Critics from both the left and the right bemoan the rise of celebrity in general, and of commercial celebrity in particular. They argue that as celebrities replace heroes, our culture is degraded, and our morals corrupted. Many argue that this trend is exacerbated when fame is put on the market. The need to produce for profit leads producers to pander to the lowest common denominator. The result is often celebrities who provide poor role models.
While they seldom come out and say so, the critics are implicitly making economic arguments. When they claim that markets do not produce the celebrities that are best for society as a whole, they are claiming that the market for celebrities fails. In my recent book, What Price Fame? I argue that the critics rely on bad economics when they attack fame. They are certainly correct to note that market outcomes are not perfect. They are wrong, however, to take the unattainable—what would happen an idealized world—as their standard. Doing so obscures the many ways in which having celebrities, and having markets choose those celebrities, improves life in our imperfect world.
If we view the matter in terms of costs and benefits, we see that the critics focus on costs—what we give up—but ignore benefits—what we get.
How does fame increase diversity?
Fame allows us to have more stars for less money because praise and attention are relatively cheap. Fame can be thought of as a "cheap date" for the fans which allows us to draw forth a wider array of diverse and creative performances. Celebrity thus allows us to get more good performances.
That people are motivated by a desire for fame is not a new insight. Many of the classic authors recognized the craving for approval. Thus, Adam Smith viewed the search for approval as "the end of half the labours of human life." David Hume wrote of the "love of fame; which rules, with such uncontrolled authority, in all generous minds, and is often the grand object of all their designs and undertakings." Who among us does not enjoy being appreciated for the work we do?
These fame incentives have been strengthened and intensified in this century by the development of the technologies of mass communication. Modern notions of fame and celebrity date from the 1920s and 1930s, when radio, recording, and motion pictures gave stars greater ability to project their personae to wide audiences. Today, television, the compact disc, and the Internet make this projection even easier. These technologies themselves are in large part the products of markets; they were invented and perfected by entrepreneurs who were responding to market forces.
Fame is not just a way to get more for less. The famous themselves provide us with a host of services that are often overlooked. Television personalities, musicians, movie stars, fashion models, athletes, and other entertainers have become shared experiences, which we can use in various ways. Strangers and casual acquaintances use celebrities, like the weather, as a comfortable and easy way to break the ice in conversations. Friends use celebrities as topics of conversation, arguing about the merits of their favorite stars or sharing their favorite moments from a movie or television program. Because they are shared, celebrities can serve as a point of reference in commercial transactions as well. Because everyone knows what Dorothy Hamill or Princess Di looks like, they can be models for haircuts. These well-known images serve as what economists call focal points: they lower the costs of trading and communication.
Stars also contribute directly to the efficient functioning of markets. For example, Tiger Woods is too busy playing golf to learn much about most of the products he endorses. But he (and his agent) have every incentive to maintain his reputation by projecting the right image and not disappointing his fans. Thus, Woods's agent makes sure that he endorses only "the right" products. Fans thus know they can expect a product of a certain kind when they see Woods's endorsement. The company, Woods, and the fans are all better off, as a result of this voluntary exchange.
The world of fame does more than lubricate the market mechanism. It also satisfies the expressive dimension of the human psyche. Stars provide a realm in which arbitrary and subjective prejudices are given free reign to rule opinion. In many cases fans take pleasure in judging stars by especially harsh standards. As Jonathan Swift noted, "Censure is the Tax a Man pays to the Publick for being eminent." Fame helps us let off steam in peaceful fashion. In economic terms, markets do more than provide us with material goods and services; markets also supply vehicles for emotional and aesthetic expression.
Finally, a world with fame is likely to be a diverse world, because fame produces many kinds of renown, not just the celebrity of Britney Spears or Eddie Murphy. More than ever before, we have minority niche audiences who know that Antoine Oleyant is the best Haitian voodoo flag maker, that Sergiu Celibadache was the leading Rumanian conductor, and that Pale Fire is the book to read by Nabokov. The Internet, a highly efficient fame-generating technology, will only extend this trend further.
The world of fame is not the grim "winner-take-all" world portrayed by its critics. Instead, publicity brings us a continual supply of new market niches and greater freedom of choice. A quick trip to a contemporary book or music superstore will confirm this truth. The fundamental result of the market is not to create only a few big winners, such as Tiger Woods or Michael Jordan, but rather to increase the number of winners on both sides of the market.
Since Plato, many critics have been especially worried about the commercial production of fame. They argue that a market economy separates fame from merit. That is, the stars we choose are not always the most deserving achievers, or the individuals of highest personal or moral worth. Thus, the critics argue that we would be better off using some other method of deciding who is to be famous.
The separation of fame and merit is inevitable in a world of commercial fame. Some kinds of stars are more profitable to market than others and thus they achieve more fame, even relative to underlying fan interest. It is easier to make money by promoting Madonna—who produces saleable, reproducible outputs like movies and musical CDs—than by promoting Mother Teresa. Suppliers, advertisers, and distributors market the stars who yield the most profit.
The critics, however, err by assuming that a separation between fame and merit is necessarily bad. Again, they are looking at the costs without an appreciation of the corresponding benefits. In this case, they overlook the greater quantity and diversity of stars that are only available when we separate fame and merit.
The production of large scale renown requires the cooperation of a wide range of people, such as advertisers, promoters, and producers. These people cooperate in fame production only because they can make money in the process. If the process isn't profitable, they won't do their jobs. The oversimplifications of modern fame are the price we pay for the mobilization of star efforts at low cost. Commercial promotions do not always give fans what they want most in absolute terms, but they do give fans the stars they are willing to pay for.
Because there is money to be made from giving fans what they want, commercial producers spend a great deal of time trying to find out what fans want. These commercial forces often do a better job of matching performers and audience than would "objective" critics with no financial interest at stake.
Contrary to what a reading of the critics might indicate, fans are not powerless against the biases of commercial culture. They have a variety of ways of escaping the market. Rather than listening to commercial advertisements, or mainstream Top 40, fans can turn to friends. And, in most cities, they can turn to a variety of niche marketers, from college radio stations to Internet chat groups. Of course, in doing so, they have to pay more for information than they would if they simply relied on mainstream media. After all, commercial promotion has influence only because it provides useful services, relative to the alternatives.
Critics also ignore the reasons that fans might have for preferring purely commercial sales pitches. Promotional campaigns signal potentially popular products and stars. Many teenagers correctly assume that a heavily advertised CD is "hot," and therefore of potential interest. Many of us sample the CDs placed on the listening station in modern superstores, even though we know that the space has been sold. Few critics of commercial culture hesitate to check out the "New Books" table at Borders or Barnes and Noble, although publishers pay to have their books put on it. Each consumer can choose the level of commercial influence which suits him or her best.
If the biases of commercial promoters are too strong, fans can pay for the promoters themselves, through direct subscription. When fans pay the entire bill, they exercise a dominant influence over their sources of information and evaluation. In almost Marxian fashion, subscription finance allows fans to construct their culture as a conscious project, employing critics to assist them in this endeavor. In these cases critics try to satisfy fans—their funders—rather than serving outside commercial interests such as distributors, advertisers, and promoters.
Subscription finance of this kind is common. When people go to a movie theater, they pay more knowing that the movie won't be interrupted every 10 minutes for a commercial break. In similar fashion, few consumers are keen to have their telephone conversations interrupted by advertisements (this service has been offered in Europe), although the price of such a phone call would be lower. The point is clear: in a market economy consumers can (and do) reject commercial promotions that do not suit their interests.
My book on fame is funded solely by the purchase price, rather than by advertisements. Presumably my buyers are willing to pay a higher price, to make sure that promoters and advertisers do not exert influence over the content or require excessive simplification of the arguments. People magazine, funded largely by advertisements, also has much to say about fame, and sells for a lower price, but its mode of presentation would not suit many of my readers. Of course most people prefer People, although some readers may buy both, again as it suits their needs.
Media guru Marshall McLuhan pointed out that a medium shapes its messages, but he neglected to emphasize the role of consumers in choosing the medium and in choosing which kind of shaping will occur. Competition does not eliminate the biases of fame-producing media, but it does allow fans to select which biases they will encounter and therefore to minimize the costs of those biases.
To sum up, consumers have created the world of commercial fame to serve their own ends, which in fact it does remarkably well. A close look at the economics shows that the modern world of fame has hidden and subtle benefits for us all.