A New Economic Theory of Public Support for the Arts

Evolution, Veblen and the predatory arts

Arnaldo Barone

• Publisher: Taylor & Francis
• Year: 2015
• eBook ISBN: 9781317428626
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Should the arts receive public support? Can the arts survive in a modern capitalist society? Can economics shed light on the nature of public support, and whether there is a rationale for public intervention? This book undertakes to examine these questions as it explores the ways government and public resources are used to support the arts.

This book applies a Veblenian approach to understanding economic development to investigate public support for the arts in an effort to determine whether this approach can elucidate economic rationales for public support. Divided into three parts, the first provides basic information on public support for the arts by surveying support in the United States and Australia. Part two includes a neoclassical overview of the topic while part three presents Veblen's ideas on economic development.

This book will be of interests to researchers concerned with cultural and institutional economics, as well as political economy.

1 Introduction

The Victorian era English art critic John Ruskin wrote: “Great nations write their autobiographies in three manuscripts, the book of their deeds, the book of their words and the book of their art” (Ruskin 1890: iii). This work is concerned with the last of these books, the book of art, and in particular with the way in which government and public resources are used to assist with and support in its writing and whether this can be justified.

The inspiration for this book came to me in a dream. The dream concerned a programme I had watched on the Australian Broadcasting Corporation many years ago. Appearing on this programme was an American trade official who lambasted Australia for its television local content requirements and regulations. At the base of his complaint was the idea that these regulations unfairly protected Australia’s arts and cultural industries and disadvantaged US producers. The Australian interviewer sheepishly responded that this was merely an attempt to protect and support Australia’s art and culture, to which the American official replied, “That’s what the French say when they protect their farmers”.

This exchange got me to thinking of the broader question of public support for the arts. Having received a music education from the Victorian College of the Arts (VCA) in Melbourne, my automatic response was “of course the arts should be supported”. To be sure, this attitude was prevalent among both staff and students at that esteemed institution, for art produced in a profit-oriented capitalist economy could be none other than ‘second-rate’, and to think otherwise was heresy and simply not countenanced.

But while my colleagues at the VCA took their positions comfortably and for granted, the economist in me forced me to question this. Why should it be the case that the arts should receive public support? Is it necessarily so that the arts cannot survive in any ‘serious’ form in a modern capitalist society? Can economics shed any light on the nature of public support and whether there is a rationale for public intervention?

But how to approach this subject? My knowledge of neoclassical approaches left me unconvinced by many of the arguments presented in favour of public support. It led me to seek out an alternative approach, one that might shed new light on the phenomenon, both regarding its nature and potential rationales.

As an undergraduate student I had come across Thorstein Veblen, ironically as part of my instruction in neoclassical economics. My knowledge of Veblen was limited to the idea of a ‘Veblen good’ (which, we were informed, was otherwise known as a ‘snob’ good) and to how this might be appropriated for use in understanding the consumption of opera, so often associated with the ‘opera snob’. This simple and admittedly trivial familiarity with Veblen caused me to turn in his direction to obtain answers regarding public support for the arts. But while my initial interest was limited by the notion of the snob good, closer examination of Veblen’s ideas showed me that this would be an injustice and that his approach, whatever one thinks of it, is far more ambitious and has so much more to offer than the ‘tit-bit’ that is the Veblen good.

It is the intention of this work to apply this rich Veblenian approach to understanding economic development to investigate public support for the arts. Further, the aim will be to determine whether this approach can give us some ideas regarding plausible economic rationales for public support. As will be seen in the chapters that follow, Veblen developed an approach built on a Darwinian platform. The socio-economic manifestation of Darwinian natural selection is conceived through a duality between what Veblen called ‘workmanship’ and ‘predation’, with the former being community-regarding activities and the latter self-regarding. The interplay of these forces, shaped by technology, causes institutional change and with it economic and social evolution. It is this duality that will be the basis of the analysis of public support.

The work is divided into three parts. Part one comprises Chapter 2, designed to provide the reader with basic information on public support for the arts. It does this by surveying public support for the arts in two nations: the United States and Australia. Both nations represent somewhat different methods of providing public support for the arts, with one giving a direct role to the state and the other preferring an indirect, facilitatory role. The chapter also provides information on the models or approaches adopted by various governments across the world to provide public support and details the policy intent and the strengths and weaknesses of each.

Part two includes Chapters 3 and 4. It would be fair to say that both Chapters 3 and 4 present the neoclassical version of events. Chapter 3 is a survey of the economics of the arts. As Chapter 3 shows, the economics of the arts, otherwise known as cultural economics, is broad and touches upon many aspects of the arts and cultural policy. This subdiscipline of economics is sometimes accused of lacking coherence, leading some to question its status as a subdiscipline. However, its practitioners suggest that it does indeed warrant this title, and they point to three overarching ‘strands’ that bind together what is seemingly incoherent. One of these strands is the quest for a rationale for public support.

Chapter 4 is a survey of rationales given for public support for the arts. In essence, it is a detailed survey of one of the three strands of the economics of the arts. As will be seen, the work undertaken by ‘economists of the arts’ is overwhelmingly neoclassical, so rationales for public support tend to be built on this foundation. Among the rationales that are discussed in this chapter are externalities, the application of the Coase theorem, and the famed Baumol’s disease. Its purpose is to give the reader an idea of where things stand with respect to obtaining a rationale for public support for the arts.

Chapter 5 commences the third and final part. Here begins the discussion and presentation of Veblen’s ideas on economic development. Chapter 5 provides a brief biographical introduction before going on to discuss five key influences on Veblen’s thinking. The chosen five include Darwinism, the pragmatist school of philosophy, the German historical school of economics, instinct theory and habit, and the salient aspects of the works of Karl Marx.

Chapter 6 presents the basic building blocks of Veblen’s theory of economic and social development. As is shown, Veblen developed a model of economic development using the idea of natural selection. Just as genes are the source of variation in biological evolution, institutions are the source of variation in economic and social evolution. It is here that I outline how the interplay between workmanship and predation acts out and leads to economic and social evolution. The chapter outlines Veblen’s four broad periods of social and economic development, which he dubbed the ‘savage’, ‘barbarian’, ‘handicraft’, and ‘machine’ ages.

In Chapter 7, I apply the foundations presented in Chapter 6 to provide an understanding of production and consumption from the Veblenian perspective. As is shown, workmanship and predation are pivotal to understanding production and consumption. Importantly, unlike neoclassical economics, Veblen’s approach gives an explicit role to social factors in determining both consumption and production decisions.

Chapter 8 is where the ideas presented in Chapters 6 and 7 are applied to the case of the arts. The chapter considers public support through the prism of the famed Veblenian duality. The chapter has two aims. One is to consider public support in an institutional sense. This involves examining public support and its historical trajectory and the idea that public support is an institution that has undergone an evolution from an ancient system of patronage. The suggestion is that modern public support could be conceived as the most recent iteration of this institution. Secondly, I attempt to determine whether rationales can be obtained for public support for the arts. Again, it is the famed duality that is the basis of this analysis. The discussion considers the possibility that public support enables workmanship to be the dominant force in the production of art. However, the chapter also shows that it is possible that public support comes to be captured by predatory inclinations, thereby numbing or muting any intended workmanship aims of public support.

Chapter 9 is the conclusion. It is here that I draw together the analysis presented from Chapter 2 onwards and make my statement regarding the nature of public support and possible and plausible rationales for its existence.

Before proceeding to the book proper, one last piece of business requires attention, namely, what is meant by ‘art’ and ‘the arts’? To be sure, this could prove the subject of a book in itself, and there has long been debate on how to define the arts. I have chosen to adopt the definition employed by the prominent arts economist David Throsby, who has defined the arts as “literature (including creative writing of nonfiction); the visual arts and crafts; the performing arts, comprising theatre, music, dance, opera and music theatre; film and video (including both drama and documentary); and multimedia arts” (Throsby 2001a: paragraph 3). This definition also fits well with those adopted by the purveyors of public support, as evidenced by the Australia Council Act (1975). That Act defines the arts as “creative and interpretative expression through theatre, literature, music, visual arts, film and crafts” (Australia Council Act 1975: section 1(3)). The adoption of the Throsby and Australian Council Act terminology might risk the trivialisation of philosophical debates on the matter of definition, but for the purposes of this work, the definition serves well.¹

Note

1 The Australia Council Act definition is also in keeping with definitions used in similar acts to establish Australia Council analogues. For example, the Canada Council Act (1985) defines the arts as “architecture, the arts of the theatre, literature, music, painting, sculpture, the graphic arts and other similar creative and interpretative activities”, while the US act to establish the National Endowment for the Arts defines the arts as “music (instrumental and vocal), dance, drama, folk art, creative writing, architecture and allied fields, painting, sculpture, photography, graphic and craft arts, industrial design, costume and fashion design, motion pictures, television, radio, film, video, tape and sound recording, the arts related to the presentation, performance, execution, and exhibition of such major art forms, all those traditional arts practiced by the diverse peoples of this country, and the study and application of the arts to the human environment” (Canada Council for the Arts Act 1985: section 2; United States National Foundation on the Arts and the Humanities Act 1965).

2 Understanding public support for the arts

2.1 Introduction

In early 1975, Australia’s commonwealth parliament passed a bill to establish the Australia Council for the Arts. In the bill’s second reading speech, the then-minister for the arts, Edward Gough Whitlam, who also concurrently held the prime ministerial position, stated that the purpose of the Australia Council would be to “administer Australian Government assistance to the arts” (Whitlam in Commonwealth of Australia, House of Representatives 1974: paragraph 1). The same speech outlined the motivation for the establishment of such a body and the provision of said assistance or support, which amounted to the belief that:

Artists have an essential role to play in society. No one can imagine a mature civilisation without their contribution…. The Government believes they should be able to work in their own country secure in the knowledge that the community and the Government place a high value on their contribution to our way of life…. We want to ensure that our greatest artists remain in Australia and prosper in Australia, and that the whole Australian community is the richer for their presence…. I believe that, through the measures in this Bill, we will create greater artistic opportunities for all talented Australians. We shall be offering to all who by birth or choice have made this country their home the prospect of enriching their lives through participation in or appreciation of the arts.

(Whitlam in Commonwealth of Australia, House of Representatives 1974: final paragraph)

The 1975 formation of the Australia Council followed decades of commonwealth government programmes to support the arts that “developed fitfully” (Whitlam in Commonwealth of Australia, House of Representatives 1974: paragraph 3). The earliest programmes can be traced to the first decade of Australian federation, when in 1908 the Commonwealth Literary Fund was established to provide pensions to Australian writers and their families (Seares and Gardiner-Garden 2011: 8). This was followed in 1912 with the formation of the Commonwealth Art Advisory Board and the Historic Memorials Committee, the former of which was founded to commission portraits of important Australians and government officials (Craik 2006: 4; Seares and Gardiner-Garden 2011: 8). An earlier version of the Australia Council arose as early as 1968 in the Gorton government, seven years before the passing of the 1975 Act. But unlike the 1975 version developed by the Whitlam government, this earlier incarnation did not carry parliamentary blessing and was less substantial in terms of both funding and activities. Its primary role was to manage public funding and support for opera, ballet and drama (Commonwealth of Australia, House of Representatives 1974). From this earliest guise into its more formalised 1975 form, the Australia Council enjoyed and was shaped by the counsel and direction of the economics profession. Two of Australia’s most esteemed economists, H. C. ‘Nugget’ Coombs and Peter Karmel, served as the council’s debut and second chairman (Commonwealth of Australia, House of Representatives 1974: paragraph 4).¹

The Australia Council’s establishment is in many respects a relatively late occurrence by international standards. Its creation follows similar moves by other nations to establish ‘arts bodies’ to manage and ...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of figures
• List of tables
• 1 Introduction
• 2 Understanding public support for the arts
• 3 The economics of the arts
• 4 Public support for the arts
• 5 Veblen and his muses
• 6 Veblen’s economic edifice
• 7 Production and consumption through the Veblenian prism
• 8 The Veblenian duality and public support for the arts
• 9 Conclusion
• Bibliography
• Index