$7 billion of neoliberalism

The Stationers' Company mark

The Stationers’ Company: an early example of government cultural policy. Image: Wikipedia.

Australian economist Jason Potts has restarted an important debate about cultural policy in this country with an article entitled “You’ve got $7 billion – so how will you fund the arts?“. I just wish he hadn’t analysed Australian cultural policy from the sort of instrumentalist, neoliberal position we find so familiar in many other spheres of policy debate.

I’ll say right up the top that I’m a fan of Potts’ work, and think him a pretty clever fellow. His work on evolutionary economics is in its own way quite heterodox, and a far cry from the sort of automatic and reflexive market worship we often associate with both the RMIT Economics school, and the Institute for Public Affairs, which he is apparently doing some work with.

On the other hand, his op-ed in The Conversation on cultural policy  is not one of his more perspicacious efforts. Justin O’Connor has already written a useful response, but I thought I’d add a few points of my own, set forth below.

Let’s start by setting forward Potts’ argument. Then we’ll move on to a critique.

Last year the Australian Bureau of Statistics did the maths – government spends about A$7 billion annually in Australia on arts and culture. The exact dollar figure varies depending on what we count, but it includes heritage, broadcasting and botanical gardens, along with all the usual suspects: performing arts, literature, film, visual arts, and so on.

This is apples, oranges and all sorts of random fruit.  “Heritage” funding, for instance, includes such things as war memorials, botanical gardens, zoos and some national parks expenditure. That’s a pretty different sort of thing to grants to game design companies or tax incentives to Hollywood movie studios. Does it actually make sense to treat all of these things as the same sort of expenditure?

Anyway, moving on:

To make this exercise fun, let’s suppose that no political horse-trading was involved in reaching this figure. Let’s assume this figure is the result of disinterested economic calculation of the size of the positive externality in the production of a public good, all wrapped in willingness-to-pay studies, and tied with a big bright cost-benefit ribbon.

So what’s next?

Do we put away our box of shiny economic tools and turn to grubby political compromise to allocate the exact market-failure correcting amount of public funding?

In Australia, as in Europe, this is more or less what we do. Economics to justify an economically efficient level of spending – and politics to implement it.

Really? Last time I looked, in most nation-states, including most democracies, politics is almost always the over-riding factor in the way  budget priorities are set. Sure, politicians and lobbyists and ordinary citizens use economic arguments to make the case for this spending increase or that tax cut. But the process is always and by definition political. On the really big picture stuff, economics arguably can’t really help us. For instance, how much should Australia invest in national defence, or climate change mitigation? The answer depends on inherently political judgments, such as whether you think global warming is real, or the likelihood of a major war.

Indeed, ‘economic efficiency’ is itself an inherently political argument, because it applies a very particular set of assumptions to public policy — namely that Pareto efficiency can actually hold in the first place. In markets in which there is imperfect information — and cultural markets are amongst the most opaque of all — Pareto efficiency may well be impossible. Potts knows this, which is why his quip about the “exact market-failure correcting amount of public funding” strikes me as disingenuous.

So let’s get to the guts of Potts’ argument:

… modern economics suggests that it would be better if we turned the process upside down. Let politicians determine the level of funding in a given area – and let economists determine the allocation.

Why? The political model of funding allocation is very bad at creating – or even recognising – new knowledge. In fact, political allocation mechanisms cause incentives that reward lobbying and punish experimental or innovative thinking.

Only by weakening those incentives can arts and cultural funding seek to be more than a rearguard preservation exercise or sinecure for vested interests.

I suppose it’s something of ad hominem attack to point this out, but it’s just a tad ironic that the person making this argument is a Federation Fellow of a publicly funded Australian university. A person writing for a website, by the way, also funded by universities and the government, using a medium — the internet — that was created almost exclusively by public investment in research.

“Political allocation mechanisms”, by which I think Potts means governments making budget decisions, certainly create incentives that reward lobbying. Then again, so do market mechanisms. Markets require the state to provide a level playing field via such basic institutions as property rights, police forces and courts of law. All of these create incentives for vested interests to plead their cause.

This is no trivial point, by the way: the cultural industries are completely dependent on intellectual property rights such as copyright and patents. The very fact that many cultural goods are non-rivalrous and non-excludable creates huge incentives for content industries to lobby governments to create and strengthen IP regulations — as has been well documented by researchers such as Lessig. When property rights become unenforceable, digital goods become a whole lot less valuable. Anyway, Potts’ claim was that public spending creates lobbying, which is bad. On this analysis, many of the cherished market mechanisms of the cultural industries must also be bad, because they were created via lobbying.

This points to a further naievete: the implicit belief that cultural goods and services are just like any other industrial product.

Even a moment’s reflection shows us this isn’t true. The products of cultural industries are not like any old widget or commodity: they are not even really the same thing as an iPhone or an operating system. Cultural industries produce symbols, and symbols are powerful (or at least highly influential). An aluminium ingot or a wind turbine cannot affect the democratic judgment or voting intentions of millions of citizens. A newspaper empire or television network can.

It doesn’t really matter whether you think that the power of media companies to swing elections is illusory. The history of modern media policy tells us that governments certainly do think symbols are powerful. Media has generally often been heavily regulated, sometimes on the grounds of public interest, but more commonly for naked reasons of political expediency. Even in the US, with its famous First Amendment, successive Washington administrations have had no qualms about controlling spectrum, imposing stringent copyright regulations, and spying extensively on their citizens’ communications. Hosni Mubarak turned off the internet in Egypt for a reason. Whether it’s internet filters or the Stationers Company, the political nature of cultural industries means they can’t be divorced from questions of power.

This curious ignorance of the symbolic reality of culture is often found amongst unsophisticated approaches to cultural economics — much as economics as taught in the modern university tends to ignore key aspects of sociology. As a result, when economists issue prescriptions for cultural policy, they tend to propose cures that are far worse than the supposed disease.

Perhaps this is why Potts misconstrues key facts about real-life cultural policy. For instance, he seems to think arts funding is about “inputs, not outputs”, when in fact nearly all Australian government arts grants are legal contracts specifying outcomes, allowing the government to recoup the funding if not properly acquitted. He also equates prizes as some sort of gold standard of outcome, which is strange because prize committees show exactly the sort of “bullshit” he decries in grant panels.

Similarly, when he argues for “tax credits to anyone – private citizen, corporation, foundation or NGO alike – for spending on arts and culture”, he seems to imply these don’t currently exist. In fact, they do. An individual donating to a DGR-status cultural organisation already receives a tax credit, while a non-profit NGO or foundation already pays no tax beyond the GST.

Charles Taylor’s modern social imaginaries

I’ve been doing a lot of reading lately of Charles Taylor’s work, particularly his magisterial A Secular Age.

Today – a link to a PDF of his which summarises one of his key ideas: “modern social imaginaries”:

This essay seeks to shed light on both the original and contemporary issues about modernity by defining the self-understandings that have been constitutive of it. Western modernity in this view is inseparable from a certain kind of social imaginary, and the differences among today’s multiple modernities are understood in terms of the divergent social imaginaries involved. This approach is not the same as one that might focus on the ideas as against the institutions of modernity. The social imaginary is not a set of ideas; rather it is what enables, through making sense of, the practices of a society.

So – what are the modern social imaginaries? Let’s take a brief journey through Taylor’s argument. (It’s worth mentioning here Taylor is talking about “the West” – roughly the industrialising nations of north-western Europe and their colonies in the new world, in quite conscious homage to Weber).

Taylor thinks that a new “moral order” emerged in the 17th century in the wake of thinkers such as Grotius and Locke. This new moral order was distinguishable from pre-modern moral orders like that articulated by Plato in The Republic:

The picture of society is that of individuals who come together to form a political entity against a certain preexisting moral background and with certain ends in view. The moral background is one of natural rights; these people already have certain moral obligations toward one another. The ends sought are certain common benefits, of which security is the most important.

This new moral order brings about a change in the way God is envisaged:

The notion that God governs the world according to a benign plan was ancient, even pre-Christian, with roots in Judaism as well as Stoicism. What is new is the way of conceiving his benevolent scheme […] what is added in the eighteenth century is an appreciation of the way in which human life is designed so as to produce mutual benefit. Emphasis is sometimes laid on mutual benevolence, but very often the happy design is identified in the existence of what one might call “invisible hand” factors. By this I mean actions and attitudes that we are “programmed” for, which have systematically beneficent results for the general happiness, even though these are not part of what is intended in the action or affirmed in the attitude. In The Wealth of Nations, Adam Smith has provided us with the most famous of these mechanisms, whereby our search for our own individual prosperity redounds to the general welfare.

This last sentence is worth dwelling on, if only because of the astonishing number of economists who appear unaware of the overtly religious subtext of one of economics most cherished theories – it’s still quite easy to find economists who nowadays think of “the invisible hand” in explicitly secular terms, as for instance the emergent property of markets in equilibrium. Another fascinating factoid: Taylor cites Antoine de Montchrétien as the apparent coiner of the term “political economy.”

Moving on, Taylor argues that what we can see here is the beginning of economic liberalism, and the “the gradual promotion of the economic to its central place, a promotion already clearly visible in the eighteenth century.” Hence, one of the key aspects of the modern social imaginary is the economy. Taylor identifies two more: “the public sphere” and “the practices and outlooks of democratic self-rule.”

So, to sum up, Taylor think that there are three dimensions to the “modern social imaginary”:

  • 1) the liberal economy
  • 2) the public sphere of newspapers, feuilletons and political speech, and
  • 3) the citizen state and civil society more generally

    In a future post, I’ll explore perhaps the most interesting of Taylor’s imaginaries, his ideas of “stranger sociability” and their concomitant expressions in political mobilisation, fashion and sexual expression as means towards personal identity making in modern societies.

  • Consumption through the looking glass: a post on consumer culture theory

    A Buy Nothing Day poster from Adbusters. It's not a logo, per se, but it's certainly a symbol

    “Consumer culture” – let’s loosely define it as the enjoyment of shopping and the positive identification with the acquisition of consumer goods –  has generally not got the greatest press in recent times amongst progressives, liberals and left-wingers. It’s fair to say there is an ambient suspicion, disdain and even fear of consumer culture amongst many cultural theorists, commentators and academics that dates at least as far back as Horkheimer and Adorno’s Dialectic of Enlightenment and indeed clearly earlier. In more recent times, the likes of Naomi Klein, Thomas Frank, Kalle Lasn and Joel Bakan (writer of the documentary The Corporation) have waged full-frontal assaults on the consumer behaviours associated with market capitalism. The political slogans advanced with these agendas include attacking the brands of corporations, and their symbolic expression, logos, as well as the act of consumption itself (“Buy Nothing Day“).

    The reason I mention all this is that it mystifies the academics who study consumer culture in business and marketing schools. In fact, many cultural theorists may be surprised to discover that there is a sophisticated literature exploring what Eric  Arnould and Craig Thompson, in a 2005 review article on the subject in the Journal of Consumer Research, describe as “a flurry of research addressing the sociocultural, experiential, symbolic, and ideological aspects of consumption.” Continue reading

    Ben Lewis’ The Great Contemporary Art Bubble

    Tonight ABC2 screened Ben Lewis‘ documentary The Great Contemporary Art Bubble.

    It’s a compelling contemporary history of the bubble in contemporary art between 2003-2008 and the dumb money and savvy art world insiders who enabled it to happen.

    This is both a vital piece of contemporary art journalism and a fine exploration of the darker side of the art world itself. Lewis argues that key dealers and galleries colluded to routinely bid up prices for hot contemporary artists such as Damien Hirst. Featuring important on-the-record interviews with leading dealers, collectors and critics, including Jim Chanos (though, unsurprisingly, not those at the centre of the art world rumours – Sotheby’s, Jay Jopling, Larry Gagosian and Hirst himself).


    Special post 1: a round-up of the academic festivals literature

    Today I present a poston the academic literature of arts festivals, focussing on a number of key papers in the field.

    This Report has been prompted by my commission to write an essay for Meanjin Quarterly on arts festivals in Australia, but can be expected to have broader relevance to arts policy and management professionals working in the field. Continue reading

    Popular music policy in Australia and New Zealand: Part Two: “A portrait of a politician as a young rocker”: Shane Homan on live music venue regulation in NSW

    Today I have a look at Shane Homan’s 2008 article in Popular Music, “A portrait of the politician as a young pub rocker: live music venue reform in Australia”, 27(2): 243-256.

    For non-Australians, the Joyce reference in the title refers not to Australia’s arts minister, Peter Garrett, the former lead singer for seminal Australian rock band Midnight Oil, but New South Wales’ former Premier (Chief Minister), Morris Iemma, who rediscovered a teenage love of attending pub rock gigs after taking office in the mid 2000’s .  But Homan’s article is really about the policy framework that regulates Australia’s live contemporary music venues in this country’s largest state, New South Wales, and the demographic and regulatory trends that have affected it.

    Sydney’s famous “pub rock” scene produced a number of world-famous acts in the late 1970’s and 1980’s, including Midnight Oil, the Hunters and Collectors, INXS, Icehouse and a slew of others. Homan’s paper does a good job of explaining this scene: “the Australian pub rock experience in particular distinguished the local product in a global market; the renowned ferocity of bands and ‘punters’ provided a distinctive regional characteristic to a local industry built upon an imported cultural form.”

    By the mid-1990s, however, the commercial live music sector was confronting some significant problems: rapid gentrification of the inner-city neighbourhoods where live music pubs were located was leading to complaints against live venues and regulatory enforcement by local governments; this issue was exacerbated by state laws aimed at suppressing alcohol-related violence and public disorder. “Gambling law changes also made an impact,” Homan writes, as slot machines rapidly proliferated in New South Wales pubs, often at the expense of support for live music.

    Ironically, it is the cosmopolitan and cultural nature of inner-city districts that is typically the selling point for urban redevelopment and inner-city gentrification; Homan argues that “the property boom, and subsequent changes to residential populations, has thus provoked a perverse programme of social selection, where the more controlled urban environment sought by the new residents is distinctly at odds with its earlier vibrant, cosmopolitan reputation.”

    Homan then goes on to take an in-depth look at New South Wales’ live music venue regulations. Predictably, he finds they are expensive, opaque and typically at odds with other aspects of cultural policy, such as live music initiatives. It’s a fascinating discussion for those interested in the policy minutiae, and a valuable lesson in one jurisdiction’s regulatory overhead  on cultural expression for the rest of us.

    Homan concludes that “within more orderly, gentrified constructions of the night-time economy, the presence of the ‘noisy’ live music venue remains a key means of assessing our commitment to a diversity of cultural leisure communities.”

    Philip Schlesinger on think-tanks and the policy process

    From Philip Schlesinger, Professor of Cultural Policy at the University of Glasgow, comes a fine paper on think-tanks as cultural and policy institutions: “Creativity and the Experts: New Labour, Think Tanks, and the Policy Process.” It’s published in the January 2009 issue of The International Journal of Press/Politics, 14(3): 3-20.

    This enviably well-written article looks at the phenomenon of UK think-tanks specifically from a creative industries perspective: an important topic, given the vast influence exerted by institutions like Demos and the Institute for Public Policy Research on the Blair and Brown governments.

    Those who work in think tanks, as policy advisers or consultants, are a tiny and select segment of the university-educated
    intelligentsia. They operate within elite circles where the costs of entry to
    knowledgeable policy discussion are high. Their exclusivity — or as Pierre Bourdieu (1986) would put it, their “distinction” — is based in the claims to expertise made by the ‘thinktankerati.’

    Those who work in think tanks, as policy advisers or consultants, are a tiny and select segment of the university-educated intelligentsia. They operate within elite circles where the costs of entry to  knowledgeable policy discussion are high. Their exclusivity — or as Pierre Bourdieu (1986) would put it, their “distinction” — is based in the claims to expertise made by the ‘thinktankerati.’

    Continue reading

    Williams and Currid’s “2 Cities, 5 Industries”

    CORRECTION: In the initial version of this post, I wrongly confused Sarah Williams and Ezliabeth Currid’s paper “2 Cities, 5 Industries” with their “Geography of Buzz” paper. Thanks to Elaine for pointing out my error.

    With that in mind, this post is about Williams and Currid’s new paper “Two Cities, Five Industries: Similarities and Differences Within and Between Cultural Industries in New York and Los Angeles” is marked “Do Not Cite Without the Permission of the Authors”, but as it is online and as Sarah Williams was interviewed by the New York Times today, I think it’s worth a look.

    Currid and Williams drill down literally to street level to examine diaggregated data about the cultural industries in New York and Los Angeles. In doing so, they are able to generate a far more fine-grained analysis of cultural industries location and co-location that previous analyses: Continue reading

    $1 billion to renovate the Opera House

    Both Marcus Westbury and Nick Pickard lead their blogs with strongly critical posts about recent reports that the NSW government is about to commit to spending $1 billion to renovate Joern Utzon’s iconic Sydney Opera House.

    As Westbury writes, “this decision is one that is so staggeringly out of touch with the realities of cultural policy at the moment that it is scary.”

    As usual, I find myself in agreement with much of what Marcus writes (more of that below). However, I think there is every reason to be far more optimistic about this decision than the initial outrage from the various unfunded parts of the arts community suggests. It may be that this decision will actually materially advance the cultural policy debate in Australia, by motivating the various forgotten voices in the arts community to finally coalesce into a coherent movement for change.

    Continue reading

    The Googlization of Everything

    Robert Darnton has written a long and interesting article about the Google books class action at the New York Reveiw of Books, entitled Google and the Future of Books.

    In the article, Darnton begins by describing a mythologised but historically extant “Republic of Letters” – the Enlightenment, if you like – inhabited by men like Voltaire and Rousseau, Jefferson and Madison. This Republic wasn’t always a wonderful thing, confined as it was to those rich and educated enough to gain entry, but it none-the-less represented a vision of free-and-frank intellectual exchange and discussion which has endured:

    One way to understand this system is to draw on the sociology of knowledge, notably Pierre Bourdieu’s notion of literature as a power field composed of contending positions within the rules of a game that itself is subordinate to the dominating forces of society at large. But one needn’t subscribe to Bourdieu’s school of sociology in order to acknowledge the connections between literature and power. Seen from the perspective of the players, the realities of literary life contradicted the lofty ideals of the Enlightenment. Despite its principles, the Republic of Letters, as it actually operated, was a closed world, inaccessible to the underprivileged. Yet I want to invoke the Enlightenment in an argument for openness in general and for open access in particular.

    Darnton argues there is a similar tension between the principles of free access and open information embodied by many libraries and educational institutions, and the money and power at stake in the information they generate, distribute and control. He points out that copyright is specifically set down in Article I of the United States Consititution ‘”for limited times” only and subject to the higher purpose of promoting “the progress of science and useful arts.”‘ In the 1780s this meant a 14 year term with one extension. Now, of course, copyright has lengethened to more than a century.

    This long and interesting article is in many ways an elaboration and commentary on Lawrence Lessig’s work, but contains many fascinating observations of the contentious interface between the public and prviate spheres of knowledge. For instance, did you know that relatively obscure journals charge tens of thousands of dollarsz to public and unviersity libraries?

    … the Journal of Comparative Neurology now costs $25,910 for a year’s subscription; Tetrahedron costs $17,969 (or $39,739, if bundled with related publications as a Tetrahedron package); the average price of a chemistry journal is $3,490; and the ripple effects have damaged intellectual life throughout the world of learning. Owing to the skyrocketing cost of serials, libraries that used to spend 50 percent of their acquisitions budget on monographs now spend 25 percent or less. University presses, which depend on sales to libraries, cannot cover their costs by publishing monographs. And young scholars who depend on publishing to advance their careers are now in danger of perishing.

    But now, of course, one corporation is changing that business model: Google, with its ground-breaking settlement known simply as the Google Book Settlement. Although there has been some in depth commentary on this topic – most notably from Siva Vaidhyanathan – there has been suprisingly little attention paid to it in cultural and economics circles. When Darnton takes the time to read through the entire 134 page settlement, he is dumbfoudned by the scale of the settlement:

    … here is a proposal that could result in the world’s largest library. It would, to be sure, be a digital library, but it could dwarf the Library of Congress and all the national libraries of Europe. Moreover, in pursuing the terms of the settlement with the authors and publishers, Google could also become the world’s largest book business—not a chain of stores but an electronic supply service that could out-Amazon Amazon.

    The problem, Darnton realises, is that Google is not just creating the world’s largest library: it is also creating the world’s largest research infrastructure monopoly, one controlled in the end by the board of a for-profit corporation – for good or evil.

    The money quote in Darnton’s article is this, which makes you realise the scale of the opportunities missed by the 1990’s IP gold-rush:

    Looking back over the course of digitization from the 1990s, we now can see that we missed a great opportunity. Action by Congress and the Library of Congress or a grand alliance of research libraries supported by a coalition of foundations could have done the job at a feasible cost and designed it in a manner that would have put the public interest first. By spreading the cost in various ways—a rental based on the amount of use of a database or a budget line in the National Endowment for the Humanities or the Library of Congress—we could have provided authors and publishers with a legitimate income, while maintaining an open access repository or one in which access was based on reasonable fees. We could have created a National Digital Library—the twenty-first-century equivalent of the Library of Alexandria. It is too late now. Not only have we failed to realize that possibility, but, even worse, we are allowing a question of public policy—the control of access to information—to be determined by private lawsuit.