We watched “My Kid Could Paint That”:http://www.netflix.com/Movie/My_Kid_Could_Paint_That/70059388?trkid=226870 last night, a documentary about “Marla Olmstead”:http://www.marlaolmstead.com/, a 4-year-old girl (now 7), who paints abstract art that turns out to be very good. It’s a good documentary but it’s consumed by the argument about whether or not she’s a fraud – some believe her father helps her after “60 Minutes did a story on her”:http://www.cbsnews.com/stories/2005/02/22/60II/main675522.shtml.
You could argue about “what is art”, whether all abstract art is a fraud and what the difference is between being coached by a father or an art teacher. But what I think is interesting about it is that people who think she’s a fraud always complain that her paintings are too pricey. If she was giving them away for free, no one would argue about whether she’s a fraud or not. The people who believe that the price is too high for her paintings are the types of people that believe prices can be set objectively by “price experts” (usually themselves, of course). The beauty of prices in a free market is that they are set by the people in the market (supply and demand), but everyone seems to think that they can determine for everyone what something “should cost”.
No one is wrong about the price of anything because prices are subjective and they are subjective because different people have different needs and wants. $4 for a liter of bottled water seems really expensive to me right now, but if I were dying of thirst in the desert, someone could charge me a lot more than $4 for that same bottle of water and I’d pay it. I happily pay $8 for a 4-pack of my favorite stout beer, most people think that’s overpriced. Lots of people spend $4 for lattes and think that’s a fair price, I think it’s too much. I’m not stupid about beer prices and smart about latte prices, I’m smart about what I like and what I don’t like. So is everyone else.
The only reason prices for things in stores today are the same for everyone is because it’s easier to average out the price than it is to charge each person for how much they value the thing. If you find something in a store that seems like a low price, you buy it. But someone else may think the same price is too high, so they don’t buy it. It all averages out to the price on the sticker. People get fooled by that and assume that prices are set by experts.
Who cares if Marla’s paintings are made by a 4-year-old and who cares if her father coaches her or not? If you like it, it’s valuable, if not, it’s not. If you like it enough, the price is fair.