Searching for Love

Cultural economics has come a long way since Baumol and Bowen first started poking around, but the fact remains that it still revolves around money—the delicate dance of legal tender among producers, sellers, and buyers. More so than other goods, there's almost always a disconnect between the price of a work of art and its value, and traditional market economies are notoriously slow and inefficient at minding that gap; while the art market as a whole can give a reasonably predictable return on investment, the market for individual works or categories of art can be dauntingly volatile. And that's the plastic arts, something you can take home and display. Music? Even cloudier.

So here's a thought experiment: what if, instead of cash, one considered curiosity as the main currency of culture? Curiosity drives cultural consumption. We keep looking until we find what we like, or what we think we like—maybe we come across a style or repertoire that seems to be enough of what we like that we consider any further search too expensive, in terms of curiosity. In this scheme, art that is harder to find is more "expensive"—and consumers who are more curious spend more. (Note that what is about to follow is laughable as economics—how do you quantify curiosity? Think of it more as a metaphor on steroids.)

In terms of curiosity, popular culture is very cheap indeed—almost free, in fact. (Try to resist applying favorable or unfavorable connotations to "cheap" and "expensive" for this one.) Popular culture comes to you via the mass media. If that's what you like, or what you decide you like, you haven't had to spend very much curiosity at all. Whereas, if what you really like is avant-garde tape-manipulation music from early-1970s Scandanavia, but you don't know that yet, you're going to have to spend a considerable amount of curiosity to find it.

The interesting thing about this goofy scheme is how, under it, one would interpret the impact of the Internet. You could argue that, back in the pre-tubes dark ages, music was actually cheaper in curiosity terms, but there was a greater chance of having to settle for less than you were prepared to "pay" for. There was whatever was being pumped out over the mass media, but beyond that, you were limited to whatever record companies were willing to record and distribute, or whatever happened to be performed near where you lived. For recordings, once you stepped into a record store, the curiosity price of anything that happened to be in the store would be pretty much the same, but if it wasn't there, you weren't very likely to find it without a huge jump in curiosity price. Live performance would be so balkanized by geography—New York? cheap; central Nebraska? not so cheap—that comparing curiosity spending would be almost apples to oranges. (Hopping on the subway=low curiosity price; moving to New York=high curiosity price.)

With the Internet, though, all music (or at least enough information to know whether it's what you want) is available, theoretically with near-immediacy—that is, if you know where to look, or, more probably, you have the time and curiosity to sift through the much wider array on offer. Has this made music cheaper or pricier in terms of curiosity? Back in the Reagan era, sifting through the bins at my local record store would take me, at most, a couple hours. A couple hours on the Internet, and I've barely scratched the surface. With greater variety comes greater investment of time, effort, judgement. (It's the same reason I can shop for shoes exponentially faster than my lovely wife, since, at size 14, my selection is usually limited to one or two pair.) Has the increased digital availability of culture, paradoxically, raised its curiosity price across the board?

As the economist Alfred Marshall once pointed out, artistic styles don't usually have diminishing marginal utility—once we find what we like, we can like the same thing pretty much forever. The thing is, most people, even music lovers, are going to decide they like some kind of music and stop spending their curiosity earlier than than those of us sufficiently obsessed with the stuff to blog about it. When curiosity prices were fixed and relatively low (i.e., record store), the chance of a given outlay of curiosity leading into jazz, classical, world music, showtunes—basically anything not served up free by the mass media—was not all that variable, once you walked in the door. (The downside? Opportunity costs, that is, the amount you give up by making a decision one way or another, were relatively high.) If curiosity prices have become higher with the advent of the Internet, the chance of a given outlay leading to a specific category is just that: a chance. It's much more of a crapshoot. There's a greater chance of stumbling on something you didn't expect, but an equal or greater chance of missing what you really want—or giving up before you find it. It all depends on how hard you want to look.

So in terms of the curiosity expended to find it, the initial price barrier to culture has gone way down, but the average price of the wanted cultural experience has, perhaps, gone up. Inflation, in other words. Is it a valid trade-off? I think so: since the resources aren't scarce—it's all out there somewhere, at the click of a mouse—opportunity costs go down. For now, the increased opportunity to at least stumble on what isn't expected seems to be raising the tide for all kinds of boats. The question is whether the way people are able to search for music on the Internet will evolve towards a more sophisticated, Pandora-like guided journey, or whether the old corporate categories will re-assert themselves, leading to more dead-end or prematurely stifled spending of curiosity.

The former, most likely. Here's why, although I admit it's a bit of a stretch. The previous way of buying and selling music was based on a certain assumed valuation of curiosity. If that curiosity is going through inflation? All bets are off. Inflation has the power to mutate economic systems at the genetic level. It's why central banks throughout the Capitalist Era have never stopped worrying about it. Here's how John Maynard Keynes put it, in The Economic Consequences of the Peace:

Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency.... Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

I wonder if the Internet is really what changed things—or if a decrease in available musical variety in the years just before the Internet caused a change in the way people allocated and expended their curiosity, and the resulting, imperceptible disintegration of the traditional recording industry was already underway when the Web came along to accelerate it. Most revolutions, after all, are as much a culmination of historical trends as an instigator of them. That causality is probably a stretch, too, but how else do you explain how the record companies were caught so flat-footed? Corporate stupidity is hardly rare, but when an entire industry is still playing catch-up a dozen years on, deeper shifts become more plausible. Did the recording industry shoot themselves in the foot just before the Internet came along to stomp on it? Curious.