CULTURE IN THE AGE OF ECONOMIC RATIONALITY

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CULTURE IN THE AGE OF ECONOMIC RATIONALITY

• Discussion about the relationship between culture
  and economy in Slovenia provoked by a group of
  younger economists
• Their position
• (1) the market economy is a universal criterion
  for assessing any activity in society
• (2) all other spheres of social life are
  expected to justify their existence using a kind
  of econometric introspection (a test of their own
  economic rationality benefits for society as a
  whole)

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CULTURE IN THE AGE OF ECONOMIC RATIONALITY

• Their demands Whoever wants to receive funds
  from the public budget must first prove that
• (1) tax payers and society as a whole will
  benefit from the activity in question
• (2) investment of public funds in a particular
  project is better (more profitable) than
  investment in some other project
• In other words
• (1) no public investment as such qualifies as
  worthwhile (for example, on the basis of expert
  assessments)
• (2) it may become worthwhile only in relation
  to another (real or hypothetical) competing
  subsidy or investment

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CULTURE IN THE AGE OF ECONOMIC RATIONALITY

• Culture and all other social activities,
  including those that the European (continental)
  model has traditionally understood as components
  of the welfare state, should be unconditionally
  subjected to market forces and prove their worth
  in competition with other market players.
• This requirement of young Slovene economists
• culture should offer convincing arguments
  (meaning acceptable to economists) proving the
  benefits of culture for society as a whole, and
  for the economy in particular
• a late response to a process that began in the
  USA in the mid 1960s,
• later spread to Canada, Australia, New Zealand,
  Great Britain
• and gradually to west European countries.

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CULTURE IN THE AGE OF ECONOMIC RATIONALITY

• The pioneering work in the field of cultural
  economics
• In the 1960s William Baumol, William Bowen
  Performing Arts The Economic Dilemma
• In the 1970s William Hendon founded the Journal
  of Cultural Economics and an international
  association that is still active (conferences
  etc.)
• In the meanwhile studies about the impact of
  culture on the economy have become extremely
  popular
• At the beginning of the 1990s Anthony Radichs
  review for the US National Endowment for the
  Arts
• Twenty Years of Economic Impact Studies of the
  Arts

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CULTURE IN THE AGE OF ECONOMIC RATIONALITY

• During the 1970s and the 1980s
• more than 200 studies in the US dealt with
  economic impact of the arts,
• discussing issues relating to 34 federal states
• and more than 100 cities
• Studies about the economic impact of culture
  flourished especially in North America.

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CULTURE IN THE AGE OF ECONOMIC RATIONALITY

• Cultural councils in the USA and Canada began to
  offer simple do-it-yourself manuals and software
  that could be used by cultural organizations to
  calculate their economic impact on the
  environment in which they operate a town, a
  region or the like, e.g.
• Assessing the Local Economic Impact of the Arts
  A Handbook. 1997. Toronto Ontario Arts Council
• or a simple software for a quick calculation of
  the economic impact of a cultural activity
  offered by the Americans for the Arts
  organization at
• http//www.artsusa.org/information_resources/rese
  arch_information/services/economic_impact/calculat
  or.asp

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CULTURE IN THE AGE OF ECONOMIC RATIONALITY

• Social and political context of US and GB
  important for understanding of the process
• At the turn of the 1980s Ronald Reagan and
  Margaret Thatcher came to power
• Their politics was based on
• (1) cuts in public expenditure and
• (2) simultaneous strengthening of the private
  sector.
• Consequences for artsculture
• (1) considerable reduction in subsidies received
  from the state budget
• (2) immediate need to compensate the lack of
  resources through market approaches

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CULTURE IN THE AGE OF ECONOMIC RATIONALITY

• Chin-tao Wu Privatising Culture Corporate Art
  Intervention since the 1980s (Verso, 2002)
• Cultural organizations were pressed to get
  accustomed to the competitive spirit of free
  enterprise.
• Particularly symptomatic the statements from
  the representatives of Reagan and Thatcher
  administrations and leading national funds, the
  Arts Council in Great Britain and the National
  Endowment for the Arts in the USA, such as
• commercial films are as much art as
  non- commercial ones
• an artists reputation is made in the market
• and the like.

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CULTURE IN THE AGE OF ECONOMIC RATIONALITY

• In these circumstances that were unfavorable for
  culture, and non-commercial culture in
  particular, and even a threat to its very
  existence, cultural workers, their supporters and
  advocates started to commission research projects
  that were expected
• (1) to provide hard (numerical, statistical)
  indicators
• (2) by doing so, to convince the economists and
  politicians that investment in culture was
• commercially justified
• that it could create new jobs
• contribute to increased consumption etc.

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CULTURE IN THE AGE OF ECONOMIC RATIONALITY

• The aim of the impact studies was to convince
  those who had power that subsidies for culture
  produce so-called multiplier effect.
• Why this conclusion is important?
• It shows that the study of the economic impact of
  culture
• did not emerge owing to some internal logic
  inherent in the research field itself
• was not motivated by a romantic search for
  truth on the part of scholars, but
• by the need to provide a politically convincing
  argument that could be used effectively when
  lobbying for culture.

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CULTURE IN THE AGE OF ECONOMIC RATIONALITY

• In principle no reason to reject in advance
  economic studies of any field of social activity,
  including culture.
• What worries experts in the field (Radich, van
  Puffelen etc.) are
• (1) the methodologically unacceptable
  shortcuts used in collecting and selecting data
• (2) attempts at self-interested interpretation
  of statistically aggregated data
• (3) simplifying /one-sided understanding of
  cultural production
• Many of these studies are
• (1) a product not of political economy, but
  rather of politicized economy
• (2) an uncritical instrumentalization of
  economic studies for political purposes

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CULTURE IN THE AGE OF ECONOMIC RATIONALITY

• Radich 2 key points of his analysis of impact
  studies
• (1) Their methodological (non)credibility, such
  as
• superficially conceptualized and inadequate
  samples
• insufficient researchers discipline in
  collecting and interpreting data
• wrong assessments when data are not available
• wrong assessments of the impact on the tax system
• inadequate methods of calculating the multiplier
  effect
• researchers being ideologically influenced by
  commissioners etc.

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CULTURE IN THE AGE OF ECONOMIC RATIONALITY

• (2) Impact studies are inconsistent with the
  nature of the arts
• structural problem of these studies because
• The arts have an economic dimension, but that
  dimension does not constitute the essence of the
  arts. Economic arguments for the arts do not
  emerge from the central philosophy or strength of
  the arts their creativity, their ability to
  challenge, for example but rely instead on
  central features of a non-arts discipline.

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CULTURE IN THE AGE OF ECONOMIC RATIONALITY

• Radich indeed says that this conclusion does not
  mean that economic analysis cannot be beneficial
  for art.
• For him, it is problematic only when the economic
  value of an artistic or cultural project becomes
  the only argument used to prove its cultural
  value and significance for society.
• If such arguing for the significance of culture
  and justification of public expenditures becomes
  the prevailing discourse, then sooner or later it
  will be the economists who will take decisions
  concerning culture instead of those to whom
  culture means much more than just the number of
  tickets sold.

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CULTURE IN THE AGE OF ECONOMIC RATIONALITY

• In a debate in which the key argument is
  economic rationality, the struggle is bitter,
  and the winner is one who can convincingly prove
  that
• the designated activity is more profitable
• it brings more jobs and
• it ensures progressive development.
• Yet it is a question whether in such a struggle
  it is truly possible to offer arguments
  sufficiently solid as to protect culture from the
  economic rationality of other, more profitable
  sectors?

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CULTURE IN THE AGE OF ECONOMIC RATIONALITY

• This by no means suggests that cultural
  researchers should refrain from addressing this
  subject.
• On the contrary, to leave this important sphere
  of cultural policy to economists exclusively
  would be irresponsible.
• Other disciplines that could contribute much to
  this debate
• - sociology and its specialized branches (the
  sociology of culture, the sociology of work,
  urban sociology etc.)
• - cultural and arts history
• - communications studies
• - aesthetics and many more

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CULTURE IN THE AGE OF ECONOMIC RATIONALITY

• Some economists seem to be unaware of the fact
  that cultural practices and artistic creativity
  are not necessary compatible with the competitive
  principle of the market.
• Radich, for example, thinks that the logic behind
  the economic (i.e. market) success of culture is
  devastating for the principle of collaboration
  characterizing many actors in the fields of arts
  and culture.
• The ideology of economic rationality and market
  success encourages competition rather than
  collaboration and the atomization of individuals
  and organizations rather than linking them
  together.

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CULTURE IN THE AGE OF ECONOMIC RATIONALITY

• Art and culture are not means to economic ends
  (as advocated by economic impact arguments),
  but the economy is a means to artistic and
  cultural ends.
• Christopher Madden

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CULTURE IN THE AGE OF ECONOMIC RATIONALITY

• References
• Madden, Christopher. 2001. Using 'Economic'
  Impact Studies in Arts and Cultural Advocacy A
  Cautionary Note. Media International Australia,
  No. 98, pp. 161-178 (see also http//www.fuel4arts
  .com/content/files/ACF5A4E.pdf).
• Milohnic, Aldo. 2004. Kultura in ekonomija
  (Culture and the Economy). Revija 2000, No.
  168-170, pp. 23-26.
• . 2005. Mladoekonomisti proti kulturniškemu
  lobiju (Young Economists against the Cultural
  Lobby). In Autor, Sabina and Kuhar, Roman
  (eds.). Intolerance Monitor Report No. 4.
  Ljubljana Peace Institute, pp. 106-123.
• Radich, Anthony J. 1992. Twenty Years of Economic
  Studies of the Arts A Review. Washington, DC
  National Endowment for the Arts.
• Van Puffelen, Frank. 1996. Abuses of
  Conventional Impact Studies in the Arts.
  Cultural Policy, Vol. II, No. 2, pp. 241-254.
• Wu, Chin-tao. 2002. Privatising Culture
  Corporate Art Intervention since the 1980s.
  London, New York Verso.