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Economists have argued in many places that there may be a justification for public funding of the arts/humanities. And I am sure you have encountered arguments from people that suggest arts funding is shrinking or needs to be bigger and so on. But the fact remains that the arts get subsidized from at least two places, and it is not clear that a case can be made for having both of these around at the same time.

First, some of the arts is promoted directly – with public support for museums, galleries and the like. In other words, since the “market” fails in the production of the actual art then we tax everyone and provide it freely (or cheaply) to everyone. Fine. Great. Let’s not debate whether this makes sense or not.

At the same time, we subsidize heavily the teaching of art at university and certainly at the K12 level. We do this separately from just funding students who are credit constrained, but rather we have dedicated fundraising programs on campuses to increase the prominence of arts and the humanities.

So we have a situation where the arts are funded at the front end and at the back end. I like to think of this as a mix of regulations resembling output and input standards. In basic models of regulations output-standard regulations are preferable because it allows the public via the political process to state a desired goal, and to provide funds (perhaps) to achieve it, but it does not specify how those goals are to be achieved. An input standard does the opposite, it dictates exactly how a goal is to be achieved. So I view the funding and subsidy of museums and theaters as akin to an output standard and the funding at the educational level of an input standard. And it is this combination I argue is a strong contributor to the over-investment in “soft” majors on campuses that Alex Tabarrok has written about in several places. If the subsidies to the actual art market are set properly (and I suggest they are) then the market signals for entry into the arts as a career are correct, and students should make choices about entering that field the same way we make choices about entering a business field. In this way, a wide range of programs would arise to meet the needs/desires of arts-interested students, and they should be willing to pay for them, since the market returns in the arts sector have been “properly” adjusted due to the subsidies.

So pick one. Either subsidize the arts industry or subsidize students at the front end, but by golly don’t do both. And once we do both, we see a race to fund every other undergraduate initiative similarly — and if we all do it, then what you’ll see is a massive case of splitting the check. The only people who win when we do that are the owners of property that the restaurant sits on.

9 Responses to “Subsidies, Subsidies Everywhere”

  1. Dan says:

    The strongest argument against direct subsidies for theaters, galleries, and concert halls may be a moral one: why are we subsidizing the leisure activities of largely white and upper/middle class families and institutions that do little for any constituency except that one?

    Good and Plenty makes the case that although direct funding is small, the US arts policy is remarkably successful. It’s mostly through indirect subsidies in the form of tax deductions that we get a vibrant fine arts scene. France has been in a cultural stagnation in the past 60 years despite massive public subsidies. Few European institutions have well-established institutions for giving, and depend heavily on public funding without paying attention to the public.

    How much can artists and musicians learn in college anyways? Shouldn’t they go instead to an art institute or a conservatory? Even those who don’t get admitted can probably get good skills away from a college setting. They may even be able to get support from kickstarter.com, which has given away more funds than the NEA did last year, and probably to more relevant projects, too.

  2. chuck martel says:

    The arts aren’t any different than other endeavors that aren’t on the public choice theory gravy train. The reasons for the acceptance of one and rejection of another can be mysterious. There doesn’t seem to be much of a problem with public funding of ice hockey rinks, for instance, but we never hear about financing bowling alleys. Every major city subsidizes stadiums for professional sports teams but none of them are willing to contribute financially to the success of horse racing tracks.

  3. Speedmaster says:

    Isn’t the entire argument for subsidies, at its root, that in their absence there will be a sub-optimal amount of the arts? But how can anyone objectively know what the “optimal” amount is? Or measure it after the fact?

  4. Brent says:

    We seem to have a plethora of “artistic” grafitti. I don’t believe that it is subsidized. It just goes to show- those that will create, will create. Enjoyed the read.

  5. Rod says:

    I don’t see why any university or college pursuit should be subsidized,

    Ever since the Renaissance (or even before that) artists, monks, and producers of pictures and music have had to figure out a day job to keep the wolf from the door while their fine art develops a following (in many cases that does not happen until after the artist dies). Certainly the painting of the Sistine Chapel was a day job, and other artists found patrons with enough spare Ducats to afford Neptune, riding a sea horse, created by Claus of Insbruck.

    I used to hire graphic artists all the time for the newspaper, and my best one was a kid who could draw cartoons. If I did not have any clip art, say, for a wrecked car for a body shop ad, I’d say, “Buddy, just draw the car.” He now has a day job lettering trucks and vehicles for a battery company up in Fleetwood. Anyway, I would be the last one to say that art is not an important part of a liberal education, and in some cases it can be channeled into commercial art: fashion design, the new model of a Ferarri or a Volt, or whatever.

    But when hard times hit, sometimes the big hitters who gave generously to the Metropolitan Museum also run out of extra money, just as many Medicis did. The secret for all these artists who tend to be Obamites? Trow da bum out so we can cut the budget deficit, simplify and lower tax rates and get this economy moving ahead.

    Another hint to artists looking for customers: there are a lot of suddenly rich people up in northern Pennsylvania and Eastern Ohio who might be persuaded to decorate their homes with some original art. Better place to go fishing than in Greenwich?

  6. Rod says:

    And back to the idea of subsidies for education. All this does is drive up tuition rates and make it easier for deadheads to inhabit dusty sinecures near the faculty club. Students can figure out on their own what constitutes good sense in the selection of a major, especially when private colleges are charging 50 grand for a year.

    In the olden days, when I was a student, liberal education was all the rage, and one of our basic requirements before we entered our junior year was to take either a semester course in music or art. I took a music course that stays with me to this day, enhancing my enjoyment of classical music in a way that never would have happened otherwise (I don’t play an instrument and I read music poorly). Liberal education as it used to be required the history majors to take math and science, and everybody in the college had to take two semesters of a challenging European History course.

  7. Rod says:

    A;so, we can’t afford to borrow money from the Chinese for art subsidies.

  8. Harry says:

    The Pennsylvania Governor, Tom Corbett, observed yesterday, according to the Allentown Morning Call, that our state teachers’ colleges graduate 12,000 teachers for 3,000 positions.

    Not everyone who goes to Kutztown or Millersville wants to be a teacher in the government-run system, but the system offers a good five-figure income with benefits that add another $30,000 per year, a good back-up unless you counted on being in the soft disciplines, like art or music.

    Meanwhile, speaking of education, did anyone see that five-year-old girl today who is going to the national spelling bee? She said her parents quiz her, she studies a lot of spelling lists, and “I have a really good memory.”

    Nice to hear an honest answer. Bright eyes, a great girl.

  9. Rod says:

    Two other courses stay with me that were part of my liberal education: Psych 101 and Ancient History.

    These two courses were enormously popular, and if you were not interested in being a psych major or were not a history major, it took a lot of humble pleading to get a permission slip for both courses. The courses were taught by two legendary professors and were scheduled for the first period on Tuesday, Thursday and Saturday. One actually had to sacrifice Friday nights’ social events so one was bright eyed for an eight o’clock on Saturday. Well, that sacrifice was small for such an intellectually rewarding course.

    The professor who taught Ancient History was Dr. Davis, who explained at the outset that he did not believe the study of history began with learning about broad trends and major events. Instead, he was big on places, names and dates and what everyone called “hairfacts” — apparently trivial facts that were just good to know, especially if you wanted an A. Beucephalus was Alexander’s horse, and Alexander named just one city not after himself, Beucephala. The horse with the beautiful head. More important than the hairfacts, of course, were such things as the dates of the beginning and ending of all of the Pharonic years. If you attended every class and learned all the facts that Dr. Davis cited in class, that’s all you had to know for an A, and it was a considerable number of facts. Dr. Davis would begin class where he left off from the last class, sometimes needing to ask the class, “Where were we?” His Schanuzer dog also attended class and paid attention, too, to make sure he did not miss out on a Dog Yummie. Not only did this give me a lasting understanding of what happened in the ancient world, it also converted me in the belief that one needs some knowledge before one can reflect upon it.

    Psych 101 was also a fact-based course. Like Dr. Davis, Dr. Langhorne thought his students should know a lot about psychology before analyzing anything and anybody. Premier fact: a five-item multiple-choice question is the fairest of all test questions because it gave you an opportunity to recall what you knew but set a trap for anyone who only had a superficial knowledge of the subject matter. Even though I asked a lot of essay questions when I taught English, I knew that my objectivity in grading would be hard to maintain. Certainly everyone at my college who taught school afterward would have leaned hard on what he learned in Psych 101.

    Is Psychology a science in the same sense that physics is? I think it’s in that middle ground between the humanities and sciences. I can see how lots of students could waste a lot of time taking psych courses, especially those cross-department courses like “Gay, Lesbian and Transgender Psychology and Its Relationship to Native American Alcoholism.”

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