Is it Junk or Is it Art?
According to The Daily Mail, a recent study suggests that people value ordinary objects differently depending on what they are told about the objects
According to the new research, being told that something is art automatically changes our response to it, both on a neural and a behavioural level.
In this case, researchers in Rotterdam, Netherlands told subjects to rate how they valued objects in photographs. When told those objects were "art" people valued them differently.
In other words, the perceived value of objects could change without any additional labor added to the objects, and without any physical changes at all.
The value, it seems, is determined by the viewer, and we're reminded of Carl Menger's trailblazing observations about value:
Value is a judgment economizing men make about the importance of the goods at their disposal for the maintenance of their lives and well-being. Hence value does not exist outside the consciousness of men.
One moment, the viewer may think he's looking at garbage, which he has likely learned is of little value. When told that said "junk" is really "art" then the entire situation changes. (Of course, we would need to see their preferences put into real action via economic exchange to know their preferences for sure.)
The change, as both Menger and Mises understood, is brought about not by changes to the object itself, but by changes in context, and in the subjective valuation of the viewer.
A glass of water's value in a parched desert is different than that of a glass next to a clean river, Indeed, a glass of water displayed in a museum as art — as in the case of Michael Craig-Martin's "An Oak Tree" — is different from water found in both deserts and along rivers. Similarly, the value of a urinal displayed in a museum as art — as with Marcel Duchamp's "Fountain" — is different from a physically identical urinal in a restroom.
The Daily Mail article attempts to tie the researchers' observations to the theories of Immanuel Kant on aesthetics. But, one need know nothing about aesthetics at all to see how this study simply shows us something about economic value: it is, to paraphrase Menger, found in the "consciousness of men."
And it is largely due to this fact that centrally planning an economy is so impossible. How can a central planner account for enormous changes in perceived value based on little more than being told something is art?
Is a glass of water best utilized on a shelf in a museum, or is it best used for drinking? Maybe water is best used for hydro-electric power? Exactly how much should be used for each purpose?
When discussing the problems of economic calculation in socialism, Mises observed that without the price system, there simply is no way to say that a specific amount of water if best used for drinking instead of being used for modern-art displays. Nor is the fact that people need water for drinking the key to determining the value of water. (See the diamond-water paradox.)
In a functioning market, consumers will engage in exchanges involving water in a way they reflects how much they prefer each use of water to other uses. At some moments, some consumers may prefer to drink it. At other moments, some may prefer to water plants with it. At still other moments, they may want to contemplate an art display composed of little more than a glass of water. The price of water at each time and place will reflect these activities.
Without these price signals, attempting to create a central plan for how each ounce of water should be used is an impossible task.
Do we need to know why people change their views of object when told they are art? We do not. Indeed, were he here, Mises would perhaps be among the first to remind us that economics is silent as to the mental processes that lead to people preferring different uses for different objects. Maybe the subjects in the Rotterdam study changed their views of objects because they wanted to be seen as sophisticated. Or maybe they truly felt making an ordinary object into art is a wonderful thing. Maybe others changed their minds because of some childhood trauma.
We can't know why each individual values drinking water over "art water," or vice versa. And a government planner or regulator — it should be noted — can't know this either.
Ryan McMaken is the editor of Mises Wire and The Austrian. Contact: email, twitter.