The embarrassing Miley Cyrus Vanity Fair photo shows the value of public relations people—and why investing real money makes people more careful about what they do.

As has been widely reported, Miley Cyrus, star of the TV show Hannah Montana and a popular singer and concert performer, has issued a statement apololgizing for allowing celebrity photographer Annie Leibovitz to photograph her apparently topless with her upper torso covered by a blanket. Here’s what Cyrus said:

I took part in a photo shoot that was supposed to be ‘artistic’ and now, seeing the photographs and reading the story, I feel so embarrassed. I never intended for any of this to happen and I apologize to my fans who I care so deeply about.

The picture is hardly very revealing, but it is indeed embarrassing for a fifteen-year-old girl previously seen as quite wholesome to be photographed so. In addition, this latest misstep comes on the heels of a couple of other well-publicized slipups on her part, in which she was photographed apparently flashing her bra in public and frisking around on a hotel floor with a girfriend. Not smart at all.

One can feel only sympathy for her for the most recent incident, however, as she was obviously tricked into it by Leibovitz, a very experienced photographer. According to reports, Cyrus’s parents saw part of the shoot but left before the embarrassing photo was taken and never reviewed it. One may well suspect that the Vanity Fair people never showed it to them, but it’s impossible to be sure without more information.

Miss Cyrus, being only fifteen years old, did a very stupid thing, but we all do stupid things. What’s interesting about this incident is what it says about economic incentives.

People often argue that money corrupts everything, but that’s as foolish as Miley Cyrus’s photo. In reality, money makes people much smarter, and the more money you have invested in something, the more likely you are to look after it.

Celebrities have always been prone to bad judgment, like all of us, but their employers used to be immensely skilled at covering up their mistakes. The movie studios and record companies had huge investments in their star performers, and they made sure to teach them how to behave, oversee their every public move, and even advise them on how to conduct themselves in private.

Even with all of that guidance and protection, however, wayward celebrities would do very foolish things, and, much worse, get caught doing so.

Police and district attorneys were easy to deal with, of course, by giving them a little money or having their superiors tell them to back off. They all knew that the movie industry was the main driver of the local economy, and nobody wanted to risk killing that very golden goose.

Reputable private-sector figures were equally easy to deal with. The big celebritiy gossip mongers, such as Hedda Hopper, Irv Kupcinet, and Walter Winchell, knew that their studio sources would cut them off from story material if they embarrassed the stars in which the companies had invested heavily, so they covered only what the studio bosses would allow them to talk about. Plus, they knew that their audiences would accept tittillation but not tawdriness.

They responded quite wisely to these various incentives, and profited greatly. 

Less reputable figures were dealt with in less reputable ways. When the publisher or editor of a lowlife celebrity magazine would threaten to expose a big star as a homosexual, alcoholic, or wife-beater, the studio would simply pay them off. If the blackmailer came back a second time, a private detective and team of hired goons would persuade them to back off. It always worked.

In this way, the major outlets influencing public opinion tended to show the glamor but not the grime, and the rumor underground of smaller publications had little effect.

Today, however, stars are managed by agents, not studios, and the agents actually invest relatively little in them. A studio, after all, would spend hundreds of thousands of dollars on a single film starring Errol Flynn or Clark Gable (the equivalent of multiple millions today), and hence could not afford to have the public turn against their star and have the movie go into the tank.

Agents, on the other hand, simply rake of 10 to 15 percent of the performer’s salary, and have little overhead. It’s largely wages and profit.

Hence, if an agent loses a client, the income is indeed lost, but there is no great investment to lose. A studio, on the other hand, could lose hundreds of thousands of dollars (today, tens of millions) on a star whom the public turned against.

Thus the studios and recording companies took great care to polish their employees’ public image.

That’s why a girl such as Miley Cyrus could do something as dumb as allowing a Vanity Fair photographer to take a picture of her evidently topless: people have always been that stupid and naive, but they had big investors to protect them. Even a girl’s parents can’t be that smart and vigilant, even if one of them (Billy Ray Cyrus, Miley’s father) is a performer himself and knows the life of celebrity very well (having had a huge hit with the song "Achy Breaky Heart"). Some sleazeball will alway slink through the cordon.

Her main employer, Disney, has already made huge profits off of all of her past work for them, and it likely does not have much product in the pipeline awaiting release. Hence, although the studio has protested Vanity Fair‘s use of the photo and said it stands behind Miss Cyrus, it did little to prevent this, because Disney really doesn’t stand to lose much because of the incident.

This is so not only because the studio can afford to cut her loose if it has to. Even more important, the public just doesn’t get very bothered by incidents such as these. A recording star such as Britney Spears can act like the trashiest trailer whore, and if her unimaginative music pleases the masses, they’ll buy it regardless of what they might think of her personal life. And of course any admiration for her music will tend to legitimize her behavior, as we saw when preteen girls were wearing revealing spaghetti-strap blouses a couple of years ago.

In addition, there are now so many outlets of public discourse available that it is all but impossible to keep things out of the press. There are simply too many big and little people willing to traffic in this stuff. No one is rich enough to buy them all off or pay enough people to intimidate them into submission.

Hence the culture becomes increasingly dirty, with no clear way of stopping the pollution.

Even so, the Vanity Fair incident could have been handled quite easily through a friendly visit with Ms. Leibovitz and a couple of the magazine’s editors. People are easy to persuade if you’re willing to give them a better reason to agree than to disagree.

If the Miley Cyrus incident teaches us anything, it’s this: People take the best care of what they value most. And the best measure of value is how much of their money they’re willing to invest.