CULTURE IN THE AGE OF ECONOMIC RATIONALITY

1. 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)

2. CULTURE IN THE AGE OFECONOMIC 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

3. CULTURE IN THE AGE OFECONOMIC 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.

4. CULTURE IN THE AGE OFECONOMIC 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 Radich’s review for the US National Endowment for the Arts: Twenty Years of Economic Impact Studies of the Arts

5. CULTURE IN THE AGE OFECONOMIC 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.

6. CULTURE IN THE AGE OFECONOMIC 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/research_information/services/economic_impact/calculator.asp

7. CULTURE IN THE AGE OFECONOMIC 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 arts&culture: (1) considerable reduction in subsidies received from the state budget (2) immediate need to compensate the lack of resources through market approaches

8. CULTURE IN THE AGE OFECONOMIC 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 artist’s reputation is made in the market” and the like.

9. CULTURE IN THE AGE OFECONOMIC 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.

10. CULTURE IN THE AGE OFECONOMIC 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.

11. CULTURE IN THE AGE OFECONOMIC 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

12. CULTURE IN THE AGE OFECONOMIC RATIONALITY • Radich – 2 key points of his analysis of impact studies: (1) Their methodological (non)credibility, such as: • superficially conceptualized and inadequate samples • insufficient researcher’s 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.

13. CULTURE IN THE AGE OFECONOMIC 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.”

14. CULTURE IN THE AGE OFECONOMIC 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.

15. CULTURE IN THE AGE OFECONOMIC 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?

16. CULTURE IN THE AGE OFECONOMIC 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

17. CULTURE IN THE AGE OFECONOMIC 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.

18. CULTURE IN THE AGE OFECONOMIC 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

19. CULTURE IN THE AGE OFECONOMIC 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). • Milohnić, 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.