Who Should Pay for the Arts?Posted: February 2, 2014
Private support beats public subsidies
Jared Meyer writes: Should the federal government subsidize the arts? Dancer Nora Younkin thinks so. In the Huffington Post recently, she argued that the societal benefits of arts such as dance are not only cultural and educational, but economic as well. “It is well documented that dance and the arts generate revenue for local economies,” she wrote. “The performing arts also create jobs. And I don’t mean just the jobs of dancemakers and performers. The technical crew, the artistic collaborators, the venues, the technical equipment rentals or purchases, the restaurant down the street from the venue, even the taxi driver that got you to a performance. Those are all real jobs from which people take home a paycheck and go on to spend buying groceries or clothes.” But assuming that all federal funding reaches struggling artists—and that art subsidies indeed “trickle down” to a local economy—is a mistake.
Government cannot create economic value out of thin air. Federal funding for the arts is not an economic gain, but rather a forced reallocation of economic productivity—from private spending to public spending. Subsidies add nothing to economic output on the whole—on the contrary, they detract from it, through transaction costs and inefficiencies. So when Younkin claims that the arts benefit local economies by generating tax revenue and creating jobs, she’s only looking at the immediate, obvious effects of subsidies: money in the artists’ pockets that can be spent buying, say, groceries and clothes. She fails to account for where the money comes from in the first place: namely, taxes. She cites a recent Arts & Economic Prosperity report that claims the arts created $135 billion in economic activity, $22.3 billion in tax revenue, and 4 million jobs in the United States in 2010. She attributes this “damn good return on investment” to the $168 million appropriated to the National Endowment for the Arts that year. But in addition to federal government funding, private sources donated more than $4.5 billion to the arts in 2010. It’s absurd to credit all those economic gains to the less than 5 percent of financial arts support from federal subsidies.
Furthermore, research by Americans for the Arts has shown that increased public funding does not mean greater public participation in the arts. Even the Arts & Economic Prosperity report states, “As people lost their jobs and houses, arts attendance—like tourism, attendance to sporting events, and leisure travel—declined as well.” To increase consumer participation in the arts, the government must first address the tepid economic recovery. Otherwise, there will be no audience even for well-funded artists.
Federal funding for the arts rose an inflation-adjusted 24 percent from 2005 to 2010. Yet, the immediate economic effects associated with the arts fell by an inflation-adjusted 10 percent over that period, due to the financial crisis and ensuing recession. A growing, prosperous private sector is the lifeblood of artistic expression….
Jared Meyer is a policy analyst at Economics21, a center of the Manhattan Institute for Policy Research.
- Does America Still Need a National Endowment for the Arts? (dailyfinance.com)
- Lincoln Chafee Calls On Rhode Island To Invest In The Arts (huffingtonpost.com)
- Dance and Capitalism: A Love-Hate Relationship (stunningguidance.wordpress.com)
- Bury St Edmunds: Council subsidy for Apex venue is less than expected (eadt.co.uk)
- Running on Empty: Scarcity for Small (sfcv.org)
- Public funding of the arts: it’s time for plan B (theguardian.com)
- Gov. Rick Snyder honored by U.S. Conference of Mayors, Americans for Arts, for arts leadership (mlive.com)
- Why the Arts Really Do Mean Business – Bloomberg (bloomberg.com)
- Zvishamiso Arts launch – new hope for dancers (thezimbabwean.co)
- The arts (createthroughart.wordpress.com)