It's amazing how a simple definition can change the coarse of history. A slight shift in one person's perception, the equivalent of a small stone, can, over time, avalanche into a change of global proportions. There is a danger that when we lose sight of a term's origins, we can find ourselves on a speeding bus without a driver. It is so with the origins of the dichotomy of "Art" and "Kitsch". Certainly, dichotomies are not representative of truths, but they do effect our perception, actions, and history. Like in all great origin stories, this one is also filled with drama, deceit, hope, idealism, revolt, and murder.
The origin of the term "Kitsch", at least partially depends on politics and timing. One can say there is a direct correlation between the upheavals in Europe during the middle of the 19th century, known as "The Springtime of the People's", and the proliferation of the term. In 1848, Europe was gripped in the throws of peasant revolutions. As a result, France elected Napoleon III as president of the Second Republic and other countries also established their own civil governments. The only major European countries who did not experience a national revolution during this period were Great Britain, the Kingdom of Netherlands, The Russian Empire, and the Ottoman Empire. The origins of these revolutions are many and varied, but it is relevant to point out that The Communist Manifesto was published in 1848, and certainly some of the revolting groups fought under the banner of communism.
In the 19th century, painting as well as the other arts held a much more influential role in society than we can imagine today. Victor Hugo's Les Miserables (1862), which met universal hostility from the likes of Baudelaire, Flaubert, and Taine, who derided it for being sentimental, vulgar, artificial, and containing "neither truth nor greatness", nevertheless became so popular with the public that the issues raised in the book were soon on the agenda of the French National Assembly. Hugo subsequently became deeply immersed in politics, gave support to the new "Second Republic" and when Napoleon III established an anti-parliamentary constitution in 1851, Hugo denounced him as a traitor, leading Hugo to be forced into exile.
"The history of all hitherto existing society is the history of class struggles." - Marx
I believe Marx was incorrect in attributing so much to class struggles, but, in this tumultuous period, it was unquestionably true.
The first known use of the term "Kitsch" is hard to determine. There is significant evidence that it had been used as early as the 1850 World's Fair in London, but it definitely came into popular use in the 1860's in Munich: describing popular, cheap, and low quality drawings and prints which were being produced in great quantities to meet the demands of the new class of Bourgeoisie that arose out of the revolutions. Given these dramatic events, it is natural that the remaining aristocracy (in London and elsewhere) would see the world they knew tumbling down all around them, would see their friends and family being executed throughout Europe, and fear that this too could take place on their own soil. It's natural that they (consciously or unconsciously) reacted to this by amplifying a disdain for the attributes and taste of this Nouveau riche, which was already present, but accelerated by cheap decor flooding the markets. It is natural that they would react by emphasizing the obvious hierarchy of "Art" over the commodities of the people: "Kitsch". Am I saying that they actively used this as propaganda to suppress peasant revolt? I don't know, though it is a possibility. But, this is only the beginning, and we're still a long way from the present definition of "Kitsch".
"There is a philosophical background to kitsch criticism, however, which is largely ignored. A notable exception to the lack of such debate is Gabrielle Thuller, who points to how kitsch criticism is based on Immanuel Kant's philosophy of aesthetics. Kant describes the direct appeal to the senses as "barbaric". Thuller's point is supported by Mark A. Cheetham, who points out that kitsch "is his Clement Greenberg's barbarism". A source book on texts critical of kitsch underlines this by including excerpts from the writings of Kant and Schiller. One, thus, has to keep in mind two things: a) Kant's enormous influence on the concept of "fine art" (the focus of Cheetham's book), as it came into being in the mid to late 18th century, and b) how "sentimentality" or "pathos", which are the defining traits of kitsch, do not find room within Kant's "aesthetical indifference".
Kant also identified genius with originality. One could say he implicitly was rejecting kitsch, the presence of sentimentality and the lack of originality being the main accusations against it. When originality alone is used to determine artistic genius, using it as a single focus may become problematic when the art of some periods is examined. In the Baroque period, for example, a painter was hailed for his ability to imitate other masters, one such imitator being Luca Giordano.
Another influential philosopher writing on fine art was Georg Wilhelm Friedrich Hegel, who emphasized the idea of the artist belonging to the spirit of his time, or zeitgeist. As an effect of these aesthetics, working with emotional and "unmodern" or "archetypical" motifs was referred to as kitsch from the second half of the nineteenth century on. Kitsch is thus seen as "false". As Thomas Kulka writes, "the term kitsch was originally applied exclusively to paintings", but it soon spread to other disciplines, such as music. The term has been applied to painters, such as Ilya Repin, and composers, such as Pyotr Ilyich Tchaikovsky, whom Hermann Broch refers to as "genialischer kitsch", or "kitsch of genius"." - From Wikipedia
(Of course, like every form of media, we must always be critical of our sources. And arguably Wikipedia is not the authority as far as encyclopedias are concerned. But, I have done some fact checking and this passage seems to be accurate as far as I can tell. Though I encourage you, if you are interested, to investigate yourself.)
The word became popularised in the 1930's by Theador Adorno, Hermann Broch, and Clement Greenberg, all of whom attempted to define avant garde and kitsch as polar opposites. As with the origin of the term, this re-definition took place during a turbulent and violent era: Hitler was rising to power in Germany, Stalin held Russia in an iron grip, and their propaganda was filled with illusionistic depictions of nude, athletic youths. Their films depicted beauty and sincerity with a saccharine sweetness and so it was an easy task for Adorno, Broch, and Greenberg to twist the populist definition of kitsch into a deceitful tool of totalitarianism. During the following years, WWII, and the communist scare during the cold war, modernism and then abstract expressionism, emerged as the champion of the avant garde and the very symbol of American capitalism. See: CIA and the Art Conspiracy.
Interestingly enough, perhaps due to the growth of the middle class and globalization; during the latter half of the 20th century, and especially with the popularity of Post Modernism in the 1980's, the lines separating Kitsch and high Art again became blurred. Many standard political associations became reversed and representational work which was labeled by the critics as kitsch, such as that of Andrew Wyeth, Odd Nerdrum, and others, was increasingly supported and collected by wealthy conservatives in America and internationally. Simultaneous with the development of camp taste (think of Jeff Koons and Takashi Murakami) in the 1980's, there arose a growing support of representational works among American conservatives which lead to the rise of the Art Renewal Center, among other groups, hoping to re-establish the representational tradition. Representational work is now being largely supported and collected by what is often referred to as "Old money" as well as many in the middle class and is increasingly being embraced by people of many political leanings. "High Art" is, as always, collected and supported by the wealthy elite and the public institutions that they often contribute to. Though, I'd like to point out an interesting chimera: whereas, many contemporary artists such as Koons, Murakami, and Hirst produce (via factory studios) and sell their work in a very capitalist manner, the content of the work is based on a relativism (equality of all things) which is philosophically related to Marx, (see Kant and Hegel) through Derrida, Foucault, and other post-modern philosophers.
Thus, today we have a confusing array of definitions for both "Art" and "Kitsch", each carrying their own set of associations. But "Art" as defined by the most influential artists and institutions of our day, is only conceptual. Consider Duchamp, Andy Warhol, Jeff Koons, Damien Hirst, Christo.... their work is considered only to be the idea, their persona the focus, and the object is simply a marketable by-product. We have the camp of Koons and Murakami, the melodramatic New Kitsch of Marilyn Mentor and Charlie White, and of course Odd Nerdrum's definition of "Kitsch", introduced in his book "On Kitsch", and which is analogous to the term "Ars" used in Greco-Roman culture as synonymous with humanism, skill, and beauty. This is the same concept used during the Renaissance, Baroque, and up until the beginning of the 19th century and is often the same concept that much of the general public today still refers to as "Art".
"Ars longa, vita brevis." - Hippocrates
As this history reveals, there are no fixed political ideologies that are necessarily fixed to these terms. They shift and evolve with the times, and are re-defined according to the politics, philosophy, economics, and fashion. They are as malleable as any other word because they are simply abstract ideals. Like all dichotomies this too is only useful in as far as it assists in analysis. Beyond that, neither idea absolutely leads to the "truth", and often - just as in contemporary politics - absolute polar ideals such as this can warp the facts and obscure our view of what's before us. Everything we see is colored and distorted by the beliefs that we hold. This is sometimes beneficial, and sometimes dangerous. Where does this history lead us? How does this apply to the questions of our lives? I'll leave that for you to decide. The place to begin is to question our own assumptions.