takes place when unusually large numbers of copies are sold. But in none of these cases do infinity operators seem to playa significant role. Amateur users also talk about their experiences. The power of word of mouth, which is particularly relevant in the movie industry,3? was mentioned above as one of the strategic concerns of producers. But what kinds of rhetorical strategies are used by amateurs? First of all, the reports are subjective; they work because they are not abstracted to critical reflection. They use fashionable colloquial terms for surprise and amazement: "awesome," "out of this world," or "it blew me away." They may also refer to pure qualities like "peace," "energy," or "joy," but such abstractions are not dominant. Overall, amateurs generate praise value that seems to have little use for infinity operators. Their messages establish a credible connection to personal experience. Amateurs also use price value because they give up disposable income for ownership and allocate their time budget to particularly favored surprise goods. "Crowd opinion" is proverbial in its propensity for change, its fickleness, and its instability. This observation fits well with amateurs' lack of use of the "infinite" qualities' value anchor. EXPERIENCE CRITICS AND FUNDAMENTAL CRITERIA OF QUALITY Critics, working either in an academic or a mass-media context, have command over mental or even material archives because they have attended many previous performances in the genre for which they claim expertise. They also store knowledge of what has been said or written by other critics and performers about similar events. On the basis of that mental and social knowledge, they establish their set of criteria for quality. They rank new events along scales that indicate the degree to which these criteria are fulfilled. Thus, the ranking of new events can be compared to the ranking of previous events. Inevitably, critics are involved in the institutions that characterize "art worlds" (Becker 1982; Danto 1981; Moulin 1995). These institutions link the critics into networks that are decisive for reaching consensus on judgments in such domains. But the process toward consensus is less germane to our issue than identifying the strategies that stabilize that consensus. Critics' statements were already used in Section 3 to provide examples for the use of absolutes in establishing the quality rank of an experience good, particularly in the arts. The examples given, however, are yet to be supported by a more detailed investigation. Such an investigation could move along the lines suggested above. Standards of excellence are a first candidate for an 37 See De Vany (2004).
217 infinity operator: are they strictly comparative, or are they thought of as ideals to which certain performers or works come very close? A proxy for such standards might be the work of certain artists who are declared to be masters. Another possibility would be various ultimate qualities like "purity," "immortality," "beauty," or "overwhelming power." These terms take on different appearances as they are recreated in the jargon of specific cultures of critical writing such as fine art scholarship, pop music reviews, or travel guides. The award of prizes for excellent works is a rich source for the use of idealizing attributes. The attraction of prizes lies in their simplicity: there is one winner, maybe a few runners-up, and many losers. But every selection of a winner needs to be based on verbal expressions of judgment, even if these statements are not known to a larger public. Such selections are typically made by a jury of "independent" critics, and the critics defend their decision in oral and written statements. They use and presumably invent criteria and expressions of judgment for novel amazing experiences, which are charged with the profound value of infinity. Such a thesis is not entirely in line with current opinion. Hutter and Shusterman (2006: 203) report that the logical form used for evaluative judgment is "inductive, deductive or something altogether different." Infinity operators are only likely to be found in deductive arguments where terms like "greatness" or "wholeness" are employed. If ideal points of reference play an important role for the stability of value rankings, then the emphasis on deductive valuation may be greater than believed. Praise Value and Economic Growth Surprise, the generation of novel experiences, has now been identified as the common characteristic of not only the products of artistic creation but all the goods produced in the rapidly growing sector of the creative industries. The subjective value of surprise can be high, and social valuations reflect that. This chapter has argued that there are two consistent valuation mechanisms in operation, one of them operating through the abstraction of prices processed in market institutions, the other one operating through the formulation of praise in valuation networks. Such praise value, it has been claimed, is sustainable if comparisons between subjective experiences, and thus expectations of future surprise goods, are anchored in references to ideal qualities. Evidence for such anchoring, however, remains fragmentary. A more thorough investigation into the valuation practices along the value chains of creative industries' goods is needed. The stability of praise valuations has implications for growth opportunities in postindustrial economies: as long as use is linked to material resources, the creation of new exchangeable value is limited. Praise value, in contrast, is
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The Worth of Goods Valuation and Pricing in the Economy Edited by Jens Beckert and Patrik Aspers OXFORD UNIVERSITY PRESS
OXFORD UNIVERSITY PRESS Great Clarendon Street, Oxford ox2 6DP Oxford University Press is a department of the University of Oxford. It furthers the University's objective of excellence in research, scholarship, and education by publishing worldwide in Oxford New York Auckland Cape Town Dares Salaam Hong Kong Karachi Kuala Lumpur Madrid Melbourne Mexico City Nairobi New Delhi Shanghai Taipei Toronto With offices in Argentina Austria Brazil Chile Czech Republic France Greece Guatemala Hungary Italy Japan Poland Portugal Singapore South Korea Switzerland Thailand Turkey Ukraine Vietnam Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries Published in the United States by Oxford University Press Inc., New York (F) Oxford University Press 2011 The moral rights of the authors have been asserted Database right Oxford University Press (maker) First published 2011 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, or under terms agreed with the appropriate reprographics rights organization. Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this book in any other binding or cover and you must impose this same condition on any acquirer British Library Cataloguing in Publication Data Data available Library of Congress Cataloging in Publication Data Data available Typeset by SPI Publisher Services, Pondicherry, India Printed in Great Britain on acid-free paper by MPG Books Group, Bodmin and King's Lynn ISBN 978-0-19-959464-1 (Hbk) ISBN 978-0-19-959465-8 (Pbk) 1 3 5 7 9 10 8 6 4 2

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