|The Painter on his way to work,
by Vincent van Gogh
Pierre Bourdieu’s work on symbolic value in the field of cultural production is surprisingly useful as a model for explaining the value of financial assets. As my recent posts have argued, financial value depends on symbolic narratives that claim certain qualities for the assets concerned and seek to associate them with particular theories of value. Bourdieu’s account of the art market examines similar processes of attributing value to works of art.
Bourdieu develops this argument in the papers collected in The Field of Cultural Production. His focus here is on the art world (not just fine art but also, for example, literature and theatre), and the ways in which cultural products are valued – not primarily in economic but rather in aesthetic terms, although Bourdieu is always aware of the relation between the two. Nevertheless, much of his argument can be transposed very straightforwardly to the financial sector. The most important parts of his argument for my purposes are encapsulated in one short passage:
Given that works of art exist as symbolic objects only if they are known and recognized, that is, socially instituted as works of art and received by spectators capable of knowing and recognizing them as such, the sociology of art and literature has to take as its object not only the material production but also the symbolic production of the work, i.e. the production of the value of the work or, which amounts to the same thing, of belief in the value of the work. It therefore has to consider as contributing to production not only the direct producers of the work in its materiality (artist, writer, etc.) but also the producers of the meaning and value of the work – critics, publishers, gallery directors and the whole set of agents whose combined efforts produce consumers capable of knowing and recognizing the work of art as such, in particular teachers (but also families, etc) (p. 37).
For Bourdieu, the aesthetic value of a work of art is not determined by any objective quality of the work but by how it is positioned in a symbolic field of cultural appreciation, and this in turn depends on a whole infrastructure of participants in the field of cultural production.
The parallels with the financial sector are clear, and merely by substituting the field-specific words in Bourdieu’s quote we can generate a perceptive account of financial value: financial assets exist as viable investments only if they are known and recognized as such by investors, and so the sociology of financial value must study not only the creation of financial assets but also the symbolic production of their value or, which amounts to the same thing, of belief in their value. It therefore has to consider as contributing to production not only the issuers of securities but also the producers of the meaning and value of the securities – analysts, ratings agencies, bankers and the whole set of agents whose combined efforts produce investors capable of knowing and recognizing financial assets and their value.
This process is achieved primarily through discourse, by which I mean not simply narratives but narratives that come to be widely accepted as authoritative . As Bourdieu says about artistic work “one has to be blind not to see that discourse about a work is not a mere accompaniment, intended to assist its perception and appreciation, but a stage in the production of the work, of its meaning and value” (p. 110), and the same argument applies just as strongly to financial assets.
|Portrait of Pierre Bourdieu
by Thierry Ehrmann
By comparison with some recent scholars of valuation, Bourdieu pays substantial attention to the role of social power and prestige in this process. Cultural entrepreneurs such as art dealers, theatre producers and publishers of literary fiction, but also critics, are constantly engaged in a struggle to establish and maintain a reputation that gives them the authority, framed as a kind of cultural wisdom, to consecrate works as having aesthetic value. Those critics and cultural entrepreneurs who achieve this symbolic authority then collaborate “in the effort of consecration which makes the reputation and, at least in the long term, the monetary value of works” (p. 78). But Bourdieu also recognises that “Among the makers of the work of art, we must finally include the public, which helps to make its value by appropriating it materially (collectors) or symbolically (audiences, readers)” (p. 78). He thus recognises that symbolic value depends not only the creators but also the consumers of discourses – there is no value without an audience, a public, a circle, that accepts these value claims – and indeed that the work of creating artistic value also operates by building these audiences.
Like much of Bourdieu’s work, this formulation would benefit from more recognition of the autonomy of audiences, but with this qualification the argument again applies equally well to financial value. Investment banks, analysts, ratings agencies and the like strive constantly to establish and maintain a reputation that gives them the authority, framed as a kind of financial wisdom, to consecrate securities as having financial value. Those actors who achieve this symbolic authority then collaborate in the effort of consecration that makes the monetary value of financial assets. But this value also depends on having an audience of investors that is capable of understanding their efforts and willing to accept these value claims – and the work of creating financial value also operates by building this audience.
It is not just a happy accident that Bourdieu’s analysis of cultural value fits so closely to the processes that establish value in the financial field. In both cases powerful actors use their symbolic power to attribute value to the objects that sustain and enhance their own position in the field.