The Business of Art
The Economics of Creation- part 1
Money and business are often scary, confusing things, that leave creatives, and people with powerful ideas feeling powerless.
To understand that world, you first need to understand your own place within it.
In 1916 the Dodge brothers, John and Horace, who owned a minority stake in Ford Motor Company, sued Henry Ford, claiming he was depriving them, as investors, of income by pricing his cars too low. Ford had plans to dramatically reinvest most of the money the company was taking in, to increase production while constantly lowering the price to boost sales. It seemed beneficial to the consumer who would be able to buy a car. It seemed beneficial to the workers who would be able to be employed and thus have the money to themselves buy cars.
Ford had plenty of bad ideas in his time, but he was unusually good at long term, holistic economic thinking– a strategy that recognized that any business is part of a larger ecosystem.
Ford had plenty of bad ideas in his time, but he was unusually good at long term, holistic economic thinking– a strategy that recognized that any business is part of a larger ecosystem.
A river can’t simply take water away from the sea and hoard it without eventually depriving itself, down the road. That’s not the way rivers flow anyway. As Ford said around 1928, “If we want the farmer to be our customer, we must find a way to be his customer.” A business the size of Ford Motor Company can’t simply maximize profit and take without giving back. Hoarded resources, like hoarded water, aren’t good for much. Rivers and rain are better than underground reservoirs. To be useful, to be worth their maximum worth, resources have to be constantly moving around.
The Michigan Supreme Court ruled against Ford in that case and established the principle of shareholder primacy– the idea that among all the many people who contribute to make any business function; customers, managers, workers– the only ones that really matter are the people who put up the money.
It’s an idea most of us accept without question today– that investors need to be protected above all other concerns, which is a shame, because it’s an incredibly stupid theory, for everyone involved.
The Michigan Supreme Court ruled against Ford in that case and established the principle of shareholder primacy– the idea that among all the many people who contribute to make any business function; customers, managers, workers– the only ones that really matter are the people who put up the money.
It’s an idea most of us accept without question today– that investors need to be protected above all other concerns, which is a shame, because it’s an incredibly stupid theory, for everyone involved.
But like most stupid, shortsighted, economic theories that benefit the powerful in the short-term, it’s extremely popular.
Common sense ought to disprove it immediately– if you’re running a small farm, you can take some of what you grow as profit, but some needs to be held back for seed for next year. Likewise, you an your workers can work hard, but not 24-7, some time needs to be held back to rest, and since we’re dealing with humans, to enjoy the fruits of your labor, otherwise, what’s the point of working? There are many factors like this, and every one of them has a balance point– a place where both profits this year, and next year, and ten years from now, are maximized. Profits are important sure, but they can never reach their full potential if they’re seen as more important than all the other, more human, less easily quantifiable, parts of any business.
That balance between profit and other factors can work in many ways, but the one way it absolutely *never* works best is to take all your food now, and save nothing for seed, to work your workers til they drop today, and have no-one left tomorrow. What never works best is to prioritize profit above all other factors.
As humans, we don’t ultimately want or need profits.
We want human things, that are rare, and harder to find.
Profits are just a way for us to eventually get to those things.
In our modern economy, these kinds of ideas only “work” because we’ve split all enterprise into multiple parts, so it’s possible to just be the guy who takes the food and eats it, and figuring out how to re-plant next year is someone else’s problem. It’s possible to just be the guy who rests and enjoys the fruits of labor, finding the energy to work more tomorrow is someone else’s problem.
It’s possible in a world like that to just look at the guy taking profits, playing with hoarded resources, and refusing to deal with the problems of where those resources come from tomorrow, and think he must be pretty smart and powerful.
That would be wrong, he is in fact *lucky*, and only in some ways, and only in the short term, but it’s easy to think that way.
That balance between profit and other factors can work in many ways, but the one way it absolutely *never* works best is to take all your food now, and save nothing for seed, to work your workers til they drop today, and have no-one left tomorrow. What never works best is to prioritize profit above all other factors.
As humans, we don’t ultimately want or need profits.
We want human things, that are rare, and harder to find.
Profits are just a way for us to eventually get to those things.
In our modern economy, these kinds of ideas only “work” because we’ve split all enterprise into multiple parts, so it’s possible to just be the guy who takes the food and eats it, and figuring out how to re-plant next year is someone else’s problem. It’s possible to just be the guy who rests and enjoys the fruits of labor, finding the energy to work more tomorrow is someone else’s problem.
It’s possible in a world like that to just look at the guy taking profits, playing with hoarded resources, and refusing to deal with the problems of where those resources come from tomorrow, and think he must be pretty smart and powerful.
That would be wrong, he is in fact *lucky*, and only in some ways, and only in the short term, but it’s easy to think that way.
This isn’t a post about economics though.
I’m only going down this path to make a difficult point for you, as someone who creates things. It’s a tough thing for artists and creatives, entrepreneurs, to understand: money is not special.
Money is not unique.
There are millions and millions of people with money out there, and none of them has money that is any better or worse than anyone else’s, except in their own mind. Money is a kind of power, but it’s like water. You need a source of it to survive. In a world like Ford was advocating for, a place like Michigan, water is everywhere, and always moving. In a poor, desert world like the Dodge’s and their successors today wanted, the world we got, water is horded by a few, and it’s possible for people to hold power over each other by having a cup of water, something that would be laughable in Michigan.
Money is a placeholder. No business person creates or destroys it. No business person is master of anything more than what they personally have in their hand, usually, not even in control of that much.
Money is a placeholder for things that people actually need and value, it is not valuable itself, and any person with money only has the ability to get other things that people value. Scarce things, special things, necessary things for survival. That’s it. That is their only power. They can not *make* food, or antiquities, or special, rare things. They can only ask other people to do it for them.
If one person with money doesn’t like you, you can always find others.
Money is not unique.
There are millions and millions of people with money out there, and none of them has money that is any better or worse than anyone else’s, except in their own mind. Money is a kind of power, but it’s like water. You need a source of it to survive. In a world like Ford was advocating for, a place like Michigan, water is everywhere, and always moving. In a poor, desert world like the Dodge’s and their successors today wanted, the world we got, water is horded by a few, and it’s possible for people to hold power over each other by having a cup of water, something that would be laughable in Michigan.
Money is a placeholder. No business person creates or destroys it. No business person is master of anything more than what they personally have in their hand, usually, not even in control of that much.
Money is a placeholder for things that people actually need and value, it is not valuable itself, and any person with money only has the ability to get other things that people value. Scarce things, special things, necessary things for survival. That’s it. That is their only power. They can not *make* food, or antiquities, or special, rare things. They can only ask other people to do it for them.
If one person with money doesn’t like you, you can always find others.
Easily.
Money is neither rare, nor scarce, nor special. It’s just a placeholder for more valuable things.
Here’s why this matters:
As a creative, as an entrepreneur, you have the power to make special, rare, valuable things out of thin air.
You are the rare thing. You are the valuable commodity. You are the thing of value that money is just an empty symbol for. You give meaning, both to the money itself, and to the *lives* of the people who hold it. You create meaning that they absolutely *can not* create or acquire without you. They need you. Not the other way around.
Act like it.
Be worthy of it.
Here’s why this matters:
As a creative, as an entrepreneur, you have the power to make special, rare, valuable things out of thin air.
You are the rare thing. You are the valuable commodity. You are the thing of value that money is just an empty symbol for. You give meaning, both to the money itself, and to the *lives* of the people who hold it. You create meaning that they absolutely *can not* create or acquire without you. They need you. Not the other way around.
Act like it.
Be worthy of it.
Can do.
The importance for Creatives in selling out, adapting, and actually doing things.
I’ve been throwing myself into higher-end 3D modeling and printing again for the last two weeks to try out a couple side-business ideas that look promising.
In the small business that is my sculpture studio, my apprentices dues basically cover our overhead, studio rent etc. It’s a solid basic business model, but it means I need sales or commissions for large, public sculptures to have any income for, you know, food and stuff.
The commission side of the business is doing very well actually, but it is moving insanely, infuriatingly slowly right now, and I may not get to start physical work on the contracts I’m working on now for a couple months yet. Thus I will not be paid anything for a few months to come.
So the reasonable response to solving that problem, of short term income, is to start a third, entirely new small business! Am I right?
Actually, I am right.
Actually, I am right.
This kind of thing happens constantly in a creative professional’s life, and there’s only one good response to it.
It’s something I learned right at the beginning of my career making a living as an artist– the correct answer to every question involving a paying job or possible paying job is “Yep, I can do that.”
Friend wants to know if you can make a logo? Yep, you can do that. Do book layout? Yep, can do that. Make Halloween masks? No problem. Go work for the circus? Cool. Work as a movie extra? Uh huh. Higher pay if you can ride a horse? Sure, I can ride a horse, just give me a few hours to make a new friend who also owns a horse…
There are limits to this obviously. Complex skills require time and energy to acquire, and you don’t want to do things professionally that you’re incompetent at. So many creatives fail to make a living though because they’re really good at writing poems about the rain, and want to find a job doing exactly that, and that job has never existed.
But if you can write a great poem about the rain, you can also write really good ad copy for shower heads, or a good song about the rain fallin’ down. And you can sell those things, and get paid for practicing writing, instead of for working at Arby’s. Which is totally fine, if that’s your calling. But if you’re a poet, it’s probably not the job you’re hoping to spend your precious and limited time doing.
Vonnegut wrote ads for G.E.
Wedding gigs for your band pay just as much as gigs at cool clubs. More, probably.
You get to spend your time honing your skills at either one.
Vonnegut wrote ads for G.E.
Wedding gigs for your band pay just as much as gigs at cool clubs. More, probably.
You get to spend your time honing your skills at either one.
Sell out kids.
Sell out early. Sell out enthusiastically. Sell out to anyone who can pay. Figure out how to make it work after.
People will try to convince you that it’s more respectable to have a spouse or parents who support you financially, or to starve, in order to remain “pure” in your art. I have always had more respect for creatives who live more like gunslingers, feet in the dirt, out in the world, with just their horse and gun, taking each new day and each new challenge as it comes. Because if you want to really be *in* the world, what else can you do? That’s the life.
People will try to convince you that it’s more respectable to have a spouse or parents who support you financially, or to starve, in order to remain “pure” in your art. I have always had more respect for creatives who live more like gunslingers, feet in the dirt, out in the world, with just their horse and gun, taking each new day and each new challenge as it comes. Because if you want to really be *in* the world, what else can you do? That’s the life.
The ones who will criticize you for selling out all have trust funds or professorships. Someone else feeds them, and they haven’t had to fight in the real world for a long, long time.
Don’t tell yourself your ideas won’t work out.
That’s not your job, to tell yourself you failed.
It’s the world’s job to reject you.
And the world only gets that one shot.
After which, you have the option to stand up, clean yourself off, and try again.
Lather, rinse, repeat.
This is the life, for creatives, for entrepreneurs, whoever.
Your job is not to predict things, or to feel safe, or to understand.
Your job is to ignore people with big ideas, and very serious advice and concerns, and to be the one to *actually try things*, and get your answer back from the big bad world, and then adjust, stand up, learn, and continue to move forward.
