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Lady Gaga, known as Stefani Joanne Angelina Germanotta until quite recently, is a phenomenon. Although only 24, she already has six number one songs from two albums, The Fame and The Fame Monster. She has toured the United States and world as a conquering pop hero, whose ascent occurred at exactly the right time with exactly the right trajectory to propel her into superstardom. Gaga is not the only vocal artist to meet this kind of success. She is preceded by the likes of Madonna, Mariah Carey, Beyonce Knowles, and, to a lesser extent, Whitney Houston and Janet Jackson. But as of the writing of this post, Gaga has something that none of her predecessors had: The Method.

Markets in Music

In the past 100 years, markets have developed widely differentiated markets to satisfy an ever-more sophisticated melange of tastes on the part of humans. Before the 20th century, musical styles may have changed relatively slowly and catered towards small groups of elites and particular localities. Through the 20th and 21st centuries, the decreasing cost to the transmission of information along with increasing standards of living fostered a vastly increased consumption of music. People consume music in the sense that they listen to it and know it, but prefer more music to less, just as with any other good, all things being equal. Discarding old music is not a condition to further consumption, only the unsatiated appetite for more is.

In recent years, several notable artists have been able to maintain their position on the top of the charts by providing music that people demand. In some cases, their styles have changed to fit so as to please shifting preferences in the market. The most notable of this group of artists is Madonna and Mariah Carey. Mariah, whose traditional path to pop supremacy leaves little in common with Gaga’s, need not be addressed in this post. But in many ways, Madonna is Gaga’s most similar predecessor. Her example helps inform the path Gaga will take. Madonna burst onto the scene in the mid-1980s with music that was as catchy as it was interminable– I, for one, cannot get “Borderline,” “La Isla Bonita,” or “Like a Virgin” out of my head if I try upon hearing it. Within a matter of years, as she attempted to evolve artistically, she fell out of favor with the public. Madonna’s concerted effort to change her image into a sexually liberated dominatrix in her album Erotica and book Sex did significant damage to her brand. As her songs fell off the charts, Madonna’s increasingly desperate bid to remain in the public eye almost completely destroyed her. But Madonna was nothing if not resilient, and she learned from her mistakes. She remade herself for Ray of Light and never strayed too far from the cultural mainstream again.

By the time of 2008, pop music in the United States had become moribund with the same acts, being replenished only by American Idol contestants who were successful not because they rocked the boat, but because they excelled at traditional artistic convention. The market was saturated with typical romantic ballads, rap self-aggrandizing, and both gritty and soft country songs. The pop music segment, which consists mostly of young people whose tastes have not hardened fully yet, had consumed enough of the old. The time was ripe for something new.

The Method

Lady Gaga literally burst on to the scene. With the market so ready for something different, all it would take was a little “going gaga” to light a real fire. Her sartorial splendor ratcheted it up a notch. Was it just a temporary act? Nope: her music videos doubled down on the schtick and she rarely broke character. In fact, she told one source that she’s “Gaga 24/7.” She told another to never call her by her real name again: it’s Gaga from now on. From the impractical, yet somehow aesthetically interesting hairdos to the occasionally unflattering but always interestingly shaped dresses, Gaga’s method was simple and pure. She would push every superficial boundary right up until the breaking point while offering up pleasing, aggressive, strongly sexually suggestive music.

The most important element of The Method is not going past the breaking point. How would she know what it is? She doesn’t have a team of market analysts and economists looking for this mythical breaking point. She knows because we’ve already seen it: Madonna’s Erotica phase.

Madonna made the mistake of getting too personal. The market readily consumed her music, and even her behavior: she was young, after all. But they would not go for boundary-pushing content that seemed authentically representative of Madonna herself. Too personal, the material was perceived as representing the genuine sexual deviant she always was. There’s no faster way to stigmatize one’s self to the broader market to which, in reality, she wished to appeal. Indeed, she only became a hero to various small groups of people by unwittingly sacrificing broad appeal. She did not intend this. We know this because of how fast she dropped the routine. I suppose it is possible that Madonna converted to that phase out of commercial calculation, but whether she did or not is not as relevant as how it was perceived by people.

Gaga has not made any mistake like this. When she became a national figure in fall of 2008, she studiously avoided campaigning for her choice for President on national radio, saying that while her preference was well known, she would not say it to Ryan Seacrest on air, presumably because it would peel away a layer from the extraordinary artifice she had devised. Nothing personal to her previous identity, Stefani Germanotta, remains. What was Stefani Germanotta like? Check out this 2005 appearance by her on MTV’s Boiling Points.

Not too different from the rest of us, but a far cry from the Lady Gaga we know and… well… appreciate today. Our Lady Gaga has platinum blonde, dirty blonde, or bizarro color hair depending on the theme of the evening. A day dress? Try trash bag couture, the devil version of 1990’s chic, or geometric glamo-sportswear on for size. Virgin Media did us a favor by putting her “worst outfits” on display here. My favorite is her red lace outfit from the MTV Music awards, shown earlier, but focused on below.

There is something so revolting about this outfit. And yet, it is partly because of this, partly because of its newness, that I cannot turn away. The most compelling part about it is that it gets me using my imagination. Why did Gaga choose this? Can she see from under there? Whatever we say about the garment, it’s not uninteresting. Not only do we talk about it, we want to see more. It’s instructive to compare this to Madonna, and in more recent times, Adam Lambert. Madonna is sublime at what she does, while Adam Lambert is actually pretty good himself. But when Madonna gave us Erotica, it was hot, when it should have been cool. What I mean by that is that it seemed to represent her real personality. Adam Lambert’s 2009 appearance on Good Morning America was cancelled after a male performer simulated giving the singer fellatio at an MTV performance. It’s not just the homosexuality that bothered people. It’s that he warmed up to us too soon. We don’t know him. Maybe now we don’t want to know him. America’s okay with certain types of sexuality as long as it’s genuine, distanced performance.

This is what Gaga has mastered in her method. None of her outfits represents who she really is. Not her name, not her hair, not her food preferences, not what kind of animals she really likes, her hopes, dreams- nothing- all barred from us. Here are some of her lyrics from “Bad Romance”:

I want your ugly
I want your disease
I want your everything
As long as it’s free
I want your love

Since we cannot possibly take these lyrics entirely literally, we are forced to take them figuratively, metaphorically. Again: thought-provoking, but this is not authentic personal expression. She may say otherwise, that this is who she really is, but it isn’t true. It’s a well-crafted commercial persona for our consumption. She’s smart enough to stay in character, too. Whereas Madonna broached controversial Catholic imagery in her “Like a Prayer” video, Gaga is light-years away from taking on religion or war. Madonna discovered The Method too, but at a later stage in her career. Gaga knew it going in. Gaga is Stefani Germanotta’s avatar, in every sense of the word. And there’s nothing threatening to people about it because it’s purely play. She’s in on the joke.

Evidence for The Method

Recently, Lady Gaga and Beyonce unveiled their long-awaited 9 minute music video for the song “Telephone,” which is currently dominating your airwaves. The video is a terrific piece of circumstantial evidence that The Method is not something intrinsic to Lady Gaga, but something that can be replicated. Here is the video:

The first 5 minutes of the video aren’t particularly interesting and seem intent merely on connecting it to its prequel, “Paparazzi,” in which Gaga gets arrested after poisoning her boyfriend. But the last 4.5 are extraordinary. Beyonce also begins wearing Gaga-esque outfits and behaving like a “monster” as Gaga might say. Unfortunately for Gaga, Beyonce is the real star of the video, and as with their joint effort in “Videophone” (also a prequel perhaps judging by similar 1940s-ish wardrobe/hair in particular scenes), steals the show. But what I wish to draw your attention to here is the complete Gagafication of Beyonce. Beyonce adopts similar personality artifice, actually out-Gagaing Gaga herself. I love it.

There is another subtext here. Beyonce’s last album was called “I Am… Sasha Fierce.” This album is her best by far (so far), featuring “Halo,” “Sweet Dreams,” “If I Were a Boy,” and “Single Ladies (Put a Ring On It).” The album title referred to Beyonce’s long-lived (though now deceased) alter ego, Sasha Fierce. According to Beyonce:

Sasha Fierce is the singer’s sensual, aggressive alter ego, but don’t expect her to surface anywhere but the stage. “Sasha Fierce was born when I did ‘Crazy in Love.’ People, when they meet me, expect that all the time, but that person is strictly for the stage.”

This implies that we don’t really know the real Beyonce very well either. As noted in my “Siren Paradox” post, we haven’t seen her real hair, or much of her real preferences and beliefs. She performed at the 2009 inauguration of Barack Obama, but she also performed with Destiny’s Child at the 2001 inauguration of George W. Bush. Yes, one more likely represents her genuine vote preference, but things may not always be as they same. Beyonce is notoriously guarded about her private life. The artistic synthesis between Gaga and Beyonce, both using the method through completely detached, methodical commercial targeting is a beautiful thing to behold.


But you know what they say: all good things must come to an end. I suspect that at some point Gaga’s exterior will begin to crack. She might have a marriage, a child, or late-night hotel altercation. She might get drunk, express a serious political theory, or get into a public personal bout with a rival. I wouldn’t bet on it any time soon, but she, like everyone else, has multiple desires in life that may shift in priority depending on her income.

To make an analogy, in economics there is the backward bending supply of labor curve. Above the reservation wage and halfway up, people tend to work more as they make higher wages. For this phase of the curve, we say that the substitution effect is greater than the income effect, which both continuously operate within us, but shift in priority as incentives as our wealth changes. At some point, they switch in importance, with the income effect overwhelming the substitution effect in our mind. That is, we no longer wish to work more hours at these higher wages, we wish to use more of our time for leisure. We just bought that 200 ft yacht and by gosh we’re going to use it, even if it costs $40,000 to fully gas!

Just so, at a certain income level, the odds are that Gaga will care less about appealing to the broad market and risk revealing herself more. At this point, she will probably never make quite as much money as she used to, but she will be more personally satisfied and the cost of her constant vigilance in obeying The Method will be relaxed. Let us hope that when the time comes, if it comes, that she can still stay in on the joke and, even if pursuing some random social justice issue, she does not take herself too seriously, as so many others have failed in doing.

Introduction to the Siren Paradox

Beyonce Knowles has already become a star for the ages. She’s the most popular solo female artist of this decade, a member of the most successful female group of all-time, the wife of rap mogul Jay-Z, and is probably considered one of the most beautiful women alive. Like any such star, she is not without her critics. In this post, I will discuss what I call “the siren paradox,” which is the simultaneous societal appreciation of an ideal and the revulsion at its consequences and costs.

The term “siren paradox” alludes first to those mythical creatures encountered by Ulysses who had top halves of women and bottom halves of birds. Although it doesn’t sound entirely appetizing today, the term “siren” retains its essence: a beautiful and unavoidable, yet dangerous woman. Beyonce Knowles can be considered thus in light of her relationship with society. We perceive her radiant beauty and value it as an ideal deserving of female aspiration. But the consequences of the aspirations engendered from these perceptions may be minimized, though they are many. Generally speaking, in order for any random woman to become more like Beyonce on a superficial level (that which is mostly perceived), she must buy certain hair care products, make-up, possibly hair extensions, fake eye lashes, and fake boobs, to say nothing of short sexy dresses and four inch platform heels. No, the image of Beyonce is not a cheap one to produce, even though she is naturally endowed with extraordinary beauty.

Klein vs. Postrel

Indeed, some, like Naomi Klein, believe that the consumer culture of the West uses Beyonce for its ruthless ends: profits. That is, they hire a respected, beautiful person like Beyonce and imply that if you buy their products you can be more like her. And isn’t that what you want? The underlying thesis is that without advertisements constantly telling you that you need this hair product and that eyeliner to really be beautiful, you would be healthier, wealthier, and happier. Unfortunately for the persons who believe this, they are only looking at a very narrow part of the picture, with almost no basis in real cause and effect. As Virginia Postrel shows in her excellent book The Substance of Style, absent advertisements, the freed women and men of Afghanistan in 2002 and 2003 quickly learned to appreciate beard shaving, haircuts, less strict clothing, and beauty products. In Iran, Tehran was and remains a haven for skirts and lipstick. The best argument Postrel wields is her discussion of the marginal. In absolute terms, yes, certain people might be better off pursuing needs according to Maslow’s hierarchy. But consumers face decisions on the margin, and if someone in Afghanistan has the equivalent of $3 USD to spend, they’re well fed for the time being, the possibility of being able to get security with the $3 USD is very low, the possibility of getting insurance for this season’s crop is even lower, then that $3 USD might be better spent according to the consumer on a deeply personally satisfying beauty product.

True, at this point, we have not entirely refuted Klein. The beauty products still likely have some prestige qualities attached to them that stems from their use in the West. Even the uneducated of modern Kabul or especially Tehran are not strangers to the idea of our customs. The evidence goes deeper, though: every society has some standards of beauty as well as accoutrements that facilitate transmission of certain qualities of beauty. Whether it is some primitive type of piercing through the ear, some tattoo, a particular garment, or even a dance, there is always some thing whose purpose is to signify or augment beauty. Furthermore, beauty goes beyond even social constructions, for it is biologically rooted in us as we search for mates. It has been often claimed that we prize symmetrical faces, certain hip sizes, and other physical qualities. It should come as no surprise that many of the instruments used to improve beauty as seen in the eye of most beholders cater to those biological tastes in some way.

At this point, we can proudly proclaim that Klein’s main points have been vanquished. Beauty is an inextricable part of the human equation, and a big part of our relationship to it, for most of us, is appreciating it in the physical qualities of other human beings. Now just because something is an instinct doesn’t mean that it cannot be fought if necessary. It has been said, though it has also been recently challenged, that we humans are savages with the blood of a million years on our hands, but that we have a choice to kill and all we have to do is choose not to kill today. The same could be said about using beauty products. There’s just one little problem. Killing imposes costs on others without their choice. When someone chooses to use beauty products, that person imposes no cost on others without their choice. And the women and men who do choose to do so are not all brainwashed. They value improving their appearance by society’s standards. Absent any form of advertising, humans still have perception and will always distinguish differing degrees of beauty. We can no sooner stop doing so than we can tear a limb off our body.

Markets in Beauty

When you see someone look at a stranger from head to toe, or for a very long time, there is a significant chance that person is determining that stranger’s “price.” Assessing the stranger’s physical qualities is an excellent, though not perfect, method for determining the price. Other factors include personality, compatibility, and to some degree an independent evaluation of wealth, but the physical qualities are an easy threshold measure and proxy for overall price. What do I mean by this? A woman analyzing a man’s body, size, weight, height, hair, eyes, shirt, shoes, muscles, and posture will be able to determine the mating market demand for that man to a fairly close degree. When that woman then proceeds to analyze the girlfriend of that man, she can determine all kinds of useful information. For example, does the girlfriend represent an “underbid?” If so, the woman’s qualities might enable her to bid higher for his services. Looking at a lot of other price signals helps determine the demand for yourself, too.

When used in taste generally accepted by large portions of the market, beauty products raise one’s price signals. One’s use of these products, whether it’s more expensive dress shirts (signaling precisely nothing to Klein, but everything to many others), cologne/perfume, nice shoes, or earrings, may be revealing about both underlying asset value and internal motivations. But there’s nothing sinister in the process, for we would not possibly begrudge someone wanting to trade up in a market that has been biologically determined to be important for us. ( On a side note: websites like eharmony and reduce our search costs, making it easier for us to match based on interests as well as threshold physical qualities. It may even reduce relationship costs! )

There’s actually some rather significant evidence that we have these markets. The first important thing to understand is that markets can exist absent a formal currency issued by a bank or government. All you need to be able to do is trade one thing for another. Currencies are only useful for quantifying to a more precise level the demand for something. The subject of markets in beauty has been a popular topic lately in some corners of the economics blogosphere, notably Marginal Revolution and one of my must-reads, The Perfect Substitute. In “Theories of Beautiful Women,” Indiana University professor Justin Ross argues that there is an inverse relationship between economic freedom and success at the Miss Universe pageant, meaning that the less free a country is, all things being equal, the better it generally performs in the pageant. A quick and dirty econometric model by Ross and Auburn’s Bob Lawson shows that this inverse relationship likely exists, though it lacks significance at the ten percent confidence level, indicating a weak finding.

Much more interesting, with much more direct impact on the thesis here, is the relationship between male-to-female sex ratio and “sociosexuality.” According to GMU economist Alex Tabarrok:

Sociosexuality is a concept in social psychology that refers to how favorable people are to sex outside of commitment. It can be measured by answers to questions such as “I can imagine myself being comfortable and enjoying “casual” sex with different partners” (agree strongly to disagree strongly) or “Sex without love is ok,” as well as with objective measures such as the number of sexual partners a person has had. A low score indicates subjects who favor monogamous, long-term, high-investment relationships. […] Why might female sociosexuality scores vary? One hypothesis is that in cultures with low operational sex ratios (the number of marriageable men/number of marriageable women) female sociosexuality will be higher. The argument is that when the relative supply of males is low, competition for mates encourages females to shift towards the male ideal, i.e. when supply is scarce the demanders must pay more. (Note that this theory can also explain trends over time, e.g. Pedersen 1991).

Enter Brian Schmitt, whose “Sociosexuality from Argentina to Zimbabwe: A 48-nation study of sex, culture, and strategies of human mating” in Behavioral and Brain Sciences (2005) tests this hypothesis. You can see that the relationship between a country’s sex ratio and “sociosexuality” is fairly robust:

As you can see in the chart, countries with many more females to males, such as the eastern European countries, have a much higher sociosexuality. Physical beauty matters primarily as a biological imperative, secondarily as a social imperative, and finally as a personal one. Competition and attempts to improve one’s signaling have always been present, suggesting that those who use beauty products are just as natural and authentic as those who choose not to use them. Society merely abhors excess: when one uses too much, it is indicative of an attempt to mask very weak intrinsic value. This is not the worry with Beyonce Knowles.

The Market for Beyonce

Although she can hardly be criticized for the power of her voice, or her talent, virtually anything used to excess will challenge good taste. Accordingly, she is occasionally accused of “oversinging.” She is also accused of being fake. One friend of mine laments that we have never even see her real hair. I have already addressed the “authenticity” argument. As to the content of her singing, and the authenticity there, that is for another post.

It seems to me possible that Beyonce, and some other women with a similar skin tone, be they black, white, Indian, mixes, or what have you, were simply blessed as a matter of phenotype to have physical attributes so close to her society’s ideal. There are large markets for a firm that is able to design a product catering to the so-called “least common denominator.” One can make more money from that market than by catering to small, niche markets in the absence of many substitutes. Beyonce has a skin color that may represent a composite of all U.S. skin colors averaged. As such, it is a color desired by most communities in the United States. Whites typically prefer to be darker. Blacks typically prefer to be lighter. Her body has a definite American sensibility to it: not too slight, not too large, but in many other countries she might be considered a little big in the hips. Not in the United States. The rest of the enhancements simply cater to cross-cultural biological tastes: redder lips, longer hair, higher heels, shorter skirts, suggestive dances (see: “Sweet Dreams” video at 1:30, 3:18) longer eyelashes all serve to distinguish from others while alluding to various instinctive preferences in mates thereby increasing their price. The intrinsic Beyonce is what pushes her to the top, even though she remains assiduous in maintaining all facets of her image.

Fighting against the beauty of Beyonce is akin to banning certain financial assets or derivatives. If someone wants to hedge against credit risk by purchasing credit default swaps, they should be able to, and such swaps have proved indispensable for many responsible institutions. If someone wants to dress or look more like Beyonce thereby increasing their price in social markets, not only including mating markets, they should be able to do that as well. Although it costs those persons income to do so, it is a decision that they find personally satisfying and brings them happiness. To do otherwise would cost them more in terms of anxiety, possibly lost opportunities, and certainly happiness. This is not to say that those who don’t use them suffer from those negative aspects — it is all a matter of personal preference and choice. Indeed, natural self-confidence, charisma, or legendary deeds often may account for much more, overwhelming benefits even brought by make-up.

Perhaps there is more to the siren paradox here than meets the eye. Like the mythical sirens of The Odyssey, Beyonce has a certain mystery about her. Her image was as carefully crafted as it has been maintained. Her privacy has been inviolable, even after marriage to fellow superstar Jay-Z. Sirens were not friendly to sailors, for the sailors were lured into their death by the sirens’ song. Of course, we never found out just what Ulysses heard as he was tied to the mast, that is, until Margaret Atwood revealed it in “Siren song“:

This is the one song everyone
would like to learn: the song
that is irresistible:

the song that forces men
to leap overboard in squadrons
even though they see beached skulls

the song nobody knows
because anyone who had heard it
is dead, and the others can’t remember.
Shall I tell you the secret
and if I do, will you get me
out of this bird suit?
I don’t enjoy it here
squatting on this island
looking picturesque and mythical
with these two feathery maniacs,
I don’t enjoy singing
this trio, fatal and valuable.

I will tell the secret to you,
to you, only to you.
Come closer. This song

is a cry for help: Help me!
Only you, only you can,
you are unique

at last. Alas
it is a boring song
but it works every time.

Possibly some women because of Beyonce, and some men because of male models, fall into this trap like the sailors did for the sirens. Led on by promises of better lives and better mates, they fatefully discover that all was for naught. The antidote to the siren paradox, unlike the siren song, is not restricting one’s free will. It’s prudent execution and healthy moderation.

When I lived in Indonesia, I purchased and devoured every Japanese classic that I could get my hands on. From Kawabata and Oe to Mishima and Tanizaki, these novels invariably featured some very odd and different themes from the books I typically read. Spring Snow by Mishima remains my favorite of that lot, which I left in trust at Universitas Gadjah Mada for a wing of the library to be called “The Douglas MacArthur Memorial Library for Peace, Tolerance, and Justice.” Eventually, I encountered a work that I had much less trouble instantly understanding and appreciating: Chiyo Uno’s The Puppet Maker.

Chiyo, herself, was a celebrity. She lived fully up until the end of her very colorful 98 year life. She penned several interesting works, most notably Ohan, according to scholars. I learned of her works through Rebecca L. Copeland’s excellent The Sound of the Wind: The Life and Works of Uno Chiyo. Copeland compiled and translated (I think) three of Chiyo’s short works and added an original biography of her. And so, it is in this book that one may find The Puppet Maker. A final note about the publication: it comes from the University of Hawai’i Press. This university press is one of my favorites, as I visited the school bookstore in February and no amount of time was enough for me to enjoy A Dictionary of Cantonese Slang, Fundamentals of Japanese Grammar, Manchu: A Textbook for Reading Documents, Modern Tagalog, and The Chinese Language: Fact and Fantasy amongst many, many others. They specialize in works with niche Asian subject matter that really appeal to specialists and really dorky amateurs like myself. Browse the UH Press titles some time.

The Puppet Maker itself is essentially journalistic, told from the first person perspective of Chiyo as she travels to meet Tengu Kyukichi, perhaps the last great puppetmaker. She, a young woman, and he, an 85 year old, witness and discuss the puppetmaking art form at the precipice. As the puppetmaker sees it, “If this story were a play, then I suppose you could say we’ve come to the third act. If we do the third act today, the rest of the play won’t last another week.”

Later, he continues:

“You know what I think?” he said. “I think the puppet theater has seen its last days.” Indeed, the old man believes that it is now only a matter of time before the puppet theater perishes completely. And yet he continues to devote himself all the more to this dying art. If those in my line of work ever heard that the alphabet we use—that is, the alphabet I am using now—was shortly to go out of existence, I doubt they would continue to write, hoping against hope that by doing so they could perpetuate their art. No, we would give up immediately, and that is why I sense in the old man an extraordinary depth of passion.

And so, the work is communicating on several levels. The author has something to say about the man, the art, and tradition. We are inclined to sympathize with the puppetmaker, but not pedantically so. Unlike in a movie, there is no musical score to make us dance to whatever feelings the director wishes to evoke. Chiyo lets Kyukichi’s words speak for themselves. For a modern Westerner, they are difficult to assess, but I suspect they represent a time and a way of life very different from today. Indeed, Kyukichi spares few words for the wife who has accompanied him for six decades, and fewer still for children, some of whom he can barely remember anymore. Of his wife, he says this:

“What was it she’d do for me that I appreciated most of all? Sometimes I’d work late into the night, you see, and when I did she’d always wait up so she could lay my bed out for me. Well now I suppose just about anyone would have done the same. Laying out bedding is no great task. But once I’d crawled into bed and started off to sleep, I’d sometimes feel my old wife go around behind me and pat the quilt down soft around my shoulders. That’s all. But no one else would have done it.”

From the few words he uses, it seems he has a core tenderness, just one that is hardly practiced and little noticed. It didn’t matter as much then, when there was so much less opportunity. Still, the truly compelling parts of the narrative concern art and our relationship with it. For this, puppet-making is truly a wonderful foil and Kyukichi’s words come alive. Kyukichi describes the state of puppet-making thus:

“You see, art is tradition. It’s the same for carving puppets, too. If you’re going to carve Lord Hangan, you carve him the way tradition tells you he’s got to look. And, if you’re going to carve the hero Yuranosuke, you carve him in keeping with the Yuranosuke tradition, the way he’s been carved for centuries. But what happens to art when it’s done the same way over and over for hundreds of years? Back in the old days folks did things a certain way because it seemed natural to them. But now we’ve reached the point where we’re just copying the way things were done long ago without really understanding why, and so long as we’re just copying, it doesn’t have much meaning for us. Years ago folks lived with one goal in mind, and once they reached that goal, well, they were ready to die. But now, if you don’t set your sights higher and higher and aim to get beyond whatever goal’s been set, you might as well go ahead and die, and you sure don’t have any business talking about art. But, you see, I didn’t come to figure this out till four or five years ago—and it dawned on me when I finally noticed folks weren’t coming to the puppet plays much anymore. They were turning up their noses at it. How I wish I’d realized this sooner!”

There’s always a sense that the old days were different than today. For example, people often say that politics was kinder and gentler in the United States. In some respects, yes. In some respects, no. Yes, in that there was less overall competition and fewer interests bound up with the results. A good ‘ol boys network might ably control local politics for decades with most living their lives well. But no, in that you were much more likely to end up dead, run out of town, or ruined as a result of them. Slander? Try 1800. Things were no better in the 1940s or 60s. And so, in this respect, Kyukichi may be overreaching about his conclusion that in the old days artists merely replicated the old ways. It is possible, but I am skeptical. Even by seamlessly duplicating another’s style, there may be slight, but important differences of technique. Perhaps one carves faster. Perhaps one artist develops a change seemingly as slight as the puppetmaker equivalent of the damp fold in sculpture, but it has not been consciously appreciated yet.

But it is true that without something more, an art form might become static and uninteresting to the consumer. I really like Kyukichi’s sensibility regarding the intrinsic need for growth in the arts. Certain forms may have held special meaning in the past, but if they fail to in the present, then artists ought to consider change. In this case, we see a titanic struggle between modernity and tradition, because what Kyukichi is alluding to is not the necessity for mere changes of style. Given the improvements in technology and the changes in attention span, the art form itself is obsolete as pure entertainment for anyone born after 1930. Rather, Kyukichi may be unconsciously be pushing at the reality that puppetmaking needs some kind of fusion with other art forms, lest it be relegated to museums and ceremonial performances. His lament, “How I wish I had realized this sooner!” gives us a window straight into Kyukichi’s heart. This is his fondest wish.

The narrator herself struggled with the character of the puppetmaker:

I had never thought anyone could actually sit in the same place for sixty or seventy years doing the same thing day in and day out. If the person were performing a religious austerity, like those who practice zazen, perhaps I could understand it. And yet here was this old man, doing just what I had thought impossible. “I don’t know how it looks to others,” he told me, “but I’ve a reason for sitting right here all day long, never going out. You see, if someone came on business while I was away—well, wouldn’t be anybody else here who’d know what to do. No, I decided it was for the best if I stayed in as much as possible. Look, I’ve got my tools and things all laid out around me so I can sit right where I am with everything at hand’s reach. The sort of life the old man has led may not seem all that strange in a country town like this. No, he has lived just as a tree or flower might live, completely natural.

The power of a metaphor isn’t only that it helps us to see data in a new but analogous fashion. It’s also that it amplifies selected fundamental qualities or characteristics of a thing or situation in our perception. Chiyo’s description reflects a common perception in the modern day that a man who found his way early and did that the rest of his life grew like a tree or flower — sitting in the same spot, but still full of life, untarnished by the blemishes of modernity, unconcerned. And yet, it would be just as true to take the metaphor in a negative sense. We can lament his lack of opportunity, to be stuck no matter his true desires or talent, to in effect be condemned to the same lot generation after generation as the vast majority of the world were for thousands of years. Only in the mid-20th century did social mobility take off. Kyukichi, after a certain age, and maybe even before it, would still probably have it no other way, though. By the time of the interview, he has a solid sense of what his role is in the art, and more importantly, art’s role in him:

“…but let me tell you a thing or two about art. There’re folks who set their sights on one level in art—and once they’ve reached that level, they figure they’re finished for life. Then we’ve got craftsmen like Hidari Jingoro who keep right on perfecting their skills until the day they die. You see, there are those who always push for better, who are always struggling and trying so long as they’ve got breath in their bodies. And, I wonder if this isn’t where art is said to live. Once you’ve decided that you’ve gone far enough—you can’t do better—well, then that’ll be the end for you. I don’t know how much longer I’ll live. Maybe two more years, maybe three, but this that I’m telling you is what is closest to my heart.”

Some artists are not possessed by achievement in their field. In these days, I suspect a higher portion were, though. I’m fascinated by his comment that he wonders “if this isn’t where art is said to live.” Is he saying that it’s in the focused struggle to create ever better art? We do know that by then, Tengu Kyukichi had ceased being someone much associated with the past, and as we know, this partly includes even insuperable ties to family. They remain, incidental, to his story, but they are far from the chunk of the iceberg. What lies below is the passion binding him to his passion: the art of puppet-making, its limits, its transcending moments. It is indeed of art that he wishes to speak:

“…as I’m making my puppets, I feel as if I’m praying to the gods. Don’t you see, where my skill stops—when it doesn’t go any further—that’s where you’ll find the gods. Yes, they’re there just beyond human understanding. […] But let me just say that if you don’t reach out to the gods first—make some kind of effort—then they sure aren’t going to go out of their way to help you. […] Before I start to carve a puppet I have it all clear in my mind how that puppet ought to look. But there’s always one part I just can’t get no matter how I try—yes, there’s always something missing, and it’s in that part, that missing part, where the gods reside.”

Humans do not possess perfect information. They act in a world replete with risk and full of uncertainty– yes, these are two different things. And despite Kyukichi’s mastery, he is humbled by the reality that there is something beyond his precise calculation that goes into the art. It’s not just chance, but perhaps the occasion when he initiates some carving only to see something he missed in his mental conception that he now wishes to execute — or something that might be a flaw. Kyukichi recognizes in the flaw of his imperfect conception the idea of gods. Gods are unfathomable, but generally considered to be, if not all-knowing, certainly more knowing than we and arguably non-linear in temporal perspective. This reminds me of the literary theorist Kermode who argued “the concords of past, present, and future towards which the soul extends itself are out of time… To close that great gap, we use fictions of complementarity. They may now be novels or philosophical poems, as they once were tragedies, and before that, angels.”

These angels very much resemble Kyukichi’s gods. And so there is something in the human make-up that acknowledges its own imperfection, yet stubbornly refuses to attribute individualistic, virtuoso creations (art) to pure chance. Instead, we seek out any semblance of knowing will. Perhaps there’s some beauty in Kyukichi’s gods, who do not exist independent of humanity’s imperfection, though they ably light the way for humanity’s endless drive to overcome it.

Former UF University Economics Society President Vivek Rajasekhar, currently on assignment promoting liberty at the Cato Institute, shared a post with some other UES luminaries recently called “What kind of innovation do patents encourage?” Apparently, people are learning a little bit more about the economics of intellectual property, probably due to several new books being published on the subject, and the promulgation of illuminating blogs.

Many persons are loathe to consider reforming intellectual property, unless it is to strengthen IP rights. Through college, we never really challenge this assumption. But long before Professor Lessig‘s outstanding works on the subject, several notable economists tackled government’s efforts to promote IP. For example, Milton Friedman writes:

…intellectual property is different from physical property: in both cases, you have a monopoly but the monopoly on intellectual property is wholly different because duplicating the property comes generally at a very low or zero marginal cost. You are enforcing a monopoly pricing, as it were, that limits output to lower than the optimum social level.

Friedman is not alone. The most persuasive and eloquent critic of intellectual property rights is the late Sir Arnold Plant. Amongst many other broadsides, he argued “intellectual property protection might result in too much intellectual property being produced rather than too little (or perhaps both, for different types of intellectual property).” This is a fundamental point. Intellectual property protections simultaneously encourage and discourage certain types of IP. Economist and philosopher Murray Rothbard concurred in the case of patents, arguing that whether or not patent rights increase the amount of research expenditures, they certainly distort the type of research expenditures. He argued this on two grounds. First, that expenditures are “overstimulated” in the early stages during patent races until the race is over, after which point they are “unduly restricted” as all competitors may be excluded from benefit. Second, that because only certain types of inventions are patentable, research is overstimulated in those areas and by corollary relatively understimulated in others due to financial incentives being diverted to the overstimulated areas. Rothbard continues from his magnum opus Man, Economy, and State:

The most popular argument for patents among economists is the utilitarian one that a patent for a certain number of years is necessary to encourage a sufficient amount of research expenditure for inventions and innovations in processes and products. This is a curious argument, because the question immediately arises: By what standard do you judge that research expenditures are “too much,” “too little,” or just about enough? This is a problem faced by every governmental intervention in the market’s production. Resources—the better lands, laborers, capital goods, time—in society are limited, and they may be used for countless alternative ends. By what standard does someone assert that certain uses are “excessive,” that certain uses are “insufficient,” etc.? […] The market does have a rational standard: the highest money incomes and highest profits, for these can be achieved only through maximum service of consumer desires. This principle of maximum service to consumers and producers alike—i.e., to everybody—governs the seemingly mysterious market allocation of resources…. But the observer who criticizes this allocation can have no rational standards for decision; he has only his arbitrary whim.

Just where do the distortions and misallocations occur? A very interesting perspective by “Renegade Division” makes use of a distinction apparently created by noted libertarian Stephen Kinsella:

Vertical Innovation is when a new product is innovated based on merely a small amount of added new technology, for example adding the facility of watching videos on an MP3 player, or adding a new metal on an alloy best suited for making railway tracks which now reduces its ability to expand and contract in heat and in cold, or creating an AIDS vaccination by using the results, effects, and formulas of 10 different immunity vaccines.

Horizontal Innovation is when a new product is developed which provides same functionality as a previously existing product but it tries to achieve that in a different manner. For example a new motorcycle is developed which uses fluids load-balancing(just making it up) for more stability because a motorcycle is already developed and it is patented, or a new type of Fan is developed which is embedded in a box because the regular fan is already developed and patented.

We give up vertical innovation in order to foster horizontal innovation. Absent IP, however, the system would reach an equilibrium that fosters more vertical innovation and still gives us some horizontal innovation, but now protected by contract. In the absence of intellectual property rights, that is to say, government-created rights to intangible assets, the free market would allocate intangible assets as prices and consumers deem fit. Suddenly, the value of these assets will be assigned by contracts between persons who can negotiate the price in order to best allocate risk, as opposed to the government-granted right of artificial scarcity that detaches intellectual property transactions from reality. To put this more simply, contracts would take the place of intellectual property and not a whole heck of a lot would change except for more efficient allocation of scarce resources, including time.

As long as people are educated as to what a circle-c symbol means in a book, and they buy it subject to that, we would a seamless transition in copyright. For trademark, we would not need to rely on the strictures of the Lanham Act, which arguably entrench the rich and powerful at the expense of those who would develop similar goods or services and thereby please consumers. Rather, we would expect the common law concept of “fraud” to rule again. It would no longer be enough to be similar, as the small Victor’s Secret store was in Tennessee. It would have to be really attempting to pass itself off as Victoria’s Secret leading to bona fide customer confusion. Patents are a more difficult case and the strongest one could be made for pharmaceuticals. We like their innovations. Speaking as an economist, I don’t think we would necessarily see much less innovation or drug development. I think we would see fewer competitors and a consolidated industry that still seeks to buy the smaller companies with promising drugs.

How am I so confident? Well, the sad truth, long unheralded by an education system stuck in the 1960s preparing people for 1950s jobs, is that contracts can fill the role of IP very well. You can have all manner of contracts: small ones, long ones, ones in shrinkwrap, ones reduced to a symbol, written in Chinese, English, or Binary. At root, contractual agreements represent a meeting of the minds and the consent of the parties. At root, intellectual property creates incentives for certain types of production at the expense of others. It’s an academic point, since it’s so strongly tied to an almost inconceivable counterfactual, but an important one nonetheless.

Don’t believe me? Fashion has worked for a very long time without strong IP. Fashion changes significantly year to year and countless billions in profits are still made. Additionally, the Open Source movement, which is very much based in the power of contract contra the limitations of IP, has eviscerated profits for operating systems, encyclopedias, and many other products. The gains we all receive are significantly greater than the jobs lost and no protection is necessary. In support of this point, Donald Bordeaux, Chairman of the George Mason Economics Department, writes in today’s “Costs are not benefits; Reducing costs is not harmful“:

How can a nation be hurt in this way if it gains greater access to lower-cost inputs? Suppose, for example, that a genius invents a low-cost machine (much like the one in Star Trek) that can safely and comfortably transport human beings from point A to point B — from our home to the local supermarket, or from our home to Tahiti — instantaneously and for only pennies per transport. This machine is soon sold for $1.99 and becomes, say, an app on a cell-phone or is clipped on to one’s belt.

The great majority of Americans who now work in the transportation and travel industries would lose their jobs. The demand for automobiles would plummet, as would the demand for airplanes and for airline services. Even the demand for hotels and motels would fall dramatically, as many business travelers would just beam themselves back home for the night rather than sleep in a far-away, strange bed. But would America be made poorer by this marvelous invention? Of course not. We’d be made materially much richer.

So, folks, let’s reform the system and go with freedom: it has worked before, it can work again. Put IP lawyers out of work and make them transactional attorneys.

UPDATE: After publication of this post, I noticed another blog post alluding to the possible demise of international IP at the hands of ever-growing contractual agreements here. Contracts govern rights between parties and will always be there. They are not mutually exclusive with IP, though they are more flexible and market disciplined.

We often hear pundits, scholars, and friends arguing about the merits of competition in the context of economics. Introducing competition to a moribund industry characterized by monopoly, as occurred when UPS and FedEx were finally able to challenge the US Postal Service (a truly damaging monopoly) for the delivery of packages, induces all competitors to improve their offerings because, in general, they have to battle on quality and price to find patrons. All else equal, this is what we would expect in any activity, leading to more choice, better service, and greater happiness. And this is what we tend to find.

But, arguably, the blessings of competition are even more pronounced in the arts. In 2008, I described the effects of competition on two great bands of the 1960s in “The Fortune of Coldplay“:

The Beatles and Beach Boys engaged in an “arms race” of sorts that propelled both bands to dizzying unforeseen heights of artistic expression. The story is worth recounting, briefly: Paul McCartney and Brian Wilson, two of the virtuosos behind their respective bands, forced each other to get better with each album. They influenced each other, beginning with The Beatles’ Rubber Soul driving the Beach Boys (read: Brian Wilson, the only one of them worth a creative damn) to produce Pet Sounds, which Paul McCartney to this day calls the best album ever and moves him to tears with its melodies. In turn, McCartney went to the drawing board with John Lennon and they came out with Sgt. Pepper’s Lonely Hearts Club Band, which is often called their best album. According to some, this album broke Brian Wilson, whose prodigy was unleashed by the album but also broken by it. Wilson had, like perhaps Fermat grasping his Last Theorem or Nash contemplating Game Theory, become possessed by the art of the possible in his field. [Yet] the fulminations of other Beach Boy members condemned Wilson’s potential magnum opus, SMiLE, to death. When Wilson recovered [from his breakdown], he produced SMiLE as he thought it would have been. The result is unlike anything else that came from the 60s, or perhaps unlike anything that has ever been made.

I had argued in the post that it may not be possible to not have an “arms race” like that again, pitting extraordinary talent against extraordinary talent, producing ever more outstanding works, and satisfying consumers (in this case, of music) better than they could have dreamed. I was strictly mistaken. This could only occur in a market with a set of tastes that are perfectly and permanently satisfied. Rather, the example of The Beatles and the Beach Boys shows the benefits of competition for us. Similarly, in my recent post on Coorte, I showed that he received a fine for selling art work in a market without being a member of the artist guild. Yet consumers all benefited from his doing so, for they received excellent art works. Allowing artists like Coorte into the market without prior approval ensures that other artists must create works that compete with Coorte’s genius. This is why artists (and workers) form guilds (and unions) that insulate themselves from becoming better.

There is no other reason.

But when they become better, and improve themselves through the crucible of competition, we can build on those achievements. There’s another example of this in an “art” of sorts: chess. The 20th century saw many advances in the art of chess, including those made by Tal, Capablanca, Alekhine, Lasker, Botvinnik, Fischer, Karpov, and Kasparov. The 1970s through the 1990s was the era of Fischer, Karpov, and Kasparov. Fischer is best known as the American who broke Soviet dominance of world chess. But in the chess world itself, his nationality isn’t very important. His contributions to opening theory and endgames are. Chess masters continuously study and study and study previous games. It gives them a sense of the probabilities of how games will play out, but it also means they are storehouses of information regarding the games and artists who came before them. According to Fischer’s wikipedia:

Some leading players and some of his biographers rank him as the greatest player who ever lived. Many other writers say that he is arguably the greatest player ever, without reaching a definitive conclusion. Leonard Barden wrote, “Most experts place him the second or third best ever, behind Kasparov but probably ahead of Karpov.” […] According to the Chessmetrics calculation, Fischer’s peak rating was 2895 in October 1971. His one-year peak average was 2881, in 1971, and this is the highest of all time. His three-year peak average was 2867, from January 1971 to December 1973—the second highest ever, just behind Garry Kasparov. […] Fischer’s great rival Mikhail Tal praised him as “the greatest genius to have descended from the chess heavens.” […] Kasparov wrote that Fischer “became the detonator of an avalanche of new chess ideas, a revolutionary whose revolution is still in progress.” In January 2009, reigning world champion Viswanathan Anand described Fischer as “the greatest chess player who ever lived…”

Yes, it is possible that his capabilities have been exaggerated by his iconic status in the media, but when so many legends and peers believe he was the best, one must concede the possibility. The media would be less likely to distort their evaluations. It is now worth considering Anatoly Karpov, still ranked the 98th best player in the world, who was a dominating world champion for many years before the era of Kasparov. Unlike most masters, he did not have just one peak of greatness. He was world champion from 1975-85, when Kasparov began his stifling dominance of chess. Yet, Karpov retained much of his ability for the following decade, despite not surpassing Kasparov or Nigel Short. Still, Karpov’s greatest performance was in a 1994 chess tournament:

The field, in eventual finishing order, was Karpov, Kasparov, Shirov, Bareev, Kramnik, Lautier, Anand, Kamsky, Topalov, Ivanchuk, Gelfand, Illescas, Judit Polgar, and Beliavsky; with an average Elo rating of 2685, the highest ever at that time, making it the first Category XVIII tournament ever held. Impressed by the strength of the tournament, Kasparov had said several days before the tournament that the winner could rightly be called the world champion of tournaments. Perhaps spurred on by this comment, Karpov played the best tournament of his life. He was undefeated and earned 11 points out of 13 possible (the best world-class tournament winning percentage since Alekhine won San Remo in 1930), finishing 2.5 points ahead of second-place Kasparov and Shirov. Many of his wins were spectacular (in particular, his win over Topalov is considered possibly the finest of his career). This performance against the best players in the world put his Elo rating tournament performance at 2985, the highest performance rating of any player in history.

In this era of Fischer, Kasparov, and Karpov, it is worth considering what a tournament between all of them at their peaks might have been like. It is something Karpov has considered, since he would have played Fischer for the World Championship had Fischer not declined to defend his title. And although considered one of the all-time greats with his positional brilliance, always ready to take advantage of the most minor mistakes, he is not considered greater than Kasparov or Fischer. According to Karpov’s wikipedia:

Karpov is on record saying that had he had the opportunity to fight Fischer for the crown in his twenties, he (Karpov) could have been a much better player as a result (in a similar way as Kasparov’s constant rivalry with him helped Kasparov to achieve his full potential).

This is probably true. On the other hand, Karpov’s place in history may be unchanged, for his own improvement may have spurred even greater improvement in Kasparov as well. Whatever the case, it cannot be said that less competition is better for fostering the brilliance of artists anywhere in any situation.

Continuing my mostly despised series on government intervention in the arts, I look at pernicious interior design licensing requirements today. This has been a cause célèbre for many libertarians, including Dr. Mark Perry of Carpe Diem and the Institute for Justice, for some years now. But with good reason: it is a terrific example of big government being run by special interests, and in so doing, working against the public interest. In short, almost half of the states in the US require interior designers to obtain licenses from the state before they can hold themselves out as an “interior designer” or work as one in residential and/or business areas. Reason TV gives us a must-see documentary on the situation, primarily in Florida, but also pointing out that President Obama hired an “unlicensed” interior designer.

The woman in Texas from the video couldn’t point to an example where unlicensed interior designers led to public health disasters. The reason is because they don’t exist, not because they’re unlicensed anyway. Other states don’t seem to be as bad, but even being better, are still awful. New York does not require all persons who work as interior designers to register with the state. However, if they desire calling themselves certified, then they must:

  • be at least 21 years of age
  • meet education and examination requirements
  • meet experience requirements
  • be of good moral character
  • pay $345

Are you kidding me? So in order to receive certification by the state, you have to be of good character? How does the state determine that? Mostly searches of your criminal history, driving record, and so on. In order to do that, the state must hire a bunch of employees. Yes, the ultimate reason you have to do this is likely that the state wants to establish a class of workers dependent on a powerful state. Why do you have to be 21? What if you’re extremely talented at 18? You can go fight a war for America, but there’s no way you can drink beer off your military base ( I guess you’re safer there?! ) or Heaven forbid, be a certified interior designer in New York.

Now, what is this about education requirements? Uh oh. The state regulations of the commissioner, section 52.18 states:

a. To be registered as a program creditable towards the education/experience requirement necessary for certification to use the title certified interior designer, as prescribed in section 79-3.2(b) of this Title, a baccalaureate degree curriculum shall contain at least 48 semester hours of course work in the following content areas:

1. drafting and presentation techniques;
2. fundamentals of space planning and design;
3. materials and methods of construction;
4. furniture, finishes, and equipment;
5. history of architecture and the decorative arts;
6. codes – construction, fire, safety, and accessibility;
7. environmental and building systems;
8. color theory and application;
9. business practices and ethics; and
10. construction documents.

b. To be registered as a program creditable towards the education/experience requirement necessary for certification to use the title certified interior designer, as prescribed in section 79-3.2(b) of this Title, an associate degree curriculum shall contain at least 30 semester hours of course work in the following content areas:
1. drafting and presentation techniques;
2. fundamentals of space planning and design;
3. materials and methods of construction;
4. furniture, finishes, and equipment;
5. history of architecture and the decorative arts; and
6. codes — construction, fire, safety, and accessibility.

Now there’s little doubt as to the value of a formal education in these subjects. Many know little of the profession before they enroll in these subjects. But there are also lots of people who learned from parents, books, television, or internships how to do much of this already. My high school, for example, offers a lot of training in drafting techniques. In any case, why does the state have to force “the history of architecture” on these students? Does the state really have an interest in telling students what kind of architecture they should be like, appreciate, or know about? You can get anything you want to know about “color theory” from COLOURlovers, textbooks, or otherwise. I should know, since I have been doing research on it for my economics project.

Usually, people who advocate licensing requirements do so for professions like law and medicine, where the quality of a practitioner, or lack thereof, may deleteriously affect clients and patients respectively. Sometimes this is true, though no known studies have shown the either the Bar exam or Boards for these professions actually raise the quality of the practice. Even licensing requirements for teachers have come under severe attack by outstanding researchers in the economics profession. Milton Friedman, the revolutionary thinker who through his arguments raised living standards all over the world from Chile to the US to Hong Kong, had this to say:

Friedman wrote in that book, Capitalism and Freedom, excerpted from a post at Carpe Diem lamenting the foolhardy regulation of florists (!!):

Licensure therefore frequently establishes essentially the medieval guild kind of regulation in which the state assigns power to the members of the profession. In practice, the considerations taken into account in determining who shall get a license often involve matters that, so far as a layman can see, have no relation whatsoever to professional competence.

Conclusion? Friends don’t let friends mix government and the arts.

It seems like Adriaen Coorte, a Dutch painter of the late 17th century, is all the rage these days. Featured in today’s Art Market Monitor (AMM), Coorte has two works that have recently been discovered and will be available through Sotheby’s soon. Estimates range from €100,000 to 150,000. His works have sold for considerably more. Called an Old Master, which I suppose is a title given to an artist whose work can fetch a pretty penny at an “Old Master” auction by Sotheby’s or Christie’s, Coorte painted all manner of works in a long, but mostly uncatalogued career. There are some interesting notes to make about the case, however.

First, according to Sotheby’s materials, as relayed on AMM, “Coorte was almost completely disregarded until the 1950s when a series of articles and an exhibition curated by Laurens Bol drew attention to him.” The late Laurens Bol, who passed in 1994, was a crucial source on the subject of Old Masters. His primary writings on Coorte spanned from the early 1950s until the mid-1970s and helped to put Coorte on the map. He also served as a long-time Director of the Dordrechts Museum. It was in this capacity that he organized a Coorte exhibition that is believed to have put Coorte on the map. The significance of this is that even directors of middle tier museums have influence on the wider art world, to place prestige on certain artists, values, and ideas. Though many have difficulty accepting the free market’s role in this, it is hard for me to believe anyone really wants government to use its premiere, coercive role in life to propagate the art of its choice on people.

Unfortunately, this is exactly what has transpired in a burgeoning scandal in the United States, where the strictly non-partisan National Endowment for the Arts recently worked with the White House to engage sympathetic artists to fight for the President’s agenda. Artists are already free to do this. What’s new is that a government agency that by law is non-partisan has been co-opted. As I wrote recently, this sets a terrible precedent for the government. No one wants the arts to be a pawn of whoever happens to be in the White House at the time, especially when it only patently works for one side of the aisle.

The second lesson I take is yet another free market one. Sorry, you knew what you signed up for when you started reading an art blog from me. Apparently, Coorte, who is now considered an Old Master, was once fined for selling art but not being a member of the “guild”!!! According to a 2003 brochure from the, sigh, National Gallery of Art, “Only one contemporaneous document mentioned Coorte, and that concerned a fine levied against him in 1695 because he had sold paintings in the Middelburg market when he was not a master in the local artists’ guild.” That pretty much sums up the utility of any kind of union. The members inside the union benefit, but consumers, that is, everyone else does not because they endure higher prices as a result. In this case, consumers were being deprived of a master’s work because he had not submitted for guild membership, for whatever reason. Guilds, unions, and other petty restrictions should be fought. It reminds me of the unfortunate case of Star Trek: Insurrection, written by Michael Piller, in which a utopian society forces people, if they want to be artists, to train for no less than 60 years. Somehow, this is argued as a good thing in the movie. Those who rebel, I guess insane tea party-loving libertarians, are exiled from society. Again, who is society to judge what “good” art is? This is not what we need more of.

We should be mindful of these lessons, for they remain timely.

The nail in the coffin of scholars attempting to deny the robustness of Berlin and Kay’s theory is contained within “Universal Foci and Varying Boundaries in Linguistic Color Categories” by Terry Regier (UChicago), Paul Kay (Berkeley), and Richard S. Cook (Berkeley). Looking at the World Color Survey of 110 unwritten languages, the authors found that foci (“best examples”) of six colors (white, black, red, green, yellow, blue) are virtually universal, although the borders of the category are somewhat more malleable and given to cross-cultural difference. Much more interesting, the authors attempt to predict these boundaries based on a computational model.

Why are these models important? Certainly, they represent a wide departure from much linguistics and anthropology, though graduate students in these fields do do learn basic, important statistics. Even in economics, there’s a vocal minority of professionals who scorn the utility of mathematics. Though it absolutely kills me to do so, I will (favorably) quote a Nobel Prize winning economist named Paul Krugman:

Math in economics can be extremely useful. I should know! Most of my own work over the years has relied on sometimes finicky math — I spent quite a few years of my life doing tricks with constant-elasticity-of-substitution utility functions. And the mathematical grinding served an essential function — that of clarifying thought. In the economic geography stuff, for example, I started with some vague ideas; it wasn’t until I’d managed to write down full models that the ideas came clear. After the math I was able to express most of those ideas in plain English, but it really took the math to get there, and you still can’t quite get it all without the equations.

What Krugman, who has long since stopped being an economist, is saying is that of course it all starts with ideas. But in order to develop these ideas into something scientific, you need to formalize the idea into equations. Why? Because equations eliminate ambiguity. It might take three pages to say what a solid equation says in a line. For someone trained in the practice, this is especially helpful because you can see which elements have been left out, where certain factors should be added, and it is vastly easier to challenge the assumptions of the equation or tweak them. If you don’t hold scientists to this standard, they can dance out of all kinds of things with ambiguity — indeed, this is just one of the problems with social sciences of the past. It’s what sets Gary Becker, for example, apart as a sociologist.

The idea I have that I would like to somehow formalize is how market demand works with biological properties of our eyes and chromatic qualities to provide a certain set of color words in a language. So step one would be to list out the factors that such a set of color words in a language is a function of. There are many factors that might be considered in trying to formalize an explanation for the consistent order of color words in languages. In one of Harold Conklin’s better known works, referred to me by a PhD student in Anthropology, the author shows that color words may not refer strictly to chromatic properties. Rather, they may be tied to other qualities, such as texture and/or ripeness. This implies that surface texture, in addition to brightness, hue, and focal points. Also tugging at any formalization would be the market demand for visual differentiation and the cost of spreading and maintaining a new word in the language. This latter cost certainly goes down as technology improves that aids in information recording (writing systems through printing presses and computers).

Let us assume that humans gain no utility from distinguishing between different visual frequencies of light (i.e. colors). If this is the case, then humans will use no words (or possible one?) for colors. Since every language has at least two color words, humans do gain utility from distinguishing between colors. Now let n be the number of words for colors that a language possesses. n only exists for languages above 1, because humans always derive enough utility to at least discriminate between lightness and darkness. Importantly, the contrast between these two “colors” is not limited to pure color values as they apply to all colors, suggesting that humans derive the most significant marginal utility from adding these words to a language compared to any other color words.

However, if these words are limited from their quality of brightness and instead are converted into a RGB scale, we might say that black is (0,0,0) while white is (255,255,255). The length of the line connecting these points in the cubic color space, 441.673, is the longest length contained within the space, though it is not unique. Other distances between points of 441.673 exist, as between lavender/purple (255,0,255) and green (0,255,0), red (255,0,0) and light blue (0,255,255), as well as blue (0,0,255) and yellow (255,255,0). These are not the next sets of colors to naturally occur in human languages.

As a universal matter, when n = 3, the third word is red, but when n = 4, the fourth word is not light blue. This means that human demand for a fourth color word is not exclusively a function of contrast in a cubic color space. Additionally, there must be a basis for choosing red as the third word. Why not green or blue? Any hypothesis must therefore take into account several factors for determining the universal order of color words in human languages. Now you’re beginning to see why an equation for the linguistic marketplace that explains how humans, across time and space, create a consistent and universal order for color words from n = 2 to 11 might be helpful. In any case, it could be modified and tweaked in an orderly manner which reduces the cost of discussion, modification, and adaptation to formalization.

Now, let us look at n = 3. What sets red apart from the remaining colors? It could be many things, but we need to establish a hypothesis. Possibilities include: perhaps an orthogonality or angle to the white / black axis in the cubic color space which might mean that, when the third word is added, the plane occupies the largest possible triangle area in the cubic color space given the black / white axis. Let us test this hypothesis. The area created by this triangle is 45,979.31 units squared. It is a simple matter to show that we would obtain the same area with green or blue. However, red does have the lowest frequency / highest wavelength among these candidates and, indeed, among all remaining colors. While we may believe that the latter point is conclusive, we do not yet know whether it is independent of the former method.

Now let us look at n = 4. Either green or yellow will always be in the fourth position, and when n = 5, its complement, that is, whichever was not selected between green or yellow for the fourth word, will be the fifth word. This implies that humans are indifferent between the two as a universal matter, but that culture-specific factors may significantly impact the decision. Additionally, both green and yellow represent vertices on the cubic color space, although they have relatively similar wavelength and frequency.

At this point, let us look at another instructive excerpt from Sampson’s The Language Instinct Debate:

…human perception of color is mediated by [a] sensory apparatus which is not equally sensitive to all areas of the colour space. Our eyes can detect great intensity of colour in the ‘focal red’ region, for instance; conversely, int he pale blue-green region we are much less sensitive, so that the most intense color we can experience in that area is not too different from a pale grey. One would naturally suppose that if a language has few words for colours, the words it does have will refer to the strongest sensations; and a comparison of Berlin and Kay’s focal points with the regions of greatest human colour sensitivity indeed shows a near-perfect match. In this respect, then, it is true that human biology does influence the conceptual structure of human language. (Incidentally, the influence is not totally consistent across the species: one reason why blue occupies a relatively late position on Berlin and Kay’s sequence is that dark-skinned people have pigment in their eyes making them less sensitive than Europeans to blue light, and their languages correspondingly often lack a word for ‘blue’.)

So now we see that there are biological factors that may see us choosing red before green and yellow and green and yellow before others. What happens when a language deviates from this model and puts orange in there? Or pink? Our equation would have variables and coefficients describing the influence of said variables that might help explain this “market demand” factor. Conceivably, we will be running different types of regressions, comparing with different kinds of baselines, to test our predictions.

I intend, in the coming weeks, to develop just such a formalization. There are other potential uses of this approach for linguistic analysis. Languages differ in the number of “number” words such as one, seven, thirteen, and so on. They also differ in the number of family member words that are available. Asking questions about similarly universal relationships in languages could yield answers about the role of language in culture, technological achievement, as well as evolution. Even though I know this is terribly boring. 🙂

In 1969, anthropologists Brent Berlin and Paul Kay published Basic Color Terms: Their Universality and Evolution. In this work, the authors forcefully argued against the sweeping cultural relativism of the day by showing that languages, despite time and distance, almost universally possess certain color words. Contrary to many critics’ assertions, they did understand that they were not dealing in strict universal terms. Nevertheless, they tried to show that all languages had at least two color words, roughly corresponding to lightness and darkness (or white and black). If a language had three color words, the third word would be red. If four, it would green or yellow, and the fifth would be the missing complement. This would go on for “seven stages” and up to 11 basic color words. Over time, Berlin and Kay weakened the strength of the results though the spine remained. An enormous amount of controversy has been generated as a result of this book.

There have been some powerful criticisms of this work. First, as Geoffrey Sampson recounts in The Language Instinct Debate, there are some rather extraordinary methodological faults:

Berlin and Kay list four basic colour terms for Homeric Greek, including the word glaukos. Standard reference works, such as Liddell and Scott’s Greek dictionary, say that glaukos at the Homeric period meant something like ‘gleaming’, with no colour reference, and in later Ancient Greek meant something like what its English derivate ‘glaucous’ means now: roughly bluish-greenish-grey. But Berlin and Kay’s theory requires a term for ‘black’ in a four-term system, so they translate glaukos as ‘black’. Ancient Greek had a standard word for ‘black’: melas, the root of ‘melancholy’ (black bile) and ‘Melanesia’ (black islands) — but melas melas did not appear in Berlin and Kay’s list of four Homeric basic colour terms.

Basically the problem is that Berlin and Kay got their data from students and apparently didn’t check it very well. Another set of dissents can be generalized as follows: Berlin and Kay did not succeed in demonstrating a universal word order for color words and categories because they did not analyze the languages correctly. Either the color terms they thought corresponded to their basic, Western-centric terms did not, or….. etc. etc. In my opinion, it does seem rather clear that this is not, in fact, a universal. Despite the criticisms, other studies have confirmed the general results, and so it seems that Berlin and Kay demonstrated a very powerful tendency. But this is just as interesting as if it were in fact a universal because the reasons underlying this powerful tendency are a matter of objective reason. Therefore, the attack on relativism has held until the modern day. Additionally, if my Google searches are correct, a World Color Survey data set has been produced from which other researchers have replicated substantially Berlin and Kay’s findings.

Although a wealth of publications have discussed this problem, and I have not read all of them, I think that an economics approach may be helpful for explaining this result. ( I did read one publication that suggested a theory similar to what I will suggest. ) And, in any event, what do I mean by an economics approach? I mean that I wish to create an equation or series of equations, with several variables representing factors that influence the human demand for color terms, that explains this pattern and offers suggestions for why deviations may occur. The equations are based less on absolute numerical values and more on logic. One example of how logic has been brought to bear on important problems by economists can be found in Gary S. Becker’s The Economics of Discrimination (a copy of which I have apparently stolen from my friend Bob). To show one simple example:

By using the concept of a discrimination coefficient (DC), it is possible to give a definition of a “taste for discrimination” that is parallel for different factors of production, employers, and consumers. The money costs of a transaction do not always completely measure net costs, and a DC acts as a bridge between money and net costs. Suppose an employer were faced with the money wage rate π of a particular factor; he is assumed to act as if π(1+di) were the net wage rate, with di as his DC against this factor. An employee, offered them oney wage rate πj for working with this factor, acts as if πj(1-dj) were the net wage rate, with dj as his DC against this factor. […]

Suppose there are two groups, designated by W and N, with members of W being perfect substitutes in production for members of N. In the absence of discrimination and nepotism and if the labor market were perfectly competitive, the equilibrium wage rate of W would equal that of N. Discrimination could cause these wage rates to differ; the market discrimination coefficient between W and N (this will be abbreviated to “MDC”) is defined as the proportional difference between these wage rates. If πw and πn represent the equilibrium wage rates of W and N, respectively, then MDC = (πw – πn)/πn.

Amazingly, Becker first published his work in 1957 (hence N standing in for ‘Negro’), but it still represents a profound attempt to modernize sociology, which is largely and almost staggeringly useless today. Just so, using such models that may be tested and for which data may be gathered may be useful for anthropology. For an amateurish approach in the context of color words, stay tuned for Part II.

One of the profound changes in human experience from 1700 until today has been the staggering increase in technology, information, and choice. These go hand in hand. When we are able to build machines, we can print books on a large scale and spread information to the masses. People can choose between the many fictions they experience: one can sail the wild seas with Admiral Horatio Hornblower, journey back to read petitions of Emperor Tiberius, or learn valuable lessons on decision-making from Sun Tzu.

The economics of technological change itself is a complex thing. However, the economics of art investment as a function of this change is not. In response to the recently concluded India Art Summit, iTrust Financial Advisors (based out of India) weighs in on the question: “Is art a good investment?” The answer of course is “it depends.” But it’s a solid article that first lists some of the investment characteristics of art assets:

  • Uncorrelated Returns. The author suggests that the returns from investment in art are not correlated with returns in stocks or bonds. I suspect this is increasingly untrue for reasons I will explain later. Still, it would not really mitigate the author’s point that art assets could be useful diversification tools (ways to not put all of your eggs in one basket).
  • Lack of liquidity. It’s difficult to convert an art asset into more fungible form, such as cash. It takes time, especially to get fair market value.
  • Lack of income. Unlike stock ownership, art ownership does not provide income streams such as dividends.
  • Fakes and regulatory framework. There’s supposedly more risk with art, but I wouldn’t say this is a very strong point. On the other hand, gains from sales in art are subject to a higher tax than stock gains. Although no one knows what this disparity will look like after the Bush tax cuts expire, and sadly, it seems they will have to because of the suicidal spending spree recently embarked on, it is likely art gains will remain taxed at 28% while stock gains will be somewhere around 20% (according to President Obama). The consequence of this is that investment decisions between these asset classes is slightly tilted, all things being equal, in favor of stocks and that the pre-tax return from an art work must be 40% more than the return from an otherwise comparable gain in stock in order for an investor to be neutral between the two. For more, see: Internal Revenue Code s. 1(h)(4) and s. 408(m)(2).
  • Transparency. The author only means here that there seems like relatively low liquidity and therefore price signals are not as robust as in other markets– though they may be just as efficient.
  • Handling costs. Stocks don’t have them. Okay.

The interesting point is the first one. You see, I am dying to get a hold of a book recently recommended to me by a secret agent code-named Hunter called The Patron’s Payoff: Conspicuous Commissions in Renaissance Art. In a review of the book by California Literary Review‘s Judith Harris:

In The Patron’s Payoff, art historian Jonathan K. Nelson and economist Richard J. Zeckhauser have harnessed their separate disciplines into a new analytical key for understanding the linked motivations of patron and artist or architect in conspicuous commissions. . . . No less than the American financier who donates a museum wing on condition it bears his name, or the merchandiser who endows a university institute named for him, the results of Renaissance patronage had to be, first of all, highly visible.

This is an intuitive, but important microeconomic finding because it suggests that in the Renaissance era, these brilliant works of art were not created primarily as an asset class that would yield investment returns directly in currency. Rather, it would yield returns in the form of status, privilege, and indirectly perhaps in currency. This makes it a very different type of asset class than stocks. Or, at least, it did. In The Economics of Art and Culture, James Heilbrun and Charles Gray suggest that the returns on art increase through time:

“The history of art connoisseurship tells us that the main lesson imparted by the test of time is the fickleness of taste whose meanderings defy prediction.” William Baumol’s skepticism is grounded in his study of 640 arts transactions during the period from 1652 to 1961, as listed in Gerald Reitlinger’s The Economics of Taste. Baumol calculated the real rates of return associated with specific works of art and concluded that the average annual compounded rate of return was 0.55% in real terms, about one-third as high as the real return on a government security. Returns varied from a high of 27 percent to a low of -19 percent per year. […] Another study, that by Frey and Pommerehene, extended Reitlinger’s data up to 1987 and included more recent auction data from France, Germany, and The Netherlands. Taking into account inflation, commission fees, and other pertinent factors, they calculated the average rate of return to paintings over the entire period to be 1.5% per year. […] It should not be particularly surprising, then, that studies of different time periods and varying data sources reach conflicting conclusions on the investment value of art.

Actually, that’s not precisely correct. It is true that we should not be surprised studies from different time periods and data will suggest different investment values in art. However, it is not because of taste or methodological issues. The most viable hypothesis to explain these findings is that from the Pharoahs through Louis XIV, very little art was transacted for the purpose of investment returns in currency. That is not to say they didn’t expect returns, as is likely shown in The Patron’s Payoff. And this is why, except for considering artifacts that are only now perhaps categorized as art, it is not difficult to catalog the few noteworthy artists and styles of those ages.

However, when technology improved, living standards improved. Commensurate with the notion that food and shelter cost relatively less in a person’s budget, more money would now be available for those “higher pursuits” such as fine arts. Previously, there would be few buyers for spectacular art works and indeed returns would not be correlated with any market because it depends almost purely on prestige issues. Now, a market develops, and we learn that people care more about getting money — which they can exchange for all kinds of things — than mere prestige, though that is still attached in many cases. The rate of return goes up through the ages, peaking with the bubble of the 1980s but settling in the 1990s, because people are getting richer and demand for art goes up. It is no more complex than that. Ironically, even though investment in art is likely at an all-time global high (certainly still true without the useless NEA), it probably pales in comparison to the amount of art that is “consumed” through television and movie watching, to say nothing of sports.