There’s actually a very good and very simple reason why price could equal value in the aggregate and not the individual case. The aggregate value is basically the average value placed by all purchasers. If you were to see one individual placing a very different value on the same thing in the data, a researcher wouldn’t even blink, because it would be an example of statistical variance. All real life data has variance, and it is a fallacy to think that variance makes a theory wrong, just like it’s a fallacy to think a theory holds for all individual participants in the market. The theories explain what happens in expectation, in the average case.

Variance is certainly not ignored by neoclassical economics (though I’m not a huge fan, either). It is actually the basis for diversification in investing. It has been clearly shown (by a whole lot of data) that if you can spread out your bets among a lot of different financial investments with different fundamental risks, the variance of the whole portfolio in aggregate will be greatly reduced. Eugene Fama, a financial economist at the University of Chicago, demonstrated this quite clearly with data, not theory.

And yes, I have almost never paid $50 for a weekend’s entertainment, and the comparison you heard between a weekend and the 8bb fee is both ridiculous and (imho) guaranteed to have come from someone in a privileged economic position. That comparison is as insulting as that old cliche in personal finance articles, “just give up your daily latte and you’ll save thousands a year.”

I’d expand a bit on your response to Devon’s sensible point about market inefficiencies. It’s true that the system we propose introduces inefficiencies vis-a-vis an open voting system (which is, of course, not the usual way of distributing grants). But I would argue that these are necessary to ensure long-run efficiency. Even if you believe that an egalitarian measure of artistic merit (which is the standard implied by democratic funding) is correct, a straight-up voting system would be flawed because artists need time to develop before they are ready to face the market. As we discuss in the 20under40 article, grants are crucial to the incubation of artistic talent; they ensure that the most gifted, rather than the most connected, artists are allowed to create. And at this early stage, experts are better placed than the average consumer to determine which artists are best poised to become great (by whatever standard). I think the guided crowdsourcing model we propose strikes this balance well, incorporating egalitarianism and meritocracy into both the selection of artists and the selection of selectors. In a sense, it uses a market-inspired system to establish necessary market inefficiencies, which in turn allow more fully informed market choices among mature artists. Given the constraints, I think it’s the best a capitalist art lover can do.