As an economics professor, you turned to the world of art, specializing in cultural economics and even cultural entrepreneurship. You certainly chose a field that is rich in contrast: economists are inclined to see value as price while culturalists believe price is no indicator of true value. In your book ‘The Value of Culture’, you mention what journalist Tom Wolfe coined as the ‘Apache dance’ in which artists try to stick to their artistic values while dancing around a bourgeois enemy to get attention and sell artworks. Why is there such a problematic relationship between economics and the arts?
Klamer:
The world of artists is first and foremost about art. It is about the creative expression of what is important in life or what I like to call ‘sense-making practices’. Artists want to make good art and get their message across. Therefore, they need to be different and stand out in a space where lots of others are calling for attention. In this world, market transactions, or the generation of money, is secondary and merely instrumental. The price of a work of art simply tells us what another person is willing to pay for it. It does not tell us anything about the work itself. When I took up the chair of cultural economics at the Erasmus University Rotterdam, I thought it was my mission to bring some economic sense to the artistic community. So I focused on teaching artists about the logic of the market, entrepreneurship and how they could generate income. But my lectures were met with lots of resistance and even frankly negative responses. I simply didn’t see the world of artists for what it truly is. It took me many years before I realized how blindsided I was by standard economics. Classical economists are so focused on transactions that they take the market as the normal form of human interaction. They completely overlook the world in which not only artists, but also scientists, athletes, communities and even parents and their children operate. Normal human interaction, or the human economy, consists of all the activities where different values, instead of price, are the central denominator. Once you see that and you start thinking about it, you realize just how much economists have contributed to a completely distorted worldview.
Classical economists are so focused on transactions that they take the market as the normal form of human interaction.
Sensemaking: art as an expression of what is important in life.
Illustration made using Midjourney.
You perceive culture as all sense-making activities and believe the purpose of art is to add meaning to our lives. Today the role of artists is not as clear as in the past when, for instance, painters and sculptors were commissioned to visualize what faith was all about or to adorn public squares and buildings with local heroes, legends or maxims. Recent attempts to bring art back to the center of the public sphere have often also neglected the true value of art. For example, subsidizing a museum or festival simply to promote tourism completely misses the point of art as a conversation and practice that contributes to better educated citizens or stronger communities. What can we do to make artists more influential without compromising cultural value?
Klamer:
I believe that the most important economy is not the economy of products, but the economy of ideas, or the economy of meanings as my colleague Kees Klomp likes to call it. This cultural economy, where ideas travel, get shared and may or may not become part of our ‘common practices’, is a major blind spot. When I talk with people in the field of art, they find it hard to acknowledge their role in this business of sense-making and to understand the responsibility that they have. That has everything to do with perspective. By including the cultural economy as a critical part of the human economy, I hope to change the way people look at the work of artists, but also the role of scientists, journalists and many others. Importantly, I learned that you must be respectful of all the initiatives that people already take and the groups or associations they spontaneously form without any government intervention. The strength of a community is entirely dependent on these common practices. If the government bluntly steps in with some money, people become dependent on that and, as soon as the funding dries up, the practice is gone. The trick for policymakers is, when they believe a common practice is not thriving as it could be, to propose a real partnership. Instead of just subsidizing, give the practice publicity, truly involve some civil servants to make useful connections and, in return, ask for contributions to community goals. As a small example, an amateur choir in my hometown of Hilversum got help from the local government on the condition that they organized Christmas concerts that were open to the public and added to the community atmosphere.
The most important economy is not the economy of products, but the economy of ideas.
The production of ideas as a critical economic activity
Illustration made using Midjourney.
The theory of economics tries to make sense of the economy. But current economics provides only a limited set of answers. Focussing on more growth or profit, it leaves unanswered what those are actually good for. You propose an economics beyond the allocation of scarce resources and centered on the realization of values. In your ‘value-based approach’ the market is just one of five alternative spheres in which we all strive to realize different values. For example, in the governance sphere we seek peace, justice and democracy through laws, bureaucracy and taxes. The social sphere, with an informal logic of reciprocity, is where we strive for identity, community or recognition. In our home sphere, we aspire to be good parents, life partners or intimate friends. In the all-encompassing cultural sphere, we look for transcendence through history, science, art or spirituality. What do you believe to be the most important practical contribution of this alternative economic model?
Klamer:
The practical contribution is that it changes your perspective. You start thinking entirely differently about issues such as the impact of a business or organization. To my economic colleagues, busy discussing ‘broad welfare’ or prosperity beyond GDP, I always ask: ‘what’s truly important to you?’ They then bring up their family and friends, the associations that they are a member of, or the feeling of accomplishment by being able to use their talents. Clearly, everything they deeply value is not included in their own economic definitions of welfare. Aren’t we then completely missing the point? If we understand how important it is to people to create a good home, we can question if our business or organization is contributing to that. Maybe we discover that we ask so much from our people that they get divorced, all care services need to be outsourced and children get neglected. Maybe we find that a lot of our coworkers do not feel accomplished in their career because they are not using their innate talents. Perhaps the sheer scale of our organization rips apart the communities we operate in, just like big department stores that crowd out small shop owners who are much more socially involved. In the case of a sports club or cultural association, we can ask ourselves what the impact is on the social sphere. Does it bring people together? Do people become friends or at least socialize there? Finally, we can even think differently about what it means to be rich or poor. Currently, we believe that rich people are people with a lot of money and poor people are people with little money. This is purely a market perspective. But from the perspective of the human economy, a good home and good friends are much more important than a large house and a big bank account. The human economy is not about quantities, but about qualities. If we want to provide answers for the actual world we’re living in, we need to develop economic methods that go beyond quantification.
In a value-based economy, we see the market as purely instrumental: the pursuit of money or goods is always a means to an end. When we can articulate those ends, we can also look for the most adequate solution. For example, managing resources as a cooperative or commons can sometimes be a viable alternative to the market or government intervention. In your book ‘Doing the Right Thing’, you explain how all the different valorization spheres have their own logic. Failure to understand this can lead to a failed implementation. Could you give an example of an organization that considered pivoting to an alternative valorization sphere?
Klamer:
I now have a major project with bankers. You could say that they are a tough crowd because they seem so focused on financial markets. But what I find fascinating is, when you start talking to them about their ideals or what it is they are striving for, they hardly ever talk about money. Instead, they talk about doing good and contributing to a better society. What I also found striking is how many bankers talk about relationships. For instance, they care about having good relationships with entrepreneurs. They genuinely believe their job is about helping entrepreneurs with their knowledge of risk and connections with investors. However, they claim that they get distracted and frustrated with this obsession over profit and shareholder value. Sadly, this can even happen to people of cultural organizations who, in principle, want to do some good. When they get into trouble, they can drift away from their purpose and suddenly find themselves doing things just for the sake of making money. Perhaps they survive, but their soul has died. Essentially, in a human economy, we turn the perspective around: we are not searching for alternatives to the market, the market is the alternative when we cannot satisfy our needs otherwise. Interestingly, this is exactly the view of Adam Smith: he warns his readers that, since we cannot be friends with all those who can provide us with everything we need, at a certain point, we turn to the market where we appeal to the self-love of others. If you read his ‘Wealth of Nations’ from the perspective of his ‘Theory of Moral Sentiments’, you understand that he thinks in terms of a human economy and points at the necessity of market transactions because we cannot befriend everyone whose assistance we need.
In a human economy, we turn the perspective around: we are not searching for alternatives to the market, the market is the alternative when we cannot satisfy our needs otherwise.
An obsession over money turns an organization into a ghost ship.
Illustration made using Midjourney.
You are not just a man of theory. You have worked with organizations and cities to help them look for value beyond money. In your hometown, Hilversum, you even took up the role of politician to try to push for change from the inside. Another entrepreneurial feat of yours was founding the Academia Vitae, a private university offering broad, liberal arts programs. Being an entrepreneur is hard, being a social entrepreneur is even harder. You often met with resistance, sometimes also with failure. As a politician, you felt misunderstood by your colleagues and left before the end of your term. The Academia Vitae had to close down. Based on your experience, what advice would you give to entrepreneurs with radically different ideas?
Klamer:
In my entrepreneurial efforts, I was not able to push through because I couldn’t get other people to see what I was really trying to do. Perhaps that shows I’m more of an academic than an entrepreneur. For instance, with the Academia Vitae, I had the idea to build a completely different type of university, not just directed at 20-year-olds, but also at people in their 40s and 50s who are already advanced in their careers. I wanted to offer a curriculum that was less about technical sciences and more about life experiences, insights and wisdom. It proved difficult to compete with other universities that could rely on government funding and, ultimately, the financial crisis gave the story an early ending. When I got elected to the city council in my hometown, I was in a coalition with liberals. When I started talking about cooperatives, for example, they became very suspicious. Moreover, I ran into a neoliberal perspective that was deeply entrenched in the city government. I started questioning why we constantly referred to our citizens as ‘customers’ and what our ‘shop’ is supposed to be then. Afterwards, I learned that some of my civil servants dreaded coming to my office simply because they didn’t understand my ideas. I wanted to do things differently, but because I couldn’t explain myself better, I built up resistance which eventually became a problem for me. So my first advice would be to really develop your skills of persuasion. Be aware that if you want to change something, it will always be a battle of ideas. You must deal with people who will not understand or are even unable to imagine what you are saying. My second advice would be to grab the opportunity. Sometimes you are surprised when an opportunity presents itself. It can be in the form of a disaster, conflict or anything else that makes people look for an alternative. Then it’s your time to jump in and say, ‘I have one’.
Be aware that if you want to change something, it will always be a battle of ideas. You must deal with people who will not understand or are even unable to imagine what you are saying.