Table of Contents


Supporting Art & Culture
by Alfred de Grazia


What Are the Social Costs and Gains of Culture Production ?

What does "art for art's sake" means? (560) Does the quality of culture artifacts necessarily bear on whether they are useful or not? (561) Does the effect of an artifact (e.g., in giving work to coproducers) necessarily bear on its quality? (562)

What weight should be given to the costs and gains that creators bring to society? (563) That is, is the "materialist calculus"? (564)

How does one measure social costs and gains? (565) How does one make up a balance sheet of social costs and gains in the arts? (566)

Considering the attempt by a group in New York City to gauge the economic importance of art as an industry, as presented below, what would you suggest are its deficiencies? (567) (It omits the immense creative writing industry in New York, for one thing.) Are the truths of the table well understood? (568)

A "multiplier effect" is often calculated on sums directly granted for and spent in local cultural activities to indicate how the economy is doubly or trebbly helped by helping culture; but would not money handed out on any local street corner produce a similar multiplier effect? (569) Suppose that in the Bicentennial Year a nationwide cultural competition had been conducted between the Indian Smoke Signal Clubs and the National Beacon Hill Signal Fire Association and 14,000 fires had been lit; wouldn't this have had a splendid multiplier effect (including the spending on pollution-effect)? (570)


Supporting Data for Tax Revenues from Cultural and Culture Related Industry in New York City*

Nonprofit arts organizations 1$193,236,000$7,959,777
Commercial theatre 2$46,250,772$1,905,162
N.Y.C.resident ancillary expenditures 3$214,471,150$8,958,072
Film production 4$60,000,000$2,471,520
Motion picture theatres 5$66,610,000$2,743,799
Television and radio broadcasting 5$311,250,000$12,821,010
Tourism (25 percent of total) 6$400,000,000$16,476,800
Related/dependent industry 5$883,565,000$36,395,810
Art galleries 7$1,000,000,000$12,400,000


1. National Research Center of the Arts, Inc., A Study of the Non-profit Arts and Culture Industry of New York State.

2. Variety.

3. National Research Center of the Arts, Inc.(unpublished study).

4. Economic Development Administration, Film Office.

5. U.S. Department of Commerce, County Business Patterns, March, 1972.

6. Convention and Visitors Bureau of New York City.

7.Art Dealers' Association, of America.

* From Report of the Mayor's Committee on Cultural Policy, New York City, October 15, 1974. Appendix Two.


Although this type of analysis has not been done for New York City before we have attempted to make conservative estimates based on available statistics. Methodology basically consisted of the following premises furnished by the New York City Department of Finance 80 percent of gross expenditures consists of salaries;

b) economic impact can be measured by a2.0 multiplier on salaries and 1.5 multiplier on purchases;

c) average net tax revenue of 1.03 percent for New York City income taxes, 1.24 percent for City sales tax. Since salaries are expended on purchases, net tax on salaries could be 2.3 percent.

Multiplier was not applied to art gallery gross receipts (taxes based on sales tax only).

Does every cultural artifact (for example, a painting , a book, a concert) demand energy in its creation or production like any other object? (571) Does every artifact use energy when it is being consumed? (572) Do these answers hold if energy is thought to mean both human and artificial energy? (573) Suppose whatever enters into any artifact is categorized as: direct natural energy (north light on a painter's studio); indirect natural energy (the energy used to cut a skylight for the northern light to enter); direct human energy (painting);indirect human energy (labor invested in the skylight, the studio, the art materials used); the materials directly employed (canvas, easel, furnishings, paints etc.); the materials indirectly employed; suppose the consumption of an artifact involves the following: the direct "joy of work of the creator"; the psychic or material satisfaction of all who enjoy the artifact, including the failure of attempts to enjoy it; the per capita energies and material required for all who enjoy the artifact to do so (e.g., the time and cost of attending an exhibition or visiting a library and enabling people to do so). Suppose that all such elements of production and consumption in the culture activity that surrounds an artifact (a concert, a Mardi gras parade, a sculpture, a drawing) are measured, would this provide a basis for determining whether or not the activity should be supported? (574) What, in detail, would have been achieved in the particular process of evaluation? (575)

But what does this balance sheet of an artifact have to do with the quality of an artifact? (576) What qualities are missing? (577) Who has the right to say what qualities are missing? (578) Or is not the related question more practical? (579) That is, who has the right to say who has the "right to say what qualities are missing"? (580)

Considering energy scarcity and high costs of transportation, what are the overriding merits of subsidized tours of culture performs and exploitations? (581)

Putting aside whether the culture tour is subsidized or earns its own way, should the government find means of positively discouraging tours? (582)

If a half -time group leader (teacher) costs $6000 a year, including overhead, and serves writing circle of 20 people within walking distance of their homes as opposed to their going five miles to a central location, and if they meet once a week, would enough be returned in energy savings (do not cost out time savings) to pay the teacher? (583)

Are travel and tourism, which have been among the great culture activities of Americans, now to be discouraged by culture-support policy because of the tremendous resources that they consume? (584)

Since cars, gadgets, and artificial energy are socially expensive, should not a culture policy stress support for culture activity that demands fewer cars, gadgets, and artificial energy? (585)

What is the net profit (in nonculture effects) of funding culture activity that:

a. consumes low nonhuman energy (e.g. gasoline, electricity)? (586)

b. requires low average mobility of people and things (e.g. non-touring cultural activity)? (587)

c. employs 1. commercial TV ; (588) 2. public service TV? (589)

d. reduces alcoholism and other delinquent activity ("the devil has work for idle hands")? (590)

e. reduces unrest, despair, loneliness, alienation? (591)

f. is productive of goods and services in itself (e.g.,cooking, wall murals, instructive poetry, handmade goods)? (592)

How do you now rate the social profit (as High, Moderate, Low, or Unknown) on the list of culture activities in the Appendix? (593)

Are there any methods of preventing dispensers of funds form falling into the "exponential fallacy" that gives the same judgmental caution to $5x10 (1) and $5x10(2) grants? (594)

Should public policy be directed at discouraging all high-cost cultural production? (595) For example, if large involuntary un-potentiated audiences exist for low-cost culture, as in small opera companies, should government and philanthropic institutions that promote culture give any support to culture-producing groups that pay great salaries to star performers? (596)That is, should public resources reinforce the star system? (597)

Should public authorities employ "stars" in their advisory and controlling councils? (598) Is the rationale behind the practice that of utilizing expertise or of public relations? (599) Can even the functional rationale work if the councils are not given real work? (600) Why should not such councils be attached to congressional committee, instead of agencies, since their function is, or is said to be, in part representation and supervision? (601)

Should an energy qualification or condition be attached to all art and culture support, to the effect the none, or no more than x%, of the monies provided may be used directly or indirectly to increase the consumption of artificial energy? (602) Might there even be a proviso that preference for culture support will be given to projects that diminish artificial energy demands and reduce inflationary pressures by reducing demand for, and circulation of, money and credit? (603)

A jury of peers sits superior to a defendant and subordinate to the Court; does a panel of peers to judge the quality of an applicant's petition for support of his/her work sit superior to the applicant and subordinate to the agency in the same sense? (604) Does the agency judge? (605) Who is the prosecutor-the staff? (606) If the staff does not prosecute, how will the applicant find sympathy from his peers?(607) If the peers are in fact of rank, pay, and creativity presumptively superior to most applicants, is not the core meaning of peers vitiated? (608) Should a panel of peers be more accurately called a panel of the peerage? (609)

Listing one by one the superiorities of the several bodies that judge applicant and application - their sovereign capacity, their security, their bureaucratic timelessness, their pay, their associations, their strength of numbers - is not the applicant's only superiority the imagined beauty of the possible offspring? (610) But is not this conception precisely the most natural object of envy to the judges? (611)

Can it be said, in the last analysis, that cultural activities have to be given disproportionately large support over other human activities because their successful products are more rare, prohibitively expensive to produce in human terms, and more enduring? (612)

If 1000 artists, musicians, and writers were given an apartment in 1000 deteriorating public housing units in the country in return for cultural services to the residents, would the cost be made up by the slower deterioration of the premises, in addition to the cultural gains achieved? (613)

Will it cost the society more to provide everyone with cultural support than to provide everyone with a car? (614)

Should the government give the people's money to an institution that pays millions of dollars for a Rembrandt painting while nearby2000 dancers, painters, sculptors, playwrights, actors, musicians, and poets altogether earn annually from their art less than the price of the single painting? (615) What will benefit America more, possessing the Rembrandt (of which a thousand fine reproductions can be made) or possessing the 2000 creative artists and writers, their works, and those who learn form them? (616)

Does the country prefer to support better house-painters or better easel-painters? (617) (Suppose 50 million rooms are painted every year and 50 thousand canvases. With a slight improvement in the craft and conscience of workers, the average paint job which lasts 5 years can be prolonged 1 year, providing a gain of 500 million dollars. This is more than the total government spending for arts support.)

If it costs $12,000 to keep a convict in jail, why not hire a sculptor at $12,000 to keep the convict as an apprentice and foster brother? (618)

Does the dollar value of improvements accomplished by the re-creators of "Soho" in Manhattan equal the value of the newly constructed World Trade Center? (619) Does Soho contribute more to the livability of Manhattan? (620) Does it relieve the city of more costs? (621)

Could the city of New York have diverted some of the resources used in the one area to facilitate the development of Soho? (622) Or would Soho ever have been achieved if the City began to lay its hands on its development? (623)

What types of government programs would you curtail, if compelled, in order to make room for greater federal spending for culture development: defense, agriculture, welfare, health, education aid to cities, highways, pure sciences, recreation, and/or what else (...............)? (624)

What optimal proportion of the Gross National Product should be paid for culture support? (625) (Do we know enough about the ways in which culture costs ramify through the "national accounts" to arrive at a present figure, much less desired figure?) (626)

Does asking how much of the Gross National Product is dispensed for cultural pursuits make any sense, granted not only the very different methods of culture support used in different countries but granted also that the GNP already provides but a "grotesque national product" form the standpoint of the real standard of living of the people? (627)

Were we to reach the point when a search is launched for a fixed formula of culture support, that is, x% of the GNP or some such formula, should one take onto account, beside national government spending, the related spending of state and local governments, the independent sector, the business sector, and personal spending? (628)

What part of how much income of how many different people is directly or "practically directly" paid by the federal, state, and local governments, exclusive of the civil service and armed forces personnel? (629)

What is the total expenditure for culture support of:

a. the Federal, state, and local governments? (630)

b. foundations and nonprofit organizations? (631)

c. individuals (in cash, energy, time)? (632)

Should one favor, as a method of supporting culture in America, the determination by the Congress of a budget percentage which, while taking into account other support and other criteria, would enable creativity as a whole to progress to a desired high level of achievement? (633)

Should another favored method be "equal-populations" (audience and potential audience) distribution of education and appreciation benefits, regardless of whether such units are geographical or social? (634)

Or should one favor the method of allocating available funds according to a priority system that evaluates the overall social importance of a creative form at this moment of history in terms of its contribution to social representative council? (635) If the answers to the three preceding questions are affirmative, then how could all three policies be applied? (636)

In which of the following areas is the risk great that a given amount of new investment of public funds will produce a lesser increment of the successful product, that is, where will the next dollar's grant bring "less bang for the buck"? (637)

a. In military preparedness, in terms of successful defense against potential enemies? (638)

b. In welfare, in terms of diminishing dependency? (639)

c. In nuclear power, in terms of energy self-sufficiency? (640)

d. In legal defense and police protection, in terms of reducing the threat to persons and property? (641)

e. In schools systems, in terms of increasing rudimentary reading, writing and figuring ability? (642)

f. In housing, in terms of improving the condition of the ill-housed elements of the people? (643)

g. In health care, in terms of the advancement of the fight against cancer? (644)

h. In culture, in terms of the enhancement of positive, personal expression and enjoyment? (645)

Is it true to say that culture production, viewed as industry, is perhaps the least costly of all production industries (defined per capita as all costs of materials-labor-sales relative to dollar-value of consumers' consumption time)? (646) Would it be true, or more true, if high fashions, haute cuisine, public spectacles that gather throngs, and advertising were included? (647) Is the culture industry one of the industries that consume the least artificial energy? (648) Or is all of this speculation useless until the culture industry is taken up category by category (as done in the Appendix)? (649) But may it not be useful to determine the true state of affairs here, because, under such conditions, should not a considerable public effort be undertaken to turn the nation toward cultural pursuits on purely economic grounds? (650)

How many general culture centers should there be in the country to satisfy the "needs" of the population? (651) (Can this question be answered without deciding what long-term funding is to be directed to culture support?) (652)

Can we properly speak of a culture-support policy if that policy does not include the costs of the benefits it seeks? (653) If, as is to be hoped, the policy sums up and integrates many sub policies, should not the directive for each of these carry its costs and benefits? (654)

How far should a culture-support policy go toward:

a. putting a price tag on every item of policy? (655)

b. ranking the policy in order of importance? (656)

c. presenting a total policy that permits raising or lowering the asserted optimum support level of the policy items? (657)

If 20 demonstrably consistent and concrete policy directives affect the work of the central cultural agency, 20 more affect the coordinated operations of other culture agencies of the government, 10 more affect other levels of government, and 100 more affect independent sectors (industry, foundations, and individuals), i.e., a total of 150 policy directives, can each be packaged for purposes of appraisal, costs, and decision? (658) Can such decision packages be prepared and reconsidered annually? (659) If not annually, then is it not true that every two-year, three-year, or ten-year policy represents a top-priority program by definition-since it cannot be cut back or abolished the following year? (660) Suppose that 50 of 150 have such a top-priority position; can it nevertheless be required that they state the consequences of immediate foreclosure or foreshortening, and thus in effect be linked up with the other 100 decision packages? (661)

How would one identify an area of activity suitable for separate decision-packaging: by scope (coverage of distinct function and clientele); (662) by organizational distinctiveness; (663) by means of execution (type of incentive and sanction); (664) by periodicity of the action process from announcement to completion and evaluation; (665) any other:...............? (666)

Is it impossible (bureaucratically, politically, contractually) to return to "point zero" on every policy item every budget year? (667) Must the present policies (as stated and as executed) be preserved, or are we realistically free to engage in zero-base planning-budgeting? (668)

Could a decision-package manager dare to attach to a package a pressure priority label estimating the "political heat and client pressures" likely to attend the several levels of estimated activity? (669) Although private business too is full of sacred precincts, "the boss' favorite product,"entertainment and enjoyment activities," and the like, isn't there some qualitative leap in this pressure factor when one compares zero-base budgeting in business with the same in government? (670) Is it true that the pressure potential of a package (activity) is not measurable, unlike "program effectiveness"? (671) If not would you name and rank a five-interval set of "pressure-potentials"? (672)

In order to clarify and reinforce a "Planning-Programming-Budgeting" "zero-base" and "pressure-potential" system of decision packaging (PPBZBPP), might activity managers be randomly assigned as co-proposers of a second activity in addition to their primary activity, so that every decision package comes up with a tandem control? (673) Was not the explicit reason for instituting the merit system in government that it would free the executive form political pressure when making decisions in the public good? (674) Where this reason to be valid, would not the "pressure-potential" concept be uncalled for? (675) If it is not valid, should not the PP index be employed? (676) If not valid, then of what important use is the merit system, except to bureaucratize a fifth of the working population? (677) Or might it be partly valid and partly a "skeleton in the closet"? (678)


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