Becker, Taste and Human Capital

I’ve been having an email exchange with Andrew Kliman about Gary Becker’s treatment of taste in his economics. Becker’s famous essay ‘De Gustibus Non Disputandum’, written with George Stigler, takes as its starting point a remark made by Alfred Marshall that the ‘law of diminishing utility’ can only apply to the consumption of ‘good music’ if we make it a condition of the law that tastes remain constant (since, as Marshall points out, ‘the more good music a man hears, the stronger his taste for it is likely to become’.

If we say that a consumer who develops a taste for art will seek out further experiences of art at an accelerating rate, then we have a humanistic, cultural and psychological explanation for their behaviour. Their ‘consumption’ of art, which often involves no purchase of artworks at all, appears not to be economic in the narrow sense and appears to follow no economic logic. We might even imagine that such developments of taste (of getting a taste for something) are necessarily individual, subjective and unpredictable. The problem that this humanistic explanation of the development of a taste for art poses for economics is not only that it is not an economic explanation but that it introduces a non-economic process that can have economic repercussions (specifically the consumer behaviour of art lovers). In principle, if art lovers develop a taste for Mondrian then the reduction of prices for works by Paul Klee does not have the effect of increasing demand for Klee and reducing demand for Mondrian. Demand is determined by taste, through non-economic mechanisms, not supply and demand.

Becker translates the non-economic mechanisms of taste into the economic language of capital, prices and costs. I do not question the descriptive power of his translation but I have serious doubts about its explanatory force. Of course, it’s not obvious that it’s wrong to say that someone who knows a lot about music is more likely to listen to more music because it will be more worth the effort for them than it would be for someone who lacks the background in music. Someone who already listens to music or attends galleries is, as you say, ‘more likely’ to do so in the future. This is widely understood, and is an observation that Becker and Marshall share. The crucial thing is that Becker explains the difference between the likelihood of the established art viewer to view more art in terms of the accumulation of knowledge and experience that makes further experiences ‘less costly’ in terms of effort, the acquisition of new knowledge and so on. It is ‘worth the effort’, for Becker, because the additional effort is smaller than the total effort required of a newcomer. This is marginalism applied to units of cultural competence.

It is important that we link both these ideas together. The reason that the seasoned art viewer is ‘more likely’ to attend art events in the future is that they require only small incremental increases in new knowledge and experience compared with the newcomer. We are not merely observing that people with ‘music capital’ are ‘more likely’ to consume further units of music than those without music capital. This is indisputable. But, this is not what needs to be explained. There is nothing exceptional about it. Existing consumers of beef are more likely to be future consumers of beef. But the more that one consumes beef – or the more one has a ready supply of beef in the freezer – the less one is willing to pay for more units of beef. In art, however, it is not only that existing consumers are likely to be future consumers but that, in addition, once the consumer ‘gets a taste for it’ their consumption of art feeds off itself leading to increasing marginal utility. This is what needs to be explained.

Is human capital useful for thinking about the ‘consumption’ of art? Music appreciation is unlike the consumption of standard goods insofar as it requires knowledge, experience, and so on from the consumer and therefore the consumption of music or art is a combination of the music and one’s own ability/capacity to consume it. Becker would say, therefore, that the consumer also consumes their own abilities to produce the good. It is clear that the experience of goods that require human capital can be distinguished from those that don’t, like eating apples. But the point of explaining the productive activity of the consumer in terms of human capital is not merely to establish the fact that the art viewer brings knowledge and experience to the art object; the point, for Becker, is to establish that such capital reduces the costs of consumption and that this leads to certain predictable average results. It is not the former but the latter that I want to question.

Becker is not the first to argue that art consumers have knowledge and experience that contributes significantly to the experience of art. He accepts this widely observed fact. Becker, however, provides a new economic explanation of the contribution of the viewer to the experience of art. That is to say, whereas cultural commentators have typically argued that the art consumer, viewer, spectator, observer or onlooker needs to be ‘adequately informed and sensitive’ and becomes so through serious engagement with art, Becker argues that the knowledge and experience of art is a form of human capital which, like economic capital, can be put to work productively, only in this case it is invested in acts of consumption. The accumulation of human capital leads to lower ‘shadow prices’ (time, effort, knowledge acquisition, etc) in the consumption of art. The problem with the concept of human capital is not that it fails to resemble adequately the phenomenon it describes. The problem, in my view, is not descriptive but explanatory: ie whether Becker explains the mechanisms by which previous experience impacts on future experience, or better still, whether he explains what Marshall and others explain in the idea of ‘getting a taste for art’.

It is interesting to note that Marshall’s reference to taste carries none of the elitist overtones of the aesthetic tradition in which taste distinguishes between those with taste and those without nor does it carry any of the normative connotations of the cultivated distinction between good and bad taste. Becker, however, who replaces the element of ‘getting a taste for art’ in Marshall’s account with reference to ‘human capital’, revives key aspects of the elitist version of taste through his understanding of knowledge, experience and competence as acquired through restricted social practices. Human Capital distinguishes art viewers from philistines just as effectively as good taste once did. Throsby dissolves the distinction between those goods that require human capital and those that don’t in his argument that ‘taste’ need not be of any concern for the economics of art since taste is involved in the consumption of apples and cars – ie standard goods – as well as art. Getting a taste for art is not the same as having a certain kind of taste – it indicates an acceleration of desire not a preference. What Throsby dissolves, therefore, is the difference between those goods for which marginal utility diminishes through incremental increases in consumption and those goods for which marginal utility is augmented through incremental increases in consumption. The question is whether Becker’s theory of human capital and shadow costs adequately explains this difference.

What exactly does Becker need to explain? Marshall seeks to explain the consumption of art in general, ie art as a type of good, whereas Becker limits his explanation to the repeated consumption of a particular work of art. Even if Marshall’s can be adapted to examine the single work and Becker’s can be extended to cover a broader range, the difference in scale must be taken into account in order for the explanation to have any precision. Getting a taste for art is not the same as being a competent observer of a particular work of art. And the explanation of one does not necessarily explain the other. I think the analogy of studying calculus at increasing levels of difficulty does not adequately account for these differences of scale. True, when T.J Clark looks again at Manet’s ‘Olympia’, which he has been studying for half a century, he has a store of knowledge that the tourist seeing it for the first time does not have, and Clark’s knowledge of ‘Olympia’, as well as his methodology of art historical inquiry, is not at all useless when he turns his attention to Pollock’s ‘Blue Poles’, and we can redescribe the contrast between Clark and the tourist in terms of shadow costs: it is ‘cheaper’ for Clark to turn his attention to L.S. Lowry than it would be for a newcomer to start from scratch. But what Becker has to explain is that the ‘cheaper’ shadow prices incentivise Clark and the relatively higher shadow prices disincentivise the tourist. If (shadow) prices are not (dis)incentives then they are merely descriptive and not explanatory.

If Becker can only claim that existing consumers of art are more likely to consume more art, then this does not require the concept of human capital to explain it. The question is whether the concepts of human capital and shadow prices explain this well observed fact. Becker needs to show more than that past and current consumption of goods is related to future consumption of goods. It is not enough to say that consumers with ‘art capital’ are more likely to consume further units of art as a result of their ‘art capital’. This is understood, whether we call it human capital or taste: we know that people who consume art are more likely to consume more of it. What economics explains is that some people who have not recently consumed beef will consume beef if the price is reduced, and, inversely, some people who recently consumed beef will purchase a different kind of food if the price of beef goes up. Economists do not argue merely that it is ‘more likely’ that demand will increase when prices fall. The tendency of demand to increase when prices fall is due to the fact that lower prices are an incentive – that is to say, demand increases because of lower prices. Is this the case with the lower shadow prices of consuming art by those with ‘art capital’? In other words, are lower shadow prices incentives for the consumers of art? Therefore, Becker needs to be able to argue that their consumption is driven by lower shadow prices as a result of accumulated human capital or else the explanation misfires.

Prices are a major force in the regulation of demand. Can we say the same for shadow prices in the consumption of art? When prices fall, we can predict that aggregate demand will increase, but what sort of predictable results follow from Becker’s human capital theory of the consumption of art? If the build up of human capital operates only at the most general level (gallery goers are more likely to visit galleries; music lovers are more likely to listen to more music, etc), then the predictions that Becker’s theory are weak compared with the relationship between prices and demand. If Becker’s theory merely implies that the listeners to serious music need to acquire more human capital than listeners to pop music, meaning that the most recent and difficult music requires the highest levels of human capital investment as a prerequisite, then its predictions are sociological truisms and do not provide the kind of regulative force that prices do in markets. But I don’t think that Becker hopes to predict the behaviour of art viewers based on their acquisition of human capital, nor does he seriously believe that shadow prices regulate demand in the way that prices do. Shadow prices are descriptively vivid but are explanatory duds.

Is it likely that a gallery goer who has studied Picasso extensively will attend the next major Picasso exhibition at a national museum? The shadow costs will be low, we can assume, but this alone will not be enough to get the gallery goer to turn up. The likelihood is reduced, of course, if after studying Picasso for several years, the gallery goer discovers Duchamp. In this instance, the low shadow costs of attending might appear to the gallery goer as proof of the judgement to abandon Picasso for Duchamp. (I can see the argument that studying Picasso means that it is relatively ‘cheaper’ to study Duchamp than somebody coming to art directly through Duchamp, but doesn’t Becker’s argument imply that the student of Picasso will continue to study what is cheapest to study?) Also, if a Picasso-phile develops the human capital capable of engaging seriously with Cubism, is this visitor more likely or less likely to visit, consume or purchase examples of lesser Cubists? Isn’t it the case that the shadow costs of attending certain art exhibitions will be so low as to act as a decisive disincentive to attend? In other words, aren’t gallery goers incentivised by the opposite of shadow costs, namely the hope of not-knowing or not-having-the-capacity to view this work? (I have written about this previously in my theory of ‘the mobile spectator’ and ‘the impossible spectator’.)