Introduction

The basic distinction made in this volume compares “economic value,” expressed in monetary terms, to “cultural value,” reflecting cultural, aesthetic, and artistic significance. This chapter makes a different distinction that is rarely made explicit but that is of central importance to the decision process in cultural policy. On the one hand, “value” is attached to the economic effects of cultural activities: When cultural values are created, economic activity is bolstered. The increase of commercial activities induced is measured by the so-called impact effect. On the other hand, the value of culture is reflected in the increased utility to consumers and nonconsumers of a particular cultural activity. This type of value is measured by “willingness-to-pay studies.” I argue that these two values dominate cultural policy, but they capture totally different aspects and are proffered by different kinds of communities.

People involved in the arts as administrators or entrepreneurs – they are referred to as arts people in this chapter – are fond of impact studies. These studies measure the economic effects of a particular artistic activity such as that of a museum or festival. In contrast, people trained in economics and applying it to the arts – they are referred to as arts economists in this chapter – are fond of willingness-to-pay studies measuring the external effects, that is, those welfare-increasing effects of artistic activities not captured by the market. These preferences are rather surprising. Arts people focus more on the economic effects of the arts than economists do.

Introduction

The Yolngu are an Aboriginal society of a few thousand people who reside on their traditional land in Northeast Arnhem Land in Australia's Northern Territory (see Figure 8.1). My interest as an ethnomusicologist has focused on the public ceremonial songs of the Yolngu community in and around Yirrkala, one of four large Yolngu settlements and currently the home or supply base to about 1,200 Yolngu people. As someone raised in a society where the most prevalent way of regarding music is as mere entertainment or spectacle (or in the case of classical music, as something transcendental, a distinction that nonetheless separates the idea of music from the main business of society), I have been pleasantly shocked to encounter a culture in which most forms of knowledge, including cosmology, law, history, science, and kinship, are fully integrated and embodied within song, and where ceremonial and musical leaders are also the de facto political leaders of the society.

Because of the centrality of songs in traditional Aboriginal societies, the notion of cultural value takes on a particular significance when applied to Aboriginal song performance. The value of song and dance performance to Yolngu people is of critical importance, both because of value ascribed to particular content within performance, and because of the general value that performance has as an important site for the creation and maintenance of sacred knowledge and group relations.

Introduction

Anthropology and economics have very different approaches to the question of value. While economists look for methods of evaluation in transactions on the basis of what is being exchanged, anthropologists have always given attention to the way agents think about value in the whole range of transactions they are involved in, but at another level they look for the value of underlying structures for society. Exchanges are basic to society but anthropology has shown that there are other mechanisms also at work – descent, affinity, memorialization, among others – in organizing collective life. Psychoanalytic, structuralist, semiological, and anthropological interpretive theories have shown how elusive and mysterious questions of value are in different societies. The notion of value in terms of underlying structures of societies is far from the simplistic rendering of this notion as narrow moral rules in current political discussions. It is also much broader than the notion of value as equivalence in economizing exchanges.

It is quite significant that in the contemporary world in which markets have become the dominant organizing principle in liberalized economies, there has been simultaneously the emergence of a multiplicity of cultural movements. In many cases, such movements become visible through resignified rituals or the invention of new ones. What is the value of such rituals for people? Why are Mexican migrants now revitalizing the ritual of the Day of the Dead, which they celebrated back in their villages in Mexico, in their neighborhoods in Chicago; why have highly mobile Caribbean migrants created a new musical culture, Rastafarianism, steeped in Ethiopian history and culture?

Introduction

Like many cultural movements of consequence, what is now readily identified as contemporary Australian Aboriginal art was shaped from its beginnings – more than 30 years ago in the Central Desert of Australia – by unprecedented meetings of agents acting from quite distinct cultural assumptions, necessities, and expectations of the other. Like the continuing interest in traditional and contemporary art from Africa, it has proved exceptional in its intensity, spread, and longevity. Aboriginal art from the remote communities maintains a distinct otherness from the development of Western modernist art. As a cultural product it originates from situations – in material actuality and spiritual inspiration – as distant from the nodes of international contemporary art as can be imagined. Yet it is, at the same time, uncannily familiar to those versed in the protocols of abstract art. In the contemporary conditions of decolonization and globalization, it is an instance of hybridity of artistic exchange that is at once unique and typical of its time.

Value clashes and public controversy have marked every stage of its development as an art movement. Yet, despite the racism that laces Australian life like an insidious poison, there is a widespread acceptance of this art by the broader community as a proud and positive contribution to the national culture. Notwithstanding the regularly expressed doubts of white professionals, nothing seems to be able to halt its accelerating powers of aesthetic self-replenishment or the growth of a deep and diverse market for its products.

Introduction

By 1521, when being feted by admiring colleagues on his journey through the Netherlands, Albrecht Dürer had good cause to think of himself as a bit of a superstar in the European art world. A century later, when Peter Paul Rubens was bargaining with a potential client in England over what would be an immensely lucrative deal for him, he had even better reason to be secure in his status as one of Europe's greatest cultural figures. The hundred years that separate these famed artists and their business transactions is a century during which, by most accounts, paintings and prints – the art forms produced by these two – were consolidated in the status of being products for a market. Although an urban art market in which pictures were treated as ordinary commodities can certainly be found earlier than this, it is really in the course of the sixteenth century that the market grows to such proportions that it affects the very status of art itself.

The economic value of a work of art is dependent on a variety of factors, only one of which may be what might be described as the intrinsic aesthetic interest or value of the work. Through comparing and contrasting two very different works of art from widely different times within the Western tradition of art, I aim in this chapter to distinguish this intrinsic value in terms of each work's distinctive acuity to its own times.

Taste, judgment, and culture

In the work published under the title Lectures and Conversations on Aesthetics, Psychology and Religious Belief, Ludwig Wittgenstein is reported as saying: “The words we call expressions of aesthetic judgment play a very complicated role, but a very definite role, in what we call a culture of a period. To describe their use or to describe what you mean by a cultured taste, you have to describe a culture” (Wittgenstein 1970: Section 25, p. 8). In speaking of a cultured taste here, Wittgenstein is drawing attention to the fact that an aesthetic judgment is in some way informed or even made intelligible by the culture within which the judgment is made. But before asking what this can mean, I want first to focus briefly on the other word Wittgenstein has used here – for he speaks of a cultured taste.

I have so far treated each country's executive as the sole decision maker for trade policy. In the theory, a single actor chooses trade policy to maximize political support. This theory is parsimonious and potentially powerful, but clearly incomplete. In particular, this approach leaves out legislatures, which normally hold or share responsibility for a country's autonomous tariff. As we saw in Chapter 8, high autonomous tariffs make trade cooperation less likely, whereas low autonomous tariffs have the reverse effect. Because of their autonomous tariff-setting authority it is important to examine the legislature's role in trade cooperation.

A country's legislature may also have the ability to veto trade treaties. When treaties require legislative ratification, executives may find it harder to liberalize tariffs through international agreement. A growing literature argues that such domestic ratification institutions, combined with differences between executive and legislative preferences, explain both the tariffs chosen by the legislature and the trade agreements negotiated by the executive (Lohmann and O'Halloran 1994; Mansfield et al. 2000, 2002a; Milner 1997a; Milner and Rosendorff 1996, 1997; but Pahre 2001a).

This chapter first examines the role of ratification institutions indirectly, by looking at the set of treaties rejected by domestic legislatures. This analysis shows that legislatures mattered for a small number of countries.

This book has been built on a theoretical scaffolding, with each chapter presenting both a piece of the theory and a test of that part. The flow of the argument has been theoretical and not driven by substantive puzzles as much as by a desire for theoretical elaboration. The central task has been a desire to explain variation between cooperation and noncooperation, for which I used a bottom-up theory of trade policy. Because the central result is that low-tariff countries are more likely to cooperate than high-tariff countries, examining the domestic political reasons for high tariffs has played an important role in the analysis. At the same time, each state's policy conditions the policies of other states, pointing to an analysis of reactions as well as international-level norms such as MFN.

The first half of this chapter summarizes the theoretical claims of the book. Beyond providing a mere summary, I also develop some suggestions for a research agenda on international cooperation. The second half uses this theory to provide a synthetic account of the nineteenth-century trade treaty network, providing an alternative narrative of nineteenth-century trade policy. For those interested in the nineteenth century, it points to greater Germany as central to the regime.

Previous chapters have looked at the characteristics of individual states and at the two-country problem of cooperation. This part moves beyond dyads to look at the international system, especially the norms characterizing that system. I also introduce the concept of a regime, distinguishing it from both norms and behavior.

As in the rest of this book, I make a point of looking at variables that actually vary. This differs from many other theories' treatment of systemic-level characteristics, including norms. For example, Kenneth Waltz's (1979) Theory of International Politics examines only anarchic systems made up of nation-states, so that two of his three variables (the ordering principle and nature of the unit) do not vary; the third variable in Waltz's theory, the distribution of capabilities, does vary. Though differing from Waltz on almost every other dimension, Martha Finnemore's (1996) National Interests in International Society also does not study variation at the systemic level, but explicitly looks only at countries that share a given norm. Representing yet another tradition, Immanuel Wallerstein (1979, 1989) examines an international system that evolves and is internally differentiated, but his conceptual framework also does not allow central features of a world system, such as capitalism itself, to vary.

Part II examined countries' autonomous trade policies. This chapter extends the political-support theory of tariffs to two countries. I consider first how each country affects the other's autonomous policy, that is, the effects of unilateral liberalization or protectionism on others. Then I look to the possibilities of joint action, that is, cooperation.

Most previous theorists have not considered how one country's trade policy affects the policy choices of other countries (but see Coates and Ludema 2001; Ethier 2001; Krishna and Mitra 2005; Wonnacott and Wonnacott 2005). These effects are important. I find that any two countries' trade policies move in opposite directions unless a trade treaty is in effect between them. Each country's unilateral actions affect the other, which leads the second state to compensate domestic groups harmed by the first's policy. This compensation leads to policy change in the opposite direction. In short: liberalization begets protectionism, and protection induces liberalization.

The resulting outcome is both politically and economically inefficient. The potential gains give politicians an incentive to negotiate mutual tariff reductions, acting jointly instead of separately.

States cooperate in order to achieve certain goals better than they could without cooperation. Because the problems of noncooperation make cooperation a more attractive option, my study begins with the main features of an autonomous trade policy. I review four major dimensions along which trade policy may vary. Each dimension has received substantial attention in the existing literature, and each is interesting for some purposes. I am interested mostly in cross-national variation because cooperation involves two or more countries that may differ from one another. This stands in contrast to earlier work emphasizing variation in a single nation's tariffs from one good to another.

These first sections shows how various theories explain particular types of variation, clarifying which parts of it relate to the problem of variation in trade cooperation. Existing theories, especially in endogenous tariff theory (ETT), have provided an impressive explanation of variation in tariffs along some dimensions. For example, differences in industrial concentration or labor intensity explain variation in tariffs from one sector to the next. However, these variables do not explain international cooperation because they do not address cross-national variation in tariffs. However, clarifying the problem of variation in trade cooperation depends on explaining cross-national variation. The identities of countries, each with particular combinations of economic and political attributes (“grain-importing democracy”), shape cooperation.

The second half of this chapter builds on this analytical clarification by explicating different ways in which we can observe and measure trade policy.

Chapter 7 showed that tariff treaties are always politically rational. However, they are not inevitable. Countries sometimes fail to cooperate even when they would gain from it. This suggests that we need a more probabilistic model of cooperation, in which cooperation and noncooperation each occur some of the time. In such a model the main theoretical task is to determine the conditions that make cooperation more or less likely.

To see what makes tariff treaties more or less likely, this chapter examines the stability condition indicating whether or not a given treaty can be enforced. States will not cooperate when the long-term rewards of cooperation are less important than the short-term temptation to cheat. Then I examine the comparative statics of this equation to find the conditions that make states more likely to cooperate. Doing so lets me find out how changing economic conditions or political institutions make cooperation more or less likely.

The most important variable affecting this condition is the average tariff. Intuitively, there are two possibilities. Higher tariffs might make tariff treaties more likely because the gains from such a treaty are greater.

The political-support theory in Chapter 3 emphasized how trade policy responds to exogenous change, partially compensating those groups that are harmed. Though it examined some cross-national variation in trade policy, the focus was on intertemporal patterns, especially on economic variables such as the terms of trade.

This chapter and the next examine cross-national differences in political institutions that help explain further variations in the autonomous tariffs of each country. This chapter focuses on the administrative problems of revenue collection, whereas Chapter 5 examines the effects of democracy. The aftermath of the Napoleonic Wars, which produced both fiscal crises and partial democratization as taxpayers demanded greater representation, provides background conditions for the changes that I discuss.

The question of tax collection is important because scholars frequently argue that a state's need for tariff revenue precludes trade liberalization that the government would otherwise pursue. For example, Percy Ashley (1926: 27) argues that Austria could not negotiate tariff reductions with the German Zollverein until its finances were in better order, especially after the expensive lost war of 1859 (see also Matis 1973).