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Michael Rushton on pricing the arts

The size of the arts sector is not a rationale for public funding of the arts sector

July 26, 2016 by Michael Rushton 2 Comments

???In yesterday’s post, I wrote (as an aside):

I see a lot of advocacy that follows the ‘1. the cultural sector is bigger than you thought it was, 2. ???, 3. deserves more public funding’ model.

Conveniently, this morning we get this story from The Scotsman on the Edinburgh Festival:

Flagship events like the Edinburgh International Festival, the Fringe, the Tattoo and the Hogmanay festivities are now attracting a record 4.5 million people each year – up by more than 250,000 in that period.

They are also now supporting 6,021 jobs – up by 26 per cent – according to findings released ahead of next month’s 70th annual season.

Major factors behind the growth in the value of the festivals include the impact of new spectator stands used for the Tattoo, Fringe ticket sales soaring 17 per cent over the last five years, and the EIF’s box office income soaring to a record £3.8m.

The research found 43 per cent of those surveyed said the festivals were their sole reason behind a visit to Scotland, with 92 per cent describing the city’s events as “must-see”.

Festivals Edinburgh, the organisation which commissioned the research, said the findings would be used to bolster the case to maintain funding for the city’s main events in the event of a predicted “fiscal cliff” in the next few years.

There can be a lot of good reasons to provide public funding, even increased public funding, to the Edinburgh Festival: its importance in presenting and inspiring new works, or its importance to the quality of people’s lives in Scotland. I have enjoyed attending the festival, and I think it would be straightforward to make a case for public support.

But the number of jobs attributed to the festival, or growth in that number, are not in themselves reasons for public funding. All sectors in the economy, if they are a sector at all, employ people. Not all sectors warrant public subsidy, which is only called for in the case where there are benefits to society beyond the activity as measured in the market. That’s what economists mean when they use the term ‘externality’: there are additional benefits external to what is captured in market prices.

It is not the role of public funding of the arts to create jobs in that sector, or to bolster business in the hotel and restaurant sector. We can create new employment in any sector by offering it subsidies (which subsequently cause declines in employment in the non-subsidized sector), and so there is no special case for public funding of the arts in that respect. Indeed, it’s a bad reason to subsidize any sector. The case for public funding of the arts rests upon the art, and the enjoyment people gain from that art as art. That’s where you make the case.

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Comments

  1. PK says

    July 27, 2016 at 8:23 am

    The article in the Scotsman doesn’t argue that job creation is THE reason to support the Fringe Festival. They use the words “also” and “bolster”–which indicates to me that the job creation ADDS value to the proposition of supporting the arts. A lot of us make this argument, which essentially is to counter the notion that arts have no utility. Yes, we jump to this argument too quickly (“See how wonderful the arts are? They create jobs!”) and we may weaken the in and of itself argument that IS central.

    But, I assert that there IS a public case for subsidizing the arts that includes the creation of jobs and positive economic impact. Often those things are invisible to those who do not attend festivals, events, concerts etc. Taxes to the military may keep me safe (supposedly). Taxes to medicare and social security keep me well (if they don’t both go broke). Taxes directed toward supporting the arts and artists keep me whole. This is a tough case to prove, so we must go at it holistically, citing emotional, fiscal, intellectual, and artistic benefits. Job creation is not a bad reason. It’s just not good enough.

    Reply
  2. Kit Baker says

    July 29, 2016 at 2:45 pm

    “The case for public funding of the arts rests upon the art, and the enjoyment people gain from that art as art. That’s where you make the case.”

    That used to be enough, but not now.

    How do you take that line and make a competitive case for funding to these two new grant programs?

    http://www.denverpost.com/2016/07/28/arts-in-society-grants-denver/

    http://www.rauschenbergfoundation.org/newsfeed/creative-interventions-mass-incarceration

    These are emblematic or a strong, long term national trend in grant giving towards the instrumental aspect of artmaking in addressing social and political problems, as opposed to “the enjoyment people gain from that art as art”.

    Reply

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Michael Rushton

Michael Rushton taught in the Arts Administration programs at Indiana University, and lives in Bloomington. An economist by training, he has published widely on such topics as public funding of the … MORE

About For What It’s Worth

What’s the price? Everything has one; admission, subscriptions, memberships, special exhibitions, box seats, refreshments, souvenirs, and on and on – a full menu. What the price is matters. Generally, nonprofit arts organizations in the US receive about half of their revenue as “earned income,” and … [Read More...]

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