Published by EH.NET (January 2005)

F. M. Scherer, Quarter Notes and Bank Notes: The Economics of Music Composition the Eighteenth and Nineteenth Centuries. Princeton, NJ: Princeton University Press, 2004. x + 264 pp. $35 (cloth), ISBN: 0-691-11621-0.

Reviewed for EH.NET by Fran?ois R. Velde, Federal Reserve Bank of Chicago.

Among lovers of classical music, there are those who recognize in the immortal works they so admire the purest manifestation of man’s genius striving to manifest the divine and touch the soul. And then, there are the economists.

F. M. Scherer, Aetna Professor Emeritus in the John F. Kennedy School of Government, Harvard University, and visiting professor at Haverford College, is one of those music-loving economists, who cannot help but see that the music he loves is, after all, an output like many others, and cannot help but ask how this output was produced, by whom, facing what prices and making what trade-offs, in what kind of markets. This book contains his answers, a bold raid by an economist into the subject matter of musicologists, but one that economic historians would be the last to reprove, and should be the first to imitate.

Scherer has much material to work with: composers have been the subject of historical research and biographies, some of it particularly directed at the business aspects of composing and performing (such as the work of Milhous and Hume on Handel’s finances). Scherer has delved deeply into this material, selecting 50 composers whose biographies he read and from which he has selected many enlightening anecdotes.

But quantitative analysis, guided by economic thinking, is the comparative advantage of the economist. The substance of the book, accordingly, consists of the analysis of a data-set constructed by the author.

Scherer took all composers born between 1650 and 1850, listed in the Schwann Opus Fall 1996 catalogue of recorded music, and whom he was able to match with biographical entries in the New Grove. The Schwann catalogue provided both the sample selection tool and the measure of musical output (the length of listings); the Grove and additional documentation provided personal characteristics (dates and location of birth and death, type and level of education and training, years spent in various locations, type and duration of employment).

The obvious weakness of the data-set appears both in the selection of composers and the in measure of output. The choice of composers reflects the availability to (and tastes of) North American music lovers of the last half-century. Moreover, musical “output” measures the number of recordings, not the number of recorded works, let alone the number of works written. Scherer wants to interpret this as output weighted by quality, or at least durability. This interpretation assigns a measure of reliability to the tastes reflected in the 1996 catalog. The same exercise today (albeit not with the Schwann, which disappeared several years ago) could well yield a quite different sample, because of the “early music” revival and rising interest in hitherto neglected composers. Scherer mentions that only three recordings of Salieri’s operas were listed in Schwann in 1996: since then, Salieri’s operatic “output” has tripled (and, with three dozen unrecorded operas, it has room to grow)!

Not only does the author fully acknowledge this weakness, he constantly reminds the reader of it, when appropriate. And I would not be overly concerned about the bias in the measure of output, since the analysis rests mostly on the numbers of composers in various categories, rather than their output (regressions with this output on the left-hand side don’t tend to yield significant results). But the selection bias itself is worrisome, particularly in opera, where the phenomenally prolific composers of the eighteenth century leave barely a trace in recordings today, for obvious reasons of costs.

Be that as it may, Scherer proceeds to make full use of the sample he has painstakingly constructed, and does so, alternating graphical displays and regression analysis (with the estimates consigned in endnotes for general readability), and qualitative evidence taken from the biographies of the composers. Some anecdotes might already be familiar from recording liner notes, but the vast and rich array assembled here, if it does not prove or disprove the kinds of hypotheses economists test, nevertheless gives texture and context, a good feel for the reality of composers’ working lives.

After a good general overview of the historical and economic background and a description of the music-producing sector, Scherer asks the questions that naturally come to mind, on origins and backgrounds, education and training, the nature of careers and employment, geographic mobility, the trade-offs faced, the rewards that could be expected, and the degree of financial success that could be hoped for. An additional chapter looks into more detail at the economics of music publishing.

Among the interesting findings of chapters 3, 5, and 6, Scherer shows that the transition from long-term employment relationships to market-oriented activity was much more gradual than is frequently asserted. While support from nobility and church collapsed after 1800, composers had already largely begun to shift toward freelance composing and performing in the eighteenth century (comparing employment within Germany between merchant cities and court-dominated principalities confirms this). In the geography of music, Austria (modern-day borders) overwhelmingly dominates the eighteenth century, both in producing and in employing composers (the concern about selection bias returns here). Thus, Scherer does not find support for the hypothesis that political fragmentation in Germany led to increased demand for music from princelings competing to decorate their courts. Also, poorer nations tended to be exporters of musical talent. This is perhaps less surprising after Scherer shows that the type of training did not seem to matter much in what was still a craft, hence poorer nations were not at a particular disadvantage in accumulating this type of human capital. Interestingly, the mobility of composers dropped very sharply in the nineteenth century, because improved transportation and communication made it easier not to move (change residence) in order to make a living.

Chapter 4, on the financial rewards and successes of composers, has little in the way of concrete results, although Scherer is able to document a very skewed distribution of rewards for musicians (being mindful again of the selection bias: for those musicians whose music we like enough to track down their probate inventories). But focusing on the income derived from publishing, which is done in the final chapter, proves fruitful. Many facts are gathered about the technology and the costs of publishing music, and the evolution of copyright, whose impact on the number of composers is examined. Scherer also looks at the fees paid by publishers to Schumann and Beethoven for their works, and measures how the fees per work rose with cumulated output (presumably a reputation effect).

In the conclusion chapter, Scherer indulges in further speculation about which system (court/church employment versus freelance) produced better music. Modern debates over government subsidies for the arts might find useful elements here, if the bias did not interpose itself once more. The best Scherer could do with his data is to make a statement about which system was better able to produce music for the listeners two hundred years hence, not necessarily the relevant question for today’s taxpayer. The concluding chapter also argues that a turning point in the 1920s (identified as the emergence of radio and recordings, and documented by the collapse of piano sales) led to a bifurcation between “serious” music and mass-market, the former contracting Baumol’s cost disease and now requiring permanent transfusions of money to survive. These considerations are a little hasty, as it is far from clear that the turning point is correctly identified, and it is performance of old works, rather than the composition of new works, that suffers from the cost disease. The interesting question is: Why have we invented this concept of “classical” music, i.e., music which by definition becomes more expensive to perform? In most of the period that Scherer studies, music died with its composer (if not before), and neither court nor church subsidized the performance of centuries-old music (Allegri’s Miserere notwithstanding).

If the book’s only merit were to raise such questions, that would be praise enough. But this book, designed to be accessible, deserves to be read widely and foremost by his music-loving colleagues in the economics profession. Even if Scherer has already done much of what can be done with the material already gathered by musicologists, there are still open questions (the economics of performing is largely untouched). And this is, of course, not a flaw but an invitation to follow in his footsteps.

Fran?ois R. Velde, Federal Reserve Bank of Chicago, is co-author of The Big Problem of Small Change (Princeton University Press, 2002), and a music-lover