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The currency of the intangible

In a period when everything is “economized”, i.e. the aim is to associate a price with each product and service, the question is: what is the currency of the intangible?

As a gallery owner I am well trained to know what the factors in identifying the price for an artwork are: The size of the object (painting or sculpture), its proportional and color esthetics, the personal competence and history of the artist, his/her standing in the community of art connoisseurs, the sequence of participation in exhibitions plus the quality of the institutes or galleries, his/her past sales on the art market and to which institutions, and, finally, his/her public recognition, especially in the community of art collectors and by the media.

Already this multiple and incomplete register of criteria makes one aspect clear: although the claim in the professional art market is that the laws of the market count, there is no formula, model or even theory of how art objects can be valued in economic terms. As we all know, art perception and appreciation are subjective, as is the taste of the non-institutional purchaser; it is context sensitive, sometimes even irrational.

The core conclusion of this blog is: there exists no mathematical equation for calculating the value of an object which, by definition, is the materialized expression of an intellectual and/or emotional concept of an ingenious mind.

One of the core businesses of a computer scientist (which I am by education) is to turn realities into algorithms and then software. Before this software is written, the “reality” to be programmed needs to be transformed by design into a model which simulates what the specifier or inventor of the algorithm intends to implement. (Referring to the previous blog contribution from John Favaro on AI, such an algorithm can be of much higher sophistication, i.e. it does not directly translate into “the solution”. AI induces genuine inherent intelligence which, as explained, cannot be analyzed in simple terms).

Any brain & heart product and any process of creating intellectual or art subjects, by definition and by nature, is invisible, intangible, and immaterial. At best it can be conceived through a model representation. The question to raise again is: how can it be valued?

Art objects, like any brainchild, cannot be valued by means of classical ascertainment of price. In the end it is impossible to transform such a value into a real currency.

When we observe how complex “intangible” values of non-formal systems are defined, the currently most common method is that the models representing such systems are constituted by indicators. These models usually are simple, in the sense that the indicator-based system is refined through a hierarchy of criteria, which, for reasons of quantification, are represented as these indicators. (If, instead of such a hierarchical approach, subtler relationships between the indicators are used, we may speak of sophisticated models, adding further dimensions to the simple dimensional structure introduced for our discussion here).

One of the best-known examples of a complex model representing intangible values is the current framework of the UN’s Sustainable Development Goals. Each of the 17 immaterial goals assembled in this relatively abstract framework on average is refined into ten indicators called targets, in total summing up to 169. Thus, we may argue, that the “value” of the intangible UN strategy launched for changing the world for the better is constituted by 169 criteria. The conclusion must be that any intangible value cannot be expressed in one currency, and even less in one monetary amount. Rather, it is valued by a combination of many indicators. The fact that an artwork is negotiated at a certain price is unquestionably an illegitimate reduction, by no means representing its “true” value.


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