Wed Jun 11, 2003

Markets and Cultural Diversity

The economist Tyler Cowen has just joined the Volokh Conspiracy. As it happens, I’ve just finished reading his book Creative Destruction, which is about the relationship between globalization and markets for cultural goods like books, music, movies and food. In particular, Cowen wants to defend the idea that trade across cultures is, on balance, a good thing for everyone. It improves diversity, encourages innovation and widens choice.

There is a downside, in that the mass market for cultural goods may tend towards homogeneity. But that’s just another way of saying that people are paying to read or watch what they like. In general, Cowen thinks, “there is no reason to expect that cross-cultural exchange lowers the quality of customer taste, all things considered.” The apparent homogenization of global cultures is really a by-product of increasing choice at the individual level. Cowen rediscovers a distinction that originates with Georg Simmel. In his essay “Group Expansion and the Development of Individuality,” Simmel points out that as a society differentiates, individuals become more and more different from one another. The advancing division of labor creates more roles for people to occupy and more social circles for them to belong to. The result is an increasing heterogeneity of individual personalities and tastes. But as differences within societies increase, differences between societies diminish. The same division of labor is reproduced inside each, creating more room for individual identities but diminishing the distinctiveness of whole cultures. There is some irony here. As more people become cosmopolitan in their tastes—sociologists call them cultural omnivores61:5%3C900:CHTFST%3E2.0.CO;2-Y) [jstor], and their emergence is one of the most striking changes in taste over the past forty years—they would rather not have everyone else do the same. If everyone was eclectic in their tastes, the authentic and distinctive bits of culture people produce might get eliminated.

Cowen makes an excellent case for the beneficial role of markets in promoting creativity in culture. There’s nothing like trade to bring new styles, tastes and genres to your hometown, and this exchange promotes artistic experimentation, bricolage and all the rest of it. The book is full of examples of trade leading to borrowing leading to creativity. I read the book on my way to a conference last week on the creative sector, and found myself arguing several of his points about the film industry to skeptical researchers and policymakers from Europe and Latin America.

At the same time, I think Cowen is a bit too sanguine. In the radio industry, the rise of Clear Channel’s marketing of “station clusters” and the increasing role of the Arbitron ratings system has reduced the range of music played in most markets. Fifteen or so years ago about 75% more new songs entered the Top 10 in a given year than do so today. (I have the exact numbers at home: I’ll have to look them up.) Regular drive-time radio is essentially undermining itself in this way, as listeners get increasingly annoyed with the same old crap and artists find more difficult to break into the market. In a post on this topic, Tyler argues that satellite radio increases the range of music you can listen to on the air. It remains to be seen how the market for highly specialized content of this sort will develop. (It’s an open question. I’m not arguing he’s necessarily wrong about it.)

The main thing that bothered me about Creative Destruction was its complete avoidance of the question of Intellectual Property (IP) rights. The word “copyright” doesn’t even appear in the index. This is odd, given that the main argument is that cross-cultural exchange enhances innovation and creativity, as people borrow something from elsewhere, incorporate into their own practice and go on to produce something new and interesting. The expansion of global IP regimes over the past twenty years is directly relevant to this process. Another book I’m reading at the moment, Information Feudalism, by Peter Drahos and John Braithwaite, gives an altogether more pessimistic account of the globalization of IP rights. Drahos and Braithwaite trace the emergence of the Word Trade Organization’s IP regime, arguing that it was put together by a quite small contingent of business interests and US trade representatives in the ‘80s and ‘90s. Both books put captialist markets and the process of innovation center stage. Cowen sees markets as the mechanism by which bits of culture can be exchanged, shared and further developed around the globe. In sharp contrast, Drahos and Braithwaite argue that the (comparatively new) legal and institutional framework that underpins these markets is mainly good for producing corporate “infogopolies.” The fact that the copyright and patent industries are justified by appeal to the the “romantic image of the author” (in Martha Woodmansee’s phrase) only makes the reality more bitter.

The key issue, then, is whether actually-existing markets are likely to continue facilitating the sort of beneficial outcomes that Cowen describes, or whether the new world of IP is suffocating the creativity it is supposed to encourage. Cowen’s book gives many examples of the benefits of the free exchange of cultural goods. I wonder how many of them would be possible in a world where, for instance, the music industry is reduced to essentially viewing its own customers as criminals.