ABSTRACT
This chapter outlines Richard Caves’s discussion of what makes creative industries different from other industries studied by economists. In his book Creative Industries: Contracts between Art and Commerce, the Harvard University economist Richard Caves outlined a theory of contracts which, in his opinion, differentiated creative industries from other industries that economists were used to studying. As he pointed out, economists had in the past studied different industry sectors in order to tease out their special and distinctive features. Thus, they had examined the pharmaceutical and computer-chip industries for their capacity to innovate. Film actors, jazz pianists, and advertising copywriters are employed for their creative talents, but just how they will deploy those talents can never be anticipated in advance. As a result, the art for art’s sake property dovetails with that of nobody knows as well as uncertain demand. Caves points out that the infinite variety economic property is not limited to consumption.
