How Supermodels Are like Toxic Assets

by Ashley Mears

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(Photo: Coco Rocha in Bill Blass by Peter Som February 2008, Photographed by Ed Kavishe for Fashion Wire Press, and is licensed under creative commons.)

In 2002, a tall and skinny 14-year old girl competed in a dance contest in Vancouver, Canada. There she encountered a modeling agent, who asked her to consider going out for modeling jobs. Today, the 22-year-old Coco Rocha is celebrated as a “supermodel” (however little of its glamazon power the term retains these days), appearing on covers of Vogue and i-D magazines, on catwalks from Marc Jacobs to Prada, and as the star face for Dior, H&M, and Chanel. You might not recognize her name, but the chances are you’ve seen Coco Rocha in the past few years.

Coco is what economists would call a winner in a “winner-take all market,” prevalent in culture industries like art and music, where a handful of people reap very lucrative and visible rewards while the bulk of contestants barely scrape by meager livings before they fade into more stable and far less glamorous careers. The presence of such spectacular winners like Coco Rocha raises a great sociological question: how, among the thousands of wannabe models worldwide, is any one 14 year-old able to rise from the pack? What makes Coco Rocha more valuable than the thousands of similar contestants? How, in other words, do winners happen?

The secrets to Coco’s success, and the dozens of girls that have come before and will surely come after her, have much less to do with Coco the person (or the body) than with the social context of an unstable market. There is very little intrinsic value in Coco’s physique that would set her apart from any number of other similarly-built teens—when dealing with symbolic goods like “beauty” and “fashionability,” we would be hard pressed to identify objective measures of worth inherent in the good itself. Rather, social processes are at work in the fashion modeling market to bequeath cultural value onto Coco. The social world of fashion markets reveals how market actors think collectively to make decisions in the face of uncertainty. And this social side of markets, it turns out, is key to understanding how investors could trade securities backed with “toxic” subprime mortgage assets leading us into the 2009 financial crisis.

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When trying to figure out how winners happen in the modeling industry, the first thing to know is that nobody knows. This was one of the most striking things I discovered over the course of researching fashion. Clients—designers, photographers, and stylists—don’t know what makes one model a better choice than another. And how would they? It’s an inherently uncertain task, hinging upon aesthetic preference, unknown consumer demand, and quick turnover—fashion is, after all, by definition change.

Consider the Fashion Week catwalks. There are thousands of models worldwide that vie for a chance to appear in the shows of New York, London, Milan, and Paris, and nearly all of them meet a high bar of tall, slim, and beautiful. As many as 200 models may walk through a casting director’s door in a single day during show season, and typically the shows have just 15 – 40 slots to fill. That’s a lot of models to sort through.

How do the clients know which models to choose for their fashion shows? Plucking the right face from the flock to fit a particular designer’s look of the season is, as Prada casting director Russell Marsh told me, like finding a needle in a haystack. Russell peruses hundreds of images of women and men for potential spots in the Prada and Miu Miu runway shows and campaigns; he’s a key “Mover, Shaker and Style-Maker” according to the London Independent. When I put the question to him—why this model as opposed to that one?—he threw his hands up in the air, and excitedly pointed around his studio, “Why did I decide to buy this chair and sofa? You know, for me, it ticks the box. You know, it’s an internal thing!”

Like dozes of fashion producers I spoke with, Russell doesn’t really know what it is about a kid like Coco Rocha that excites him. He “just knows” if a model is right for him, and further, he “knows it when he sees it.” This instantaneous knowledge is what sociologist Patrik Aspers calls “contextual knowledge” that creative producers tap into as they broker otherwise “fuzzy” values like beauty and edginess. It’s also what sociologist Michel Abolafia has called “gut feeling” in his study of Wall Street traders—on the trading floor, brokers have a kind of 6th sense for what’s hot and cold.

But while fashionistas express this 6th sense as an internal thing, they feel it together. Here we have a paradox: Despite an abundant labor supply and uncertain criteria, there is enormous inequality in who gets to participate in Fashion Week. With my colleague, social networks expert Frédéric Godart, I studied the Style.com show reports from Spring 2007 and found that designers used a total of 677 fashion models worldwide for their shows. Coco Rocha was among just 60 other women in the entire modeling universe to walk in over 20 shows; in fact, she walked in a whopping 55 shows. In contrast, the overwhelming bulk of models, 75% in fact, were used in just 5 shows.

So our plot thickens: What’s at the center of this collective “gut feeling” that happens to land on Coco, ratcheting up her popularity and hence, her economic value? The answer holds parallel lessons for how traders in finance markets were able to assign so much inflated value to relatively worthless mortgage assets now known as “toxic assets.”

Coco could herself be considered toxic, depending on who you ask, and crucially, when. To the average American consumer, Coco isn’t exactly good-looking. She has what industry insiders call an “edgy” look: pale and thin, with long brown hair hanging over a small face with a sharp small mouth and big almond eyes. She certainly is strikingly interesting, but a New York casting director of 14 years explained his initial reaction when he first saw her for show castings back in 2005: “Like Coco, urgh!” Making a sour face, he continued, “Ooh, like she came in and I was like, in my head I was like, ‘What trailer park did she come from?’” (This might sound particularly cruel, but rest assured it’s a pretty routine way for people in the industry to talk about bodies as a car mechanic might review an engine.)

A year after this casting, Coco graced the cover of Italian Vogue shot by powerhouse photographer Steven Meisel, and when Spring runway season concluded, she boasted a resume of 55 shows from Marc Jacobs to Chanel. By the time the next show season rolled around, when Coco made her way back to the initially skeptical casting director, he desperately wanted to book her.

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“I can’t just book any girl I want,” he explained. “After I see all the girls, you know, I call the agents up and I say these are the girls that I would like for this show. And they don’t normally give me girls right away. The first thing they ask you is, “Well who else is in the show?” … They want to know who else you’ve got. So I always have to get that one girl. If I can get, I guess this season was Coco.” At this he rolls his eyes, and continues, “You know as soon as I got Coco in the show, it was like, okay now I’ll book whoever I want.”

Today, this casting director still cannot see what it is about Coco that makes her a winner. “But now,” he explained, “it doesn’t matter. It doesn’t matter what I think now. Like she is, you know, it right now.” As in the fable of “The Emperor’s New Clothes,” even if one does not believe in the legitimacy of a social order, one obeys the conventions of a social order because one believes that other people find it legitimate and will obey, a classic condition of legitimacy noted by Max Weber. Quite possibly, one may not be able grasp why a model stands out as a winner, but the label legitimates itself as other tastemakers imitate their high-status peers.

Imitation, however, is a funny thing. It’s not so simple as mere mimicry of established players, because in fact, established players are just the best imitators. That is, a successful and powerful fashion client like Russell Marsh also has to know what to imitate, and crucially, the right moment. To do this, they need a little help. I found both formal and informal means of sharing information in the fashion market. Informally, producers talk. They hang out throughout the week at lunches, dinners, parties—at one point I studied booking agents in New York who had a regular karaoke party with clients and models. They talk constantly, facebooking, texting, and drinking; they even date each other. They share social and cultural space, and they pick up on the gossip, or “the buzz,” this way. Naturally, social ties are important for producers to figure out what’s fashionable, since there is so much uncertainty and ambiguity in their work. Lots of industries work this way: publishing, film, art, and even, sociologists have found, financial investing.

The fashion modeling market also has a formal mechanism in place, known as the “option,” to ensure all tastemakers get in on the action. An option is an agreement between client and agent that enables the client to place a hold on the model’s future availability. Like options trading in finance markets, an option gives the buyer the right, but not the obligation, to make a purchase. In the modeling market, it enables clients to place a hold on the model’s time, but unlike finance options trading, model options come free of cost; they are a professional courtesy to clients, and also a way for agents to manage models’ hectic schedules.

While the actual runway casting may take just minutes, the work of optioning models begins weeks before Fashion Week, when agencies send clients “show packages,” akin to a press kit, announcing every model available for hire. Each agency can have 20 – 50 models up for the shows, given that there are at least 12 high fashion agencies in NYC alone, we’re already talking 600 model cards vying for clients’ attention! It’s a familiar site in the months of February and September to see stacks and stacks of these cards lining the walls of casting directors’ offices.

In addition to circulating model cards, this pre-Fashion Week ritual begins the important work of circulating buzz. Options serve the symbolic purpose of “signaling” the model’s popularity to all other clients. During castings, clients are likely to ask models, “Which shows are you optioned for,” thereby letting them know their competitors’ tastes. Modeling agents drum up buzz using options as selling points too, as in, “Russell Marsh just optioned Coco Rocha for Prada!” To most fashion designers’ ears, such words sound like warm honey; they greatly reduce the anxiety of having to sort Coco from 599 other striking teenagers.

These formal and informal mechanisms of gossip result in a classic cumulative advantage effect in which successful goods accrue more success (also known as “the rich get richer” phenomenon, or by Biblical reference, the Matthew Effect). Hence, a model with several show options is deemed to be in high demand, or “hot,” compared to the model with no options. The opposite is also true. Thus, small differences in quality snowball into large differences in popularity—this is how, among a pool of nearly identical Sashas, Dashas, Mashas and Natashas, fashionistas can pick out a supermodel of the moment such as Sasha Pivovarova.

In the language of economic sociology, options are performative; they create what they putatively just describe. In other words, the models have agency (that’s market models we’re talking about, not the fashion models, heaven’s no!). Options enable investors to anticipate other investors’ actions, which spurs herding behavior, where actors decide to disregard their own information (i.e., “That Coco Rocha, urgh!”) and imitate instead the decisions taken by others before them (but Russell Marsh optioned her).

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In behavioral economics, Coco Rocha’s success is a case of an information cascade. Faced with imperfect information, individuals make a binary choice to act (to choose or not to choose Coco) by observing the actions of their predecessors without regard to their own information. In such situations, a few early key individuals end up having a disproportionately large effect, such that small differences in initial conditions create large differences later in the cascade. We see such effects in fields ranging from consumer fads (think Atkins—everyone knows a meat-and-cheese diet isn’t healthy for you!), science (like global warming), and technology (VHS beat BETA in the video market, though BETA was a superior machine).

Herding and cascades are rather problematic to financial markets; they leads investors to artificially bid up asset values, thereby leading to bubbles and eventual crashes, even if investors knew better all along, which, it turns out in the housing market, they largely did. But because investors, like fashionistas, react to each other as well as to the aggregate traces of fellow investors’ actions (captured well in signaling instruments like options), they exacerbate systemic risk. Essentially, valuing financial goods is a matter of trying to be in fashion, which is a gamble.

In fact, the economist John Maynard Keynes likened finance markets to casinos, in that both are based in speculation. To illustrate, Keynes drew on newspaper beauty contests from the 1930s, where readers were asked to rate the contestants, but with a catch. The prize would go to the reader that could guess the highest ranked winner. So readers would rate not what they themselves thought was personally beautiful, but what they thought other readers would find beautiful. The sociologist would add that beauty is always in the eye of the socially-dominant beholder, but as a metaphor for financial markets, it should worry us, as it worried Keynes: Finance assets accrue profits not according to their actual worth, which, at the height of the housing boom we know now was vastly inflated; rather, their worth is generated in how speculators perceive what other speculators will perceive. A finance market, like a fashion market, consists of speculators chasing each other’s tails in disregard for what things are really worth.

But perhaps most worrisome in the fallout of the economic crisis is our ongoing commitment to an ethos of individualism to make sense of it all. We chalk the crash up to a few bad apples and “greedy” executives gone astray—not far off, by the way, from individualist rhetoric in the fashion press celebrating the genius new beauty of Coco. Without a view of the market as a social body—composed of individuals acting in concert with each other, aided by financial models, and bound together by conventions to help them anticipate one another’s actions—we can’t see how participants act together. Yet their collectively attuned steps can inflate or deflate the value of assets, thus building economic values from cultural ones. Don’t take Fashion Week at face value; the catwalk delivers an important sociological lesson for free market enthusiasts.

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