Museums, Washington, D.C.. Bluford, A. (1997) E Pluribus Unum. University of Minnesota Press, Minneapolis. Buchloch, B.H.D. (1989) âThe Andy Warhol Lineâ, ...
Journal of Cultural Economics 23: 13–30, 1999. © 1999 Kluwer Academic Publishers. Printed in the Netherlands.
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Culture and Commerce? MARTIN SHUBIK Seymour H. Knox Professor of Mathematical Institutional Economics, Department of Economics, Yale University, New Haven, Connecticut, U.S.A. Abstract. The cost aspects of supplying cultural goods and services have raised many basic questions concerning the economic activity of cultural institutions. There is more or less a consensus that the same criteria that apply to the cost aspects of any business also apply to cultural institutions. The nature of the products supplied and the stress on revenues earned are different. A key question to be asked by each society is how to balance the product mix offered by its cultural institutions taking into consideration both the societal valuation of the public goods provided and the earning potential of the institution. This essay examines some of the questions that occur at this intersection of culture and commerce. Key words: culture, cultural goods, commerce, national purpose
The title of this essay is an inversion of the name of an excellent collection edited by Stephen Bailey (1989) entitled Commerce and Culture. Although my concern is with cultural activities in general, I have more or less confined my remarks to museums as sufficiently representative in the study of the basic problems faced in paying for cultural activities. I also have benefited from a rereading of Edward Alexander’s (1979) Museums in Motion as well as two thoughtful studies aptly entitled Supporting the Arts: An International Comparative Study by Mark Schuster (1985) and Who’s to Pay for the Arts? The International Search for Models of Support edited by Milton Cummings and Mark Schuster (1989). I recommend these to those concerned with both the role of culture in our society and who is to pay for its support. This brief overview raises far more questions than it attempts to answer. In part this is because from generation to generation and society to society many of the basic questions remain the same, but the debate over them varies both in intensity and relevance. In part this is because the questions have become more pertinent. In the past thirty years we have seen both a growing interest in the supply of cultural institutions and a concern for their changing cost structure. The mere fact that there have already been ten international conferences on cultural economics is indicative of a level of interest which would not have appeared likely thirty years ago when William Baumol and William Bowen (1968) published their book on the economics of the performing arts. The change in the
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skills and attitudes of new museum directors and the difficulties in the recruiting of museum directors are indicative of new challenges. A director such as Tom Krens at the Guggenheim with his program for franchises for an international museum chain may be symbolic of a new breed where both business and curatorial skills are called for. Grampp (1996) has presented an imaginary colloquy between an economist and museologist that illustrates the clash in views of the museum world. As I wish to comment on several varied points, I am presenting my observations in point form together with a suggestion as to whom we should be asking some of the basic questions raised. Like the final examination in economic theory, the questions are often, if not always, the same, but the answers may vary with the context. 1. Some Questions Among the more important questions that need to be asked at local, national and international levels are: • Does a society get the cultural institutions it deserves? • From the point of view of those who worry about culture, is the current cultural situation in various societies precarious or in some sense critical? Using the economist’s language, given some form of social welfare criterion is it reasonably satisfactory? A more parochial question to ask is: • Are there important differences between developed and underdeveloped countries? • Furthermore, are there basic differences among developed countries? • Still further, do the development of commerce and the growth of market economies and the attitudes accompanying them have a positive or negative influence on the development of cultural institutions? For example, does the mind set which regards visitors to an art museum as “customers” imply a shift in cultural values? These questions are perennial and value-laden in content and are basically answered by the political process. The role of the economist as a professional is to help to structure the debate.
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2. What Are the Measures and Indices of Culture? Sometimes the economic theorist is accused of trying to quantify the unquantifiable. The argument goes that culture is too complex and too delicate a flower to be adequately characterized by quantitative measures. Up to a point I agree. But as a first cut a little simple counting in terms of numbers of institutions, money spent, and attendance helps. The Council of Europe’s Program on the Appraisal of National Cultural Policies and the UNESCO program for cultural indicators are indicative of the understanding of the need to at least attempt measurement. Often the insights gained from an attempt to measure are more valuable than the measurement itself. Crude measures of some activities of interest include attendance and expenditures on: opera, theater, ballet, modern dance, orchestras, jazz and popular music, films, books published, libraries, formal gardens, cultural monuments and buildings, art museums, science museums, history museums, other museums, universities, and postgraduate studies. In the United States, at least, the growth in the number of museums in the last twenty years has been phenomenal. In the 1970s alone the American Association of Museums (1994) noted the creation of 2,390 new museums. Most of these are small, local and specialized. Although many of my remarks pertain to art museums, some comments on new museums are called for. In order to understand culture in its full societal context I believe that one should also look at sports, hobbies, and the attitudes of society towards science. Most European societies, like the United States have precious magazines that are selfappointed guardians of culture. In them professors of literature and other literati defend their view of culture. This view appears to be consistent with the proposition that a scientist who understands modern physics but not modern dance is less cultured than a critic who understands modern dance but not physics. The lengthy list noted above covers most of the cultural “public goods” in a society. A key question that faces every society is how is the division of production, supply and costs to be met by public and private means? Many of the public goods involved display “network increasing returns to scale” (Arthur, 1994). Once enough members of a society start to follow some particular cultural activity, the more socially important that activity becomes, and it may easily display considerable societal increasing returns to scale. 3. National Purpose and the Support of Cultural Activities There are diverse reasons put forward for national support for cultural activities (Cummings and Katz, 1987; Meisel, 1986). Among them are: International prestige: The Soviet Union supported ballet, Italy has favored opera, Austria has a tradition in light opera and Mozart (since his death) is a national icon. There is a complex relationship between cultural taste, political control and national pride.
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Preservation and reinforcement of cultural identity: A major preoccupation in Canada has been to avoid being swallowed culturally by the United States (Meisel, 1986). The Guggenheim project in Bilbao provides an example of such a cultural statement, as does the Sidney opera house in Australia. Education of the young: To many individuals a central role for many cultural institutions is educating the young. The shepherded visits of school children to art, history and natural history museums pose problems in joint cost allocation and raise questions concerning who supplies the educational inputs on these occasions and how effective these visits are. The cynic might suggest that these museum trips provide a way of utilizing school time where the teacher need be less concerned with teaching than acting as a tour guide. Although I do not subscribe to this viewpoint, it presents a challenge that cannot be dismissed casually. Education of the “worthy poor”: In the United States, especially, there has been a traditional concern with universal education (exemplified, for instance by the Carnegie libraries). John Cotton Dana of the Newark Museum pushed resolutely for education at all levels. He viewed the museum as an instrument for community betterment. This included the encouragement of community museums and exhibitions designed to reach all levels and every ethnic group in the population. Preservation of cultural evidence and the fostering of culture: Francis Henry Taylor of the New York Metropolitan Museum of Art stressed as a prime function of the museum the validation and preservation of art objects as documentation of cultural history. Benjamin Ives Gilman of Boston argued for “art for art’s sake”. He believed that there had to be an oasis in society for the pursuit and contemplation of beauty. Yet the social dynamics of the establishment have always raised problems between the Academy and Fauvres, the respectable artists and the Ashcan school, the preservers and the innovators. Economic Impact: The actions of the Santa Fe, New Mexico government provide a striking example of the economic impact of the arts on the development of the community. There is a city hotel tax utilized for cultural purposes. There is a completely conscious effort by this town of around 60,000 to attract over 500,000 visitors, with cultural activities being offered as an important part of the attraction. The new museum designed by Frank Gehry in Bilbao with the collaboration between the Basque government and the Guggenheim involved not only national pride but also considerations of economic impact. Unfortunately, in spite of the veneer of economic measurement, there are many imponderables involved in the assessment of the influence of a cultural institution on its society. The manipulation of economic impact studies can be utilized for political and administrative purposes to rationalize the expenditure of considerable public funds for a baseball stadium or opera house under the rubric of cold economic objectivity. Disguised unemployment of the upper middle class: The two major correlates in museum attendance in the United States are education and income. When a teacher or other educated professional spends a few days in town and is not fully employed
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by conferences or meetings, the museums, theaters, ball games and golf courses can expect extra business. Entertainment and culture that pays: Book publishing; record, tape and CD production; and most of film making appear to be reasonably profitable privately run enterprises. In the United States many private universities and some private schools prosper with relatively low government subsidies, but they have private endowments made feasible to some extent by the nature of the tax laws. The key observation concerning government giving directly via subsidy, or indirectly via tax break, is that the nature of the centralization or decentralization of the decision making is different. Whom do we trust or distrust the most, the politicians and administrators or the businessmen and other rich? My guess is that the answer is ad hoc. There are some politicians and philosopher kings worthy of our trust as well as some philanthropist tycoons. Unfortunately most of the kings and tycoons most of us can agree upon are long since dead. As early as 1782 Charles W. Peale had opened a private museum in Philadelphia and later opened branches in New York and Baltimore. Temporary help to this museum was given in 1802 by the Pennsylvania legislature for rent free exhibition space. Aid from the American Philosophical Society was extended to finance an expedition to find mastodon remains. But the museum eventually failed after the rent subsidy was withdrawn and competition from small “museums” more devoted to entertainment eroded its initially respectable profits. P.T. Barnum in the 1840s combined showmanship, collecting, entertainment and promoting in his private museum. He made and lost several fortunes. In some ways Barnum may be regarded as a precursor of Disney. A biography of Barnum is well worth reading (Harris, 1973; Bluford, 1997). The story of the efforts of both Peale and Barnum raise basic questions concerning the boundaries between culture and commerce. In particular they illustrate the difficulty in trying to set up strict bounds between high culture, culture for the common man, science, hokum and entertainment. More relevant to today has been the growth of Disney. The blend of education and entertainment at Epcot or the use of symphonic music in Fantasia may be regarded by some as an assault on cultural and educational values. By others they may be seen as a profitable way to spread elements of high culture to an audience that would otherwise not be reached. The key question for all of us is when has the sugar coating of the pill destroyed its original purpose? I believe that all directors of cultural institutions have both positive and negative lessons to learn from the rise of Disney as an entertainment/cultural force run at a profit. When we consider the attendance figures and the revenues from popular sports, perhaps the wave of the future might call for an institutional relationship between the major football or baseball teams and the museums in their cities. This could be aimed at placing previews of the more popular museum exhibitions in the stadiums. A concrete example might be the promotion of an exhibition on the art of the motorcycle.
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Links between high culture and popular culture, paraphrasing the quote of a major United States bank robber (Willie Sutton) “are where the money is”.
4. A Little History What does history have to teach us concerning museums and their past, present, and future roles in society? What is a museum? Is it a black hole for works of art and the bones of the extinct? Is it a cemetery or a treasure trove of past culture, but an inhibitor of the new? The original Museion was dedicated to the 9 muses: epic poetry, lyric poetry, history, music, religious music, tragedy, dance, comedy, and astronomy. The first museum was probably the museum in Alexandria in the third Century B.C. It was apparently also a research institute as well. However, after this clearly dedicated museum-library-graduate school it is hard to discern much (at least in the western world) that we could classify in modern terms as a museum open to the public until around the seventeenth century. Prior to the existence of modern museums there were the great collectors such as the Duc de Berry in the early fifteenth century, Charles I of England later, and various popes. The age of the museum more or less dates from around 1700 with the Ashmolean Museum of Natural History at Oxford founded in 1683 being one of the earliest. The Uffizi Palace became an art museum in 1743. The British Museum followed, opening with the purchase of the Sloane collection in 1759. It was probably the first national museum. Pope Clement opened the Vatican collection in 1773. The Louvre was opened in 1793 and was the first national gallery. The National Gallery in Great Britain opened in 1824. The great Russian museum, the Hermitage, came later opening in 1863. The United States was somewhat later than much of Europe in its opening of museums. The first natural history museum was opened in Charleston in 1773, but the Smithsonian came into being in 1846, later than the Trumbull Art Gallery at Yale, which was the first university gallery in the United States. The golden age of museums in the United States was in the 1870s with the Metropolitan Museum of Art and the American Museum of Natural History opening in New York and the Museum of Fine Arts opening in Boston. Early in the American tradition private enterprise played a role, and even among the great museums of New York, Boston and many other U.S. cities there was a mixed blend of city and private donor funding. In New York, between the two World Wars, three modern museums came into being with private sponsorship. The Museum of Modern Art opened in 1929, the Whitney in 1930 and the Guggenheim in 1939. Since then museums for design, for space and aeronautics, for architecture and other special topics have been formed. The 1979 Museum Universe Survey estimated around 5,000 museums for the United States. By 1994, according to the American Association of Museums, this number had grown to 8,200 and it is still growing (O’Donnell and Garfield,
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1994).1 With the proliferation of both museums and collectibles I am reminded of a recent New Yorker cartoon which had four stores in a row with signs of “Antiques”, “collectibles”, “bric-a-brac”, and “garbage”.
5. Costs and Products A major professional contribution of cultural economics comes in understanding costs, products and revenues. The cost side of any cultural institution is a business. What to pay the guards and how big the parking lot should be are not primarily questions in aesthetics. The gray area between selling an institution’s cultural soul and defending its prime purpose is not particularly large when dealing with the cost management side of running a cultural institution. The cultural problems come on the product and revenue side. The moral dilemma is not present when estimating the costs of plumbing. When costs are mounting there are two “fixes”. The first is to show some business sense and make sure that cost control is efficient. The second is to look for new revenues. The insightful work of Baumol and Bowen (1968) has led many cultural economists to show concern for “Baumol’s Disease”, named after their observation of the rise in relative costs in the performing arts, where most factor inputs (acting “productivity”, for instance) show little change in productivity since Shakespeare’s time. The contributions in Ruth Towse’s (1997) recent book show the influence of this analysis. In the original context of Baumol and Bowen’s study of the theater, I subscribe to the thesis put forward. It is not that clear that this somewhat pessimistic analysis applies with the same force to museums and educational institutions. There is the possibility that in the last twenty years the change in automation, communication and display techniques has been so large that the productivity in the operations of museums and educational institutions may change. There may even be profitable opportunities for new forms of interactive wired audiences for the performing arts to be able to catch up with baseball games and championship fights, although the basic input requirements for a play may have shown little change in several hundred years. A basic desideratum for a museum directorship is that the director has a clear sense of cultural purpose but also that he or she fully understands the need for managerial and business skills. A Ph.D. in Art History and an MBA are a desirable combination. The combination of scholar and manager provides a viable economic basis for cultural institutions, but it does not cover the role of the entrepreneur. The entrepreneur is associated with change. Change itself may or may not be desirable. When an institution verges on becoming financially nonviable, change may be necessary for survival. The fact is that we do not know how to grow entrepreneurs. They may be viewed as a mutation. The problem faced by most societies in dealing with them is not so
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much how to create them, but given that at least a few of them are present, how to identify and distinguish them from cranks and vandals. Tied in with both culture and a business viewpoint is the way inventories are regarded by museums. It is not uncommon for a major museum to have only 2–5 per cent of its collection on display at any time. The cataloguing, storage, preservation and restoration of the enormous percentage of the line items in inventory is a Herculean and highly expensive task (and one which the museums in a country such as Italy may find more burdensome than the museums in the United States). Even after one corrects for poor quality items that the museum is not in a position to dispose of, for items under repair, or for items on loan, it is possible that a major museum has an inventory large enough to cover more than one location. In part the “franchise concept” of the Guggenheim, now in New York (two locations), Bilbao, Venice, and Berlin, was based on this observation combined with a belief in the internationalization of some aspects of culture. Inventory management in all of its operations research implications is not a sexy subject for an art historian. But its implications for museum management are large. A valuable discussion of many of the details concerning the treatment of art museum inventories in the United States is provided by Peter Temin (1991). An example of the Alice-in-Wonderland aspects of special accounting considerations is given by the values of several university art collections such as that of Yale. If their collections were carried on institutional balance sheets at market value, instead of at a negligible symbolic valuation, several universities might appear to have a much larger endowment, which might negatively influence alumni giving. Another area of museum operations in which culture and commerce come together in an important manner is in acquisition. Are (and should) all the great works of art, historical objects and natural history specimens be draining into the museums of the world? Before the museums and the democratic nation state came into being, there were the great collectors. A major source for the founding and the updating of museum collections has been the gifts of private donors. In a world where a single major painting can cost $10–15,000,000, museum budgets for major acquisitions are simply insufficient without the assistance of the rich or government support. The development of worldwide electronic communication and the building up of computerized catalogues with information on ownership, location, and last price sold have influenced the structure of the art market. These developments combined with frequent well publicized auctions has moved the art market far closer to the commodity markets than it was twenty years ago. But this has had both positive and negative implications for museums. The increase in liquidity of an “art portfolio” makes it more tempting to sell it, but the increase in the difficulty of secretly giving a reasonably valuable object of art to one’s heirs without the tax authorities knowing is going down. The relationship between dealers, museums, and collectors is one of both competition and cooperation. As the art market grows, the role of the dealers, curators
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and connoisseurs as both taste setters and evaluators becomes important. It is probably easier to evaluate Royal Dutch Shell or IBM or BMW shares than to evaluate a painting by Dali or De Kooning. The art dealer’s commercial bias may influence his evaluation in a manner different from that of a curator or critic, though I am reminded of a (possibly apocryphal) story involving the great art dealer Gimpel and Bernard Berenson. When Gimpel gave his opinion on a specific work of art, Berenson is reputed to have observed in a patronizing manner that Gimpel’s assessment was rather good for a mere dealer. Gimpel is reputed to have replied, “I would rather be a scholarly dealer than a dealing scholar”. As an economist there are some fundamental economic phenomena that can be observed. Regardless of cultural product, business control must be applied to costs. Decent accounting, recording and inventory control are a must. There is even room for special cultural financial structures such as a mutually owned art insurance company. Good cost control will not cure all of the revenue problems, but it will certainly help.
6. Revenues and Products In Section 3 I have listed eight points concerning the purpose of the arts. If one adopts a broad, evolutionary, rather than overly analytical, parochial viewpoint, it is evident that as societies evolve they place different emphases on their cultural needs. There are no clean answers to the global questions that come back generation after generation. At the level of societal wants there is no easy economic fix that enables us “to price the priceless”; however, when one talks about elementary management, decent inventory control, and economic cost control, there is an economic fix. If we move the clock back three hundred years, there were few museums to worry about, there were a few musicians, painters and playwrights and no economists studying them. Society’s effective demand and technology are both in flux. It is my belief that the computer and communications revolution has barely started to influence most museums never mind other cultural institutions, even though the availability of web-sites and search and look up techniques have certainly shown signs of major growth. The explosion in technology has greatly influenced printing and the nature of machine reproduction. For example, computer assisted design (CAD) in architecture has revolutionized the reproduction and modification of plans. The use of copies of art works in teaching has proliferated. The growth of both computer science and biology has given a new twist to the old problem of what the distinctions are between a copy and an original. At a basic level, creation is a code. Life itself may be regarded as based on a code for a self-reproducing system. The key distinction between a valued original and a reproduction of the original appears to be more and more that the original may be regarded as a successful mutation, while its copies are mere templates of this mutation. Yet much commerce
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and a considerable amount of education depends on the ability to propagate decent copies of valued cultural artifacts, be they books, records, or other reproductions. The last thirty years has seen a considerable change in the attitude towards museum directorships. The directors of art museums tended to be art historians, many with Ph.D.s (DiMaggio, 1987). The study chaired by Bloom and Powell (1984) sponsored by the American Association of Museums stressed the importance of having directors who are professionals trained in their subject. Unfortunately, the running of a museum is in many ways harder than running an ordinary for-profit business. The main product is primarily a public good; the cost side, however, is not far differentiated from most businesses. It requires most of the same management and business techniques that any business with high and valuable inventories requires. Furthermore, there is a gray area involving ancillary products that could be money makers helping to finance the central cultural goals of the institution, including reproductions, the museum shop, the restaurant, the parking lot, T-shirts, and rubber dinosaurs. The danger in adding these features is that “the tail may wag the dog”, the museum collection may become an ancillary product to the store. Museums have learned a considerable amount about display from department stores and vice-versa (Bayley, 1989). Whether one institution transmutes into the other is a matter of keeping priorities straight. Museum stores and restaurants are here to stay. The museum stores in New York yield a comfortable (taxable) income for their museums. The clash between culture and commerce and culture and politics comes in the sources of revenue and the product variation and politics employed to capture these sources. In the United States a partial listing of these sources is: public subsidy, private subsidy (facilitated by tax laws), admissions, memberships, corporations and foundations, special exhibit fees, educational fees, and revenues from stores, restaurants and parking lots. But the basic challenge to all cultural institutions is how to change and fulfill their self-perceived and socially-perceived functions. The clash among the purposes noted in Section 3 is always going to be present. The balance between education and entertainment will remain in contention. Even more important, the zone between high culture and popular culture is and will remain gray. Although the economist, the operations researcher, the manager and the accountant can all make relevant observations on cost control; they can, at best, serve only as minor advisors in the selection of new cultural products. The debate on blockbuster exhibitions is not going to be resolved completely one way or the other. The solution is a function of society, time, and place. Questions concerning the growth of stores, the sale of reproductions, the use of reproductions in teaching, the outreach of the museums to all parts of the community, or the building of special museums to reach out to special segments of the community, will all be debated with the solution being the process whereby a society redefines its culture. At institutes of higher learning, the debate ranges around open admissions, scholarships, the existence of elite institutions, and the creation of
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polytechnics differentiated from regular universities. In publishing the distinction between university presses and other for-profit presses is a matter of degree. It is a judgement call in many instances to be able to decide when a cultural institution has betrayed its mission by its commercial activities. Societies as an entity do not spend heavily on high culture. High culture provides the spice shelf for the dish. Football games, movies, radio, TV, and pulp novels as well as other forms of wholesome entertainment for the whole family provide the meat and potatoes for popular culture. As the supplying of popular culture may be highly profitable, those of us who support high culture must consider the possibilities for joint ventures between the institutions of high culture and the commercial suppliers of popular culture. In order to provide us with a feeling for some orders of magnitude a few statistics from four New York museums are profiled together with some measures from a major university and the Disney Corporation (Table I). All of this information is gleaned from corporate reports. The Metropolitan Museum of Art and the American Museum of Natural History are hybrids of private institutions with city and other public support; the MOMA and Guggenheim are closer to being private. In all instances endowment is of considerable importance. The Guggenheim is by far the smallest and has only recently emphasized the raising of endowment. Yet when even the top museum’s endowment and operating budgets are compared with a major university, they are minor. The Disney customer statistics, denoted by ***** in Table I, are difficult to summarize in one number, however some indications can be given from the Disney Annual Report (1997, p. 5): Consider the week of November 2–8 in the United States. During these seven days, 34.2 million people watched The Wonderful World of Disney, 3.3 million turned on One Saturday Morning, 3.6 million subscribers viewed the Disney Channel, 2.8 million listened to Radio Disney, 793,000 visited Disney theme parks, 810,000 made a purchase at a Disney Store and nine million copies of Beauty and the Beast: The Enchanted Christmas were shipped to video stores across the country. Tokyo’s Disneyland had over 17,000,000 visitors in 1997 (Hockenberry, 1998, p. 61). Thus, it is not the United States alone where Disney has made middle culture pay, although it may still be somewhat early to judge Disney’s “battle of the Marne” in France. As noted above, museums carry their art inventories at essentially zero. In a relatively unimaginative manner one could do the gedanken experiment of imagining the sell off of all inventories at market prices. In all probability if any major museum attempted to liquidate it would break the art market. However in a world where institutions may be required to carry their inventories “at market”, guesstimates of the numbers would be at a billion or two for the Yale art collections, roughly the same order of magnitude for the Guggenheim, and around ten or fif-
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Table I. Comparative analysis of major museums, Yale University, and the Disney Corporation Institution
Metropolitan Museum of Art
Operating costs
Endowment
Assets
Employees
Visitors
Revenues from memberships + admissions
$115,700,000
$878,000,000
$1,300,000,000
2,400
5,500,000
$29,600,000
Museum of Modern Art
$66,000,000
$300,000,000
$465,000,000
570
1,650,000
$13,000,000
Guggenheim Museum
$30,000,000
$16,000,000
$71,000,000
370
875,000
$7,000,000
American Museum of Natural History
$77,400,000
$484,000,000
$484,000,000
800
3,000,000
Not available
Operating costs
Yale University
$940,000,000
Endowment
$4,900,000,000
Operating costs $15,400,000,000
Not applicable
Source: Annual reports of the respective institutions.
$6,300,000,000
Employees
8,900
Equity
Employees
$16,900,000,000
108,000
Students
10,900 Customers *****
Revenue from tuition and fees $232,700,000 Net income $1,534,000,000
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Disney
Assets
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Table II. Annual earnings for various types of artists by gender, 1989
Actors/directors Architects Authors Dancers Painters Photographers
Full time full year employment in 1989 male/female
Median earnings males
Median earnings females
36,000/21,000 107,000/14,000 29,000/20,000 1,300/3,400 60,000/50,000 67,000/19,000
$32,000 $40,000 $33,000 $16,600 $24,000 $25,000
$28,000 $29,000 $25,000 $15,600 $19,000 $17,000
Source: National Endowment for the Arts (1994) Trends in Artist Occupations: 1970–1990. National Endowment for the Arts, Washington, D.C., Table 29, p. A-45.
teen billion for the Metropolitan. Thus, one could make the debating point that the Metropolitan and Disney are of the same asset size. 7. Employment in the Arts Earning a substantial income and leading a satisfactory life are probably less closely related in the arts than in other endeavors. The National Endowment for the Arts has estimated average incomes for artists engaged full time in various cultural activities in 1989 (Table II). It is clear that dancers are at the very bottom in income. Second jobs, many of a menial nature, are held by many artists. The number of poets who can make a living out of poetry is so small that it is hardly worth recording separately. How much more talent would be brought forth by doubling incomes is by no means clear. Furthermore, the motivation for doing so must derive from the cultural climate. Surprisingly, this pattern holds even in the commercial world of art galleries. In a survey of art dealers in Santa Fe (Shubik and Shubik, 1992) I found that a substantial number of the dealers had entered their occupation as dedicated collectors who could not afford to be a major collector, but could “feed the habit” by being a dealer-collector, constantly buying, selling off and updating their collections. 8. So What? A great president of the United States once commented that he wanted a onehanded economist so that he could avoid “on one hand and then on the other hand”. Unfortunately, as with double-entry bookkeeping there are always two sides to the story. Nevertheless, these final remarks are given in the spirit of some “one-handed” conclusions.
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Employment in the arts: The individuals who choose to devote a considerable part of their life to modern dance or poetry and who sacrifice comfort or support themselves with second occupations are choosing to make a life they like. If they have any sense, of course, they will advocate for better support for dance or poetry. The supply of great artists is probably more or less inelastic to funding. The major concern of a society is to make sure that no Mozarts die in coal mines or of starvation. But this is more or less taken care of by the elementary education system and social support systems of most societies. I suspect that lavish funding helps to expand the tier of middle grade talent where formalized teaching can add to their numbers. Enough money thrown at the universities and art schools will produce more standard Ph.D.s, and, as museum support and utilization figures show, this will generate a wider customer base for museums and a wider political constituency. Costs and control: Museum guards, theater ushers, or hospital orderlies are no longer almost a free good in modern society, and as the costs of services in general increase, a lack of elementary economic cost control becomes more and more of a luxury. The cost side of culture is a business and economic problem and must be treated as such. Even in 1998 the computerization of museums is woefully behind many for-profit institutions. Universities appear to be somewhat better; the changes in publishing and architecture are monumental. The drive of the film industry in general and Disney in particular in the employment of new technology and managerial control is considerable. I have hardly discussed some of the reasonably clear implications of the communications world in the next twenty to thirty years, such as the growth of the interactive museum and the availability of easily accessed data banks with specialized information. The skills of the manager are needed for the management of the arts at least as much as they are needed for the local supermarket. This does not mean that the skills of the art historian or naturalist are to be ignored. It means that they must be supplemented. It is not enough for a museum or theater director to be a trained professional in an appropriate cultural activity. He or she must sense at the level of the subconscious the importance of managerial skills. This cannot be delegated by merely hiring MBAs. As the management of cultural institutions is part of the political, economic and administrative processes of any society, a director who understands how to deal with high bureaucrats and local politicians and how to obtain financial assistance from the private sector is highly desirable. But these skills probably cannot be taught at the level needed. Revenues and Product: As a member of the formally educated and reasonably economically comfortable segment of society, I want more and better cultural institutions. One of my prime rationalizations could be how beneficial this would be for the poor. It is at this point that the debate becomes murky. The immediate figures on attendance tend to support the view that the palaces of high culture are
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pleasant refuges for the educated and the rich. The growth of local specialized small museums may aid the trickle down to the less fortunate. Impresarios and cultural entrepreneurs have and probably will continue to be at the edge of cultural change. New products can only be judged on an ad hoc basis. At the risk of sounding Panglossian, when one compares the population and the educational basis of the planet now to fifty or a hundred years ago this may not be, for some of us, the best of all possible worlds, but it is not too bad a world. In spite of snobbish complaints about the decline of modern culture and my own desires for high funding for the arts and culture, as an analytical economist viewing the socio-political-economic process I find it difficult to perceive a cultural crisis or a defeat of culture by commerce. 9. A Little on Future Museums Most of this essay has dwelt on the past and present of museums. But we are in a period of considerable flux. When we examine the growth of museums, specialized museums have grown considerably over the last few decades and I expect this trend to continue. New cultural needs are emerging and are being met by newer institutions that deviate from the old. The trend in science museums is going to be towards more and more interactive exhibits. Games that can be played, data bases that can be interrogated, environments that call for the viewer to be actively involved are in the offing. As a specific example of a potential new museum whose time has come and is of special interest to those concerned with both culture and commerce, I suggest that the building of a major museum devoted to money, basic economics, and financial institutions is overdue. A small museum devoted to some of the mechanisms of finance and trade exists in Los Angeles. There are several numismatic museums. But there is no science museum for economics and commerce. Given the central role of money, finance and communication in modern society I believe that a major museum would have a high social purpose and impact. It would be highly interactive, stressing process.2 As science and technology grew so did the level of education and the number of museums of science and technology. As the business and financial aspects of modern life have grown so have the needs of the man or woman on the street to appreciate and understand the basics of the economic world. This need extends to the managers and proponents of all of our cultural institutions if economic sense is to be combined with the promotion of cultural values. 10. Concluding Remarks In these observations, several major themes have been omitted. The first is the international comparison of cultural activity. There have been several studies of comparative statistics (see, for example, Schuster, 1985). Who is “culturally ahead” is
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more a matter of nationalistic debate than economic fact, especially when one corrects for different modes of sponsorship and centralization or decentralization. The second topic that has not been sufficiently treated is the implications of the changes in information and communications technology for museums, libraries, publishing houses, universities, films and wired theaters in the next twenty years. Most humans perceive only local continuity even though they are present at times of considerable discontinuous change. I suspect that the innate sense of self-preservation for most of us is locally oriented. Thus, the ability to rationalize continuity in discontinuous times is great. The results may be extinction for many, but they do not survive to reexamine the evidence ex post. So it is with museum or theater directors who think that the change in economic costs is of no concern to them. The dichotomy between culture and commerce is a fundamentally false dichotomy. On the cost side there is little or no difference in the problems faced, except that cultural institutions tend to be more incompetent and more politicsridden than private institutions. The real problems are manifested on the production side where values matter. Furthermore, as we progress more and more towards a knowledge-based society the problems concerning public or private goods become larger and more complex. In the United States the legal case against Microsoft is less a specific case against a particular corporation than a major signal for the reexamination of what constitutes a private and a public good in the domain of a network, information, and communication rich world. A healthy culture will have cultural institutions that are not mere guardians of the old but are also at the edge of a growing evolutionary process. Cultural institutions have much to learn from commerce. They should collaborate with, but not be swallowed by commercial institutions. Their role should not be reactive, but proactive. Culture should not only welcome learning from commerce; whether it manifests itself in mini-museums in banks or airport terminals or in improvements in design logos or changes in display techniques it may have as much to teach commerce as it has to learn. The sensitive cultural economist knows that there is no fixed solution to promote the growth of culture as we see it. At best the cultural economist can help facilitate the ongoing debate by providing a better analytical structure to frame the economic implications of cultural choice.
Notes ? The author wishes to note the considerable research assistance of Francesco Bonomolo.
1. An institution is counted by the American Association of Museums if it satisfies the following properties: • •
it is organized as a public or private nonprofit institution, existing on a permanent basis for essentially educational and aesthetic purposes; it cares for and owns or uses tangible objects, whether animate or inanimate, and exhibits these on a regular basis;
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it has at least one professional staff member or the full-time equivalent, whether paid or unpaid, whose primary responsibility is the acquisition, care, or exhibition of objects owned or used by the museum; and it is open to the general public on a regular basis (the general public can or may arrange to visit on at least 120 days per year).
2. The painting of Warhol attests to commerce and culture. He has proposed that making money is art. He said, “I started as a commercial artist. I want to finish as a ‘business artist’ ”. (Buchloch, 1989, p. 55). J.S.G. Boggs, an American artist, has developed a considerable specialization in painting currency and using it as a direct means of exchange. The imaginative work of Mark Taylor (1992) entitled “Disfiguring” devotes a chapter to currency. The equation, “relevancy = currency = money” is considered, as is the relationship between money, art, and abstraction. In many ways as we move into the modern electronic world of trade and finance, money becomes a pure abstraction, possibly more minimalist than any minimalist has conceived.
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Schuster, J.M.D. (1985) Supporting the Arts: An International Comparative Study. National Endowment for the Arts, Washington, D.C. Taylor, M.C. (1992) Disfiguring: Art, Architecture and Religion. University of Chicago Press, Chicago. Temin, P. (1991) “An Economic History of American Art Museums”, in M. Feldstein (ed.), The Economics of Art Museums. The University of Chicago Press, Chicago. Shubik, M. and Shubik, J. (1993) The Santa Fe Art Market. Santa Fe Institute 92-02-008. Towse, R. (ed.) (1997) Baumol’s Cost Disease: The Arts and Other Victims. Edward Elgar, Cheltenham, U.K.
