Professional Documents
Culture Documents
Cultural
Economics
RUTH TOWSE
Professor of Economics of Creative Industries,
CIPPM, Bournemouth University, UK and
CREATe Fellow in Cultural Economics
(University of Glasgow)
Edward Elgar
Cheltenham, UK • Northampton, MA, USA
© Ruth Towse 2014
Published by
Edward Elgar Publishing Limited
The Lypiatts
15 Lansdown Road
Cheltenham
Glos GL50 2JA
UK
Abbreviationsx
3 Performing arts 26
3.1 Economic features of live performance 26
3.2 Demand for the performing arts 28
3.3 Subsidy and the performing arts 31
3.4 Measures of the effectiveness of subsidy 33
3.5 Economic features of individual performing arts 35
3.6 Conclusion 38
vii
viii ADVANCED INTRODUCTION TO CULTURAL ECONOMICS
7 Copyright 80
7.1 Economics and copyright 80
7.2 Incentives and disincentives 84
7.3 Alternatives to copyright as an incentive to create 86
7.4 The value of copyright to artists 88
7.5 Impact of digitization on copyright 91
7.6 Concluding remarks 92
10 Conclusion 121
10.1 The early years: economics of the arts and culture 121
10.2 The creative industry paradigm 124
CONTENTS ix
References134
Index139
Abbreviations
x
1 About cultural economics
1
2 ADVANCED INTRODUCTION TO CULTURAL ECONOMICS
“The arts” is a catch-all term for the live performing arts (music, thea-
tre, opera, ballet, dance, and other staged events), literature and con-
temporary art, all art forms that are typically supported one way or
another from the public budget. Heritage means museums and built
heritage, which ranges from archaeological sites to buildings of archi-
tectural and historic importance, even to whole cities or parts thereof.
Museum buildings and collections are mostly publicly owned, though
they are managed in different ways either by public authorities or as
private non-profit organizations; museums are very diverse, ranging
from those with collections of works of art, applied arts and crafts, sci-
ences, ships and aircraft, to zoos. Private for-profit companies operate
in the art and antiques market for historic and contemporary works
of art and other collectables and in the cultural industries (see below).
The turn of this century saw the development of the notion of crea-
tive industries combining the “traditional” non-profit arts and heritage
with the for-profit cultural industries in a “creative economy”. The
creative industries began to take centre stage and governments world-
wide now view them as a major source of growth and employment.
ABOUT CULTURAL ECONOMICS 3
Value is a word that has both positive and normative connotations, and
nowhere do these two elements crop up more than in cultural econom-
ics. The debate on value in economics is an old one, called the “paradox
of value” by Adam Smith in the Wealth of Nations; it hinges on the
ABOUT CULTURAL ECONOMICS 5
Prices, however, are a reasonable measure of value for goods and ser-
vices that are supplied by private enterprise, for which sales revenues
6 ADVANCED INTRODUCTION TO CULTURAL ECONOMICS
There is another factor however, that has held back price rises. Artistic
labour costs have risen but not as much as labour costs in other indus-
tries. This has muted though not fundamentally altered the predictions
of the cost disease. Studies of artists’ labour markets have consistently
shown that there is generally an excess supply of artists of all kinds –
10 ADVANCED INTRODUCTION TO CULTURAL ECONOMICS
Very similar things have been said about built heritage. Buildings are
listed or otherwise designated as important historically and/or archi-
tecturally so their “supply” depends upon the choices made by experts.
Those choices are not necessarily governed by considerations of cost,
nor may they coincide with what taxpayers would choose, although
they end up financing preservation. A further aspect of preserving
built heritage is that many listed buildings are privately owned and the
costs of maintenance and preservation fall to the owners. Moreover,
the expert authorities listing the buildings make stipulations about
changes to the building and enforce standards of preservation that
may be expensive, as they require the services of skilled labour for their
maintenance. Chapter 4 goes into these issues in more depth.
and grow until they either push out old firms or are swallowed up in
mergers.
Market power is significant for two reasons: dominant firms can exploit
consumers in terms of price, and they can restrict novel cultural devel-
opments and creativity. Particularly where there is globalization of
ownership, there is always the possibility of dominant interests offer-
ing a restricted supply of cultural products, but leaving small suppliers
unable to compete on costs and price: the case with Hollywood movies.
For those reasons, there are often special cultural policies that seek
to protect national cultures and to ensure cultural development, and
competition policies to regulate oligopolistic firms and monopolies.
This introduction to cultural economics has shown that the arts and
cultural goods are economic goods to which basic economic concepts
such as opportunity cost, supply and demand, production and con-
sumption, apply. There are specific attributes of the arts and creative
industries, however, that call for special treatment and adapting eco-
nomic theory to them is what distinguishes cultural economics. The
chapter has introduced the reader to many of the topics discussed in
the field and to the basic tools of economic analysis. The remaining
chapters in this book deal with these topics in greater detail by going
over the concepts and material introduced here. The final chapter pro-
vides a summary of the concepts, and an evaluation of progress in
cultural economics.
Further reading
David Throsby’s book Economics and Culture (2001) offers the thoughts
of one of the most eminent cultural economists on the role of econom-
ics in relation to culture broadly defined. Similarly, Arts and Economics
by Bruno Frey (2003), another distinguished cultural economist, pro-
vides a non-technical introduction to many of the topics mentioned
here. Tyler Cowen’s 1998 book In Praise of Commercial Culture can
be seen in retrospect as a forerunner to the creative industries move-
ment. Michael Montias (1976) and William Grampp (1996) were both
trenchant critics of museum management, and are well worth reading.
2 Cultural economics and cultural
policy
13
14 ADVANCED INTRODUCTION TO CULTURAL ECONOMICS
In very general terms, the aims of cultural policy are to ensure the
existence of the arts and heritage, to enable access to them and to raise
or maintain their quality. Cultural policy has changed considerably
over the fifty years’ existence of cultural economics and of course, poli-
cies vary a lot between countries and cultures. Some countries barely
had an overt national cultural policy until relatively recently. In the
UK, the preference for most of the twentieth century was for arm’s
length non-governmental public bodies (NGPB) to administer rela-
tively modest amounts of public money to support the arts and muse-
ums, with archives, archaeology, national monuments and suchlike
being the direct responsibility of central government. The Standing
Commission on Museums and Galleries, set up in 1931 (which became
the Museums and Galleries Commission in 1981) dealt with national
museums and art galleries, later also with national libraries, and from
1944 the Arts Council of Great Britain (ACGB) was the effective policy-
CULTURAL ECONOMICS AND CULTURAL POLICY 15
making body for the performing arts, literature and visual arts; ACGB
received a lump sum grant from government to disburse according
to its own criteria and (as the Arts Council England) continues to
do so today. The BBC (British Broadcasting Corporation) is another
semi-autonomous body, financed by a licence fee set by Parliament;
it was the sole supplier of radio and television until the 1960s and
was responsible for its own broadcasting policy. Thus, what we would
now call cultural policy was effectively made by these separate institu-
tions in the UK until the establishment of the Department for Culture,
Media and Sport (DCMS) at the end of the last century which then
assumed overall responsibility for cultural policy.
Along similar lines, in the US the National Endowment for the Arts
(NEA) was established by Congress in 1965 as an independent agency
of the federal government with a remit that covers performing arts, lit-
erature, museums and traditional arts; it works with state arts agencies
and philanthropic donors. Each state has its own provisions, financial
responsibilities and policies for the arts and culture. Many of the lead-
ing American museums and art collections were established by phi-
lanthropists as charitable trusts responsible for their own governance,
finances and policies.
Author: J. Säilä
Language: Finnish
Sommitteli
J. J. [J. Säilä]
Mutta kohta oli idän rohkea kotka levittävä siipensä lentoon yli
meren ja ulapoiden iskeäkeeen kyntensä lännen monista taisteluista
uupuneesen jalopeuraan.
*****
Uljaasti sanoi hän nyt miehilie, ettei ollut muuta neuvoa enään
jäljellä kuin yksimielisesti karkoittaa vihollinen pois ja vapauttaa maa
raskaasta rasituksesta. Sentähden oli yleinen kansan kapina vielä
saman päiwän ehtoona klo 8 pantava toimeen. Kaikki alukset olivat
poistettavat rannoilta loitommaksi, ettei venäläiset pääsisi
pakenemaan ja äkkiä yllätettävä heidän kimppuunsa sijoitus
asemissaan. Ensin aikoi hän itse tehdä ylläkön vihollisten päällikön
pääkortteeriin. Strömsvikin kartanoon, missä Nejdhardt 10 kasakan
kanssa majaili ruununvouti Taxell'in luona.
Päätös oli tehty. Salaman tavoin olivat Arén’in uljaat sanat
sytyttäneet miesten mielet. Tuo synkkyys, mikä äsken kuvastui
heidän kasvoissaan, oli nyt kadonnut ja uljuus loisti nyt silmistä.
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Kaunis oli keväinen ilta toukokuun 6 p:nä, kun klo 9 j.pp. nähtiin
erityinen joukkio verkalleen liikkuvan koilliseen suuntaan Finströmin
pitäjän Bambölen kylästä, missä Arén'in asunto oli. Siinä oli sankarit
Arén ja Gummerus ratsain ja heitä seuraa 100 Finströmin
talonpoikaa jalkaisin, enimmät varustettuina terävillä seipäillä, syystä
että ennenmainitun venäläisten käskyn johdosta ampuma-aseet
olivat riistetyt pois. Harvalla ainoastaan oli tuo tunnettu, mainio
hyljeslinkku. Arénin vanhemman veljen, Malmbergin johdolla
lähetettiin Hammarlandiin 30 miestä estämään vihollisen pakoa,
mutta itse pääjoukko marssi Strömsvikiin vihollispäällikön
pääkortteeriin siten yhdellä iskulla masentaaksean vihollisen.
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