Why Are Artists Poor? Part 5

The high incomes of a small number of artists can be explained by the tendency of consumers to attach much value to small differences in the relative performance of top artists, while at the same time they can handle only a limited number of stars. Also the consumers' desire for authenticity explains the high incomes in the arts.

It is more dif.cult to explain why the income of the majority of artists is so low. This chapter gave six reasons why people continue to want to become artists, despite the fact that the average income is low. 1 Many people are attracted to the arts because the top incomes are extremely high. 2 Artists think they are un.t for non-arts jobs. 3 Artists are less interested in monetary rewards than other profession- als and more in private satisfaction and status. Therefore, they are pre pared to work for low wages. 4 The average artist is relatively more daring or reckless. With its high prices the arts are attractive to daring people.

5The suggestion in the ill.u.s.trations that artists sometimes ignore infor-mation is plausible. Over-con.dence and self-deceit add to art world overcrowding. And .nally, an important explanation for low incomes is 6Misinformation. In this case, the cause of low incomes is not sought in the artist's character, but in how society deceives potential artists. Per-sistent myths continue to lure talented youngsters into the arts. All these factors make the arts more attractive than they would otherwise be. Therefore many people enter the arts and income is low.

In the introduction to this chapter, in my capacity as an economist I could not explain the permanent state of poverty in the arts. I expected poverty to be more temporary. Due to the prospect of low incomes, I thought that fewer people would choose to enter the arts, that conse-quently the sector would shrink and that incomes would adjust to a normal level. Nevertheless, I noticed that this is not the case. Taking into account the a.n.a.lysis put forth in this chapter, I now understand that in the exceptional economy of the arts, income can remain permanently low.

The six reasons for the low incomes of artists presented in this chapter contribute to the solution of the recurring quandary of this book 'why are incomes so low in the arts'. The relative impact of each of these .ve explanations is important when it comes to interpreting 'poverty' in the arts. If the .rst .ve explanations are the most signi.cant, then artists, in fact, do have little money, but because of other rewards they are not really poor in other respects. To a certain degree, then, poverty is a choice. However, in the point about misinformation, society is to 'blame' and artists are its 'victims'. More will be said about these two contradic-tory a.s.sessments of the economic situation of artists in the next chapter.

Discussion 1 Can you offer some alternative explanations for the high incomes andlow incomes in the arts from those already presented in this chapter?2 Which of the six explanations of low incomes in table 3 do you think is the most important, and least important?

Chapter 6

Structural Poverty

Do Subsidies and Donations Increase Poverty?

Subsidies Make Artists Lose Interest in Selling Nicole draws in Alex's life drawing cla.s.s. She has recently left art school. Although she is a good artist, she has yet to .nd a gallery. The following weekend she is going to join an annual 'open studios exhibition' in her neighborhood and she asks Alex for advice about pricing her work. Alex asks her what kind of prices she has in mind. Alex thinks they're much too high. He asks her if she really wants to sell. Nicole says she's desperate to sell. If she doesn't earn some money soon, she may have to stop making art. So Alex suggests that Nicole lowers her prices by approximately forty percent. (Couching his words, he advises her to set prices so as to maxi-mize sales.) Nicole is shocked and objects, but in the end she lowers her prices. That weekend she ends up selling some etchings and three draw-ings. Alex has come to the realization that after art school, most students tend to price their work too high. They determine their prices based on the costs it took to make a particular work including a fair remuneration for their labor. Gallery owners usually inform them that with these kinds of prices they won't sell a thing and in the end recoup none of their costs. Low prices seem unfair. Nevertheless, gallery owners demand lower prices from start-ing artists. Robin is an ex-student of Alex's. He left art school a year ago. He recently received a government grant for promising young visual artists. He has been offered a show in an alternative s.p.a.ce. As there is no dealer involved, he has asked Alex to help select the work for the show. Alex casually asks about the prices he intends to ask. Predictably, his prices are far too high. In a long argument, Alex tries to convince Robin to lower his prices, unsuc-cessfully. At some stage in their discussion, Alex tells Robin that like other young artists the prices he is asking are way too high for his work. Robin furiously objects that he cannot be compared with other novices. To be subsidized by the government means that he is a 'promising young artist'. Only then does Alex begin to realize, that the foolish behavior of Robin has been caused by the government grant. Government grants give young artists like Robin the freedom to make 'real' art that in their eyes 'deserves' to fetch high prices. Moreover, they not only feel superior; they can also afford not to sell. Since receiving the grant, Robin has quit his second job in a restaurant because he receives enough money to live off of. And so now he is insisting on asking 'fair' prices, even though he knows there is little chance that his work will sell. For the time being, Robin and his subsidized colleagues can feel special. When Alex visits Robin's exhibition on the last day, he is amazed to see that Robin has sold one of the thirty exhibited paintings. It's one more than Alex had expected. Later, in talking to Robin, Alex discovers the painting was sold to his uncle, who is a well-to-do professor. Alex likes Robin's work and is sure that, if Robin cut his price by half, he would have sold at least four paintings, maybe enough to propel him into the thick of the art market. Of course, Alex believes that talented artists like Nicole and Robin deserve to sell most of the work they exhibit. Alex realizes however, that even when they do price their artworks more reasonably, this still doesn't happen. There are just far too many Robins and Nicoles anyway. And all these artists produce far too much art.

Now that Robin is receiving a subsidy, he has enough to live off of and so has overcome his survival constraint. He quits his second job and concen-trates on making art, not selling it. In doing so, Robin reveals himself to be more oriented towards the government than towards the market. This kind of att.i.tude affects the economy of the arts. This chapter sets out to investigate the general effects that income decreases and increases via subsidies, donations, and spending have on the average artist's income and on the number of artists in the arts. Do subsidies that are intended to raise income levels in the arts really increase income, or do they only increase the numbers of artists? Is it possible that they even lower the average artist's income?

Many donations and subsidies rest on the premise of .ghting poverty among artists. Therefore this chapter also attempts to explain the immensity of the gift sphere in the arts.

Finally, how should one interpret low incomes in the arts? This chap-ter poses and discusses the question of whether poverty is uncompen-sated and therefore 'real', or whether it is compensated through other forms of rewards.

As an artist, it is my opinion that low incomes are unjust. They do not be.t a modern and just society. Therefore, as an artist I think that the government and donors are obliged to raise the income levels in the arts through subsidies and donations, but also through social security and affordableartstraining. Asaneconomist,Imaygoalongwiththeartist's moral judgment that low incomes are unjust. But at the same time, I believethattheremediesproposedwillprobablyonlyexacerbatethedis-ease: as an economist I think that the effect of more subsidies, and more donations, social security and subsidized education, is that more people will become artists and more people will end up earning low incomes.

Artists Have Not Always Been Poor Were comparable incomes in the arts always as low as they are now? There are a number of stories in circulation about famous artists who died extremely poor. People tend to remember these stories, because they .t the present mythology of the arts. Nevertheless, the biographies of famous artists from the past are stories of wealth far more frequently than stories of poverty. Such stories do not need to be representative, but they offer relevant information as long as they are not used as exemplary proof, but instead serve as pieces of a puzzle.1 Sometimes information on art prices and the lifestyles of artists from the past offer insight into the incomes of not only famous artists but also of average artists. In the seventeenth century for instance, along with the .uctuations in general economic welfare, the number of Dutch painters .uctuated as well, but incomes were not lower than in comparable pro-fessions.2 Also in the nineteenth century, the average painter probably received higher prices for his work than an average contemporary painter. Research has shown that at that time, prices in the primary visual art market, the market where artists sell paintings for the .rst time, were higher than those in the secondary market, which is devoted to the reselling of paintings.3 At present, it's the other way around. It was common for professional artists in the nineteenth century to hold estab-lished positions and people were prepared to pay considerable prices for their most recent paintings. Given primary market prices, the average income of nineteenth century artists was not particularly low. (Buying new work was not considered much of a risk. Meanwhile today, the pri-mary market is over.owing with artists selling their work at low prices that is apart from newcomers like Robin who ask higher prices and do not sell at all. Only a few artists' work ever reaches the secondary market, where prices rise briskly; there prices are sometimes many times higher than the artists themselves fetched earlier for these same works in the primary market. Although reputations were not unimportant in the nineteenth century, price and income differences were not as pro-nounced.) The general picture I get from discussions with art historians is that the phenomenon of artists living in poverty found its beginnings in some corners of the nineteenth-century art world. But poverty as a widespread phenomenon belongs to the twentieth century, particularly to the second half of the twentieth century.

Althoughartistsweregenerallynotpoorinthenineteenthcentury,the type of artist that made poverty in the arts more likely was already emerging. An increasing number of bohemian artists were entering the sceneatthattime.Theysoldlittleandwhentheydidsellapiece,theydid not use the customary channels. Most of these artists were technically notpoorbecausemanyofthemhadothersourcesofincome,suchastheir families,b.u.t.theirhourlyartwageswerelow.4 Nevertheless, bohemian artists in the nineteenth century were still decidedly a minority.

The bohemian artist represents two developments that occurred during the twentieth century. First, art becomes increasingly attractive because of the sacred status it has garnered. And second, because the autonomy of the artist is increasingly venerated, established regulations begin to be rejected and vanish. Prior to the twentieth century, the arts were not as attractive an alternative, and regulations a.s.sured a higher average income.

Not only were the arts less attractive, there were union-like organiza-tions that helped regulate the profession and protect artists' incomes. They protected quality, drew up strict rules for admission and sometimes even set prices. This long period in the history of the arts commenced with the guilds and ended with the prestigious academies. All the while however, organizations existed that managed to keep incomes reason-ably high by keeping the numbers of artists to a necessary minimum. In other words, only people who met certain quali.cations were admitted into the profession.5 In the course of the nineteenth century however, the academies and similar organizations gradually lost their omnipotence. In the end most of them closed down or became unimportant. In today's world, almost every profession formally controls the size of their membership in one way or another except for the arts. In the late nineteenth and twentieth century, artists became more or less autonomous. Both artists and the art world at large regarded artistic autonomy as a step forward. Auton-omy in the arts was incompatible with membership requirements based on diplomas or ballot. Anyone could become an artist. The number of artists increased and income went down. (Chapter 11 discusses the absence of regulation in the modern arts in more detail.) Artists are nowadays more willing to accept lower paying jobs. One important reason that we mentioned in the previous chapter is that as the arts became increasingly perceived as sacred, artists were accorded a spe-cial status. Therefore, the reason why incomes remain low can be found in the exceptionally high status of the arts.

The opposite perspective can also be instructive. This implies that incomes used to be more reasonable in earlier times and that the arts did not have the level of status then that it has now. And so, while monetary incomes may have been higher back then, the other rewards were less attractive. Because the monetary incomes in the arts probably began decreasing somewhere between one hundred and one hundred .fty years ago, it is likely that at that time, around the 1850s, the internal structure of the arts including its much vaunted beliefs and myths began to change drastically. Artists who began to reject the economy became more and more common in the arts. The worship of authenticity which had its roots in the Renaissance and gained momentum during Romanti-cism fully appropriated the arts and vice versa. The regulations that controlled membership and prices became taboo and the arts as a profes-sion became more and more attractive. The current exceptional econ-omy of the arts is rooted in the changes that were initiated during the course of the nineteenth century. This change is most evident in the reduction of the average incomes of artists (thesis 42).

The Desire to Relieve Poverty in the Arts Led to the Emergence of Large-Scale Subsidization It is fairly evident that most rich and civilized societies .nd it intolerable that some of their citizens live below the accepted poverty level. Espe-cially in Europe governments see it as their .rst responsibility that people have enough money to lead a decent life. Although in the thirties the us were the .rst to subsidize the arts for social reasons, it was in Europe that substantial aid for the arts emerged after the Second World War.6 After the war, European governments embarked on a general mission of social justice, which focused on eliminating poverty altogether. Their efforts in the arts were particularly resolute.

During the .rst post-war decades, arts subsidies in Europe were mostly based on social arguments. The desire to improve the .nancial straits of artists was the most important reason for the substantial increase in the subsidization of the arts. It was only later that other argu-ments began to come to the fore. The social justice issue however, contin-ues to complement other subsidization arguments in most of Europe.7 It appears that governments, as well as foundations, corporations, and private donors are particularly sensitive about poverty in the arts. The image of the starving artist appeals to benefactors. Helping a poor artist is more rewarding than helping other kinds of poor people. Financial a.s.sistance is not only a gift to a needy artist; it can also be seen as a gift to mankind. After all, there is a small chance that the artist receiving a.s.sis-tance will eventually become a great artist. This kind of romantic notion is always present when it comes to the various forms of .nancial a.s.sis-tance available to artists.

The following sections address the question of whether subsidies and donations really raise artists' low incomes. But regardless of the answer, the present conclusion is that the desire to raise the low incomes of artists partly explains the existence of a large gift sphere in the arts (thesis 43).

Low Incomes are Inherent to the Arts Before discussing the question of whether .nancial a.s.sistance can effec-tively increase the low incomes in the arts, it is important to note that low incomes do not necessarily imply that artists are starving. If we look at relative hourly incomes, we see poverty in the arts and poor artists. But artists are not necessarily poor in an absolute sense or when we compare them with manual laborers from a hundred years ago. Moreover, some artists hold down lucrative second jobs or have access to other sources of income, such as trust funds and inheritances. These artists then, are rela-tively well off, but not as a result of art. If they were to work full-time as artists with no outside income, they would have a very hard time surviv-ing. So when artists earn too little in the arts to be able to work full-time in the arts, they can be labeled as poor. It's in this sense that poverty exists in the arts.

Based on the existing income studies mentioned in the previous chap-ter, there does not appear to be a relationship between developments in spending on art and the income of artists. The total amount of .nancial a.s.sistance for artists has no effect on artists' incomes. The same applies to social bene.ts. Irrespective of developments in spending, donations, subsidies and social bene.ts, the incomes of artists have remained rela-tively low throughout the West for more than a century now, and most p.r.o.nouncedly since the Second World War. If there is a trend in the second half of the twentieth century, it is a downward one. Countries become wealthier and more money per capita ends up in the arts, and yet income in the arts remains about the same or actually decreases.8 In countries like the Netherlands where there is extensive subsidization of the arts, the artist's average income is the same or lower than of artists in countries like the us and England, where subsidization levels are lower.

It appears then, that the current phenomenon of poverty in the art is largely a structural issue; poverty is built into the arts.

How can structural poverty be explained? Apparently, it's because artists seem to be quite willing to work for low hourly wages. Table 3 in section 5.5 listed six explanations for the permanent willingness of artists to work for low hourly wages: Artists are un.t for non-art jobs, artists prefer non-monetary rewards, artists seek risks, artists are over-con.dent and self-deceiving, and artists are ill-informed.9 The bigger the role any of these explanations plays, the stronger the willingness of artists to work for low incomes. Because artists must survive, however, a minimum income constraint exists. Given this constraint and a large willingness to work for low incomes, an increase in average hourly income is almost completely nulli.ed by a corresponding increase in the number of artists.10 External forces, like increased spending, donations, or subsidies, lead to more money being pumped into the arts, which fail to effectively increase average incomes, and instead lead to artists working more hours at their art. (It leads to more people entering the arts. It also allows artists with second jobs to start to cut down on these jobs and begin working longer hours at their art. But because young artists earn the least and usually work more hours in second jobs, the average number of hours artists work in the arts is not really affected.) In theory the extra money leads almost exclusively to more artists. It follows that on average, extra funding affects employment .gures more than it affects the artist's aver-age income.

In theory, then, extra funding will never increase income levels but merely increase the number of practicing artists. This is true only if the inclinations discussed in the previous chapter are very strong: artists want to exchange all extra money for non-monetary rewards (or they very much want to take risks, are totally over-con.dent, or see no possi-bilities at all outside the arts). However, it is safe to a.s.sume that the aver-age artist who earns more than the minimum income level is mainly interested in non-monetary rewards, but is not totally immune to extra .nancial income.11 Therefore, it must be stressed that the notion of struc-tural poverty applies broadly to large groups of artists.

The main evidence that bolsters this chapter's theses structural poverty and that .nancial a.s.sistance for the arts only leads to more artists is an indirect corroboration. Because as more money is pumped into the art world, the artist's average income does not as a consequence increase, and because the number of hours average artists spend every week making art remains the same, there is only one possible outcome: an increase in the number of artists. This is what happened. The amount of art subsidies per inhabitant, and to a lesser degree, the amount of money spent on the arts per inhabitant, has risen substantially in all of the western countries during the second half of the twentieth century. Meanwhile, artists' incomes have remained relatively low or have even gone down (in real terms). This means that the total number of artists must have risen.

This theory implies that increased subsidization and other types of incomes to the arts have led to a corresponding growth in the number of artists. As we shall see, measuring the numbers of actual artists over time is problematic. Nevertheless, researchers generally a.s.sume that in the West the number of artists has risen spectacularly since the Second World War and that there is currently an 'oversupply' of artists.12 The conclu-sion is that the arts are like a bottomless pit. In general, more money spent on the arts per capita whether its from consumers, donors, or governments does not raise the average incomes of artists; instead it just increases the number of artists, including a larger number of poor artists per hundred thousand inhabitants, and therefore to more poverty (thesis 44).13 Poverty in the arts is structural (thesis 45).14 The Number of Artists Adjusts to Subsidy Levels It is important to realize that the thesis that more money leads to more artists and not higher incomes, doesn't only mean subsidies but all forms of income. (Take two imaginary countries where the number of artists is higher than in other countries. This fact can be due to above-average per capita subsidization in one country and above-average spending on the arts in the second.) Nevertheless, in the following sections I shall concen-trate on subsidization (including social welfare), rather than on spending and donations, because the goal of subsidization is often the raising of incomes in the arts and because subsidization expenditures are more easily in.uenced by politics than either spending or donations.15 More arts subsidies doesn't increase artists' average incomes; it only leads to more work hours spent on art.16 The main evidence for this thesis is the indirect proof presented in the previous section. What is the impact of speci.c subsidies in speci.c countries?

Refutable hypotheses based on the thesis can either be synchronic or diachronic. On the one hand, geographical (synchronic) comparisons could be produced. In the previous section, I produced a rough syn-chronic comparison by stating that in countries with ample subsidization artists' incomes are the same or lower than in countries with less subsi-dization.17 A more detailed a.n.a.lysis would compare numbers of artists working in different art forms in, say, the us and one or more European countries. This would test the prediction that in a country like the Netherlands with large subsidy levels, the number of artists per hundred thousand inhabitants is higher than in the us. 18 Or one can attempt to produce (diachronic) comparisons over time in one country. If the level of subsidization (or social welfare or donations or spending) in a particular country suddenly increased (or decreased) the total number of artists would have to increase (or decrease), as well, while income remained largely the same. Because the conclusion regard-ing the relation between arts, money and numbers of artists refers to long-term employment, the change had to be drastic, with other circ.u.m-stances remaining unchanged or changing at a steady rate.

This latter situation is rare. The main problem is however, how to count the artists. This remains extremely dif.cult because a) diplomas do not reveal who is a professional artist, b) many professional artists are self-employed and unaf.liated, and c) many artists earn most of their income from second jobs and thus often do not appear in statistics. Therefore if countries count artists at all, the strategies vary greatly from country to country.19 So a conclusive test of our thesis remains outside the realm of possibility. Nevertheless, on the basis of personal observa-tions and discussions with other observers, it is possible to gather some initial data, inconclusive as this evidence must remain, but at least it lends our thesis some plausibility. For instance, in comparing the us and the Netherlands, few observers would disagree with the observation that subsidy levels in the us are lower than they are in the Netherlands and so is the number of artists per hundred thousand inhabitants.

But making a diachronic comparison within one country is almost as problematic. One could try to study the effects over time of drastic changes in subsidization on numbers of artists. In this case, one would need to take consistent counts of artists over a suf.ciently long period of time.20 These kinds of .gures are very dif.cult to come by. Nevertheless, I will examine a few instances when drastic changes occurred in the Dutch art-subsidization 'landscape' since the Second World War, in rela-tion to available data on numbers of artists.

Subsidies in the Netherlands Have Increased the Number of Artists Without Reducing Poverty In order to demonstrate the plausibility of the thesis that more subsidies leads to more artists and vice versa, I will .rst discuss the effects of the introduction and growth of a particular Dutch subsidy plan of the visual arts, the so-called bkr, which existed from 1949 to 1987. It is a well-doc.u.mented case of a major overhaul in the subsidization of visual artists in the Netherlands.

Gradually between 1949 and 1956, the Dutch government developed an extremely generous subsidy plan for visual artists, the so-called bkr. The primary aim of the bkr plan was to offer temporary help to impov-erished visual artists.21 This was emphasized by the fact that the money came from the ministry of social welfare and not from the ministry of culture. Professional visual artists earning less than a certain minimum income were allowed to sell art to local governments in order to supple-ment their income. If their work met certain rather low criteria, local governments were obliged to buy the art offered to them.

According to this book's theory, this kind of .nancial a.s.sistance plan should encourage more people to remain or become visual arts. Because no consistent .gures on numbers of Dutch visual artists exist for this period, it is impossible to appraise whether this is indeed what happened. The fact however, is that the number of partic.i.p.ating artists increased from 200 in 1960 to 3800 in 1983, which means it is highly likely that the total number of visual artists increased far more than the demand for art work in this same period.22 The main evidence is indirect, however: during the same period .gures of students enrolled in the .ne or 'autonomous' departments at the Dutch art academies grew strongly. In fact, the growth rate was 60% higher than the average growth rate for technical and vocational training enrollments during that same period.23 This implies that the arts became more attractive and this led to increases in the total number of artists.24 Therefore, even without strong evidence, almost everybody concerned admits that the bkr plan was (partly) responsible for the huge increases in the number of visual artists in the Netherlands during that period of time.

The effect of the termination of the bkr plan represents our second example. Because the number of artists increased and more and more artists began to utilize the bkr plan, it eventually became too expensive. This led to the gradual termination of the plan between 1983 and 1987. During this period, overall government spending on the visual arts went down approximately 20%. (Visual artists were partly compensated via other newer subsidies. Otherwise, the reductions would have been even larger.25) The change over was relatively abrupt, taking place over a much shorter period of time than the earlier expansion of the program. And so, if our thesis is correct, the reductions should have caused, with some delay, a decrease or at least a deceleration of growth in the total number of visual artists.

Most signi.cantly the strong growth in enrollment .gures to .ne arts departments at art schools stopped in the years around the conclusion of the program. The yearly increase in enrollment .gures began to normal-ize and resemble those of other technical and vocational training schools. Moreover, more of the artists who utilized the bkr plan, left the arts within ten years after the program's termination than would have left if the plan had been continued.26 Therefore, the numbers of visual artists not only increased less rapidly because fewer people were enrolling in the visual arts, but also because more people departed. (As one might expect, given the a.n.a.lysis in chapter 4, most of the ex-users of the wik plan who remained artists found their way to other government subsidies, while only a small minority among them adopted a new strat-egy by orienting themselves more towards the market.27) The third example involves the 1999 introduction of a new program for all Dutch artists, the so-called wik plan. In the Netherlands as well as other countries, many artists have managed to continue to work as artists thanks to social bene.ts. For a long time the Dutch authorities closed their eyes to this abuse of social bene.ts. Nevertheless, the author-ities felt that this kind of illegal abuse of the welfare system could not continue forever. Therefore, they made it more dif.cult for artists to con-tinue receiving social bene.ts, while simultaneously offering an attrac-tive alternative to artists in the form of the wik plan. It applies to all artists, writers, performers, visual artists, etc. Basically the partic.i.p.ants in the wik plan receive social bene.t legally for a limited number of years without ever having to apply for other jobs. However they must earn at least a minimum income in the arts. In this manner, artists are encour-aged to begin to acclimate themselves to the realities of the market. If after the end of the wik years artists still can't earn a living from their art, they are not allowed to re-register for social bene.ts and have to .nd employment outside the realm of the arts. (The artists I know who make use of this program are not particularly concerned about the limited time period. They a.s.sume that by then Parliament will have amended or extended the program or have come up with something else to keep them going in the arts.) Although the new plan is supposed to lead to net savings, the opposite is more likely to occur. Because of a number of amendments that were added by the Dutch Parliament, the new plan has become quite attractive for artists. In the future, a diachronic comparison of money .ows and numbers of artists will hopefully determine whether this program actu-ally encourages or discourages people from entering the arts. At the time of writing this book, the only data that exists is for the .rst year of the program, 1999. 28 In that .rst year, some 4000 Dutch artists had already made use of this program. It turns out that 58% of the applicants had previously received social bene.ts, while 19% were recent graduates of art schools, while 23% did not .t into either of these categories.

It is too early to reach .rm conclusions based solely on the results of the .rst year, but in my view, the latter two percentages are exceptionally high. It is hard to believe that without the wik plan all of those who .n-ished school would have made their way to the social security of.ce. Some probably would have quit the arts, while others may have been able to make it without the wik plan. This applies even more emphatically to the 23% who were already artists but who were not receiving social ben-e.ts at the time they applied for the wik. It's hard to believe that all these artists had unexpected downturns in earnings and therefore would have been candidates for social bene.ts.

In talking to colleagues in the arts who currently receive wik bene.ts and had not been receiving social bene.ts prior to applying for the wik, it seems that most of them had not suffered any dramatic decreases in income. Instead they quite strategically applied for this new program because it was the best choice among their alternatives. To them the wik is helpful because it enables artists to reduce their hours spent working second jobs or producing 'commercial' artwork. In short, it enables them to spend their time making .ne art. This also applies to certain groups of artists like writers and cabaret performers in the Netherlands who could not qualify for this kind of subsidies before. Therefore it seems likely that the new program will only lead to more overcrowding.

The fourth example rests on a rough synchronic comparison. Although performing artists in the Netherlands earn the same or less than in comparable countries, many foreign artists work in the Nether-lands. Naturally this is most applicable for art forms that do not require language, such as dance, mime, and instrumental music. In dance both at art colleges and in Dutch production companies the percentage of foreign performers is often greater than 90%, in mime it can be more than 50%, while it is relatively high in a number of music areas. Although foreigners in art schools pay higher tuition fees than Dutch res-idents, their education is still subsidized. More importantly, art compa-nies receive generous subsidies in the Netherlands. Therefore, when for-eign students are good (and most of these students are motivated and talented, otherwise they wouldn't have risked coming to the Nether-lands), upon graduation, they stand more of a chance of .nding paid employment in the Netherlands than they would in their own countries. (In Germany, for instance, subsidies are also generous, but foreigners are not allowed to work in subsidized companies.) Therefore, the unusually large presence of foreign artists in the Netherlands also adds to the plau-sibility of the thesis that subsidies only leads to more artists.

Subsidies Are a Signal that Governments Take Care of Artists The conclusion of section 6.3 that poverty is built into the arts and that any extra money for the arts has little effect on income and only leads to increased numbers of artists refers to the long term and to the sum of all subsidies, donations, and spending. It does not necessarily apply to any speci.c subsidy or donation. Although it probably applies most strongly to the Dutch subsidy plans discussed in the previous section, it may not apply or hardly apply to certain other subsidies. In order to examine the different short-term effects of changes in speci.c subsidies and donations on the number of artists, it is useful to distinguish between the direct effects and the indirect signaling effects of subsidization and donation.

First of all, changes have direct effects. For instance, if it is mainly suc-cessful writers who bene.t from a certain type of subsidy or private grant and if more money is made available for this grant or subsidy, the direct effect would be that the income distribution among writers becomes more skewed, while the number of writers hardly increases. It follows that average incomes must rise, at least a little. If, however, another subsidy or grant is inst.i.tuted to relieve poverty, and mainly poor and unsuccessful writers pro.t from this program, then the direct effect is that the number of artists increases, while average incomes remain the same.

In the second place however, changes that become common knowl-edge can often have a signaling effect. Such indirect effects of subsidies and grants can easily outdo the direct effects. When a new award is insti-tuted that might confer honor, fame and money on recipients, the direct effect in the form of a raise in average income can be small, while the indirect effect can be signi.cant due to so-called signaling. Because would-be artists begin to believe that they can win these awards it encourages more people to enter the arts and so the net effect is that aver-age incomes decline. This applies to prestigious awards that are won mostly by internationally successful artists such as the Booker Prize for literature, as well as to numerous, more modest, and local rewards in all areas of the arts. The latter awards are less lucrative, but are more appealing because they seem to be less unattainable. In either case, the stakes both in terms of money and recognition increase, therefore the arts become more attractive, the number of artists increases and incomes decline.29 The winner-takes-all principle and the inclination of artists to take risks, further increase the impact of such awards systems on the numbers and incomes of artists.

Most subsidies have both direct and signaling effects. As soon as Robin in the ill.u.s.tration received his government grant, he decided to spend more time on his art and quit his restaurant job. This is a direct effect. But Robin's grant also indicated that he might be better than other artists and he mistakenly expected that the government would continue to reward him. Any interest he may have had in the market receded even further than would have been the case without the signal. So, because of the signaling effects of certain subsidies artists' average incomes can actually decline.30 As has been previously noted, subsidies can increase levels of poverty because the numbers of artists increase and thus lead to a condition where there are more poor artists per hundred thousand inhabitants. The signaling effect can even further exacerbate the effect of subsidies on incomes because instead of the situation where there are more people earning the same low income, incomes may actually decline.

Subsidies and Donations Intended to Alleviate Poverty Actually Exacerbate Poverty As was noted earlier, the desire to raise artists' incomes is the intended function of many arts subsidies. Even when it isn't the subsidy's primary function, it continues to play a secondary role. Policymakers who want to eradicate artists' low incomes usually turn to subsidies that offer direct help to the target group. This implies that government interven-tion tends to be supply-oriented; subsidies go to the poorer artists and art inst.i.tutions rather than to art consumers. And yet, because of their sig-naling effects, these types of subsidies are more counterproductive than other subsidies.

I will .rst take another look at the direct effects. Contrary to the desire of raising income levels, the direct effect of supply-oriented subsidies for the average artist is an increase in the number of artists and not an increase in average income.31 When Robin receives his subsidy and con-sequently totally stops thinking about selling in the market, newcomers immediately take his place. Thus the income distribution and average incomes remain the same, but the number of poor artists increases and so does poverty.

Supply and demand subsidies are not that different when it comes to their direct effects. For instance, a tax deduction on art purchases, a demand subsidy commonly employed in the us, also has the direct effect of primarily increasing the number of artists, while leaving income distri-bution and average income untouched.32 In this context, the signaling effect that subsidies have on art students is important. When education is subsidized, this seems to imply that society takes some responsibility for the schools and its students. There-fore, subsidized education indirectly suggests at least somewhat that would-be students expect to .nd some form of employment in their chosen .elds after graduation. Or, if there are in fact no employment opportunities, students expect their government to take care of them upon graduation. (This expectation is probably not altogether wrong considering the sums of money governments and government-related inst.i.tutions provide for programs that are created to deal with the poor .nancial prospects of many artists. Some examples of these programs are: the wik in the Netherlands, the French 'Intermittent de Spectacle' and the 'Kunstler Social Ka.s.se' in Germany.) Subsidized art education also insinuates that the arts, like other pro-fessions, are now more 'democratized' and that almost anybody can become an artist and earn a living as an artist. But whereas in other pro-fessions most of the time the large majority of graduates can make a living as a professional, in the arts only a small minority of those who graduate will make it as a professional artist. And so it's hardly amazing to note that the arts are still less 'democratized' than other professions. The parents of art students are still wealthier than the parents of stu-dents in other comparable professions. Because these wealthier parents can later a.s.sist their sons or daughters, the risks of going into a high-risk occupation like the arts are reduced.

If we observe the signaling effect of supply and demand subsidies they tend to vary however. Supply subsidies are usually part of well- publi-cized nation-wide programs that artists can apply for and usually raise artists' general expectations. Well-publicized programs aimed directly at artists broadcast the message that the government offers hope for .edg-ling artists. Subsidies for agents and brokers also tend to send a message of hope albeit not as forcefully. The message coming from demand subsi-dies such as tax deductions is least clear.33 Whereas artists and prospec-tive artists are hardly aware of tax deductions for art consumers, they are very aware of the nation-wide generous subsidy programs available to artists. They include the aforementioned wik plan and other Dutch sub-sidy programs, the French 'Intermittent de Spectacle',34 the heavily sub-sidized 'Kunstler Social Ka.s.se' in Germany, the American nea grants system35 and, to a lesser degree, also the plans of the Regional Arts Boards in Britain.36 Many artists are aware of these programs, because they personally take advantage of them. Plus, these subsidy programs are constantly dis-cussed inside and outside the art world. Regardless of the programs' intentions, they spread the message that society looks after its artists whatever their number. Becoming an artist is a risky endeavor, but subsi-dies (and social bene.ts) make it seem less risky. 'The government will always be there to come to the artist's rescue.'

Because subsidization does not boost incomes, this signal is nothing but misinformation. Moreover, no government is capable or willing to go on supporting ever-increasing numbers of artists. The signaling effect of generally known artists' subsidy programs just adds to the existing misinformation and in doing so, make the arts seem even more attrac-tive. Subsidies for artists lead to more artists, lower incomes, and more poverty. (Thesis 46).

The present a.n.a.lysis leads us to expect that the total government arts subsidies program in the us with its emphasis on tax deduction leads to less overcrowding, and higher average incomes for artists than in Europe, notwithstanding the intentions of European governments to reduce poverty among artists.

The goals of most subsidies however, is not only to raise artists' income, but to serve a variety of functions. Thus an a.n.a.lysis of costs and bene.ts could help with the selection process of different types of supply and demand subsidies as well as the over-all package of subsidies. In that context, an inventory and a.s.sessment of possible signaling effects is essential. (Subsidies can produce many unintended side-effects.37) Governments can choose from a variety of subsidies. They can also choose whether to provide more subsidies and less spending on art or less subsidies and more spending. A cost-bene.t a.n.a.lysis could perhaps pro-vide a more informed choice in this matter. For instance, a government could begin by purchasing more visual art as an alternative to more sub-sidies for visual artists. Demand subsidies, such as tax deductions, can serve as another alternative. (It may turn out that demand subsidies, are actually less attractive than they appear to be on the basis of the previous a.n.a.lysis. The effect on demand is probably small, while there are impor-tant negative effects, most notably on the general distribution of income.) Finally, it is doubtful however, whether there is any speci.c subsidy strategy that can have much of an impact on average income in the long run. In the exceptional economy of the arts, the basic variable is not income but numbers. If art spending per capita is the same in two coun-tries but country one provides more in art subsidies, then this country will also have more artists, and among them, more poor artists. Poverty is built into the arts. It follows then, that if the sole aim is to reduce poverty in the arts then the best policy is to reduce overall subsidization of the arts (thesis 47).

Low-priced Education Signals that it is Safe to Become an Artist Subsidized education, state employment programs, and social bene.ts all have a different effect on income and employment in the arts than sub-sidies do. That is because these programs serve a broader range of groups. While subsidies for the arts make the arts more attractive and therefore other professions slightly less attractive, subsidized higher edu-cation and social bene.ts affect all professions. Nevertheless, it appears that the effects of these broader-based programs on the arts are more conspicuous.

I will .rst look at higher education. In Europe, due to grants for stu-dents or subsidies for educational inst.i.tutions, the relative price of higher education has dropped considerably in the twentieth century, and most dramatically in the decades after the Second World War. The .nancial aspect of a higher education has become less signi.cant for parents. And thus, less af.uent social groups began entering the higher education system and the total number of students increased. In other words, higher education was 'democratized'. In the immediate post-war period, there were plenty of employment opportunities for the increasing num-bers of graduates. When on occasion, employment opportunities declined in a certain profession for instance, the 1970s was a decade of low employment opportunities for graduating sociologists enrollment .gures quickly declined in response. In this sense the market worked well. And if the system worked less successfully, authorities seldom hesi-tated to redirect students to other .elds. When giving information had too little effect, a numerus clausus has been utilized regularly in most European countries.

The .ne arts case was different however. Here enrollments of arts stu-dents just continued rising. No government tried to deter students from studying art, even though it was clear that only a few graduates would ever be able to make a living in the arts.38 There was also no pressure from professional artists to reduce enrollments to art colleges. Admis-sions restrictions other than those based on talent were taboo because these would be contrary to the spirit of autonomy in the arts. Therefore, in the short run, admissions adjusted to a particular schools' capacities. And in the long run, the size and number of schools adapted to the number of talented youngsters who were willing to pay the (limited) tuition fees.39 In this context, the signaling effect that subsidies have on art students is important. When education is subsidized, this seems to imply that society takes some responsibility for the schools and its students. There-fore subsidized education indirectly suggests, at least a little, that would-be students can expect to .nd employment after graduation in their chosen .elds. Or, if there are no employment opportunities after all, stu-dents expect that the government will still take care of them upon gradu-ation. (This expectation is not altogether wrong given the sums of money governments and government-related inst.i.tutions spend on programs aimed at relieving the bad .nancial situation of artists, like the wik in the Netherlands, the French 'Intermittent de Spectacle' and 'Kunstler Social Ka.s.se' in Germany.) Subsidized art education also suggests that the art profession, like other professions, is now 'democratized' and that anybody can become an artist and make a living as an artist. But whereas in other professions most of the time the large majority of graduates can make a living as a professional, in the arts only a small minority of those who graduate will make it as a professional artist. And so it's hardly amazing to note that the arts are still less 'democratized' than other professions. The parents of art students are still wealthier than the parents of students in compa-rable professions.40 Because these wealthy parents can later a.s.sist their sons or daughters the risks of going into a high-risk occupation as the arts is reduced.

The presence of highly subsidized art education regardless of future employment sends the wrong signals to potential artists. It contributes to an overcrowded .eld and low incomes for many artists (thesis 48.) Social Bene.ts Signal that it is Safe to Become an Artist During this same period, when higher education became affordable and thus made the arts more attractive, the growth of employment bene.ts and social security bene.ts affected artists more than other profession-als. This was caused by the inclination of artists to forsake money in combination with the artist's survival constraint. Generally speaking, the social security or unemployment bene.t allowance is suf.cient to overcome the survival constraint. These bene.ts allow artists to work full time in the arts even without other outside income. That means that if artists can count on social bene.ts, art as a profession becomes a much less risky proposition. More social bene.ts induces more people to enter the arts and as a consequence, more people earn lower incomes and poverty in the arts increases. (Thesis 49) Many artists use social bene.ts, unemployment bene.ts, or related government money to .nance their activities. The government often turns a blind eye to these activities or artists manage to mislead adminis-trators. In the 1980s in the Netherlands, social bene.ts money was gen-erous and the rules were .exible. Thousands of artists, from dancers to poets, could make art thanks to the generous social bene.ts program. Presently the bene.ts program is more restrictive. It is more common now that artists be required to seek alternative forms of employment. However, new programs like the aforementioned wik plan have replaced more conventional social bene.ts in the Netherlands. Moreover, in the Netherlands as well as in other countries, many artists continue to .nd new ways to go on receiving social bene.ts.41 Unemployment bene.ts is a form of indirect subsidization that is widely used by performing artists and performing arts inst.i.tutions in the us and a number of European countries. Bene.ts are given for a limited period, for instance six months. The use of these bene.ts is legal. Author-ities sometimes devise attractive programs (such as the aforementioned 'Intermittent de Spectacle' program in France) geared toward perform-ing artists. These programs have a powerful impact on the behavior of artists and art companies. For instance, since the inst.i.tution of the 'Inter-mittent de Spectacle' employment contracts have become much shorter in France, which means that performers receive unemployment bene.ts for a larger part of the year and companies can pay them less.42 This is not unlike the situation in the us. (Britain approached the situation from a different angle, which made it more attractive for performing artists to become self-employed.) This doesn't only involve social security bene.ts. It's amazing to see how eventually a disproportionately large share of almost any subsidy or bene.t, aiming to reduce general poverty or unemployment, starts to pour into the arts. For instance, many countries have developed pro-grams to use money from bene.ts to .nance the wages of employees who were unemployed for a relatively long period. Thanks to subsidization, they receive low subsidized wages, while employers end up paying little or nothing. The wages are often so low that the jobs remain unattractive for unemployed non-artists, who know the prevailing wages for these kinds of jobs. But in the arts incomes are low anyway and a subsidized poorly paid job is more attractive than doing the same arts-related job as a volunteer. And so that's why art companies and art inst.i.tutions are the .rst to apply for these kinds of subsidies and how a relatively large pro-portion of these subsidies ends up going to the arts.43 In most of the wealthier countries, disproportionately many artists receive social bene.ts and unemployment bene.ts and a disproportion-ately large share of social a.s.sistance ends up going to the arts (thesis 50).

10 Artists Supplement Incomes with Family Wealth and Second Jobs Even when artists receive subsidies, they often earn so little that one has to wonder how they manage to survive. For instance, the average visual artist in the Netherlands earns (including subsidies!) barely enough to cover costs, with almost nothing left to live off of. The median income (including subsidies, after costs) is close to zero.44 More than 40% of Dutch artists don't earn enough from their art to cover the cost of making the art itself. This means that at bottom these artists are actually paying to be an artist. On top of that, more than 75% do not earn enough to earn a basic living.45 How can they go on being artists if, despite donations and subsidies, they cannot make a living? In other words, how can such poverty continue to exist?

The super.cial answer is simple: Poverty among artists is only possible if they manage to .nd other sources of income to make up the de.cit in their budgets. What other sources exist? Mainly, the .nancial aid comes from the artists themselves and from families and friends. Artists trans-fer non-arts income or arts-related earnings into their art production budgets. This may include savings from previous employment, bene.ts, or an inheritance.

Although the role of families funding the arts was probably more per-vasive in the past, its current role should not be underestimated.46 First of all, inherited money enables a number of artists to work full-time (or at least more hours) on their art. And, although family members seldom supply regular .nancial a.s.sistance anymore, they do still come to the artist's rescue in emergency situations. Probably the most important source of .nancial a.s.sistance is the artist's partner, however. Often this kind of a.s.sistance is built right into a couple's budget. For instance, the partner who holds down an 'ordinary' job, naturally pays most of the recurring bills.

Inheritances and other types of family a.s.sistance make the art profes-sion a slightly less risky endeavor. This helps explain the fact that at least 40% more arts students have parents with a higher than average educa-tion than other students do.47 Parents with higher educations earn more and are more able to a.s.sist their sons and daughters in their artistic pur-suits when they can't make ends meet.48 But the majority of artists who cannot earn a living off their art and who have no family wealth to fall back on have to .nd a second job if they hope to continue making their art. Evidence reveals that the extent of multiple jobholding in the arts is large and increasing.49 A survey of American artists in New England reveals that in 1981 76% of all artists had a non-arts second job.50 In 1993, among Australian performing artists, almost 90% had an arts-related or non-arts second job.51 Due to the comparatively higher level of subsidization, these percentages are lower in a country like the Netherlands. Nevertheless, in 1998 around 33% of Dutch visual artists had an arts-related second job and spent 10 hours a week doing arts-related work. Moreover 29% of Dutch visual artists worked at a non-arts job on which they spent an average of 17 hours a week.52 According to another poll, 60% of Dutch visual artists who were still employed in the arts a year and a half after graduation had a non-arts second job.53 Artists teaching art has been common practice for a long time, but the fact that so many artists are now supplementing their art-generated incomes with second jobs appears to be a phenomenon of the last quarter century. To some extent, second jobs seem to have replaced family-related .nancial a.s.sistance. Nevertheless, it is even more the present large number of artists who consequently earn too little from their art that has forced artists into seeking out second jobs.

The majority of artists have non-arts related second jobs out of neces-sity; they no doubt would prefer to work more hours on their own art.54 The common types of employment such as restaurant work, cleaning, and other forms of menial labor neither offer much satisfaction nor pay very well. As we have already noted, as soon as their income rises and exceeds their survival constraint, they reduce their hours on these second jobs in order to work more hours on their art.

Because second jobs are often regular jobs, they offer some security. Thus, they're attractive because of the income but also because they reduce the risks involved in choosing a career in the arts a little. In this respect, it is worth noting that the risks involved in the arts profession have increased even more over the past thirty years, because the number of regular jobs became smaller in the performing arts and artists had little choice but to become self-employed.55 Many performing artists lost steady jobs and now .nd themselves working freelance.

11 Artists Reduce Risks by Multiple Jobholding Arts-related jobs such as teaching art differ in a number of respects from non-arts jobs. Teaching art usually pays better and offers more satisfac-tion than, for instance, cleaning.56 Therefore, it is understandable that when artists start to earn more they sooner give up non-arts jobs than arts related jobs. The difference is also evidenced by the fact that art stu-dents sometimes try get a teaching degree as well.57 These students intend to work as full-time artists if things work out, but if they don't, they are a.s.sured of a pleasant second job as an art teacher. Moreover, part-time artists who hold down teaching positions for a number of years usually make less of an effort in order to pursue their career in art. This means that artists do not always cut back their hours on interesting second jobs when their .nancial prospects suddenly improve. (Whereas internal subsidization is an unintended by-product of regular teaching jobs in Europe, at American universities teaching jobs for artists are designed to enable such cross-.nance.) By making certain occupational choices artists learn to diversify their risks.58 They reduce their risks by multiple jobholding outside the arts, as well as inside the arts. They do so by choosing a certain product-mix or combination of activities. For instance, a musician maintains a regular job as a studio musician and earns some extra income by playing in a band. Because these activities demand different skills, she maintains these skills and consequently increases her own chances of continuing her work as an artist. When this band ultimately becomes successful, she learns some managerial skills. She then gets a job teaching, as well, and ultimately ends up sitting on a government committee which decides on grants for young musicians. This is a form of hybridization: artists com-bine various artistic skills with arts-related skills or perhaps even non-arts skills.59 Modern artists have grown versatile. Sometimes versatility is more than just some survival strategy. Some artists, in fact, .nd this kind of diversity rewarding in and of itself.

The number of arts-related jobs that are government-.nanced or sub-sidized, has grown. Over the past 25 years, many new jobs emerged in the world of art-mediation. Meanwhile, the number of teaching positions has also increased. It's plausible that the urgency of self-employed artists seeking more stable forms of employment has contributed to the emer-gence of a so-called 'experts regime' in the arts.60 These developments may have indirectly exacerbated the already large burgeoning artist pop-ulation or 'the self-congesting spiral of oversupply' as Menger calls it.61 A kind of hybrid artist is now emerging on the scene. These artists have attractive and well-paid non-arts and arts-related jobs. Sometimes they have managed to pursue an altogether different profession as well. These hybrid artists are multiple jobholders by choice. They are de.-nitely not the self-sacri.cing artist of old, who considered a restaurant job as a necessary evil. Hybrid artists instead choose a sensible portfolio of activities. This kind of artist is still in the minority, but their numbers are growing.

Suppose that this new type of artist were to eventually become more common. Then the hourly income earned from art would decline even further because these artists would have even less of a need to earn a living from their art. But because these artists earn good wages in attrac-tive non-arts jobs and, at the same time, don't reduce the numbers of hours they spend working in their non-arts jobs as they begin earning more, the average incomes of artists will begin to look almost normal.62 Modern multiple jobholding artists are relatively well off and can afford to make art; as artists they can afford to be 'sel.ess' and to dedicate themselves to their art. They usually earn very little directly from their own art, but because they have well paid second jobs they don't need to. If this form of multiple jobholding becomes the trend, then the arts will again become an occupation for those who can afford it the wealthy, in other words.

12 Artists Could be Consumers rather than Producers Judging from the .gures showing average income, the arts are an unprof-itable production sector. Many artists grow old without ever having been able to make a living from their art. Others leave later in their careers than they would have had they been unsuccessful in another profes-sion.63 Artists are then, generally speaking, poor. The notion of multiple jobholding however, suggests an alternative interpretation of low incomes. It can be argued that the arts are not as unpro.table as it may seem. This is the case if many artists were not tabulated as producers but as consumers. Such artists are producers in their arts-related and non-arts 'second' jobs, but in making art they are consumers. Part of what they earn as producers in the other jobs they end up spending on their 'hobby', making art. Sometimes they get lucky and they earn a little extra income from this hobby bu