{"id":3818,"date":"2025-07-02T11:51:44","date_gmt":"2025-07-02T18:51:44","guid":{"rendered":"https:\/\/www.artsjournal.com\/worth\/?p=3818"},"modified":"2025-07-02T11:51:47","modified_gmt":"2025-07-02T18:51:47","slug":"should-we-subsidize-arts-consumers-art-producers-or-neither","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/worth\/2025\/07\/should-we-subsidize-arts-consumers-art-producers-or-neither\/","title":{"rendered":"Should we subsidize arts consumers, art producers, or neither?"},"content":{"rendered":"\n
\"\"<\/a><\/figure>\n\n\n\n

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My friends Joanna Woronkowicz and Doug Noonan have started a new venture, Arts Analytics<\/a>, where they hope to bring more extensive, and shared, use of data into arts policy thinking, and also to spur discussion.<\/p>\n\n\n\n

A recent post of theirs<\/a> asked what is actually an old question in the arts policy world: if we are going to subsidize the arts, is it best done through grants to arts producers, or through running the subsidy through arts consumers? They think we ought to give more consideration to the latter:<\/p>\n\n\n\n

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A demand-centered reframing would start by letting audiences steer a portion of public funds. Converting a slice of operating grants into cultural vouchers or match-savings accounts would shift purchasing power directly to households and reveal real preferences. Public support could be indexed to robust engagement metrics\u2014unique visitors, hours of participation, co-creation\u2014rather than to the sheer number of productions mounted. The tax code could extend credits to ticket purchases, streaming subscriptions, or the DIY tools that turn consumers into creators. Investments in open-licensed archives, maker spaces, and remix rights would raise the psychic return on participation, while a modernized data regime could publish an \u201cattention GDP\u201d alongside conventional value-added, finally giving non-market demand a seat at the policy table.<\/p>\n<\/blockquote>\n\n\n\n

They invited readers to respond, and this week published two of those responses<\/a>, from former NEA Chair Bill Ivey, and from me. It’s nice to see this sort of dialogue – I hope there is more of it.<\/p>\n\n\n\n

You can read Bill’s full response at the previous link. He begins:<\/p>\n\n\n\n

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The [nonprofit] arts sector likes to \u201clook at itself from the stage\u201d because a producer dominated perspective frees policy actors to pay little or no attention to audience demand, audience choice, or audience taste.\u00a0 This focus conceals the reality that given the opportunity, many Americans would not buy what arts organizations are selling.\u00a0 Early in the most-recent incarnation of government support for the arts (The NEA Era,1965-2025), advocates disdained popular arts and mass culture, offering an alternative that justified nonprofit access to public money.\u00a0 In this formulation, the nonprofit fine arts were embraced as an antidote to TV, movies, rock \u2018n\u2019 roll, and so on.\u00a0 This public interest role justified the development and maintenance of a closed system: producers and experts who \u201cknew what is best\u201d for audiences would frame objectives, determine costs, and then motivate a tiny audience \u2013 government officials \u2013 to \u201cconsume\u201d the nonprofit arts product.\u00a0 The pitch to funders was about secondary, instrumental benefits: an investment of a few million would make their communities happier, their youth better aligned, their nation a bit stronger.\u00a0 Favorable tax policy complimented grantmaking.\u00a0 Freed from the limits imposed by demand, this approach enabled a spectacular expansion of the nonprofit sector, one that over the decades all but guaranteed a \u201cchronic oversupply\u201d of many kinds of artmaking.\u00a0 Today, nonprofit leaders know that their foundational argument \u2013 a virtuous alternative to corrupting mass culture \u2014 isn\u2019t the political asset it was years ago.\u00a0 Although no longer in the foreground, disdain for \u201cthe popular\u201d that justified claims made to policy actors lives on in the field\u2019s DNA.\u00a0 (Our<\/em>\u00a0nonprofit art is just better!)\u00a0 Unfortunately, no new \u201cwhy?\u201d has been advanced in support of the current model, and the \u201creplace-TV- and-rock argument\u201d has retreated to the background.\u00a0 It is surprising that, despite the absence of a compelling justification, a closed system in which the only \u201cdemand\u201d is what can be sustained among a handful of elected officials and societal elites remains essential to the fiscal health of the entire nonprofit arts community. …<\/p>\n<\/blockquote>\n\n\n\n

Here is my response. You’ll see the style is pretty informal – I originally just wrote to Joanna and Doug via email, not expecting publication. In any case…<\/p>\n\n\n\n

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When it comes to using public funds to support the arts, a question needs to be asked at the outset: Why? What is it about the market allocation of resources and distribution of outputs in the cultural sector that could use some improvement via public policy? This has to come first, and then we can ask: so, given the goal we want to achieve, what is the best means of getting there?<\/p>\n\n\n\n


Normally, we look to subsidies when we think there is under-consumption and production. But is that what we have? Recorded arts \u2013 video, music, images, text \u2013 are widely available at extremely low prices to the consumer. As you note, we already have tons of consumer surplus. This is in itself a result of a market failure \u2013 in an internet world with digital recordings, it is really hard to guard one\u2019s intellectual property, and so any provider of product is sharply constrained in what they can charge without consumers turning to other options. So, in that sphere there is loads of access, and any state subsidy would be superfluous \u2013 would we really need to subsidize Spotify subscriptions?<\/p>\n\n\n\n


So, what about \u201clive\u201d arts \u2013 performances, and visual art on canvas or in marble? Again, we would need to ask what problem we are trying to solve. You are correct that if<\/strong> we thought there was less-than optimal consumption, we could subsidize, and we could subsidize either through grants to nonprofits (as we typically now do in North America) or through consumer vouchers (as with, for example, the youth cultural vouchers that were tried in some European countries recently). Now, while in teaching undergrad public finance we show students that when it comes to subsidies (or excise taxes) on a good, in terms of outcome and incidence it doesn\u2019t matter which we choose regarding who \u201cofficially\u201d gets the subsidy (if we want to put a ten cent subsidy per pint of blueberries, it doesn\u2019t matter whether it is given to consumers or producers \u2013 prices will adjust the same way), in the arts it is a different sort of thing, because the subsidy isn\u2019t per pint of arts. Consumer vouchers are more like an ordinary subsidy \u2013 they apply to purchases \u2013 but producer subsidies are not \u2013 they apply to the grant-writing prowess of the organization, in which audience numbers play some<\/strong> role but are not the whole story. <\/p>\n\n\n\n


I think<\/strong> what you are trying to say here is that there ought to be a subsidy of some sorts, and that basing it on consumer choices is better than a system of grants that is only tangentially related to audience numbers. Okay. But it leaves the question of why we are doing this. When French kids with culture vouchers mostly ended up at the manga store, the government was forced to ask, \u201cis this what we were trying to do?\u201d What sorts of things would the voucher apply to, and what would be left out? Respecting consumer choice doesn\u2019t get the state out of having to answer that question. And once it gets into the job of figuring out where to draw the boundaries, well, that has<\/strong> to be \u201ctop down\u201d. It requires a statement that these<\/strong> things warrant a subsidy that other<\/strong> things do not. If I can shamelessly self-promote, that is one of the arguments in the final chapter of my book \u2013 arts policy means choosing what is going to count as art worthy of subsidy, and what is not. You can\u2019t get around it.<\/p>\n<\/blockquote>\n\n\n\n

Note I wrote about the French Culture Pass on this blog here<\/a> and here<\/a>…<\/p>\n","protected":false},"excerpt":{"rendered":"

My friends Joanna Woronkowicz and Doug Noonan have started a new venture, Arts Analytics, where they hope to bring more extensive, and shared, use of data into arts policy thinking, and also to spur discussion. A recent post of theirs asked what is actually an old question in the arts policy world: if we are […]<\/p>\n","protected":false},"author":3,"featured_media":3819,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[26],"tags":[],"class_list":{"0":"post-3818","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-issues","8":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/www.artsjournal.com\/worth\/wp-content\/uploads\/2025\/07\/image.png","jetpack_shortlink":"https:\/\/wp.me\/p3dIW5-ZA","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1533,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/09\/how-should-we-subsidize-charitable-giving-to-the-arts\/","url_meta":{"origin":3818,"position":0},"title":"How should we subsidize charitable giving to the arts?","author":"Michael Rushton","date":"September 22, 2014","format":false,"excerpt":"In the New York Times, Nicholas Kristof and Sheryl WuDunn write: Moms in poverty often live in stressful homes while juggling a thousand challenges, and they are disproportionately likely to be teenagers, without a partner to help out. A baby in such an environment is more likely to grow up\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"the state really ought to pay for this","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/09\/nurse-with-baby.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/09\/nurse-with-baby.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/09\/nurse-with-baby.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/09\/nurse-with-baby.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/09\/nurse-with-baby.jpg?resize=1050%2C600&ssl=1 3x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/09\/nurse-with-baby.jpg?resize=1400%2C800&ssl=1 4x"},"classes":[]},{"id":2195,"url":"https:\/\/www.artsjournal.com\/worth\/2017\/05\/cost-disease-in-the-arts-what-does-it-mean\/","url_meta":{"origin":3818,"position":1},"title":"Cost disease in the arts: what does it mean?","author":"Michael Rushton","date":"May 4, 2017","format":false,"excerpt":"Professor William Baumol, one of the greatest living economists, has died at the age of 95. Alan Krueger did an interview with him here, and Tyler Cowen has written often about him, here. Readers of artsjournal.com know him best for his conception of cost disease, done jointly with William Bowen.\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"this costs *how* much?","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2017\/05\/barbershop.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2017\/05\/barbershop.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2017\/05\/barbershop.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2017\/05\/barbershop.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2017\/05\/barbershop.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":2118,"url":"https:\/\/www.artsjournal.com\/worth\/2016\/10\/what-arts-legislation-do-we-want-then-a-call-for-suggestions\/","url_meta":{"origin":3818,"position":2},"title":"What arts legislation do we want then? A call for suggestions","author":"Michael Rushton","date":"October 1, 2016","format":false,"excerpt":"A few days ago blog neighbour Doug McLennan lamented that Congress seems to have no interest in arts-related legislation, with no bills coming to floor on which we could even guess at how elected officials actually weigh the arts as a matter of national importance. I responded that we should\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"not sure about this one...","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2016\/10\/suggestion-box.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":1394,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/07\/love-of-art-and-love-of-place\/","url_meta":{"origin":3818,"position":3},"title":"Love of art and love of place","author":"Michael Rushton","date":"July 2, 2014","format":false,"excerpt":"Those of us who teach classes in cultural policy at some point always engage our students in the fundamental question: why is government in the business of subsidizing the arts? Only when we have really thought about the ends of the policy can we think clearly about the best means\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"Jack's Creek, Clay Co, KY","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/07\/JacksCreek.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/07\/JacksCreek.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/07\/JacksCreek.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":1148,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/03\/tax-relief-for-british-theatre\/","url_meta":{"origin":3818,"position":4},"title":"Tax relief for British theatre (updated)","author":"Michael Rushton","date":"March 20, 2014","format":false,"excerpt":"The budget just announced by the British government provides for significant tax relief for live performing arts. Here are reports from The Stage, The Telegraph, and The Independent. The Stage gives details as follows: The scheme will mean producers are able to claim up to a 25% tax rebate on\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"how shall we spend it?","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/03\/Blithe-Spirit-at-the-Schu-002.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":2791,"url":"https:\/\/www.artsjournal.com\/worth\/2022\/06\/book-diary-june-7-new-working-paper-on-the-economics-of-arts-funding\/","url_meta":{"origin":3818,"position":5},"title":"Book Diary – June 7 – New Working Paper on the Economics of Arts Funding – Updated June 9 with a good question","author":"Michael Rushton","date":"June 7, 2022","format":false,"excerpt":"Still a work in progress, but a draft essay summarizing the economic approach to public funding for the arts is available here for (free) download. 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