Economics and
Heritage Conservation:
Issues and Ideas on Valuing Heritage
Marta de la Torre and Randy Mason,
Getty Conservation Institute, Los Angeles, California
In our presentation today, we will be talking about economics and conservation, a topic that is part of a larger research initiative at the Getty Conservation Institute on the socio-economic contexts of conservation.
The language and logic of economics and business are a strong - and ever stronger - influence on conservation and historic preservation. Few decisions are taken without considering economic questions, and economic valuations influence both what we conserve and how we do it. These reasons alone argue for us to engage economics critically as a way of valuing heritage.
All decisions taken regarding the conservation of the heritage are influenced or determined by considerations on three different fronts:
First is the physical condition of the object. These considerations are the technical issues related to the characteristics and behavior of materials and structural systems, the causes and mechanisms of deterioration, the physical environment, possible interventions, long-term efficacy of treatments, and so on.
Second is the management or legal contexts in which the objects exist and decisions are being taken. The managerial and legal front includes such considerations as availability of resources - funds as well as trained personnel - legal environment, governance structure, land use patterns, and more.
Third, decisions must consider cultural significance and social values, such as the meanings attached to places, buildings or objects, the reasons for conserving these objects and their meaning, and their importance to different stakeholders. Our research deals with this third front.
Consideration of all three areas is critical if decisions are to be effective and have long-term impact.
No one involved in heritage and conservation will question the importance of the physical condition of the objects. In fact, conservators traditionally have seen their responsibilities and skills focused mainly on resolving problems in this area. In the last few decades we have made great strides towards understanding, slowing down, and some times reversing, material deterioration. This research goes on in the laboratory, in studios, and in the field, carried out primarily by scientists and trained conservators. Yet, while we now have "solutions" for many problems, often they are not always applied, nor are they appropriate for all situations. We know that knowledge in this area alone is not sufficient to actually conserve the heritage.
The managerial and legal contexts in which the heritage exists constitute the second major factor that determines whether and when technical solutions are applied. Much attention is being paid these days to the "management" of the heritage, and as a result, we are gaining a better understanding of the effects of different managerial and administrative environments in which conservation happens. Research and progress on this front is the focus of many different fields in addition to conservation specialists including lawyers, policy experts, political scientists, elected officials, and economists.
However, we are encountering difficulties in "managing" the heritage, not only as individual resources, but in making choices about what to conserve and how. We propose that these difficulties stem from the fact we, as a society, have insufficient understanding of the third point mentioned above - questions of values and significance. This shortcoming is; in part, the reason we are increasingly relying on "economic" considerations for our decisions.
Management is a process designed to move smoothly and efficiently towards a specific goal. In economic terms, it assures that the resources available are used efficiently to achieve maximum benefit. Management is not an end in itself; it is the means to achieve an end. Companies, organizations - even our personal lives - are managed to achieve goals, missions, aspirations. Business enterprises are managed to obtain profit - the famous "bottom line." Not-for profit organizations are managed to fulfill their missions. We "manage" our lives to make our aspirations a reality - usually happiness, however that is defined.
But what do we manage for in the field of cultural heritage? What exactly are the goals - the benefit(s) that we seek in the field of cultural heritage? Often we say that our goal is to preserve the heritage, but we also say that conservation is not an end, but the means towards an end - described in terms of cultural confidence, cultural diversity, or a strong sense of place. All these "ends" are in the realm of the third front of social values.
Economics is one sphere of these social values, and one that plays a very important role in today's society. Very often it provides the yardstick used to measure "value" as well as benefits, in society at large and in the cultural sphere as well.
Yet economic benefit is not one of the "ends" often mentioned in the cultural field, although we are hearing with increasing frequency that the conservation of the heritage plays a role in the development of society. More and more we are using economic measurements for the value of the heritage, and furthermore, we are using economic rationales to justify conservation. Consider the frequent use of economic impact studies as elements of conservation planning, and the enormous influence of economic policies on preservation, as well as the strategies of organizations large and small to justify their conservation and preservation work in terms of how much "it pays." Economic thinking about conservation does not need to be resisted out of hand, but it does need to be tailored and reformed so that it helps the field manage heritage to achieve its full set of (cultural) goals.
By focusing narrowly on money, price and financial returns on investment, we lose sight of a whole universe of values that should be important to us, as members of society and as individuals devoted to the conservation of heritage. In a way, we are accepting that "economic benefit" is one of the ends that we are seeking through conservation; and we have started to justify conservation actions by the financial return on the investment.
How have we gotten to this situation? The cultural field does not exist in a vacuum and is influenced by trends in society. The trend to measure things in terms of "monetary" value is much too strong not to have influenced us. Other changes within the cultural conservation field have had a strong impact on how we consider heritage.
Traditionally, our field had been autonomous, inward-looking and comprised of a relatively small group of people led by specialists and experts. It was the specialists who decided what "heritage" was, what was worth conserving for posterity, and how it should be conserved. These specialists were recognized as authorities by those who funded conservation - usually national authorities - and so there was a consensus on the "values that mattered," at least among the groups that had the power to make it happen. In other words, the experts and funders agreed on "the bottom line."
And where are we right now? We have evolved and have become more outward-looking. Our field has expanded by several orders of magnitude. We still have specialists and need them, but many others outside this group are defining and deciding what heritage is, and these newcomers have their own criteria for determining what has cultural significance and what does not. This is the democratization of the heritage field, and it follows the trend of society at large. It is a positive development, of course, but we must recognize that it has changed the field: the old canons have been broken, the certainty of specialists no longer carries the day, and we have much mote complex negotiations when it comes to making decisions about heritage. In short, we have a much a larger and broader field, with many values at play, and more people seeking benefits from the conservation of heritage.
As more and more diverse values comes into play - and they have to be defined, articulated and prioritized - economic values are the ones most universally known and common to the larger group. For better or worse, economic language has become the lingua franca of our society. Economic and business values dominate increasingly in decisions, including many in the field of conservation.
At the same time, it can be said that economists have also joined the expanded cultural conservation field.[1] This is not a bad thing, unless their "values" and valuation methods come to replace all others that exist in this area. What is needed is a balance between economic, cultural and other values - not an a priori decision to accept one type and deny others - and one of our research goals is creating frameworks to making this kind of balanced assessment of values. It is worthwhile looking as some of the principles and concepts that economists use when "assessing value," and see if they match our own understanding of the values of the heritage. Some economic principles appear to be very different from the way things have been considered in the cultural field. While it is impossible in this paper to cover these in detail[2], a few examples might help illustrate the point.
Economists hold the individual, the consumer, to be sovereign and the measure of things. This is in marked contrast to the discourse of the conservation field, which emphasizes the collective nature of heritage.
Closely related to this concept is the assertion that economic analyses do not concern themselves with the tastes or preferences of consumers. Economists assume that consumers know the value of what they are considering and that this knowledge is reflected in the preferences they express and the decisions they make. Economic analyses, economists tell us, are an accurate measure of the values of individuals. In our case, we would need to assume that individuals are aware of all the values that heritage brings not only to them, but to society.
Economics hold that price - expressed in monetary terms - is an accurate surrogate of the "value" that consumers place on given items. Thus, the monetary value that an individual places on something reflects all the benefits - material as well as intangible - that he or she expects to get from it. While most of us in the field of conservation would be uncomfortable with the idea of putting a price on a monument or a historic city, this seems perfectly acceptable in an economic framework.[3]
Finally, one last economic concept that is critical for the cultural field is that of "opportunity cost." Opportunity cost is the theoretical sacrifice that one makes when allocating resources to a specific purpose. It is the value of the foregone alternative, the benefits that would have been derived from an alternative use of those resources. This concept is particularly important because our economic arguments increasingly rely on "impact studies" where we attempt to quantify the economic benefits brought by an investment in culture or conservation. These studies - generally considered unreliable in the economic community - ignore economic benefits could be derived from alternative investments. It is safe to say that in many instances there could be found alternative investment for the resources invested in culture that would bring a higher economic return. If that were to be the case, our so-called economic argument would be destroyed, unless we can show that there are other (non-economic) benefits that justify the investment in culture.
There are many other economic concepts and tools quite relevant to the conservation field. The most compelling and promising among them were developed in the closely related field of environmental conservation. Notions of "public goods," "externalities" and "market failure" all apply to resources and issues of the natural environment. We should exercise caution, though, in our borrowing from the environmental field, and analyze carefully whether or not they are suitable.
It would be wrong to give the impression that there are no points of agreement between economics and conservation fields. Economists emphasize that resources are scarce and choices have to be made. We all accept that. The important questions remaining are the criteria and processes used for allocating those scarce resources. In these subjects we have joint interests. Economists say that their analyses provide the criteria and information for making decisions about what and how to conserve; we believe that in many instances economic analyses do not measure fully the values of the heritage, neither to individuals nor to society, and need to be supplemented with other kinds of information.
It is obvious that we must work hand in hand with economists to find means of expanding their analytical tools to account better for the values of the heritage, and there is also much work to be done on the cultural side. We need to articulate clearly and expound on those values of the heritage that might not be so evident or understood.
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Referring again to the three fronts of conservation/preservation considerations, and the third front of cultural significance, the underlying question that needs addressing is one of values, or more accurately, of valuing processes and practices.
Practically, our research in this area tries to illuminate the question of why we preserve certain things, in certain ways, as a companion to the field's traditional strength in understanding of how we preserve. This relates to the need to think expansively about the definition of conservation and its role in society: looking more deeply into social and cultural values of heritage turns the conservation perspective inside out by focusing on how society values heritage, as opposed to why we experts think heritage is valuable. In order to do this one needs to "collect" research from many different fields, just as in the case of the environmental conservation field.
"How can one put value on heritage? What is culture worth?" are the questions posed directly in the conference announcement. GCI's conservation research has been focusing on just such questions, and what kind of knowledge and concepts and models the conservation field needs to begin answering these questions.
One must begin by recognizing that there is a multiplicity of values behind the notion of "heritage." Cultural heritage is an essentially collective phenomenon; it is essentially multivalent as well. A particular building or site embodies many different types of value: social, political, aesthetic, spiritual, educational, and, of course, economic. The different types of value are well understood on their own, by their corresponding sets of experts. But they are not easily understood in relation to one another - often they are seen as incommensurable, or just plain contradictory. Economic values, for instance, tend to take precedence and crowd out other values. Economists often think in terms of maximizing one value, but this might come at the cost of eliminating other values.
Given this morass of values, how do we assess their relative importance in specific instances? How can we take account of them? How do we make decisions about investments or significance? These sound very much like economic problems.
Traditionally, historic preservation has judged value according to the aesthetic and historiographic canons handed down by scholars, connoisseurs and taste-makers. But these traditional, canonical ways of assessing cultural value have been thrown into question. Given vast changes in the way we think about culture in the last generation, these canons have been seriously challenge.[4] Despite our use of "cultural significance" and the increasing use of more democratic planning processes, we have few good answers to the question of what heritage should be conserved. And in fact we shy away from making any relative judgments (lots of things can be independently "significant") because the main cultural value in the educated, contemporary West is to be relativist. But as values compete, and the amount of heritage piles up, we must ask tough questions and think about making choices about what is and isn't "heritage." (As an alternative, we can be nationalists, and this is certainly the dominant value in lots of places, and leads to enforcing another kind of canon.)
Economists have ready answers to assessing the relative value of things. Economic science suggests that price is a good surrogate for diverse kinds of value, and economists have figured out a number of elegant methodologies for making those calculations, and have even applied them to heritage decisions (contingent valuation studies, willingness-to-pay, hedonic pricing).[5]
Strategically, there is a real danger in this: if one agrees to translate all values of heritage into terms of price, and argue for conservation on the grounds that it is economically rational (that "it pays"), one becomes susceptible to any alternatives that pay better. -Our concern is that the conservation field does not, in turning to economics as a language to talk about preservation, allow the "cultural" rationales for conservation to give way to economic arguments. We have to strengthen the appeals to meaning, memory, spirituality, beauty that are our faith and our roots.
The more pragmatic among us will argue that it does not matter how we justify the conservation of the heritage, as long as it happens - whether the appeal is to the bottom line or beauty or faith doesn't matter in the end. However, we believe that the justifications used for conservation affect not only what we conserve, but also how we conserve it and the impact it has on society.
Our research has focused on this deeply seated conceptual problem vis-à-vis the role of heritage conservation in society: something is lost when cultural values are measured in terms of price, something fundamental to the whole prospect of heritage conservation as part of a healthy society. Thus we are devoting energy and thought to ways of dealing with the assessment of cultural and economic values of heritage together, and the way they shape conservation decisions.
Why do we see this as a conceptual problem? The heritage field has little intellectual capital to invest in new models for assessing cultural and economic values. We have no unified body of theory to draw upon - it exists in many different fields and needs to be gathered and honed. The closest analog is ecological theory and environmental history and the ways they inform environmental conservation. We would benefit greatly by having a social "ecology" of heritage to refer to.
What concepts and models exist (or could be designed) to bring cultural and economic values into a common framework - a common ground - that allows their assessment side-by-side without the a priori devaluation of one side or the other?
GCI held a conference last December, bringing together cultural economists, scholars of culture and conservation/preservation experts to investigate this question. A report on this meeting will be available very shortly. One of the conclusions was that such common ground is out there, and needs to be explored in a multi-disciplinary way.
Among the outcomes of the meeting was a research agenda, in which several concepts were identified as having the potential to bridge the two "sides" of valuing. Foremost among these concepts is sustainability. We are pursuing sustainability and the related notion of cultural capital as a means of connecting conceptual questions with new methodologies for assessment.[6] There are more points of mutual interest between economic and cultural perspectives, and we hope that others will pursue these topics - for instance, economists and conservation professionals both have deep and abiding interest in decision-making processes, but approach them in very different ways.
Sustainability is used in so many senses these days, one hardly knows where to start. Often, one begins with the Brundtland Commission's definition: "Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs."[7] The work of countless organizations and individuals has produced this foundation for sustainability - a different development paradigm that takes into account ecological as well as economic considerations.
Other ideas have been layered on top of this: In economists' terms is sustainability simply an intertemporal resource allocation problem? To what extent does this lead to a different way of making decisions, and recognizing a different set of stakeholders? Does it require a different ethic of stewardship?
How does culture enter into the sustainability question? Are we talking about sustaining culture or sustaining development by using culture? How can the sustainability of a culture be measured? Like biodiversity? Is development sustainable if it responds to existing cultures ("ways of living together") without changing them unduly? How can we measure the impact of development on culture? Is some measure of "cultural comfort" possible? Are the "culture industries" necessarily a more sustainable type of investment? Or less sustainable?
Sustainability holds great promise for helping to transcend the disciplinary, expert "boxes" in which we place ourselves, and bringing back a holistic way of looking at heritage, its many values, and its role in society.[8] This way of seeing heritage is at the root of historic preservation -- it is, in fact, our field's own heritage - and we would do well to regain it.
The notion of cultural capital is one of the conceptual tools we will use to address these questions. It is potentially a way to model culture in a way that is susceptible to economic analysis while preserving the complex, intangible values of heritage as a cultural and social phenomenon.[9]
In our research on the economics of heritage conservation we are working with a number of experts to develop the concepts of sustainability and cultural capital in ways specific to the challenges posed by heritage and conservation in contemporary society. We're presently working on developing and debating the concepts. Then, we will devise a methodology for assessing the multiple values of heritage and apply this methodology by examining several empirical cases, understanding how values have been assessed and might be assessed differently, understanding the decision-making processes at work, and testing ways to gauge the outcomes of conservation decisions (this work is aimed at the scale of buildings, sites and landscape).
Finally, what are the messages we can leave you with given our research on Economics of Heritage to date?
1. Because society is constantly changing, and ever more quickly, we have a responsibility to re-think and re-imagine the work of preservation and conservation. Do we preserve "things"? Or do we preserve timeless, universal values? What kind of values, and whose? This is particularly urgent vis-à-vis the ascendance of economic language and business logic in all parts of society.
2. The conservation/preservation field needs better methodologies and assessments for dealing with the multiple values of heritage. We need this in order to make (collectively) better and more appropriate conservation decisions.
3. To do this, we must understand our work conceptually, and be able to model the roles that we wish heritage and conservation to play in society. Adding to the field's intellectual capital is an important kind of investment, enabling us individually and collectively to keep learning as well as doing.
4. Getting perspective on our field requires us to reach out and work with other disciplines and fields, in particular, the economics field. .
5. The notion of sustainability holds great promise for seeing heritage holistically (not just as specialists) in order to realize its many values and strengthen its role in our societies. As we've gotten more "specialist" and more "expert" and more divided in other ways, we've lost the ability to see culture, nature and economy as the legs of a stool - instead of sticks to beat each other with. Our field's relationship to the economics profession and environmental conservation, for instance, should not consist of simply importing ideas. We should adapt tools in the spirit of sharing concerns and faith, and building an ethos of sustainable landscapes and culture. This is where we can add value.
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[1] Cultural economics is not a new field. The International Association for Cultural Economics has published a The Journal of Cultural Economics since 1973. It has over 180 members and has been organizing specialized meetings and conferences since 1979; its 10th international conference was held last year in Barcelona. Most of its members are economists; very few people in the cultural field are involved in this association or even aware of its existence. There exists also an extensive literature on the subject; see for example Ruth Tows, ed. Cultural Economics: The Arts, the Heritage, and the Media Industries. International Library of Critical Writings in Economics. Cheltenham, UK: Edward Elgar,1997.
[2] See for example: Bruno S. Frey, "The Evaluation of Cultural Heritage: Some Critical Issues"; Michael Hutter,"Economic Perspectives on Cultural Heritage: an Introduction"; and David Throsby, "Seven Questions in the Economics of Cultural Heritage" in Michael Hutter and Ilde Rizzo, eds. Economic Perspectives on Cultural Heritage. New York: St. Martin's Press,1997.
[3] Economics uses concepts such as "public goods" and "externalities" to model such instances of "market failure," in which market pricing mechanisms don't accurately reflect the economic value of a particular good. For more detail on these subjects, see the Getty Conservation Institute's report Economics and Heritage Conservation: Concepts, Values and Agendas for Research,1999.
[4] The World Culture Report (Paris: UNESCO,1998) provides an excellent window on the pressures for cultural change at a global scale; otherwise, the vast literature on post-modern culture and society, in virtually every academic field, speaks to the sea changes in culture at all scales.
[5] The World Bank is applying these methods in some of its cultural development projects. For an overview, see Stefano Pagiola, "Economic Analysis of Investments in Cultural Heritage: Insights from Environmental Economics." Environment Department, World Bank, June 1996.
[6] There are more points of mutual interest between economic and cultural perspectives, and we hope that others will pursue these topics - for instance, economists and conservation professionals both have deep and abiding interest in decision-making processes, but approach them in very different ways.
[7] World Commission on Environment and Development. Our Common Future. Oxford: Oxford University Press, 1987. p.43.
[8] Gilman Foundation president James Allen Smith recently argued that a holistic look at nature and culture must be one of the principles of sustainable development, that nature and culture, seen as contributors to our heritage, are inseparable. He added that economics is inseparable from nature and culture as well. It is not as if we can get more of one by wanting less of another. We have to figure out ways of having all of them together. (Smith's speech is available on the World Bank web site: http://wbIn00l8.worldbank.orglInstitutional/SPRConferences.nsf/Session+Information?OpenView) We also note that the recent push to acknowledge cultural landscapes as the object of heritage conservation is another expression of the effort to reinvigorate conservation with a holistic perspective. See Bernd von Droste, Harald Plachter and Mechtild Rossler, eds. Cultural Landscapes of Universal Value: Components of a Global Strategy. Stuttgart/New York: G. Fischer Verlag/LTNESCO,1995.
[9] For further reading on the subject of cultural capital, see David Throsby, "Cultural Capital" in Journal of Cultural Economics, forthcoming; Pierre Bourdieu, The Field of Cultural Production: Essays on Art and Literature. (Randal Johnson, ed.). New York: Columbia University Press,1993, and "The Forms of Capital" in John Richardson, ed. Handbook of Theory and Research for the Sociology of Education. New York: Greenwood Publishing Group,1986; and Jon Gunnemann, "Capital Ideas: Theology Engages the Economic" in Religion & Values in Public Life (Center for the Study of Values in Public Life, Harvard Divinity School), volume 7, number 1, Fall 1998.