El valor cultural en el pensamiento de David Throsby

Introduction

David Throsby was born in Australia in 1939. His career as a teacher and researcher in cultural economics was developed at Macquarie University (Sydney, Australia). Thanks to his excellent training, tenacity, and intellectual acuity, he is currently considered the most brilliant economist in the field of the economics of art and culture. His vast intellectual work has inspired many researchers and thinkers from different latitudes to apply the tools of economic analysis to the understanding of the cultural world. We would certainly not know so much about the economics of art and culture today, nor would we be motivated and passionate about this developing discipline, without the legacy of Professor Throsby.

As for the purposes of economics, they undoubtedly focus on the material welfare of society, more specifically on the level of gross domestic product per capita as a debatable measure of economic prosperity. The role of the economist is thus to evaluate the costs and benefits of resource allocation among a set of possible alternatives (Blaug, 1992). Indeed, some alternatives are more advantageous than others, so the mission of the economist mission is to identify the optimal, or at least the suboptimal, allocation. In this scenario, economic science is clear that its field of study is production, distribution, exchange, and consumption of goods and services for the satisfaction of material needs. In the case of cultural goods and services, they not only satisfy the current needs of individuals related to their direct and indirect use. The non-use value associated with the concepts of existence value and legacy, or inheritance value is also contemplated. There are many of us who agree in preserving the arts and cultural manifestations and institutions, not only thinking of today, but also of tomorrow, that is, we share a concern for the welfare of future generations.

However, the conjunction of culture with the economy is hardly evident. Artistic and cultural activity draws on economic fundamentals to justify government and private funding of artistic and cultural activity (Throsby & Withers, 1979). For Frey (2000), the arts and the economy walk hand in hand: the economy provides financial support to culture for its sustainability, while artistic creativity ensures that the economy flourishes. Incidentally, Throsby (2011) reminds us that cultural production and consumption are elements of human activity that have been around for a long time, even, needless to say, that both appeared in parallel to the human species. However, the price system that replaced the rustic exchange system is the fruit of capitalist development from its earliest stage as an instrument to accelerate the accumulation of capital.

Throsby & Zednik (2014) question the adequacy of economic value theory as a mechanism to fully capture the value of cultural phenomena. These authors argue that, although in theory the parallel existence of these two types of value is accepted, the empirical evidence is not sufficient to support the thesis that they are distinct phenomena or, at least, to explore a possible relationship between them. In fact, in the approach of De Marchi (2008), the question is whether it is possible for artistic, cultural and economic valuations to coincide. Depending on the type of science or discipline consulted, the answers will surely be opposite. The opinions of cultural economists are inclined, in principle, to affirm that artistic and cultural value largely explain the variations in the market price of cultural goods and services. Their perception may even go further, stressing that economic value incorporates the cultural value. Nor is it advisable to lose sight of the perspective of philosophers of aesthetics, and cultural anthropologists and sociologists, for whom artistic and cultural value is intrinsic, since it is strongly linked to cultural, aesthetic, and artistic experience. Thus, Throsby (2001) reminds us that cultural value depends on creativity and symbolic meaning with marked implications for personal and group identity.

The purpose of this article is twofold: on the one hand, to pay a well-deserved tribute to David Throsby as one of the most influential researchers and theorists in cultural economics of the world, whose theoretical and empirical approaches have illuminated the path of many economists and other professionals; and on the other hand, to examine and interpret in the thought of Professor Throsby, the concepts of cultural value and economic value as channels of communication and cooperation between culture seen as a whole and economic science, always concerned with the efficient allocation of limited resources that have diverse uses. This manuscript provides some theoretical elements that help understand the difficulties in the allocation of cultural value given the limitations of the economic approach. Although this old debate is not resolved here, it is hoped that the reflections provided may be useful to the public interested in the subject and may motivate the development of future research.

Methodology

The analysis of cultural value and economic value in the work of David Throsby was approached through the review and study of his numerous books, articles, interviews and lectures given in different academic spaces throughout his professional career. In his vast scientific and academic work, manuscripts both of his individual authorship and texts shared with other prominent theorists of cultural economics are distinguished, namely: Victor Ginsburgh, Ruth Towse, Bruno Frey, Mark Blaug, Anita Zednik, Glenn Withers, John R. Severn, Katya Petetskaya, among others.

'The theoretical position of David Throsby on cultural economics is complemented by the publications of several Nobel Prize-winning economists, namely: Herbert Alexander Simon (1916-2001), Kenneth Joseph Arrow (1921-2017), Gary Stanley Becker (1930-2014), Daniel Kahneman (1934-2024), Amartya Kumar Sen (1933- ), Richard Thaler (1945- ), and Joseph Eugene Stiglitz (1946). It is also worth mentioning the inclusion of theoretical positions of representatives of the classical school of English political economy such as William Petty, Adam Smith, and David Ricardo, who were pioneers in examining the labor theory of value, as well as the prominence of Karl Marx as the standard-bearer of the theory of capitalist exploitation centered on commodity fetishism. This theory is in stark opposition to the subjective theory of value, defended tooth and nail by marginalism and the Austrian school from the second half of the 19th century onwards.

The Journal of Cultural Economics was consulted as a valuable and up-to-date source of information on the state of the art of cultural economics in general, and the study of cultural value in particular, bearing in mind that the work of David Throsby also addresses other topics, such as cultural capital, cultural policy, cultural economic development, cultural sustainability, the labor market for artists, and cultural heritage.

Results and discussion

David Throsby in chapter 2 Economics and Culture, published in 2001, asks: can economic value encompass cultural value? Or in other words: can economic value include cultural value? To this question, Throsby (2001) points out that it is essential to understand that: "economic value and cultural value are distinct concepts that need to be separated in order to analyze the valuation⁵ of cultural goods and services in the economy and in society" (pp. 59-60). In fact, the constituent aspects of cultural value remember the aesthetic, spiritual, social, historical, symbolic, authenticity, and let us add one more to the list: emotional value. All of them fit adequately into the theory of individual preferences in the neoclassical tradition.

Individual preferences refer to an ability of an individual to order consumption possibilities according to their relative utility, until the optimal or, rather, the suboptimal (second best) choice is achieved, understanding that the optimal is a faithful copy of the caricature of homo economicus extracted from the ideas of John Stuart Mill in the 19th century. Neoclassical economic theory assumes that preferences are determined by consumer tastes, which are considered infinite, making the consumer an insatiable being, but at the same time limited in his decisions by the effect of diminishing marginal utility. That said, economic rationality establishes that individuals act in a way that is more convenient to their tastes when faced with budgetary decisions and restrictions. This means that, when people use reason appropriately, they are less likely to make mistakes in the allocation of their limited resources, as Robbins (1984) states.

David Throsby directly and clearly argues that cultural value and economic value are two distinct concepts. Each has its own identity and a defined field of action, although the two act together, complementing each other and generating common benefits. Cultural value and economic value form a dual value system referred to by Hutter & Throsby (2008) as twin concepts of value. This means that cultural value is associated with cultural, aesthetic, and artistic experience, while economic value is directly related to exchange.

Although the theory of subjective value enjoys recognition and acceptance in mainstream economics, it is not free from criticism, doubts, and inaccuracies. It is worth noting that absolute rationality has been questioned, both in the scientific and pragmatic fields. This is demonstrated by the findings of Simon (1955), for whom rational behavior is limited by the fractioned knowledge of reality, the human impossibility of anticipating the consequences of desired acts and the limits of imagination. According to Ariely (2008), human beings, far from being rational individuals, generally exhibit irrational and compulsive behaviors that make them unpredictable; Sen (1977) stresses that the strictly rational being created by the fiction of neoclassical economics is mentally retarded from the social point of view. Added to this is the fact that actual behavior of people differs from the predictions of economic models (Thaler, 1980). The self-interest and willpower of human beings are limited, and, in many cases, their social preferences are motivated by justice and equity (Thaler, 1985), not only by economic outcomes. Ultimately, individual choice in risky situations does not conform to neoclassical rational choice theory, because people tend to choose a safe alternative rather than a likely one, due to the existence of cognitive biases (Tversky & Kahneman, 1981).

That said, humans, as individual and social beings, do not act as simple machines devoid of will, feelings, emotions, passions, and even altruism. The limits of economic value are narrower than those of cultural value, the latter being more profound in its conception and application, particularly when it comes to answering the question: how much does culture contribute to economic development? It should be recalled that the purpose of Throsby (2001) is to define culture, initially from an anthropological and sociological perspective, and subsequently to identify its instrumental aspects to approach its valuation. With regard to the economic measurement of culture, Throsby (2003) is aware of the limitations of economic valuation methods, for example, he recognizes certain strengths of the contingent valuation method in quantifying the demand for non-market cultural goods and services; however, he criticizes this method for not providing a complete picture of economic value, given its inability to capture the complexity of cultural value. If economics is guilty of being abstract, culture is even more so.

According to Bille (2024), contingent valuation is a suitable method for the valuation of cultural heritage because the benefits are only related to the legacy or inheritance value. Beckert & Rössel (2013) argue that the determination of the value of a work of art is the result of an intersubjective process where the opinions of gallerists, curators, critics, art dealers, journalists and collectors are combined. Note that the price set for a work of art incorporates elements of cultural value, not only those represented in the talent and gifts of the artist, but also those related to the professional trajectory, the good name, including the characteristics of the context in which the work arises. For Bonus & Ronte (1997), the quality of the visual arts cannot be measured objectively. Therefore, if an artist wants to generate economic value in their works, they must necessarily gain credibility among the public. Finally, Dekker (2014) adds to this view, expressing that market prices are not enough to determine cultural value.

In fact, Throsby (1990) points out the importance of qualitative variables in demand and supply decisions in the performing arts, despite the inclusion of qualitative variables not susceptible to measurement. In the case of live theater, Garboua & Montmarquette (1996) argue that, although demand is price elastic, taste for theater requires long and disciplined learning, given the importance of both past and recent audience experiences. Throsby et al. (2024) point out that while preferences are the cornerstone of neoclassical consumer theory, it is essential to first understand how preferences are formed and then to develop the means of satisfaction. They also recommend incorporating non-market preferences into the analysis of the arts and culture market if a more structured view of cultural economics is to be achieved.

Angelini & Castellani (2019) clarify that economic value and cultural value complement each other, highlighting the link between the characteristics of the artist and the value of cultural goods. Thus, the fame and talent of artists largely explain the formation of cultural value. In this regard, Throsby (2006) highlights the contribution of creative talent to the human capital of artists. Hence, Throsby (2008) asserts that creative work is the driving force behind cultural industries, distinguishing them from other economic ventures. In fact, creative work is governed by uncertainty, but without uncertainty, self-realization is not possible as it lets alone creative innovation. In the discourse of Menger (2014), this means that without techniques to manage uncertainty, it will be virtually impossible for profitable artistic careers and cultural ventures to emerge. One needs only look at the labor market for artists to realize that, despite the low pay and multiple jobs characteristic of this sector, academic training has not stopped, as was the concern of Adam Smith in the 18th century.

Throsby (2008), when referring to cultural policy, is concerned that it is losing clarity and becoming just another accessory to economic policy. It should be remembered that cultural value determines cultural consumption, which in turn contributes to the formation of cultural capital. Cultural capital determines cultural economic development, with cultural policy being a useful instrument of cultural management. Throsby (2010) argues that the centrality attributed to the creative arts can serve to reinforce the orientation of cultural policy, relying on creativity as a catalyst for innovation. Finally, Throsby (1997) draws a parallel between natural capital and cultural capital to highlight the influence of culture on sustainability and economic development.

Before concluding this section, it is worth recalling some of the points discussed in this article regarding the theories of objective and subjective value. Regarding the first theory, value is, in essence, the result of the labor incorporated into the production of any commodity, leaving aside the commodity fetishism exposed by Marxist ideology. As for the second theory, we will take a brief example to illustrate how subjective value operates in the market sphere. We will start with any good, for example, a handicraft in which raw materials, inputs, direct and indirect labor have been invested. The artisan adds a percentage of profit to the direct cost as a reward for their talent and creative effort, which results in the natural price based on production costs, including profit. The natural price is the price calculated by the artisan for the sale of their handicraft, which could be lower than, equal to, or higher than the market price according to the preferences or tastes of handicraft consumers.

Subsequently, the optimistic artisan, convinced of his creativity, takes his craft to the nearest market in search of the highest bidder. This cultural producer is aware of the difficulties involved in marketing a superior good, so he chooses to display his product on an elegant shelf, highly visible to the public. His desire is that potential buyers can observe the tangible and intangible attributes of the handicraft and then proceed to purchase. Potential consumers then look closely at the handicraft and analyze the desirability of its price, which contains a lot of value. In the dialogues that the artisan establishes with the attending public, some express that the price is adequate, others argue that it is expensive, and others, on the other hand, believe that it is cheap. Note that the opinion of potential buyers is a matter of individual will. Those who believe that the price of the handicraft is adequate, as well as those who consider it to be low, will surely make the purchase decision, but those who perceive the price to be high will desist immediately.

Note that potential buyers do not only see in craftsmanship the exchange value. They seek to be sensitized to the cultural value of the handicraft object expressed in its physical characteristics, namely: size of the object, weight, design, color, decoration, texture, attractiveness, originality, and so on. Although they know that handicrafts are predominantly handmade, they do not know at first glance how many hours of work the artisan dedicated to its elaboration, nor are they aware of the history of the object. Consequently, the objective value centered on the amount of human labor is difficult to see, although it is understood that in cost accounting one can find information related to the calculation of the selling price or reference price for the upcoming negotiation. Recall what De Marchi (2008) said: the artistic and cultural value largely explains the variations in the market price of cultural goods and services. This assumes that the economic value incorporates the cultural value. This position is openly rejected by cultural economists who believe that this relationship operates, but in the opposite direction.

In the previous example, we see that the value that was initially objective for the artisan depended on the number of hours of hard work and the level of creativity, has now been turned into a subjective value by the consumer. Their rationality and preferences have determined that the price paid for the craftsmanship may be higher, equal, or lower than the cultural value that the artisan assigns to the good according to the complexity of the work involved. It should be noted that, for the consumer, price is the guide that determines the assignment of value. Beyond the fact that value and price are two different elements, and that the value of artistic work as a product of talent is superior to non-artistic work, consumers in general are guided by the market price they assign. In fact, cultural value may be higher if the price paid by the cultural consumer is higher than the natural price initially set by the artisan.

It goes without saying that the principles of labor theory of value are applied in the valuation of some artistic goods. Many cultural consumers value the time invested in artistic work and are therefore willing to reward that talent by paying a higher price for the ticket. Cultural consumers can identify both use values and non-use values; consequently, they would be willing to reward creative effort by paying a market price higher than the value. There are plenty of examples that demonstrate this, namely: paying for expensive tickets to hear a famous rock band play, the exorbitant prices paid for works of art by renowned artists, the high prices paid for unique and irreproducible historical objects, or the simple fact of standing for several hours in an open, rainy space or in an extremely hot environment, listening to a musical concert where the cries of excitement and personal and collective satisfaction echo. This is a clear sign of the reward for cultural value.

There is no doubt that economic value is determined by individual preferences and diminishing marginal utility. Cultural goods and services are no exception to this reality. Given that capitalism is based on the market and that the flexible pricing system is its main feature, at least in competitive markets, consumers are short-sighted about objective value. For this reason, subjective value centered on functional rationality is and will continue to be decisive in the valuation of all types of goods. In this sense, the great challenge facing the cultural economy is to make the multi-dimensionality of cultural value more visible to consumers. In other words, the challenge for artists is to externalize cultural value in such a way that consumers are willing to pay a market price higher than the cultural value as a reward for creativity and symbolic significance. Thus, for David Throsby, cultural value and economic value are inseparable. Although the two act together, it is important to understand that cultural value transcends the boundaries of economic value, that is, cultural value is above the market price subject to individual preferences. That said, cultural value is strictly governed by the symbolic, which is not always properly captured by the market price that symbolizes consumer tastes.

Conclusions

Before defining the differences and boundaries between cultural value and economic value, and even before referring to a possible order for these two concepts, David Throsby prefers to first define culture. He initially does so from an anthropological perspective, and later in an instrumental or operational way to facilitate its intervention and management. From the first approach, the cultural world is made up of a set of attitudes, beliefs, conventions, customs, values, and practices common to any group. From an operational point of view, culture encompasses a set of activities that lead to the development of the arts or artistic talents that create cultural value. This author is emphatic in stating that culture incorporates some form of creativity in its production, transmitting symbolic meaning. Creativity is, at least potentially, a form of intellectual property that can be protected.

Once the definition of culture has been resolved, David Throsby deals with the theories of value of great interest for economic science since the origins of the classical school of English political economy headed by Adam Smith and David Ricardo. In the thinking of David Throsby and Arjo Klamer, the term "twin concepts of value" was born as an expression to communicate the inevitable and highly beneficial interaction between the cultural and economic worlds. That said, the purpose of cultural economics is to improve the understanding of cultural phenomena from an economic approach, meaning to examine the influence of culture on the economy, not the other way around. This theoretical argument assumes that the cultural world operates as a large system within which the economic world interacts, that is, cultural value is much richer and broader than exchange value. From this, the answer of Throsby arises as to what cultural value and economic value are not the same. The former is primarily difficult to quantify and value despite the existence of scientifically proven methods and techniques. The cultural value is intrinsic because of the creative and symbolic aspects it contains. Thus, in many cases the natural price and the market price do not always correspond. In fact, the challenge of cultural economics is to provide the necessary knowledge about how cultural preferences are formed and then to develop the satisfiers that motivate cultural consumer behavior, the willingness to pay a market price over and above the cultural value.

The logic of the market, to which art and culture do not escape, does not allow the consumer to see a commodity objectively (from the perspective of human labor incorporated in material and immaterial production, be it goods or services) beyond the market price. In the meantime, the theory of subjective value is a determining factor in the valuation of all types of goods, whether cultural or not. If the cultural consumer can feel the subtlety of the creative and artistic work in cultural goods and services, he will probably be more willing to pay a price equal to or higher than the cultural value. In this desirable scenario, the cultural producer, the cultural consumer, culture and society will have won; otherwise, the economy will put cultural sustainability at risk. Let us remember the message of Adam Smith: monetary remuneration in the arts should be of such a magnitude as to guarantee their preservation, without ignoring the fact that the training of artists is long, costly and sacrificial. Although this does not sound good, the solution in favor of culture is to be found in the realm of economics in rational choice despite its imperfections.

Despite the limitations of the economic valuation exercises of cultural goods and services frequently carried out by cultural economists, these attempts cannot be considered unsuccessful. Precisely, the essence of cultural economics since its emergence in 1966 is to better understand culture from an economic perspective to support decision-making related to public intervention and regulation, government and private financing, and the design and implementation of economic incentives. In the words of Frey (2000), culture and economics go hand in hand and need each other: without a solid economic base, culture dies out, and without creativity and cultural innovation, the economy cannot flourish.

David Throsby and other theorists of the economics of culture cited in this article doubt that market prices can capture cultural value in its full dimension. The underlying question, then, is: are there any other means that can do so? If market prices make more than one uncomfortable, the answer should be sought in the labor-value theory in the conception of Smith and Ricardo as a measure of comparison. The operative problem that arises here is that objective value would have to contend with serious problems of instrumentalization with little chance of success.