Transition of the mechanism of reputation of painters: from Salon to Market

Salon, Exhibition of Rejected Art, and the emergence of Impressionism

Historically, the Académie des Beaux-Arts dominated French art. Academy controlled both the content and the style. Religious and historical themes and portraits were supported, landscape and still life were not really permitted, while precise brush strokes characterized the style. For centuries, showing at the Salon was a necessary condition for establishing an artist’s reputation and career in Paris.168. A success in the Salon implied the emergence of reputation, both in terms of prestigious jobs (as teaching positions at the Ecole des Beaux-Arts, and awards, as the Legion of Honor, created by Napoleon, and maintained by all French governments. The selection process was led by the Salon’s jury controlled by members of the Academy. As it happens always, selection committees attempts to conserve the status quo. We cannot blame them, it is due to human nature. The reputation of artists depended on the Institution. As Gustave Courbet (1819-1877) famously stated after the refusal of all the paintings he submitted to the Salon of 1847:

It is bias on the part of the gentlemen of the jury: they refuse all those who do not belong to their school, except for one or two, against whom they can no longer fight, such as MM. [monsieurs] Delacroix, Decamps, Diaz, but all those who are not as well known by the public are sent away without a word. That does no bother me in the least, from the point of view of their judgment, but to make a name for oneself one must exhibit, and, unfortunately, that is the only exhibition there is.

The Exhibition of Rejected Art ”Salon des Refusés”) was established in 1863, somewhat as a consolation price, and an alternative pathway to show paintings that have been rejected by the selection committee. This year is refereed as the birth of ”modern art” is 1863 – as Edouard Manet (1832-83) exhibited his – than infamous -painting Le Dejeuner sur l’herbe. (Please, don’t kill me: 1863 is also the year when the Football Association was founded in England. Football means soccer, of course. So, modern art and modern sport were born synchronously.) The breakthrough happened in 1874, when the first Impressionist exhibition was organized. Claude Monet, Edgar Degas, Pierre-Auguste Renoir, Camille Pissarro and Berthe Morisot called themselves the Anonymous Society of Painters, Sculptors, Engravers. The paintings were modern, still lives and portraits as well as landscapes, by adopting small, thin, still visible brush strokes. After 1874 Paul Gauguin and Georges Seurat and other major artists had a different career pathway, they no longer debuted at the Salon. There was a life outside the review of the Salon’s juries!

The emergence of market-driven reputation

Paul Durand-Ruel (1831-1922) has had a reputation for discovering impressionists. As an anecdote tells ”One of his artists came in one day with a young French painter, introducing him and saying, ’This artist will surpass us all’ — and that artist was Claude Monet.”169. He made an innovative (which also means risky) business by buying a huge number of paintings of artists with low reputation. Duran-Ruel’s was also an early adopter of the single artist exhibition, called that time as ”one-man show”. He also established a journal to explain and support what later became not less, than modern art. He was not an art historian, but a businessman, a dealer. His instinct, however, led him to trust and invest to a totally new school of painters. Soon the impressionists had won initial reputations at their independent exhibitions, and Durand-Ruel bought between 1882 and 1884 a large numbers of paintings from Monet, Pissarro, Renoir and Sisley. A new mechanism, the dealer-critic system produced a new social market, and gradually superseded the academic system. Art galleries emerged to became the forum for the modern art to meet its public. The slowly growing reputation of the Impressionists was not sufficient to ensure the artistic and financial success. Durand Ruel made another innovative step: he made the market from local to global, by organizing exhibition in addition to Paris in London, and in New York. In 1886, Durand Ruel produced an exhibition of 289 Impressionist paintings at the American Art Galleries in New York. The American public was fascinated by the paintings of Monet, Renoir and others. Many of the artworks sold became the core of impressionist collections in major American museums. The artistic and financial success obtained by the help of American collectors allowed Durand-Ruel to get out to debt, The reputations of the Impressionists, the first real modernists, quickly became established in the advanced art world. In the early twentieth century the number of ”for profit” art galleries grew large enough to create a genuinely competitive market. The transition from the monopoly of Academy to a market-oriented contemporary art was completed.

Struggle for reputation

7.1 Reputation
7.1.1 From “I don’t give a damn ’bout my reputation” to reputation

It is not necessarily compulsory to start this chapter with a story about the role of reputation in popular culture. However, I let myself be seduced by recent news, and I wrote a preliminary draft about Taylor Swift’s on-going “Reputation” tours. As you may know from the introduction of this book, Natalie Thompson is my copy-editor, and she enthusiastically comments when she disagrees with me. In reading my draft, she wrote: “I think in it’s current formulation it is a bit awkward, but there might be a way to restructure it.” Here is the result:
The importance of reputation in popular culture has been vastly expanded by the
Internet and our ability to broadcast information about our lives on social media platforms to both friends and strangers. We carefully curate the best possible images of ourselves, but we may also be subject to scrutiny and cannot control what others say about us, which may become more important than what we say about ourselves.

The recent popularity of Taylor Swift’s studio album Reputation is a perfect microcosmof both the importance and uncontrollability of our reputations in a digital age. Born out of a spat between the pop star and rapper Kanye West, Reputation addresses the constant negativity that Swift faced from individuals on-line and the ensuing damage to her reputation and attempts to demonstrate that reputations can be falsified and misleading. With lines like, “My reputation’s never been worse, so you must like me for me” and “Ooh, you and me, we got big reputations, and you heard about me. Ooh, I got some big enemies (yeah),” Swift speaks to the distinction between public and private personas that everyone navigates on a daily basis. While Swift’s reputation
as an artist defines her celebrity and is, as a result, fundamentally distinct from the reputations of most individuals, her desire to call attention to the ways in which reputations can be misleading or manipulated, especially on-line, provides a telling example of the difficulties of navigating the subjectivity/objectivity dilemma that we have repeatedly encountered in this text. Swift has also garnered attention in political headlines as the Congressional midterms approach with stories like: Conservatives are turning on Taylor Swift after she endorsed Democrats, and here is a quantified effect: Trump “likes Taylor Swift 25% less” after political post.

When I asked my youngster family friend and former coworker, Judit Szente (who just got a PhD in Climate and Space Science at University of Michigan) about the role of the word “reputation” in these songs, she wrote me back that she prefers Joan Jett’s Bad Reputation from 1981:
I don’t give a damn ’bout my reputation
You’re living in the past it’s a new generation
A girl can do what she wants to do and that’s
What I’m gonna do … 149
While I was somewhat surprised that the concept or reputation plays such an important role in the rock music, it is less surprising that Gloria Origgi, an Italian philosopher working in Paris, raises and answers the questions: What does it mean to have a good reputation? What do we lose when we lose a reputation?150. Our character and our actions shape our reputation, and reputation is a form of currency. Our reputation determines whether or not other people invest in us, buy from us, or give us an award.

Who determines our reputation?

How many friends do you have? Despite what Facebook might suggest, we cannot have a thousand friends. We cannot even have a thousand close acquaintances. The British anthropologist Robin Dunbar has estimated the number of persons with whom we can form stable social relationship: 150, which more precisely means that between hundred and two hundred. When I began my and searched my email inbox to decide whom I could easily ask to follow my website, I was shocked. The number was 149 (well, only sixty of them kindly pushed the follow button). They are the people who know some of my characteristic features and my actions, so my reputation is based on their perception of my activities. But in a broader sense, my reputation is the collective opinion of everybody else, except myself.  As most people know, it takes time to build a reputation. We all know that a single moment is sufficient to destroy a good reputation. As a quote attributed to Warren Buffett says, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” Unfortunately, even malicious gossip is sufficient to smash a reputation. Having a good reputation among friends might help, as they may defend you even without your knowing.
The traditional mechanism for constructing a reputation is hierarchical. First, your reputation emerges in the layer of people closest to you, so among your friends, and propagates through layers of more distant acquaintances to the friends of your friends of your friends, etc. Modern media have produced other mechanisms and enabled the emergence of overnight popularity. One of my recent favorite examples of overnight popularity is Baddie Winkle, a grandma who conquered the hearts of the Internet when her great-granddaughter posted her photo on Instagram. She now has millions of followers.151

Of course, being an overnight sensation does not necessarily imply (positive) reputation. Reputation is social information about the value of a person and their activities. To conduct business, for example, people rely on having a good reputation to communicate their trustworthiness to their clients. It is not enough to be honest; you must also be seen as honest in the eyes of the others. (I don’t want to adopt the cynical perspective by suggesting that because you need to be seen as honest, it is not necessary to be honest).

Struggle for reputation

I am writing this chapter, and reading lyrics of Taylor Swift’s songs.
Should I start the chapter by

Big reputation, big reputation
Ooh, you and me, we got big reputations
Ah, and you heard about me
Ooh, I got some big enemies (yeah)
Big reputation, big reputation
Ooh, you and me would be a big conversation
Ah, and I heard about you (yeah)
Ooh, you like the bad ones, too

(from Endgame)


This ain’t for the best
My reputation’s never been worse, so
You must like me for me…
We can’t make
Any promises now, can we, babe?
But you can make me a drink

(from Delicate)


Ranking countries by credit rating: the objectivity-subjectivity dilemma again II

Critics on ratings based on their subjectivity

It is (not) difficult to believe that rating agencies perform consulting services, and this is an obvious source of potential bias in ratings. (Remember the story of woolf-boolf!) The credit ratings game is played under the condition that their principal source of revenue comes from the firms whose products they are rating.133 CRAs have been accused of biased evaluation and violating principles of objectivity. Generally, CRAs have denied the existence of any conflict of interest. They have stated that rating decisions are not made by individuals, but by committees, and the analysts have not received any compensation based on their ratings. Rating agencies now us mathematical models, the details of which are not fully disclosed. We already know that models are based on human assumptions. Furthermore, the results of any model can be overridden by humans (they might be called a “rating committee,” whose activity are kept secret). To make the rating procedure more transparent, the Dodd-Frank Wall Street Reform and Consumer Protection Act (2010) required CRAs to disclose their methodologies. (Well, it would be nice if they did so.) So we have the question: who should have the last word: the computer or the human?

Objective algorithms versus subjective conflict of interests

What would be the difference between a subjective credit rating and an objective credit rating? We have again the dilemma: what would be the difference between a subjective and an objective credit rating? A subjective credit rating would be one individual’s, or CRA’s, point of view. It would reflect the expertise of a particular analyst and their agency’s proprietary algorithms. An objective credit rating, on the other hand, would be something based on open databases and open source algorithms. If CRAs were really objective, then there wouldn’t be any need for more than one agency, and we wouldn’t have different rating results. CRAs would not make big revenues; anybody could simply use the only ratings agency’s publicly-available, consistent criteria to generate the (objectively existing) ratings.

Unhappy Reactions:From China to Europe

Several years ago, S&P downgraded China’s credit rating, and the finance ministry of the huge country vehemently criticized the validity of both S&P’s procedure and its result. Other developing countries, most importantly India, continuously rebel against the CRAs. India has a battle with Fitch, which has refused to upgrade India’s credit ratings each year since 2006. Since India has recently tried to attract more foreign investment, it is very painful to get a mediocre grade for creditworthiness. Europeans generally feel the Big Three CRAs show bias towards the United States. The US has managed to maintain its AAA rating despite a growing deficit and high levels of public debt. But in August of 2011, S&P downgraded the US’s credit rating to AA+ for the first time ever in history. The other two agencies still assign top credit scores to the U.S., but S&P affirmed the US’s AA+ credit score this year, reflecting the balance between positive and negative factors expected over the next two years.

Should we or should not we?

As debates over the merit of credit ratings abound,they remain a crucial facet of the international financial system. The spirit of this book is in accordance with the evaluation of Sebastian Mallaby from the Council on Foreign Relations:134 The best way to counter the monopolistic power of the Big Three, he argued, is for investors to stop giving their ratings so much weight.

“The reason why the subprime bubble could happen, or the reason why the European sovereign debt crisis can happen is, largely, that very blind investors bought bonds relying on ratings, and [didn’t do] their own homework about what the real credit risk was in the bonds.”

Ranking countries by credit rating: the objectivity-subjectivity dilemma again (Part I)

We already know that individuals get credit scores, while corporations and governments receive credit ratings. This is just the jargon. Governments of countries require ratings to borrow money. Credit ratings also reflect the quality of a country as an investment target, and a county’s credit rating depends on the economic and political state of the actual country. Why do countries need credit ratings?129

          Many countries rely on foreign investors to purchase their debt, and these investors rely heavily on the credit ratings given by the credit rating agencies. The benefits for a country of a good credit rating include being able to access funds from outside their country, and the possession of a good
rating can attract other forms of financing to a country, such as foreign direct investment. For instance, a company looking to open a factory in a particular country may first look at the country’s credit rating to assess its stability before deciding to invest.

 It is well known that the US leads the list of countries ranked according to external debt, followed by the United Kingdom. It is remarkable that Luxembourg has much larger debt per capita than any other countries (6 million per capita). Luxembourg is known as a major financial center, so presumably the country owns large deposits belonging to foreign people.

In principle, the rating process should give an objective and independent assessment. If the procedure were totally objective, it would be sufficient to have only one credit rating agency. But we have three big (Fitch, Moody’s and Standard & Poor), and many smaller, agencies, who might use different databases and (generally private) algorithms, and they therefore produce (slightly) different results,

Capsule history of the three famous credit rating agencies (CRAs)

In 1860, Henry Poor (1812􀀀1905) published History of Railroads and Canals in the United States, an attempt to collect and provide comprehensive information about the financial state of such transportation companies. Standard Statistics started to published ratings of different bonds in 1906, and they merged in 1941 to form Standard and Poor’s Corporation. Their product, the S&P 500, became a stock market index, a measure of economic activity. John Knowles Fitch (1880 􀀀 1943) founded the Fitch Publishing Company in 1913 to provide financial statistics for helping investors’ decision making. In 1924, they introduced the AAA through D rating system that has become the industry standard for bond ratings 130. John Moody (1868 􀀀 1958) and his Company first published “Moody’s Manual” in 1900. Moody’s Investors Service has provided ratings for nearly all of the government bond markets and today is a full-scale rating agency.

There is a Latin phrase that goes: “Quis custodiet ipsos custodes?” It is literally translated as “Who will guard the guards themselves?” A natural question arises: Who rates the credit rating agencies?131 In 1975 nationally (US!) recognized statistical ratings organizations (NRSRO) were created. Investors simply needed more reliable information to help their decision making to allocate their resources, and this demand has led to enormous growth, expansion, and influence of the credit ratings industry. Three decades later, the Credit Rating Agency Reform Act of 2006 allows the main regulatory agency—the Securities and Exchange Commission (SEC)—to regulate internal credit-rating processes. CRAs had a critical role in the financial crisis of 2008, and the details are far beyond the scope of this book. The lesson I learned from Michael Lewis’s bestseller 132 was: “The line between gambling and investing is artificial and thin.”

Pay more in tax and be happier

While there are almost infinitely many ways to rank countries, many readers will agree with me that one of the most important questions to answer is how happy a country is. In 2011, the UN General Assembly initiated a project that sought to measure the happiness of citizens of member countries. But how do we measure the happiness of a country? The measurement is mostly based on a simple task: in each country, a significant number of people are asked: “Please imagine a ladder, with steps numbered from 0 at the bottom to 10 at the top. The top of the ladder represents the best possible life for you and the bottom of the ladder represents the worst possible life for you. On which step of the ladder would you say you personally feel you stand at this time?”

A report issued by the UN in 2017 ranked Norway as the happiest country in the world. (The Reader already knows that the phenomenon of “pecking order” among chickens was discovered in Norway, and the Norewgian Magnus Carlsen has the highest Elo number. The neurobiologists among our readers will also remember that May-Britt Moser and Edvard Moser from Norway were awarded the Nobel Prize in Physiology or Medicine in 2014 for discovering certain types of neurons called grid cells, which are responsible for spatial information processing.) It was remarkable to see the reaction of the Prime Minister Erna Solber: “even if we top this statistic now we must continue to prioritize mental healthcare.” Actually there is no statistically significant difference among the happiest five countries, which each received scores around 7:5: Norway – 7:54; Denmark – 7:52; Iceland – 7:50; Switzerland -7:49 and Finland – 7:47. The Central African Republic had the lowest score at 2:69. In 2018, Finland took the lead, and the United States ranked 18th out of 156 countries surveyed–—down four spots from 2017’s report. In spite of a strong economy, the US ranks quite poorly on social measures such as life expectancy and suicide rates. Major factors possibly contributing to this drop in ranking are the worsening of the opioid crisis, the growing economic inequality, and the decrease in confidence in government. Investment in mental health care is likely to correlate to average happiness. A good proxy for investment in mental healthcare is the number of psychiatrists and psychologists working in mental health care per capita. Based on these figures, average happiness appears to be higher in countries that invest more in mental health care. Like it or not, developed mental health care implies the more frequent use of antidepressants. Increasing antidepressant utilization and decreasing national suicide rates have been reported recently from the happiest country in the world.