In Praise of Commercial Culture

Tyler and Alex revisit Tyler’s 1998 book and trace how commerce disciplines and amplifies creativity. Great artists bargained hard because money buys orchestras and time. “Inspired consumption” means high-quality audiences shape better art. Dynamic, Hayekian competition discovers new genres, while pulp cross-subsidizes the sublime. They disentangle when government support works, why TV improved with entry and subscriptions, how “payola” rhymes with supermarket slotting fees and with Spotify’s algorithmic era, and why some modern art maligned as minimal is, in fact, marvelous. Along the way they touch on reading’s spiky renaissance, textiles as the smartest undervalued collectible, the real story on brutalism (is the DC Metro overrated?), and a sober take on cultural pessimism’s recurring illusions—plus what all this implies for AI-era culture.

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ALEX TABARROK: Good morning, Tyler.

TYLER COWEN: Good morning, Alex. 

TABARROK: Today, we’re going to be talking about your 1998 book, In Praise of Commercial Culture. Let me begin with a little praise of the book. I’ll try not to do too much, but this is, I think, my favorite book of yours. It’s certainly one of your best books. The idea of an economist writing about culture brings to mind the quip that the economists know the price of everything and the value of nothing.

I think if most economists had written—praise Gary Becker—but if Gary Becker had written this book, I think that critique would’ve applied. What you do is you have the economic scaffolding, the economic theory, but then you put in so many details and so much love of art and art history that I think that critique does not apply. It cannot be said on reading this book that you are a philistine. This is clearly somebody who knows culture and who loves culture. As a result, the book cannot be dismissed as a shallow take.

The other reason I like it is that I think it really filled the lacuna in that history in the literature on capitalism. There are all these books on capitalism and growth, capitalism and women, and capitalism and X. This one is about capitalism and the arts. There’s no other book, which, I think, fits that mold. I think on reading it, as I was reading it again and preparing for this podcast, it also holds up. 

COWEN: Thank you.

TABARROK: There’s a few references to compact discs. Other than that, it’s really, I think, timeless. Before we get into the book in detail, into the theories, and so forth, tell us a little bit about what you were thinking when you wrote this book. Why did you write it? Where were you in your career and what was the background on the book?

Motivation Behind the Book

COWEN: Well, I don’t even know if you know this story, but you deserve the credit for my having written this book.

TABARROK: What?

COWEN: Yes, I barely knew you then. I knew you a bit, but you came to me and said, “Oh, Camille Paglia has this new book, Sexual Personae. You’ve got to read it.”

TABARROK: Right.

COWEN: I said, “Okay, I’ll read the book.” At the time, I was doing more narrowly academic work. I saw that Paglia wrote a book that was passionate about art and full of information. It wasn’t a low-level book. And it was very popular. I just thought, “I should try to do this.” I wasn’t so much influenced by the details of her content, but the fact that she did the book, which you brought to me, is the reason why I started In Praise of Commercial Culture. It took me a long time to get the book written and then published. It had a very tough publishing history. It was turned down many times.

TABARROK: Oh, wow.

COWEN: Harvard University Press, they published it. At first, they turned it down.

TABARROK: Wow, that’s surprising because it was reviewed everywhere. It put your name on the map.

COWEN: There was another episode. I submitted it to University of Michigan Press. They decided they would take it. It had positive reviews, and then their editorial board read the book and just decided they hated it.

TABARROK: Wow.

COWEN: They vetoed Michigan doing the book and then I went to my former adviser, by then friend, Thomas Schelling. I was like, “Tom, what can I do?” Tom said, “Well, let me write Harvard University Press.” I said, “Oh, they already turned it down.” Tom says, “Well, let me write Harvard University Press.” That led to a path of events where maybe I started this book in ’91, I would guess. It was published ’98, you said. That’s a long time. It took me three or four years to write the book, but equally long to get it out.

TABARROK: Well, Schelling point, right?

COWEN: Exactly. There has always been a lot of hostility toward this book because the notion that capitalism is ugly and violates the aesthetic is one of the criticisms that it was felt still held up even after communism fell. It was knocking out one of the last pillars of what Mises called the anti-capitalist mentality.

TABARROK: Let’s begin with a little bit of the economics then. The most obvious, right? First law of economics, incentives matter. The most obvious incentive, by far, not the only one as we’ll discuss, but the most obvious incentive, is money. Now, you might think that only the lesser-quality artists are motivated by money. Only the popular rock ’n’ roll, those guys are motivated by money, but the real artists, they’re in it for something else. Here, you bring the receipts sometimes.

COWEN: Literally.

TABARROK: Exactly. Tell us about Michelangelo and Beethoven and all of these guys.

COWEN: Well, one simple example. If you read the letters of Mozart or Beethoven, they’re obsessed with money. They seem to be quite good bargainers. They always want more money. You might think they’re greedy, but also money is a means toward realizing your art. How good a piano can I buy or how good an orchestra can I work with, or can I travel to give a concert in Prague or Vienna?

The more an artist cares about art in many situations, the more they’re going to care about money. It’s a very simple point. At the time or even still, you didn’t hear it much. It’s always money versus art rather than you can care about money as a means to your art. The Italian Renaissance artists also, they’re great bargainers. They’re highly commercial. They treat their enterprises like true businesses, which they were, and took commissions, wrote contracts. It was a commercial endeavor.

TABARROK: Mozart is an interesting case because he was in between moving from the patron model like Haydn to the pure selling model of Beethoven. He was in between, right?

COWEN: Even as late as Liszt, you have great and famous composers who earn more money by giving concerts. To this day, it can be the case that a tour for a popular music group—Taylor Swift, Rolling Stones, Paul McCartney—brings in more money than trying to sell the recordings. That’s longstanding in the history of music amongst other arts. 

For economists, it could be, you can earn more money by giving talks than by writing a book. The book is a way you might get to give the talks. The shift is still going on, you could say. It’s often the case, you earn more money from the ancillary products. Just how frequently we saw that in the history of the arts was one of the things I learned researching this book.

TABARROK: You say something else, which is very interesting, about the role of money and prices in the creation of great art. You say, I’m going to quote—your book has got some great sentences. This is one of them: “Art consists of a continual dialogue between producer and consumer. Consumers and patrons stand as the artist’s silent partners. Inspired consumption is a creative act that further enriches the viewer and the work itself.” What’s inspired consumption?

Why Great Art Needs Great Audiences 

COWEN: Very often, you need great audiences to have great art. Someone has to be watching or listening and care. You might think in a vacuum, you could just have the artist make something, but that’s hardly ever the case, if ever. If you try to have a brilliant musician write in a totally new style of music that no one appreciated, there’s not the audience feedback. There’s not the iterative process. There’s not the evolution. One reason why I think some artistic genres turn bad or sour or boring is just the quality of the audience goes away.

It’s striking, say, in 19th-century Germanic territories, how well educated in music the audience is, how many people in the middle class played pianos, owned pianos, would sing in the evening. Obviously, there’s no TV, no internet. Your own music, music at home, Hausmusik, was a way in which you would become a fantastically high-quality audience. We’ve lost that. We have high-quality audiences for popular music in other ways. High school kids play the guitar, heavy metal, whatever, so on. I think that’s an important part of how commerce boosts the arts is by channeling high-quality audiences and matching them to higher-quality performers. 

TABARROK: The other impact of commerce, of course, is that society gets richer over time. There’s more wealth. More wealth gives the artists more options, but this seems to cut in two ways. The artists are then free with more wealth to not pay attention to the consumers. How does this dialogue or this push and pull between the artists and the consumers work as society is getting richer and richer and artists perhaps don’t need consumers as much as they did in earlier times?

COWEN: I think it’s the Adam Smith effect that the growing size of the market gives you greater division of labor, more diversity. You have more artists who just “sell out,” and they try to please the crowd. Some of them can be wonderfully good. You have more artists who just go their own way like My Bloody Valentine, the Irish group with Kevin Shields. They went 20 years and did nothing because Kevin was not happy with how things were going.

You get both. Sometimes you get both in the same career. Early R.E.M. was considered an indie band that made obscure albums like Murmur that were artistically of high reputation, but not incredibly popular. Then R.E.M. becomes just an extremely popular generator of hits and they have this evolution within the career and you get both. I think that’s one of the virtues of the system of having more wealth and better-developed markets.

TABARROK: One of the things which, actually, a paper you and I wrote following your book was an economic theory of avant-garde and popular art or high and low culture. We talk a little bit more in that paper about the division between what artists want and what the consumers want. The artists are always pushing up against the consumers. Is this one reason why the artists tend to dislike capitalism, even though capitalism is actually supporting art in the bigger picture?

COWEN: People judge things at the margin, right? In a friendship or marriage or if you have co-founders at the margin, am I getting what I want? Getting out of that mindset is very difficult. Actually, you and I are in a collaboration, so I think we’ve done great on that. You said, “Look at the total value created.” 

There’s this recent movie, The Brutalist, about an architect who’s trying to build a building his own way. The patron doesn’t want to do it that way. The moviemaker himself has been in similar positions. He wanted to make the movie his own way. The rest of the world didn’t necessarily want to cooperate. 

I think you replicate that dynamic at all levels of wealth. You even get more instances of it because the company is just basically going to want to profit-maximize even in a very wealthy society. The artist who now has better opportunities or spousal support or whatever tenured academic position will want to indulge his or her fancies. Those conflicts only increase. It feels like they’re getting worse all the time. They are getting worse all the time in equilibrium, but that’s part of the system and how it works.

TABARROK: The painter, they don’t require all that much to make the painting? They don’t require a big company behind them, but the movie director does.

COWEN: The sculptor does more than the painter. It depends on the kind of sculpture or kind of painting, but on average, absolutely. There’s more conflicts in the movie industry. You would expect movies to be more anti-commercial than some other artistic genres. I’ve never tried to measure that. It accords with my intuitions. Someone who’s a poet, it used to be pen and paper. Now, maybe it’s computer, but that doesn’t cost much at all. There’s hardly any conflicts of that kind in poetry.

TABARROK: The director is always having legendary battles with the producer, right?

COWEN: Orson Welles is another example. They wanted popular movies from him. He wanted to do his own thing and he wouldn’t finish projects on time. Don’t think the creator is always in the right. 

TABARROK: Yes, true.

COWEN: Very often, the companies are.

TABARROK: Right, inspired consumption.

COWEN: Yes, and the companies will force compromises on the artists that often are for the better. Like Paul McCartney wanted Red Rose Speedway to be a double album. Four or five years ago, he put out what that double album would’ve looked like. It wasn’t actually that good. It was Paul being self-indulgent, the company, by insisting on a single album—Paul could have walked away from the company. He was Paul McCartney, right? Still, Paul went along with it and for the better.

Artists’ Compensation

TABARROK: I don’t know if there’s a quote from your book if I wrote it down, but artists are low paid but well compensated.

COWEN: That’s right. We should tax them, you could say. Tax them more. They have fun. It’s challenging. It’s a kind of life and lifestyle that many people desire, even though it’s not actually that fun. People like the idea of being a creative artist. We as academics, you wouldn’t say what we do is art, but it’s some form of creating that we derive additional pleasure from. We’re, in that sense, underpaid.

TABARROK: There’s a compensating differential.

COWEN: Right. Control over your time is part of it.

TABARROK: Right, so this means that artists, they’re always complaining about being low paid. If the government were to give them a stipend, then they’re going to produce more art. They’re going to work less in the nonart sector, but also produce more art in tune with their own preferences and less in tune with the market, right?

COWEN: Yes.

TABARROK: It’s always going to be that conflict because the bigger the stipend, the more the artist moves away from the market.

COWEN: One point I make in the book is that often government support for the arts does better when the government treats itself like a commercial customer with desires and whims and fancies of its own. This was the case in the Italian Renaissance. Some of the support behind those great artistic creations was governmental or maybe quasi-governmental in the case of the guilds or how exactly would you count the pope. But it wasn’t done bureaucratically[MH1] . There were people, often with excellent taste, who wanted particular things and demanded them and acted like customers, albeit with government money that they taxed from others. When it’s more of a market, you often do better than when it’s more of a bureaucracy.

TABARROK: Here’s a quote from the book, “Art and democratic politics, although both beneficial activities, operate on conflicting principles.”

COWEN: So much of democratic politics is based on consensus. So much of wonderful art, especially new art, is based on overturning consensus, maybe sometimes offending people. All this came to a head in the 1990s, disputes over what the National Endowment for the Arts in America was funding. Some of it, of course, was obscene. Some of it was obscene and pretty good. Some of it was obscene and terrible.

What ended up happening is the whole process got bureaucratized. The NEA ended up afraid to make highly controversial grants. They spend more on overhead. They send more around to the states. Now, it’s much more boring. It seems obvious in retrospect. The NEA did a much better job in the 1960s, right after it was founded, when it was just a bunch of smart people sitting around a table saying, “Let’s send some money to this person,” and then they’d just do it, basically.

TABARROK: Right, so the greatness cannot survive the mediocrity of democratic consensus.

COWEN: There are plenty of good cases where government does good things in the arts, often in the early stages of some process before it’s too politicized. I think some critics overlook that or don’t want to admit it.

TABARROK: One of the interesting things in your book was that the whole history of the NEA, this recreates itself, has recreated itself many times in the past. The salon during the French painting Renaissance, the impressionists hated the salon, right?

COWEN: Right. And had typically turned them away because the works weren’t good enough.

TABARROK: There could be rent-seeking going on, right? The artists get control. Sometimes it’s democratic politics, but sometimes it’s some clique of artists who get control and then funnel the money to their friends.

COWEN: French cinematic subsidies would more fit that latter model. It’s not so much that the French voters want to pay for those movies, but a lot of French government is controlled by elites. The elites like a certain kind of cinema. They view it as a counterweight to Hollywood, preserving French culture. The French still pay for or, indirectly by quota, subsidize a lot of films that just don’t really even get released. They end up somewhere and they just don’t have much impact flat out.

Ups and Down in TV Quality

TABARROK: Let’s talk a little bit about television. While you weren’t pessimistic about television in 1998, you did tip your hat a little bit to the cultural pessimist on that ground. You said, “Well, yes, television’s not so great.” Since that time, I think television has exploded in quality. 

COWEN: Declined again too. 

TABARROK: It had its moment. I’d mention The Wire, Veronica Mars, Succession, which is pretty recent as just a few of the standouts.

COWEN: They’re not that recent. That’s important. Keep in mind when I wrote that sentence—so this is published in ’98—I probably wrote it in ’92. There was not great material on TV. It was much truer in ’92 than in ’98. I say in the book, “I think it’s going to get a lot better,” and it turned out I was right.

TABARROK: Correct. That’s what I want to get to. Why was television so bad before? I grew up on like The Gong Show, which I guess you could still see. Why has it gotten so much better? What are the economics?

COWEN: Well, there were restrictions on entry. Three networks were given privileged positions. It had to be advertising-funded partly for legal restrictions, partly for technological restrictions. Ad funding favors consensus, least common denominator. You have three networks. It’s just hard to break in with new ideas that were pretty high-fixed costs. Even given all that, I’m surprised it wasn’t better. I like I Love Lucy. There’s other shows from that era that I think are good. At the end of the day, there’s very little I ever want to go back to and rewatch.

TABARROK: Star Trek was good.

COWEN: Star Trek was very good.

TABARROK: Speaking of I Love Lucy, because she funded it.

COWEN: That’s right, yes, with her own money. During pandemic, went back and rewatched some classic Star Trek with Natasha. That was rewarding. Again, there’s just not that much. That’s surprising. Maybe it’s an audience issue.

TABARROK: The fixed cost, the moving away from broadcast television where you’re really just going after eyes, right? When you say advertising, what you mean is that the advertisers, they just care about the number of eyes, right?

COWEN: Not intensity of pleasure.

TABARROK: Not intensity of pleasure, right.

COWEN: Not satisfying minorities, not giving someone thrilling that will change their life, just getting someone with a TV dinner in front of the set not walking away to the bathroom.

TABARROK: Yes, and maybe the whole family too, right?

COWEN: Right.

TABARROK: You got to appeal to mass.

COWEN: That’s also groups. Group consumption can be bad for the arts. You want to appeal often to individuals.

TABARROK: Yes. Now, everybody’s got their own Netflix subscription. They can appeal to their own particular taste.

COWEN: YouTube, internet, that’s a mixed blessing in some ways, but you’re not producing for groups as much as you used to.

Books and Reading Culture

TABARROK: On page 46, you have, again, a nice interesting quote. You say, “In 1947, only 85,000 books were in print in the US, but now the number has risen to 1.3 million with 140,000 published for the first time in 1996.” Now, I went and looked up more recent figures. Of course, we do hear a lot about everyone’s short attention spans. People aren’t reading anymore, the visual audiences, YouTube, all of that, but here’s what I found.

Today, 2025, Amazon offers about 50 million books and approximately 500,000 to 1 million new titles are published annually in the United States. That doesn’t include the number of self-published books, which if you do include those, that goes up to 4 million. What is the deal about reading? Is it down? Do you see that novels are getting worse or reading is ending? How do you see this?

COWEN: I think it’s a complicated picture. In terms of attention span, my current model is that, at least recently, the variance of attention span has gone up. People will play computer games for many hours on end. Very long novels such as Harry Potter, or these long fantasy series, they’re extremely popular. More popular than before. Lord of the Rings, it’s not a super, super long novel, but it’s not short. It’s just increased in influence. 

At the same time, TikTok would be the easiest example, the super short form is more popular. Maybe the middle is being hollowed out somewhat. That will hurt some kinds of books. On airplanes, I see people reading less than I used to. That means something. It’s true either in economy or in business class. It doesn’t matter how elite the flight might seem to be. Hardly anyone’s reading. People are looking at screens. I do think reading of books in the United States, I suspect, is going down, but with huge spikes in a bunch of positive directions. Not a story of simple decline, but probably down on average.

TABARROK: You say people are looking at screens, but, of course, sometimes they’re reading on the screen, right?

COWEN: Oh, of course, yes. If you count that, reading is way up, but reading of books as physical objects or even Kindle objects, I believe, is down. Though I know the data on sales are fine, it’s interesting what now sells better. Books about dogs as a category, that’s done fantastically well. I’m not saying people aren’t reading those, but what people are reading matters. Nothing against dogs or books on dogs.

I think within the classics, there’s enormous spikiness. Jane Austen, Shakespeare, Lord of the Rings, truly enduring, more popular. Dostoevsky becomes a kind of must-read in some form. White Nights is now a hot thing because of TikTok, which is not otherwise that well known of Dostoevsky. I guess you’d call it a novella. Now, it’s ranked quite high on Amazon. Some of those people are reading it, but a lot of other classics just seem to be forgotten.

TABARROK: Should Shakespeare and even Jane Austen, should they be translated into modern English?

COWEN: Paul Novosad got into trouble on Twitter for saying this. What we should have is AIs that will do any translating you want, and then the decision is up to you. 

I feel it’s wrong to read them in modern English. You’ll lose everything. People should be free to do it. I’m happy if you want to do it. The LLM will translate it for you, but I feel it’s deeply immoral in some sense.

TABARROK: Shakespeare wrote in modern English for his time, right?

COWEN: You lose so much of the cleverness, the wit, the wordplay. It’s just not translatable. I also think there’s a lot of poetry from, say, French and Russian—I wouldn’t say you shouldn’t read it in English—you should read it for historical purposes, but you shouldn’t think you’re reading the poetry because you’re getting something. No matter how good the translation, you’re just not getting it. You should read poetry in languages you can read. As I improve, my German and Spanish over time, I just saw the difference. To think you’re reading poetry in some other language is a big mistake usually.

TABARROK: Here’s another interesting quote from your book. I like this because you reverse expectations very quickly. This is interesting. “Unlike established authors, newcomers do not capture most of the publishing profits in the form of high advances and royalty rates.” Now, when you initially read this, it sounds like a left-wing critique. “The newcomers don’t capture these publishing profits in the form of high advances and royalty rates,” but then the next sentence is, “For-profit publishing houses, therefore, have a continual incentive to discover and promote new writers.” A nice little twist there. Explain.

COWEN: Oh, that’s how they earn their money. If Stephen King, whether today or at his prime, has a new book to publish, everyone knows more or less how many copies it’s going to sell. They’ll pay him more or less what it’s worth. Everything proceeds in a fairly predictable manner. There are not huge profits there. Plenty of places will publish Stephen King. What you want is an unknown author where there’s some kind of auction.

Maybe you pay in advance of low six figures and then the book just sells for 10 years and hits the top of the bestseller lists. Something like Rebecca Kuang, whose books have done very well. We had a podcast with her. I don’t know what her initial advance was, but I’m sure they made a lot of money on her because she’s not Stephen King. Now, she’s well known. She is the Stephen King figure now.

TABARROK: Right. You have to provide some skin in the game for the people who go out and discover.

COWEN: There’s risk because most of the chances the publishers take fail to pay off, right? It’s very hard to predict what will do well. It’s a funny feature of a lot of these cultural markets that nobody knows which books become bestsellers. Harry Potter, reviewed early by The New York Times, they don’t treat it as anything important. They sort of panned it. It took a while for it to take off.

TABARROK: Turned down by, I think, 12 publishing houses.

COWEN: Yes. Basically, hardly anyone knew.

Competition as a Discovery Procedure

TABARROK: Talk about competition as a discovery procedure in Hayek and your thinking. How was your thinking on this book influenced by reading Hayek and the Austrians and thinking about the market process as opposed to maybe perfect competition neoclassical model?

COWEN: Well, the book and most of what I’ve written comes from my background reading Hayek and the other Austrian economists. The notion that the market is a dynamic process, it’s not about its static properties. It’s how do you discover and help create new art. That’s what’s valuable. New goods have this especially high value. It’s also true in international trade theory.

That means that you think about these systems not in terms of have you gotten rid of every pocket of monopoly, which is a kind of antitrust approach, which I think is very harmful for culture, but just how dynamic is the system? How well informed are your customers? What kinds of opportunities are there? Is there some kind of creative ferment? Do groups come together in a useful way? Do you have institutions of civil society that help, say, The Beatles to form? They did.

It’s a very different lens to view economies, but in particular, the arts. Hardly anyone had done it. There’s a big literature on the economics of the arts. Much of it is quite good, but a lot of it’s static. There’s identifying some wedge of an externality and then you’ve got to subsidize or tax something. That, to me, misses the point. You want these dynamic systems that are working very, very well. That’s how you get the big returns.

TABARROK: Another quote from the book, “Masterpieces usually arise in a climate full of pulp and trash.”

COWEN: Well, the pulp and trash cross-subsidize the masterpieces. You walk into a bookstore, and we do still have them, go into a Barnes & Noble. A lot of the sales are of pulp and trash, but that’s how they can afford to put the store there. If you want to buy Dostoevsky or Shakespeare or whatever else or our books, the bookstore is there for you. You need these cross-subsidies. They’re essential to so much of artistic production.

TABARROK: One of the things which interested me in rereading the book is, of course, in the book, you deal with the cultural pessimists. Obviously, you’re a cultural optimist. So many of the debates, which we’re having today, including which you are having today, are recounted or preceded in this book. You’ve been, for example, quite skeptical about some of Jonathan Haidt’s work, panning the cellphone. Haidt talks about how cellphones are creating suicide and making people miserable and lonely and so forth. Everything which Haidt says about cellphones, people also said about books.

COWEN: The opera for that matter.

TABARROK: The opera, right?

COWEN: Novels in particular. Romantic novels.

TABARROK: Yes.

COWEN: Now, they might have been right in a funny way back then. We shouldn’t dismiss that. The important point is the dynamic point, especially with smartphones and AI. I’m not sure we’ve ever had technologies changing and developing more rapidly than what we’re seeing with AI and the internet and smartphones right now. The notion that you can usefully regulate something that’s changing faster than any technology in human history, I think, is a kind of hubris.

There’s a separate question, do the data support Jon’s contentions? Aside from all that, it’s a moving target. It’s a rapidly moving target. Markets are there to help people solve problems. When there are problems, there are endogenously created institutions to address those problems. It’s not obvious that government is the way to do that, especially when governments have such a bad track record on free speech.

TABARROK: I was amazed to read that people were saying that books create melancholia, depression, right?

COWEN: They do when I read them even now like, “Oh, how could you have written this book? It’s terrible.” Another boring book on this topic.

TABARROK: That’s a little bit different.

COWEN: “Where’s the Hayekian perspective in this one?” “Hasn’t he read Fischer Black?”

TABARROK: Let me give you another quote. “Modern techniques for painting display were, in fact, taken from the practices of department stores.”

COWEN: Sure.

TABARROK: How’s that?

COWEN: Department stores obviously want to sell their wares. They put things forward in a way that is visually quite attractive. Some of the most beautiful places, say, in Dubai are the department stores and their displays and that’s to make money. It becomes a kind of art just like fashion becomes art, but people learn from those displays as they did in the late Parisian 19th century. You present paintings in similar ways, how you use light, what kind of order you put things in, how much is in a room. Of course, commerce and business are major inspirations for so much of the arts.

TABARROK: It’s not just Andy Warhol taking from the department stores.

COWEN: It goes both ways, absolutely. A gallery, you go to a gallery in New York City. They don’t call it a department store. Look, it’s what it is. It’s the same people who go to the upscale department stores and the galleries. Now, Warhol knew that and he made fun of it in a neat way, but yes.

The Value of Modern Art

TABARROK: All right, let’s talk a little bit about so-called modern art, which is maybe where I disagree with you a little bit. I completely agree with you about all of the dynamics of the cultural marketplaces and that capitalism supports the arts and creative destruction, and the importance of wealth and prices, and prices as signals, and so forth. Yet, some of the time, some of the art which is produced is just terrible. It’s just crap.

COWEN: Of course. It’s like the pulp and trash surrounding the masterpieces.

TABARROK: Yes, but sometimes I think the masterpieces are trashy too. There’s the famous, which you deal with in the book, the famous Morley Safer episode on 60 Minutes on modern art, right?

COWEN: Right.

TABARROK: More recently, they got the guy taping the banana to the wall. I don’t know. Robert Ryman, Agnes Martin, these are famous people. I can’t tell the difference between them at all. If you don’t know, these are the minimalists. Agnes Martin is just like a white piece of paper. Come on.

COWEN: Robert Ryman in particular, his prices have held up very well. Agnes Martin also. They used to be somewhat cheap. Now, they’re quite expensive. They’ve gone from six-figure territory to seven-figure territory. You can’t blame it all on the Fed. The textures are wonderful. It takes a long time to appreciate and it’s best if you live with it. I think there are far worse offenders than those two. I would love to have works by Ryman or Agnes Martin. Ryman, there’s small bits of green sometimes or red amongst the white. I think he’s a fantastic artist. Same with Agnes Martin. Now, do I think there’s a lot of conceptual art that is just a waste and not really any social value? Absolutely, but I wouldn’t put those two up.

TABARROK: I’m not a big fan of rap, but I’m totally willing to say that’s my fault. I’m totally willing to say it’s a great art form. But some of these guys really push it to the limit, I think.

COWEN: When you have a case where you could call them the experts, the critics, the auction houses, the galleries, the writers on art, and the market, if they’re all agreeing, it’s not a forcing argument, but I think it’s a pretty good sign. Ryman and Martin have been out there now for many decades. It’s not new or contemporary anymore. That’s a very good sign that they’re right. You don’t have to like it for yourself.

TABARROK: In architecture, The Brutalist. You mentioned The Brutalist movie. That type of architecture, people still hate it. It’s been around now for well over 50 years. People still hate it, right? All of that stuff which suffuses Washington, DC, and all these Department of Energy buildings and so forth. People didn’t like it then. They still don’t like it now. It’s got to be bad, right?

COWEN: Well, let me just make a general point. I agree. A lot of architecture has gotten worse in the US and many other places compared to earlier periods, so I accept that. I don’t think brutalism is that unpopular as you suggest. People come to Washington. They say it’s a beautiful city. They’re not thinking about the HUD building. In fact, the HUD building, the Hirshhorn, the Metro, which gets a lot of praise, that’s brutalist—all that is part of what makes the city look good. I think people, when they’re presented with brutalism in a different context where they don’t know it’s a something they’re supposed to dislike, they sometimes fall in love with it.

TABARROK: The Metro is okay.

COWEN: The Metro is very good. 

TABARROK: I don’t know. All right.

COWEN: I agree. Architecture in many, many spheres, especially at the neighborhood level, it’s much worse compared to, say, the 1900s, 1910s, 1920s. World War II is a breakpoint. Now, architecture, it’s highly regulated as you and I know. It’s high cost. There’s a lot of reasons to think it’s a vulnerable area. Maybe economies of scale have been a problem, but I think it has to be that there’s some problem gone wrong on the taste side. People want dull, boring homes with incredible interiors, but they just look quite mediocre from the outside. It doesn’t matter how much money the person has in many cases.

TABARROK: There’s a problem with some homes, but it seems to be more in the public architecture, which is particularly bad. That just seems to be a cabal of artists, architecture artists, who just revel in the fact that people dislike the building.

COWEN: No, I’ll blame too much bureaucracy there. New public buildings in the US, they’re not that brutalist. They’re just mediocre. There’s all these planning processes, layers of veto, environmental review. You just are hoping you can build anything at all. It’s a very bad setup. It’s not going to produce much that’s great. Now, Vietnam Veterans Memorial, that’s incredible, right? That was a public process. There are exceptions.

TABARROK: Yes, there are exceptions. Speaking of conceptual artists, there are some good ones. I love the Christo or the Christos.

COWEN: The wrappings.

TABARROK: The wrappings.

COWEN: Amazing, the NIMBYs ever let him do that.

TABARROK: Unbelievable, right?

COWEN: That’s right.

TABARROK: It’s interesting. Often, it took 20, 25 years to get permission to do it.

COWEN: Returns to determination are high, right?

TABARROK: Yes, and the returns to determination. In fact, if you understand how difficult the process was to produce these artworks, that just adds to the beauty of them, I think.

COWEN: I have a Christo print in my office here at Mercatus.

TABARROK: Oh, okay.

COWEN: One of The Paris Review ones.

TABARROK: Oh yes, The Umbrellas, I think, was fantastic.

COWEN: Of course, Surrounded Islands. I’ve only seen photos of the wrapped islands in Biscayne Bay, but it looks like one of the best ones, Central Park, and on and on.

TABARROK: Yes, exactly. There’s some good conceptual artists too.

COWEN: It’s a case, by the way, of cross-subsidies. The projects don’t pay for themselves, but he’ll do offshoots of prints, sketches, other things, and sell them. It helps him realize his artistic vision because we have this thick market. A lot of the Christo offshoot works, they’re not all that great, I would say. People are just buying the name. You could be cynical about that or some are getting ripped off, but it’s what pays for his best stuff too.

What's so Bad About Payola?

TABARROK: One of the interesting cases in the early history of rock ’n’ roll was payola, which is amazing to me that payola still has this negative spin to it. What a successful campaign to make this a dirty word where even today, payola has a dirty connotation. You have a quite different story about payola in the early history of rock ’n’ roll.

COWEN: In supermarkets, there are slotting fees where they put your product. In bookstores, typically, there are sliding fees, what gets to be on the front table. There are some people who criticize this, but it’s not any sign of moral turpitude. You think you have something that will sell and you want to get it exposure and it’s like buying ads.

TABARROK: Explain the slotting fees at the supermarket. Tell us a bit. What do you mean?

COWEN: Well, if you have a new product, you would much rather it be at eye level than be way at the top or way at the bottom. You want it to be in the more heavily traversed aisles rather than others. The rights to that are bought and sold for prices. This happens all the time. No one would say it’s a perfect process, but it’s often people with new products that use it because they need the exposure.

Everyone knows what Kellogg’s Corn Flakes is and that will probably get a good spot anyway because people are inclined to buy it. If you have some new bar of soap or whatever and you want it to be in Whole Foods where people will experiment with it, you might pay a slotting fee.

TABARROK: You pay for that privilege, yes.

COWEN: It works. It’s fine.

TABARROK: It’s like marketing.

COWEN: It’s like marketing. It is marketing. If this is done in music, I don’t think there’s any problem. The alternative back then was more music was financed by ads over the radio rather than payola. That led to some homogenization, least common denominator incentives. You look at R&B or early rap, what was called payola was quite important for doing the marketing and promoting of those genres. That’s fine.

Now is there some corruption in payola where you pay what was then the disc jockey when he or she doesn’t have that right and they’re violating their contract with the radio station? That’s a problem of corruption that I would just leave to them to sort out. It’s not actually a problem for the music. In fact, it lowers the cost of promoting the music if you can be corrupt and just pay the disc jockey directly.

TABARROK: Alan Freed got a raw deal.

COWEN: Yes, he got a raw deal. It’s because of him that Chuck Berry became famous. “Maybellene,” his name is still on the song as a co-writer. He really had nothing to do with writing the song but that’s how Chuck got him to promote the song because he got the royalties. We still talk about Chuck Berry. You know what the best Chuck Berry song is?

TABARROK: “Maybellene.”

COWEN: “Maybellene.”Chuck, like many other artists, he earned most of his money giving tours. You could say yes, it’s highly unfair. He had to share the royalties with Alan Freed. So much of history of music you’ve got to perform to earn. Yes, it’s unfair, but everything in life is unfair. Everything in the arts is unfair. Sometimes you just need a little bit of perspective.

TABARROK: You see on the movies all the time, there are executive producer credits. No one seems to complain about that but everybody knows.

COWEN: That’s right.

TABARROK: People have gotten back onto payola in recent times complaining about streaming.

COWEN: Spotify in particular.

TABARROK: Yes, Spotify.

COWEN: There’s a whole new book out complaining about this.

TABARROK: You would have the same critique.

COWEN: Well, I think the details are quite different, but I don’t see a problem with it. What’s happening is Spotify will put you higher in algorithms if you agree to take a lower royalty rate on the streams. It’s indirectly how the payment is channeled is different. I think what we learn from Spotify and streaming, there’s a whole bunch of listeners who are entirely passive. They don’t care that much what they hear. What they want to hear, I would call crap. Am I allowed to say that?

It used to be people would listen to Muzak but because everything’s so individualized, we now can really segregate those people and target them with crap and serve them very cheaply. It’s just AI-generated music. I don’t mean the more clever stuff. I mean the bad things. They just get it but they’re not victimized. They can leave that ecosystem at any time, and they don’t. They want the crap. You have plenty of alternatives. YouTube would be the most obvious, but many, many music services, or just clicking on something on Spotify and hearing what you want.

I think it’s depressing how many people are quite passive as music listeners, but we segregate them. We actually somewhat remove them from the rest of the market. There may be less of an incentive at the margin for the other performers to appeal to them. Let’s hope it makes the rest of music just that marginal amount sharper. That’s what I think is happening.

TABARROK: I think there’s a bunch of interesting cases where the consumers are more or less indifferent but the producers care very much about getting to the consumer. Going back to the supermarket example, there’s a lot of people, not everyone, but there’s a lot of people who don’t care whether it’s Coke or Pepsi. But Coke and Pepsi, they care a lot.

COWEN: That’s right.

TABARROK: They’re willing to pay. In the case of paying to get on the playlist, there’s a lot of people who don’t care what’s on the playlist. As you say, it’s background music.

COWEN: They run to it, or they’re talking over it.

TABARROK: They’re doing the ironing whatever, but the artists do care. You have this system where there’s a lot of money which is being spent to market or to get into those distribution rights, which seems to suggest that it must be anti-consumer. The consumers actually most of them don’t care and that’s fine. If you do care whether it’s Coke or Pepsi, you’re not bothered by the fact that Coke is at eye level and Pepsi, you have to look down a little bit.

COWEN: I don’t understand why Ted Gioia is so falling apart over this. The bad parts of the system, they have become more legible. When I was a kid, my father would drive his car, he would listen to Muzak voluntarily. I thought this was awful. I was rude to him even. I shouldn’t have been rude. You know how kids are. No one other than me saw or heard what he was doing. Now it’s a known thing that there are all these passive listeners who are fed slop. It’s not the world ending. It’s how matters always have been but we just see it more clearly.

TABARROK: Yes. Why did the Soviets suppress rock ’n’ roll?

COWEN: They viewed it as capitalist, of course. It was rebellious. You’d have a Beatles song like “Revolution,” which actually is anti-revolution. People didn’t know that at the time. Just the title “Revolution.” Titles really matter. The title of this book, In Praise of Commercial Culture, I was going to call it Enterprise in the Arts, weak title, bad title. A number of people said, “Oh, you should call it In Praise of Commercial Culture.” I’m glad I did.

Rock music, some of it’s about sex, which had an unclear status under communism, but certainly you were not supposed to talk about it too openly. It was a sign of the West and a thing the West could do. There were plenty of Soviet bands that tried to do some kind of Soviet version of rock. They were allowed. I think it was seen as a way of diffusing interest or making it more communist mainstream. They’re not that good, but I know people from the Soviet Union who will still listen to it for nostalgic reasons.

Why Cultural Pessimism Pervades

TABARROK: The final chapter in your book deals more with cultural pessimism, which we’ve already touched on a little bit. The final chapter’s asking the question, why is cultural pessimism so common? It seems to arise in every single era. It seems to repeat itself over and over again. You have a number of different theories for why cultural pessimism appeals and is so strong.

One is cognitive illusion. You give really a beautiful illustration of this fact, which I haven’t heard other people put in quite this wonderful way. Let me read you what you said. “We are like observers on a shoreline watching ships sail away over the horizon.” This is the arts which are declining in quality. “We can see the departing ships dwindle in size, but we cannot observe the new ships approaching. We have a memory of each ship that is left, but no corresponding market for those in the early stages of their voyages to us.”

COWEN: You see this today with AI. I’m not aware that AI has produced any great art or music yet. If they have, I’m not aware of it. It’s wrecking some things. It’s injecting more slop into a number of processes. You don’t see what’s coming. It’s probably not here yet. It may not be far away. Everyone is in a big panic over it. I think it will be fine. It will be incredible when we get the goodies.

Artistic revolutions in the past, they’re never totally smooth. You have these odd gaps of time, mostly just random in the Italian Renaissance. Oh, what exactly was painted in 1523? Well, I’m not sure, but it’s not always the case there was something. Arguably we’re in some of those gaps now. I see these very healthy infrastructures, a lot of talent going into most of the arts.

Some things that have gone badly wrong. I would say like neighborhood architecture and Hollywood to me right now are the two things that are the most screwed up. I think the pessimists, they’re right about some mix of the short term or the particular things they’re focusing on. Cinema now still is incredible at a global level as good, I think, as it’s ever been. Architecture needs some work. We have many wonderful standalone buildings, but we’re not building new great neighborhoods. There’s an ebb and flow.

We’re not producing great baroque music today. Maybe we never will again. Maybe the AIs will do it for us. You have to get used to that and realize there’s plenty of ways to consume the past and enjoy the new things being fed to you now. You can still just go to New York, go to the Village Vanguard, pay $35, get there a little early, sit in the third row, and see the world’s best jazz. No one will stop you. It’s incredibly good. Somehow this doesn’t count for very much because not that many people do it. That’s why you can do it so easily. All the opportunities like that, they’re way undervalued.

TABARROK: You got to be a certain kind of consumer to do that, right?

COWEN: Sure. If you want to do the slop while you’re at the gym, that’s fine. You’re actually going to cross-subsidize what I do because you’re boosting the profits of Spotify. I use Spotify. If there’s a new review of a recording, I’ll listen to it a bit on Spotify. It’s not the main way I listen to things, and then I’ll either buy it or not buy it, and then I proceed.

TABARROK: We have a cognitive illusion of the past. The baroque music has sailed away, and we’re not yet being able to see what is coming toward us. The past is also much bigger than the present. You point out that it takes time to sift; “the passage of time reveals that Haydn and Mozart are superior to Gluck, Cherubini, Cimarosa, and Gréty.” I don’t even know who those people are.

COWEN: Cherubini’s better than I thought when I wrote that sentence, but he’s not as good as the others.

TABARROK: “Most music critics in the 18th century did not understand the categorical distinctions between Mozart and his contemporaries.” It takes time to appreciate. The past looks much better because we’ve had time to figure out what is really great.

COWEN: Your favorites are always in the past, by definition. My favorite movie, oh, that was from back then. My favorite music from Beethoven back then. The past is so wonderful. What do I have now? Again, it’s confusing stock and flow.

TABARROK: Yes. There also seems to be just something inbuilt in the human brain, particularly with music, that the music that you hear in your adolescence just appears to cement itself in the brain, and bind in the brain in a much stronger way. Even though I know it’s false, like the music of my youth just sounds better, deeper, more important than the pablum, than the Britney Spears my kids sometimes listen to. Some of that, they love. A few of the songs from Britney, they love that, right?

COWEN: You have to work hard to overcome this, I think. Like Sibelius I never listened to until I was, I don’t know, over 50. Now I love it. I can tell how much harder it is to appreciate also.

TABARROK: You’ve got less time going forward. Shouldn’t you just be—it makes perfect sense that young people experiment more and have a wider variety of tastes because they don’t know what they like yet. As you get older, shouldn’t you just focus on what you like? Isn’t that just going to make you crotchety?

COWEN: That’s my stubborn arrogance, to stay young through the arts. If something to me seems difficult but there are some clues it might be good, like reviews from smart people, just keep on at it till I get it. Things like atonal music, Indian classical music so many people don’t like, but at this point, I just know they’re wrong. A lot of it, of course, isn’t good, but they’re just wrong. If they don’t have the time and energy, that’s fine. 

Most people shouldn’t pursue those things. There’s no practical return. Maybe Indian classical music there would be, but not atonal music. People would just think you’re weird and want to stay away from you.

TABARROK: You dislike it too when you first hear it, but you think that because other people say that it’s good, you work at it.

COWEN: I don’t think dislike is the word. When I first heard atonal music, I was intrigued. I didn’t enjoy it, but I felt there was something there and I didn’t hate it. Then I just kept on at it. It took years, many years of going back to it. Maybe each time I liked it a bit more. Then you can use like Indian classical music and contemporary classical music to a bit make sense of each other. There’s this iterative process, but it’s a lot of investment.

TABARROK: Yes.I don’t think I have the time. 

COWEN: That’s what I would call like the correct cultural perspective. It’s quite hidden to people.

TABARROK: I’m not sure I have the time or the energy or the capability to do that.

COWEN: You do it in other areas, right, like things in math?

TABARROK: Yes, sure.

COWEN: Not that easy to just master.

TABARROK: Sure. I think I have the meta-rationality to understand that my personal perspective is not actually revealing the truth about the global creative destruction and the flow of new artists. I think the music my kids listen to is probably at least as good as the music that I listen to. I have the meta-rationality of, if not the ability, to appreciate everything which comes my way.

COWEN: Most people don’t, and then there’s generational conflict. Your kids might listen to something to irritate you. You know that’s their motive so you’re really inclined not to like it. Then parents will turn against it because it becomes rebellion. It’s contested territory and so on. Parental relationships are often not good for you as a consumer of culture.

TABARROK: Fashion changed a huge amount between the 1950s, 1960s, 1970s, 1980s. You can take any one of those decades and immediately pick out, you have a picture, what decade it was. You see a picture from the 1970s, you know immediately it’s the 1970s. From the 1990s on, nothing has changed. What’s going on there? Do you have any thoughts on that? Other than the people using cellphones, fashion has not seemed to have a wave since the 1990s.

COWEN: I think fashion is an area that, overall, has gotten worse. It could be we used to use fashion for signaling what kind of person you are, how much money you have. We don’t need that anymore. People can Google you. They can ask the AI. You have many ways of establishing your reputation. Just how people dress, it seems to me, has been getting worse.

I was just watching a movie, with mostly film clips from the 1960s. Every shot, I’m admiring how well dressed people are. It’s not a style I want to wear, so I’m part of the problem. Suit and tie in a civil rights march. It’s a huge difference. Yes, that’s a case where it just seems to me it’s getting worse. If it’s stagnated, maybe it’s so bad it can’t even get that much worse. It just stays put. It’s a shame.

TABARROK: You have another explanation, another theory for cultural pessimism, and that is that the artists are trying to fool us with their radicalism. It’s the Straussian interpretation of cultural pessimism, is that the artists do this to hide their radicalism and you point to Jonathan Swift in particular as someone who did this thing. He complained that the artists were too radical to hide his own massive radicalism.

COWEN: He faced a lot of censorship in his lifetime. To be Straussian about some of these earlier figures, it’s common sense. It’s not going off the deep end. I think another factor with Swift in particular, but many, a lot of top artists are highly neurotic or bipolar or schizophrenic, whatever. We don’t necessarily know, but they’re not normal people. They can be very depressive. The notion that you’ll get a lot of cultural pessimism from people with those proclivities, it’s going to be correlated. That seems to have been the case with Swift also, not the cheeriest guy, from what we can tell.

TABARROK: Right. Another point which you make in that latter chapter is you draw a connection between cultural optimism and declining mineral prices. The famous Julian Simon bet and so forth. Tell us about, again, how your cultural optimism connects with your understanding of markets and creative destruction and innovation and so forth.

COWEN: Origins really matter. The very first piece I ever wrote as an economist, I think I was maybe a freshman in college. I wrote a guide for high school debaters on how to use Julian Simon’s The Ultimate Resource in debate. Simon, as you know, is an optimist about resources. He stressed innovation and creativity. He’s a big influence behind this book, In Praise of Commercial Culture, and I imbibed his ideas very early.

Later on, I got to know him. The main book, I think, was 1981, The Ultimate Resource, and it just seemed the logic of that was quite general. The prices and incentives encourage creativity, whether it’s with minerals or music, and people hadn’t really made those connections back then. Again, it’s just dynamic Hayekian economics that Simon was practicing.

TABARROK: You say “pessimism falls as a tax on consumers by leading them to neglect contemporary culture.”

COWEN: I think I would rewrite that. I think it’s often an efficient tax. It’s become increasingly clear over time what people do and do not care about. People are much more tolerant of slop than I thought when I wrote this book. Some of that is bad. I think it’s one of the things I would have written differently.

Without the pessimism, I don’t think you’d get a much better outcome. The pessimism, in a way, is supported by the consumers because that gives them a rationale for often doing the slop and not trying to get into atonal music. Maybe that is in some way efficient, even if it’s not artistically entirely correct.

TABARROK: One of the sentences I didn’t understand relates to this. It’s an interesting one. “Cultural pessimism insofar as it tries to provide an embracing account of modernity’s failures serves as a competitor to myth and magic.” 

COWEN: Well, here’s what I think I might have meant. Cultural pessimism is a story about the modern world. It’s a story that people can run with. Religion is a story. Myths are stories. Belief in magic is pretty common. The notion that some kind of mini or full apocalypse is upon us, and Peter Thiel still talks about this, it’s in the mix and it’s not ever going away. It is this intellectual competitor.

If you’re going to have the Smithian framework with a lot of division of labor and more diversity, you’re going to get a lot more pessimism. You might get better, more informed pessimism, more biting pessimism, more sarcastic pessimism, AI-generated pessimism. Enjoy it. A lot of the pessimists, T. S. Eliot, Jonathan Swift, they are a lot of fun.

TABARROK: You never underestimate the elasticity of supply—

COWEN: Exactly.

TABARROK: —of pessimism.

COWEN: Especially of pessimism.

TABARROK: All right. Well, let’s conclude with this. This is, I think, the most Tyler sentence in the book. Maybe the most Tyler sentence ever. It’s a couple of sentences. We’ll conclude with this. “We now know that women’s quilts stand among the best American artworks of the 19th century and that central African pygmies are among the world’s most talented musicians. In light of such discoveries, should we not upwardly revalue our estimation of the world’s cultural prospects?”

COWEN: Thank you for rereading my book so carefully, Alex.

It’s a shame what’s happened to pygmy culture, largely due to war. It’s become much, much worse, war in the Congo, problems in Cameroon. That’s a tradition that is being destroyed and it’s one of the world’s great traditions. I used to have this dream I would someday go and hear pygmy music in person. It was always a daunting endeavor, but now I think even if I were younger, there’d be no real chance that can happen.

TABARROK: You recently introduced—

COWEN: Rick Rubin.

TABARROK: —Rick Rubin.

COWEN: And he loved it. Yes. Pygmy music is incredible. It’s now freely available, I know, on YouTube. I’ve never checked on Spotify. It’s a lot of vocal hocketing, highly sophisticated. You can’t even really hear it in concert in the West anymore. On the verge of vanishing totally.

TABARROK: I agree with you about the quilts by the way. As you know, I collect the quilts or tapestries from the Asian, mostly Indian, continent. Some of them, they’re equivalent to modern works of art, and totally undervalued, totally underrated. It’s women’s work. You could buy them extremely cheaply, but they’re amazing works of art.

COWEN: It’s weird how undervalued textiles have remained to this day. Everyone knows this and will say it and what a shame it is, oh, we’re not valuing women’s work, whatever, but it continues. If you want to collect something that’s beautiful, the chance that you will find the best buys in textiles is really quite high.

TABARROK: Yes, exactly. It’s one of the things that a collector of modest means can, I think, get top quality work at very low prices brought to us by the market process.

COWEN: It’s a great arbitrage hack to know.

TABARROK: All right. In Praise of Commercial Culture, check it out. It stands up. It’s a great book. I hope you’ve enjoyed our conversation. I know I have. Thank you, Tyler.

COWEN: Thank you, Alex. Thank you, everyone. Bye.

Further reading

An Economic Theory of Avant-Garde and Popular Art, or High and Low Culture