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Culture and economics: looking for the buried hatchet by Patrycja Kaszynska

The difficult relationship between cultural value, economics, and the problem of measurement and evaluation is at the heart of The #culturalvalue Initiative project, which seeks to counteract the predominance of economics derived language and methods in cultural policy discourse. The need for this is not rooted in the denial of the economic dimension of the arts and cultural sector (that would be plain silly), but in the concern over the way in which the pre-eminence of economic arguments seem to obliterate the possibility of developing other angles of analysis in public policy debates. Yet, economic approaches to valuing culture need to be acknowledged for what they can contribute to policymaking, better understood and more widely debated for their critique to be both possible and well-founded. This new mini essay by Dr Patrycja Kaszynska, Project Researcher on the AHRC Cultural Value Project, and writing here in her personal capacity is therefore a really important contribution to this blog and the discussion it has endeavoured to stimulate. Patrycja’s thoughtful, precise and compelling dissection of cultural value’s ‘problem’ with economics is a helpful account of where the debate has got so far and how it might move forward. I look forward to a healthy debate!

 

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The relationship between culture and economics is a troubled one, yet the most fundamental cause of disagreement remains strangely overlooked in the debate. The dispute has frequently been cast as polarised between those vehemently opposed to putting cultural value into the ‘straitjacket’ of economics and those prepared to give in to economic methods, either believing it to be the right path to travel, or going down that route only too well aware that refusal is not an option (‘If you treasure it, measure it’[1], as Sir Gus O’Donnell once put it). Those who object to submitting culture to economic treatment do so on the grounds either that economic measurements miss altogether what is ‘essential’ to cultural value, or that economics can produce only highly distorting estimates due to the shortcomings of the methods used. As I argue below, the first of these objections can be rebutted, and the second is not lethal. The crucial thing, however, is that even if both of these objections were to be satisfactorily resolved the problem would not go way. This comment shows that the bone of contention in this polemic is more deeply buried than most suspect.

When people complain that economic measurements of culture fail to quantify what ‘matters’ and present a kind of category error[2] – they usually refer to the measurements of outputs, investment, and employment in the cultural and creative sectors. It is indeed true that in many cases the wildly exaggerated claims of the importance of culture as an engine of economic growth through various direct and indirect impacts – such as increasing retail sales and improved footprint – tell us little about culture itself (Belfiore 2003, Evans 2005, O’Brien and Cox 2012). But here one should distinguish between capturing the economic consequences of cultural activities and goods on the one hand, and applying economic valuation techniques to culture on the other. The former is most typically articulated in terms of economic impact assessment – including direct, indirect, and multiplied impacts; sometimes it is also expressed in terms of economic footprint analysis, looking at employment or Gross Value Added. The latter, by contrast, consists of the application of a range of econometric techniques – such as contingent valuations or choice modelling – to derive economic value based on people’s revealed or stated preferences. Significantly, in cultural economics – as opposed to the economics of culture – there are some examples of sophisticated models applying empirical techniques to arrive at a sense of the actual value people attach to undergoing cultural experiences (Bakhshi et al 2009; WolfBrown and Baker Richards, 2011; Fujiwara 2013). Indeed, the models which have evolved over the last decade can account for a range of less tangible, non-use facets of the value of culture such as existence value, bequest benefits and, crucially, intrinsic value.

Of course, these models are not perfect – which brings me to the second objection I mentioned in the opening paragraph. There are problems with bias in self-reporting due to irrelevant factors in the stated preference approaches (which also applies to self-reported satisfaction in Subjective Wellbeing approaches) and benchmarking problems are apparent in revealed preferences, to name just some. Perhaps more interestingly, there is a worry about the overarching principle of consumer sovereignty underpinning these approaches. What if cultural goods play what Charles Taylor referred to as ‘irreducibly social’ functions (Taylor 1995) and their augmented welfare benefits cannot be attributed to individuals – can they still be expressed in terms of individual preferences?  There is a consensus that more work still is needed to answer these and other questions. It might be that stretching and twisting traditional economic models and bending the principle of consumer sovereignty are required – but this is not to say that cultural economics is incapable of suggesting proxies for aspects of cultural value. In fact, the debate gets really interesting when one hypothetically assumes that the valuation methodologies could be refined sufficiently to provide a reliable model to predict how much economic value people attach to culture. This is where it gets interesting because side-stepping these ‘technical’ problems reveals that the objection to cultural economics is more fundamental than any inadequacies of econometric methods.

What some find troubling about cultural economics, on the most basic level, is the implication that thinking of the cultural in terms of the economic endorses a hierarchy of disciplines with economics as top dog. Economic value, the argument goes, is an expression of normative attitudes – one among many expressions –  and there is no reason to think that economic value should be some privileged Esperanto or necessary common denominator to which all other values should be reduced. Rather, the insistence on economic valuation betrays a normative choice and a bias – the same bias which sees qualitative research as something you do when you can’t find any numbers. Thus, what seems to be underpinning the reservation about analysing cultural value in terms of economic value is an anxiety about granting and sealing the hegemony of one discourse over another willy-nilly. Economics provides organisational principles for one domain – not all – and hence expecting other domains to adhere to the standards and methods of economics might be seen as amounting to no less than an imposition.

But it is not just a worry about the hierarchy of disciplines and discourses – serious as that is – that is the source of the most prescient opposition to cultural economics. The fear of flattening all expressions of value into a single register is fed by a more fundamental worry. Just as in the case of Bentham’s inglorious contention that pleasure is a single sensation, varying only in terms of quantity or duration – economic measures assert ordering commensurability; ‘they have a common unit of account, money, which enables the value of culture to be compared with other social goods.’ Paradoxically, what is held as the greatest advantage of cultural economics, namely that ‘it can encompass multifaceted valuation processes and express them in a way commensurable with the way other goods are valued’ (Bakhshi et al 2009) – is the site of the problem.

Why is this a problem? Treating economic value as the common denominator of all values is a problem for a number of reasons. Firstly, because it is a way of making choices whilst pretending that no judgements are being made. Economic valuations can provide a way of ordering ‘without’ making qualitative judgments, just as the invisible hand of the market allegedly came to arbitrate without the need to consider normative issues. ‘The beauty of the market, from a political point of view, is not that it is necessarily efficient or optimising, but that it relieves public figures and institutions from having to take moral positions on things. It is a way of absenting oneself from a thorny normative issue’.[3] Here of course the cultural economists will retort that economic valuations are not the same as the price-fixing mechanism of the market and that thoughtful economists have their eyes fixed on the non-market, non-use value which calls for the finest of introspective, self-reflective judgements. What the thoughtful economists are trying to do is not to substitute economic for cultural value but to come up with an equivalent. In other words, their model is a proxy, a place-holder for cultural value, not the thing itself; the value in question is therefore not reduced but merely expressed in economic terms. Still, advocates of this approach will not be able to deny that they are after equivalencing; they are in the business of creating commensurabilities. These commensurabilities are in turn translated into ranks and orders – and with these rankings we are very much back to the situation where decisions can be made as it were, not based on normative reasoning, but in a positivistic manner, by picking the highest numbers. It is far too easy to forget that the choice of the econometric approach is itself a value choice.

With a broader perspective in mind, what is at the heart of the doubts about cultural economics is a fear of the endemic eradication of judgement and normative reasoning as such. Making economic valuation sovereign – the worry goes – will eventually destroy this evaluative capacity that makes it possible to choose between different things. Here again, the thoughtful economists will insist that rather than eradicating, they enhance the ability to appreciate why the intensities of cultural experiences should be chosen over other, more prosaic pleasures – after all, this is the very experience that is brought into focus in economic valuations as a subject of self-reflection. Still, the point of valuation is not to dwell on these experiences, it is to come up with economic proxies. Economic valuation is about habit-formation and it may not take long before these equivalencing judgements lead to unwonted forms of reasoning.

The objective of economic valuations is to replace teleological valuations with equivalencing valuations. The worry is that persistently assessing non-economic human pursuits in terms dictated by economic valuations will erode the ability to exercise judgement, understood in terms of weighing qualitative distinctions – that is, distinctions of kind, not degree – and comparing the merits of incommensurable domains without reducing to the common denominator.  There are some similarities here to Habermas’s admonition that, if not kept in check, technocratic reason – which is in many ways conducive to human progress –  would erode the kind of understanding people have in every-day communications and lead to the colonisation of the life-world by the instrumental rationality of bureaucracies and market-forces (Habermas 1987). What is troubling about economic valuations of culture is that in some ways, just like technocratic reasoning, they are useful: what are the chances that culture would disappear from the policy-making map altogether if a price tag could not be attached to it? And yet, the danger that the endorsement of this approach carries should not be underestimated.

Hannah Arendt once allegedly said of behavioural psychology – ‘the problem is not that it’s false, but that it’s becoming true’[4]. If we are on the way to eradicating the habit of appreciating incommensurability and making qualitative distinctions, this is bad news. It is troubling for our civilisation and culture because in an important sense, cultural value is about foregrounding qualitative judgements. This is the gist of the argument of Keat’s ‘Cultural goods and the limits of the market’, where cultural goods are said to be meta-goods in that they help to develop the capacity to value other goods (Keat 2000). This argument also recurs in a slightly different guise in Nussbaum, who maintains that culture, from time immemorial, has functioned as a kind of mirror to see and question the values prevalent in societies (Nussbaum 1997). These arguments are not new – they can probably be traced back to Plato and Aristotle; still, this does not mean that the ability of culture to deliver on this front is immune to decay. Cultural value calls for agents with a capacity to appreciate different, incommensurable registers of value. Could it be, paradoxically, that attempts to assess the value of culture in economic terms, and thereby to put it firmly within the realm of ‘what gets treasured’ (to paraphrase O’Donnell),  contribute to the demise of the vary capacity that makes it possible for culture to be valued – as a meta-value –  in the first place?

Valuing culture economically thus raises a number of problems: it presents the problem of asserting a hierarchy of disciplines and discourse; it may provide a means of disguising normative decisions as if they were not matters of choice; it carries the danger of draining the ability to think teleologically and to make comparative judgements across incommensurable registers; and ultimately, it presents the risk of killing the core aspect of cultural value itself. Perhaps, however, there is no reason to be alarmist. The voices of those who insist that cultural value and economic value are co-existent and that cultural value cannot be fully expressed in economic terms are increasingly audible, and amongst cultural economists themselves (Throsby 2001; Throsby and Hutter 2008). The unwillingness to accept that economics presents the only theory of value is a good start. Still, this heyday of the agreement to ‘render unto Caesar the things that are Caesar’s, and unto God the things that are God’s’ – i.e., to consider cultural value in cultural terms in some contexts and in economic terms in others – is by no  means an indication of any impending peace treaty. Setting the boundaries of each domain will not be a matter of simple empirical experiments. How the terms, methods, and frameworks of the debate get to be defined will be the outcome of an ideological contest; the boundaries can only be set in light of a consideration of purposes and goals. This note is an attempt to put on the table some of the arguments to consider, now that the war hatchet is being unearthed.

 

BIBLIOGRAPHY

BAKHSHI, H., FREEMAN, A., HITCHEN, G. (2009) Measuring Intrinsic Value How to stop worrying and love economics. British Council.

BELFIORE, E. (2003) Economic impact – inconclusive evidence. ArtsProfessional (No,43).

EVANS, G. (2005) Measure for Measure: Evaluating the Evidence of Culture’s Contribution to Regeneration. Urban Studies.

 FREY, B., and HUTTER, M. (2010) On the Influence of Cultural Value on Economic Value. Revue d’économie politique.

FUJIWARA, D. (2013) Museums and Happiness. The value of participating in museums and the arts. The Happy Museum Project.

HABERMAS, J. (1987) Theory of Communicative Action. Volume 2. Boston: Beacon Press.

KEAT, R. (2000) Cultural Goods and the limits of the market. Basingstoke:Macmillan

NUSSBAUM, M. (1997) Cultivating Humanity: A Classical Defense of Reform in Liberal Education. Cambridge, MA: Harvard University Press.

O’BRIEN, D. and COX, T. (2012). The “Scouse Wedding” and other myths and legends: Reflections on the evolution of a “Liverpool model” for culture-led regeneration. Cultural Trends.

TAYLOR, C. (1995) Philosophical Arguments. Cambridge, Mass: Cambridge University Press.

THROSBY., D. (2001) Economics and Culture. Cambridge: Cambridge University Press.

THROSBY, D. and HUTTER, M. (eds) (2008) Beyond Price: Value in Culture, Economics and the Arts. New York: Cambridge University Press.

WOLFBROWN and BAKER RICHARDS (2011) Intrinsic Impact: How Audiences and Visitors are Transformed by Cultural Experiences in Liverpool. LARK.

 

BIO

Dr Patrycja Kaszynska is Project Researcher at the Cultural Value Project –  a two-year AHRC funded research initiative whose objective is to advance the understanding of the value of the arts and culture to individuals and to society, but she is writing here in a personal capacity. She has extensive experience of public policy: prior to joining the Project she worked in policy research for a number of Westminster-based organisations; and before that she spent two years researching Higher Education policy. She completed her PhD (DPhil) investigating the political significance of the aesthetic domain at the University of Oxford, where she also taught aesthetic theory. Patrycja has written on the potential of aesthetic sensibility to act as a catalyst in the process of political decision-making and consensus-formation. She is a Fellow of the Royal Society of Arts.

 



Discussion

One Response to “Culture and economics: looking for the buried hatchet by Patrycja Kaszynska”

  1. Thanks – that’s a useful and really well considered piece which does a great job of pulling together the the key elements of the discourse around this theme. The one thing I’m keen to explore is probably part of the next discussion following this – namely, how we establish an acceptance of these multiple orthodoxies. This piece sets out an argument for the status of these parallel orthodoxies, but leaves us with a sense that both set of proponents are somewhat recalcitrant partners in this duality. Where do we go from here ?

    Posted by Clive Gillman | April 21, 2014, 11:05 am

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