The economic argument for the arts…is it really what you think?

It seems like every time I turn around, I am reading another study done by an arts organization with graphs, dollar signs, and percentages showing the economic impact that the arts have on a community or region or state. Although I am always glad to see the statistics and have often quoted them to talk about the importance of arts in a community, I always felt that they were missing something.  Maybe because they often seemed to look mostly at the major arts organizations, where you could count “butts in seats”, and left out the smaller arts groups or the individual artists.  Or maybe because it didn’t take into accounnt the more personal experience that many people have through viewing or participating in the arts. Somehow, I just felt like something was missing in this argument. There are SO MANY people that realize that the arts and creativity matter on their own, regardless of the money they bring in, or sometimes, don’t bring in.

Imagine my joy in finally hearing from an economist that “got it”.  That the true impact of the arts and creative community on a region’s economy goes beyond statistics.  In his article, “A good economist knows the true value of the arts” in Financial Times (August 11, 2010), economist John Kay has the following to say,

John Kay

“Activities that are good in themselves are good for the economy, and activities that are bad in themselves are bad for the economy. The only intelligible meaning of “benefit to the economy” is the contribution – direct or indirect – the activity makes to the welfare of ordinary citizens.”

He goes on to discuss the current trend of studies on the  economic impact of the arts, saying

“(t)hese studies point to the number of jobs created, and the ancillary activities needed to make the activities possible. They add up the incomes that result. Reporting the total with pride, the sponsors hope to persuade us not just that sport, tourism and the arts make life better, but that they contribute to something called “the economy”. ….. “the economic value of the arts is in the commercial and cultural value of the performance, not the costs of cleaning the theatre. The economic perspective does not differ from the commonsense perspective. Good economics here, as so often, is a matter of giving precision to our common sense. Bad economics here, as so often, involves inventing bogus numbers to answer badly formulated questions.

“But good economics is often harder to do than bad economics. It is difficult to measure the value of a Shakespeare play: you can start with the box office receipts, but this is only the beginning of the story. …. The relevant economic questions are whether the cultural and commercial value of the performance offsets these costs and whether these benefits can be translated into a combination of box office receipts, sponsorship and public subsidy. The appropriate economic criterion, everywhere and always, is the value of the output.”

So, when we talk to funders, grantors, customers or even friends about the value of  the arts to the “economy”, are we best served by trying to quantify the value in pure dollar terms?  Does this make the arts community become too one dimensional, so that someone doesn’t  buy the statistical argument, it then give them an easy out to reject the “value” of the arts?  Instead, as John Kay says, maybe we should focus more on how the arts “make our lives agreeable and worthwhile.”   Maybe our main focus should be to ask them to envision our economy, our region, or their lives, without it?

Read more of John Kay’s article here


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