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For What It's Worth

Michael Rushton on pricing the arts

About that Italian €500

August 23, 2016 by Michael Rushton 2 Comments

I'm a boy and I'm a manThe Italian government has announced that it will give all eighteen-year olds, on their birthday, a €500 voucher to spend on books, film, music or theatre. The Independent reports here, and The Atlantic here, which says:

The initiative “reminds [youth] how important cultural consumption is, both for enriching yourself as a person and strengthening the fabric of our society,” the Italian parliamentary undersecretary Tommaso Nannicini said in The Local.

I think cultural vouchers are an interesting idea: they fund the arts by giving directly to arts consumers rather than to the organizations and artists that would produce the work. The presenting organizations are reimbursed by government according to the vouchers redeemed at their shows. It raises interesting questions about who decides where public money for the arts ought to go. But …

I can’t cheer this policy, whether vouchers are a good idea or not. The Italian economy is in pretty bad shape. Its banks are on the edge of collapse, its government debt is one of the highest in the world relative to its GDP (i.e. its ability to finance the debt), and the economy has been stagnant while the rest of the world recovers from recession. Giving this kind of money away on arts vouchers does not suggest a government that is serious about grappling with genuine fiscal problems.

Artists do not do well in a collapsing economy. Greece might have more public arts funding per capita than the UK or Canada, but that doesn’t mean artists have it good there. When I visited Portugal a few years ago, another country with reasonably generous arts policy, the artisans I spoke to were in bad shape, saying no one had any money to buy their wares.

And this is why I think arts policy people get too wound up over what political parties promise regarding that small slice of funds known as ‘arts policy’. It is the general state of things that has more influence on the arts – a stable economy, full employment, a strong safety net – than whether the arts council budget rises by 1% or 3%.

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Comments

  1. William Osborne says

    August 27, 2016 at 6:11 am

    Good points, but as the USA illustrates, healthy economies do not help the so-called fine arts if people do not spend money on the fine arts. Healthy economies must be combined with good arts education and intelligent funding systems for art forms that by nature cannot thrive within the free-market. The real question becomes, why is the USA the only developed country that can’t implement these principles? (Apologies in advance to Milton Friedman.)

    Reply
    • Alex Strong says

      September 15, 2016 at 10:47 am

      Dr. Osborne,

      Firstly, The US actually has implemented these principals in the arts. By and large, fine arts in the US already exist outside of the “free” market with funding structures to support them.

      The most widely used mechanism for public spending on fine arts is Section 501(c) of the U.S. Tax Code. The fine and performing arts, along with all of the other services that make up the nonprofit sector are all recipients of a huge government subsidy through their tax-exempt status. Not only do 501(c) orgs receive government support by not having to pay income, sales, or property tax, like other businesses do, but they also have the capability of receiving philanthropic gifts from donors, who can then write their donations off of their taxes. These tax exemptions aren’t free and, in most respects, are essentially tantamount to direct government subsidy.

      Tax-exempt status allows nonprofit arts organizations to present to a much wider audience. Without the tax abatement and donation mechanisms, orchestras, museums, and other “fine” arts would be much harder to come by and, realistically, only available to the uber-rich. As pricey as a trip to the symphony may already be, it would be FAR more expensive if consumers were left paying what it actually cost to operate an orchestra.

      As with a lot of goods and services, there are government subsidies the fine arts and performing arts at the local, state, and federal levels. The National Endowment for the Arts, while by no means one of the LARGEST government agencies, spent nearly $122 million on arts programming in FY 2014 (source: NEA FY 14 Annual Report). That fact aside, I can think of hardly any goods or services that are being bought and sold on a truly “free” market. Every five years or so, congress passes the “Farm Bill,” which includes omnibus spending a huge variety of products. Any service that is receiving government money, either by appropriations, grants, or some other mechanism, can’t rightly be said to be operating on the “free” market in the first place. The reality is that the price of almost anything we buy or sell is being influenced by government spending at one level or another.

      I think the question that you are raising is not really about “spend vs. not spend”, but rather, it is a question of degree. (i.e. “how MUCH” should be spent?”). To this point, I think there is a strong case to be made for why the US shouldn’t spend as much per capita on Fine Arts as other countries.

      When people in the US talk about the “Fine Arts”, they are mostly talking about European art (i.e. the “Killer Bs”, Mozart, Handel, and others) or American art closely tied to European tradition (i.e. Copland, Bernstein, Gershwin, etc). These are just examples in classical music, of course, which is near and dear to my own heart. As far as relevance goes, however, they don’t come close to America’s chief cultural exports, Those art forms such as television programming, movies, jazz, and stand-up comedy are what I would argue will become some of the US’ greatest cultural contributions and will enter the pantheon currently occupied by impressionist painting, romantic music, cubism, Shakespearian drama, etc.

      All of this is to say that I believe there certainly should be public support for the Arts in the US (and there is). I am a lifelong supporter of the arts myself. In school, I studied music education and performance as well as arts administration. These are precisely the issues I care about as well. However, I think drawing comparisons with Europe and labeling the US as “the only developed country” that cannot implement public stewardship of the arts is unfair. As it stands, the US is not in Europe. Yet, the majority of our formal arts education initiatives focus exclusively on Euro-centric fine arts anyway.

      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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