Why Are Artists Poor? Part 6

Do Rising Costs in the Arts Make Subsidization Necessary?

No Cost is too High When it Comes to High Quality Ruth Towse told Alex the following story from the opera world. When Samson and Delilahby Saint Saens was staged by the Royal Opera House in London it included a large chorus. All chorus members had expensive .tted silk dresses. The woman playing Delilah at one point complained that her silk dress did not stand out enough from the other dresses. So they put the expensive dresses with the exception of Delilah's in a washing machine. The effect of washing silk in a washing machine was as expected. The point of whether Delilah was unreasonably demanding or right wasn't the issue; a small improvement had been bought at great expense. The expense was unnecessary because, according to Ruth, cheap dresses could have been made for the chorus members and the silk dresses could have been saved for a later occasion. The problem could have been solved for a lot less money. Plus had the designers been more cost-minded, they would have thought twice about having all the silk dresses looking exactly alike. What shocked Ruth was the total disregard for costs.

Costs are Irrelevant; Artistic Justi.cation is All that Matters Alex's friend, Gerald, is a composer of contemporary cla.s.sical music. When Gerald graduated from the conservatory, Alex heard the composi-tion he'd written for his .nal exam, as performed by a large student orches-tra. Alex enjoyed it a lot. Since then, Gerald has written three more pieces for a large orchestra. None of them have been performed yet. After that he has also written eight pieces for small ensembles, of which seven have been performed; some of them several times. So, compared to other young composers he is relatively successful. Alex observes that part of the trick must have been writing compositions that are less costly to perform. Gerald is furious, and begins a long involved story explaining how his rea-sons for writing for small ensembles were purely artistic. It was a 'natural' step in his artistic development and it had absolutely nothing to do with lower expenses perhaps increasing the chances of getting his work per-formed.

Alex tries to explain to Gerald about all those visual artists who right after they graduate start right off painting huge museum-sized canvases only to later reduce them to more consumable sizes, sizes more appropriate for the homes of the well-to-do. These artists also deny that there's any rela-tionship between expenses and marketability. Is all this just coincidental? Gerald says he doesn't know about visual art, but in his case the adjust-ments have certainly not been coincidental. They are based on his own deliberate and purely artistic decisions. Some weeks ago, Alex heard the performance of his latest work, which he had written especially for a unique concert of contemporary music in the Queen Elizabeth Hall in London. It was a work for harp, cello, violin, and celeste. Alex noticed that the celeste was the sole electronically ampli.ed instrument among them. Alex asked Gerald about this afterwards. Gerald felt really embarra.s.sed. During the .nal rehearsal, they discovered that they were just not getting the right balance. The sound of the celeste was not loud enough. He said that in writing the piece he had overestimated the hall's acoustic qualities. He at .rst wanted to cancel his performance, but the director convinced him that electronically amplifying the celeste could provide a makeshift solution to the acoustic problem. The director a.s.sured him the audience would have no problem with it. Gerald reluctantly agreed. Speaking with Alex Gerald emphasized that he was not against electronic ampli.cation in contemporary music, as long as the decision rests solely on artistic considerations. In other words, ampli.cation should never be used to cover up compositional defects, or to play in a larger hall with more people present. Gerald still believes that he should have withdrawn his contribution. By not doing so, he feels he has failed as an artist.

Why is it so important for artists to insist that cost considerations don't in.uence their work? Why does Gerald agree to allow his work to be electronically ampli.ed when it serves artistic purposes, but opposes its use if the aim is to serve more people in a larger hall? Come to think of it, is it possible to make purely artistic decisions independent of cost consid-erations?

Costs in the arts rise faster than in most other production sectors. Do rising costs help explain the high level of donations and subsidies, i.e., the large gift sphere in the arts? And do rising costs also help explain the rela-tively low average incomes of artists? Many art donations and subsidies stem from a desire to preserve the high quality of art and the desire to help poor artists. And so can we argue that because rising costs endanger artistic quality and further reduce artists' incomes, rising costs can be used as an additional argument for subsidization? Or is it more an excuse than an argument for subsidization? In order to answer these questions, this chapter will attempt to put the notion of rising costs in the arts in perspective.

As an artist, I believe that the existence of high quality art is essential, essential for the well-being of individuals as well as society in general. If rising costs begins to threaten the integrity and survival of art then subsi-dies and donations are essential. Moreover, subsidies and donations are also necessary to a.s.sure artistic freedom. As an artist, I insist that artists must be free, and costs should not impinge on artistic freedoms. As an economist, I point to the fact that in the past many art and non-art prod-ucts have disappeared or became largely obsolete because of increased expenses. Some examples include domestic servants, lady companions or a shave at the barber. Subsidizing these kinds of activities has never been seriously proposed. But if it were proposed, it would anyway have been too expensive. Plus it would have been inef.cient to maintain these kinds of activities through subsidization. I see no reason why the arts should be any exception. As an economist, I think it's best to let people decide for themselves whether they still want to keep buying more expensive art products or prefer to buy other products. Moreover, with respect to artistic freedom I believe that all production, including artistic, ulti-mately takes place within constraints because resources are limited. There is no freedom without constraints.

'Artistic Quality Should Remain the Aspiration, Regardless of the Costs'

Many artists are easily insulted and reveal their indignation whenever anyone suggests they cut their expenses or adjust their artistic choices because of limited funds. "We're not business people, we're artists." The lack of concern about expenses is most prevalent in performing art insti-tutions. The silk dress story occurred some twenty years ago, but it could just as easily have happened today. The artists at an art inst.i.tution often feel superior to the non-artistic personnel. Worrying about expenses and searching for funding is something let for others to deal with. This atti-tude is somewhat understandable, as artists in art inst.i.tutions do not deal as directly with cost and revenue issues as, say, self-employed artists do. Producers and .nancial directors are positioned between the artist and the market or between artists and donors. Instead of blaming them-selves or the consumers, artists can always blame the administrators for the lack of funds or for impinging on their artistic aspirations or, even worse, for 'killing art' as if it were the personal fault of the administra-tors that funds are not in.nite.

Although self-employed artists are more familiar with costs, they also daydream about unlimited funds. They too can get pretty upset about the 'enormous injustice' of not having suf.cient funds to make the art they want to make. (People in the arts expend a lot of 'artistic' energy on being indignant. Actually this is a natural response for people who feel they work too hard for too little remuneration. In this sense, poverty in the arts is not compensated but real, as we suggested in Chapter 6.) Producers, .nancial directors, and consumers are all blamed for the lack of suf.cient funds, but none more so than donors and governments. In the Netherlands, most of the indignation is naturally aimed at the pri-mary donor, the government. Despite, or rather because of, the fact that the Dutch government spends comparatively large sums on the arts, it is continuously attacked for not giving more. It's 'stinginess' is said to be impinging on the autonomy of the arts.

To many people, many of them artists, the autonomy of the artist means that any artwork is worth producing, regardless of expenses or demand. The artist alone should decide the artwork's quality. Financial restraints violate the autonomy of the artist. The att.i.tude that 'sacred art has no price, and that costs are therefore irrelevant' is a prevailing notion in the art world (thesis 53). This att.i.tude is also exhibited in the above ill.u.s.trations. For the composer, even insigni.cant compromises in qual-ity remain taboo, even if they effectively cut costs. And no cost is too high if it means an increase, however small, in an opera's quality.

But quality is always relative. In poor countries, the food, housing, clothing, or household appliances are usually of a lower quality than in wealthier countries. People there cannot afford high quality goods. And also in rich countries not everything is available. Many quality products, from superior blenders to advanced building materials, remain on the drawing table because they are (still) too expensive to produce.

In art as well, technical restrictions and cost limits are present. Take the extreme example of an artist who, in the context of an artistically interesting project, wants to reclaim the Atlantic Ocean. Due to limita-tions, this kind of project can only exist on the conceptual level and in the form of sketches. And even in the cases of more modest projects the real-ization of a work still depends on an examination of bene.ts in relation to costs. Usually this examination is left to the market. The .nal decision then is dependent on market variables. But if it looks like consumers won't be able to foot the bill, donors and governments can always step in and make their own appraisal of costs and bene.ts. For instance, after many years of discussion, German of.cials decided that the bene.ts of Christo wrapping the Reichstag were worth the costs. (In this case, bene-.ts and costs were clearly interdependent: the initial resistance of German politicians actually increased the aesthetic value of the project. This con.rms the conclusion of chapter 3 that aesthetic value is a social value.) 'The Arts are Stricken by a Cost Disease'

Due to a general sustained increase in productivity, people in the West have far more purchasing power than they had one hundred years ago. Because people earn more, labor costs are higher. The impact however, of higher wages in the industrial and agricultural sectors, has been more than offset by the increase in productivity. Corrected for in.ation, due to the savings on labor costs, most products became cheaper. In other words, labor productivity has risen considerably.

However, as far as labor in the art world goes, this is an entirely differ-ent story. If developments in the arts were comparable to those in agricul-ture, we wouldn't have four musicians perform a Haydn string quartet, but only one musician playing at twice the speed. This is not what hap-pened in the world of art. Because Haydn's instructions and speci.ca-tions are respected, still four musicians appear on stage, who take the same amount of time to play the piece as in the days of Haydn.

It seems that there is just no way to save on labor in the arts and that labor productivity has not increased. And although the incomes of artists have not risen as dramatically as elsewhere and are presently relatively low, they have nevertheless risen considerably. Thus, without the support of subsidies or other non-market revenues, art products should be con-siderably more expensive in relation to other consumer goods. Due to rising costs the arts have gradually lost their compet.i.tiveness and they may not survive without subsidies and donations. Baumol and Bowen, who .rst used the example of the string quartet, have called this phenom-enon cost disease. 1 It is a disease, because like a cancer it grows and threatens the infected.

In its pure form, the cost disease is .rst found in relation to a real-time personal service. Because this service is in real time, it establishes natural limits to possible technical progress. This is the case when it comes to performing a Haydn string quartet or Beethoven's Fifth Symphony, or Shakespeare's Hamlet. The real-time service offered by actors, musi-cians, dancers, etc. is comparable to the services offered by female com-panions (or prost.i.tutes). If female companions, prost.i.tutes, actors, dancers, musicians, etc. are not present in person that speci.c service does not exist.

(The same does not necessarily apply to surgeons, nurses, teachers, or hairdressers. In their cases, it is usually the result that counts and not the human presence itself. Their activities can be accelerated or even replaced by technology. Nevertheless, they represent mixed cases, as their presence and conversation may actually involve an essential addi-tional service, which involves real time. Thus, we can say that the pure cost disease also applies to these sectors as well, albeit to varying degrees.) There is a tendency to widen the concept of cost disease to more labor-intensive areas of production where the chances of net savings on labor costs are small.2 This most commonly applies to the service sector, which includes retail trade, banking, insurance, and civil service. It also applies to certain areas in the arts, where the .nal product is not a real-time serv-ice. For instance, most creative artists do not offer real-time services, but their products, paintings, ma.n.u.scripts, scores, etc., involve much per-sonal labor, which usually offers little opportunity for reductions. After all, authentic works of art necessarily depend on personal services.

Economists tend to agree that over the past .fty years labor productiv-ity .gures in much of the arts has risen less than elsewhere. Even though artists' incomes have lagged behind, labor costs have risen more than elsewhere. These .ndings con.rm the presence of a cost disease in the arts.3 In smaller areas of the arts such as cla.s.sical music, where quality has been largely constant, the rise in relative costs has been the most pro-nounced. Costs for live pop music concerts have also risen, although less dramatically because attendance .gures have risen as well. The intensity of the cost disease therefore varies depending on the art form.

The presence and intensity of the cost disease depends on three cir-c.u.mstances or a.s.sumptions: 1 quality is constant,4 2 there is no technological progress, and 3 labor costs are high.

Moreover, just because the cost disease is found in an area of the arts,doesn't necessarily mean it is malicious. Whether it is virulent dependson two additional a.s.sumptions:4 increasing costs are not compensated by increased revenues and5 tastes are constant.

I shall examine these a.s.sumptions in the following sections. They applyto speci.c cultural .elds in varying degrees. Therefore, the presence andthe particular virulence of the disease is more a matter of degree than a.n.a.ll-or-nothing affair.

Technical Progress has Always been a Part of the Arts Is quality constant and isn't there any technical progress in the arts? The two a.s.sumptions are related: constant quality usually implies the absence of technical progress, while technical progress implies a change in quality. Art consumers often demand that quality is constant; this is especially true in the performing arts. A constant quality must be main-tained regardless of rising costs. This is in keeping with the general art world att.i.tude that sacred art has no price, and that expenses must never interfere with quality. Therefore, its not so amazing that quality is a con-stant in Baumol and Bowen's cost disease model developed for the per-forming arts.5 As art lovers these economists had thoroughly internal-ized the art world's dogmas. Nevertheless, it is strange that a basic aspect of any developing society, that of changing quality, is a.s.sumed to be invalid when it comes to the arts.

Or maybe it is not so strange. For if we limit our attention to the tradi-tional performing arts of the past one hundred years, one may get the impression that quality has remained constant and that there have been no noticeable increases in productivity. Looking at the rest of culture however, one notices considerable productivity increases. For instance, over the past .fty years, 'commercial' (pop music) performances have not been hampered by demands for constant quality and has introduced numerous technological advances that have increased productivity.

Technological change in the arts is nothing new. Art products have continued to change with the times thanks to technological advances. This also applies to the predecessors of present-day traditional art forms. For instance, the works of renowned cla.s.sical composers were allowed to change during their times and after. New performance formats and new musical instruments were consistently being introduced. Generally, audiences applauded the changes in quality.

The arts not only applied but also initiated and invented new tech-niques. People we now consider artists introduced notational systems for music. This led to enormous increases in productivity. The written music of Bach, for instance, has been performed for literally millions of audi-ences worldwide. The audiences reached by medieval minstrels during an entire lifetime were nothing by comparison.6 Sheet music did not just serve professional musicians; the published scores allowed this music to enter middle cla.s.s homes. (Composers like Telemann and Mozart were all for the dissemination of their music in this manner. This is how they earned extra money, while their fame grew as well.7) Visual artists, meanwhile, developed oil paint and the technique of lithography. Oil paints were the backbone of all manufactured paint for at least three centuries, while the most used present day commercial printing technique is still based on the principle of lithography.

Although new techniques inevitably led to changes in existing prod-ucts, these changes did not prevent them from being used. Not only did new techniques alter existing products, they also opened up new artistic possibilities which consequently led to new types of artworks being developed. A more recent example is the computer: word-processing, musical notation programs (Finale and Cubase), electronic music pro-grams, drawing programs, photo-manipulation programs (PhotoShop), etc., not only save time, they change existing products and encourage the development of new products.

In the performing arts, new sound and visual ampli.cation techniques through so-called video-walls have gained widespread use. This tech-nology allows for smaller ensembles and casts to perform for larger audi-ences. Using these techniques, existing products necessarily change while new products are introduced into the scene.

Technological advances also affect the arts indirectly. For instance, ticket reservations and sales for performances have become far more ef.-cient over the past few decades with the introduction of computerized systems. Theatre lighting technology has also been vastly improved, and now requires less labor.

The technical reproduction of art is not only interesting because it demonstrates the possibility of increases in productivity in the arts, but also because it's a good example of the extremely relative nature of the cost disease. The reproduction of performances on cd, radio, .lm, tele-vision, videotape, and now dvd, and the reproduction of paintings in art books, clearly shows how technological advances has allowed the arts to reach increasingly larger audiences, more so, in fact, than any other mechanisms or gadgets discussed thus far. One-hour live performed art is easily more than hundred times as expensive than one-hour of art at home, on television, listening to a cd or viewing a rented videotape or dvd at home.8 Due to technical reproduction the technically reproduced art product moves out of the realm of personal service and into the domain of cheap industrial good.

Cowen, who presents numerous other examples of technical progress in the arts, considers increased diversity as an easily ignored form of increased productivity. Not only are performers more versatile than they were two hundred years ago, the diversity in musical styles available to consumers is also larger. Increased diversity suggests more quality and consequently, a higher output. Productivity in the arts, it is safe to say, has increased.9 There are many possibilities for the introduction of labor-saving techniques, which lead to productivity increases in the arts. This is not to say that there is no limit to the labor-saving techniques. The arts and unques-tionably the live performance sector, need to provide personal services in one form or another. Because live performances require personal service in the form of living people on stage, this aspect establishes a .nal limit on possible changes in existing products and the introduction of new products. (It should be noted, however, that the processes used for the production of industrial consumer goods also "rely on some irreducible quant.i.ty of creative labor".10 Therefore, it's not just the arts that faces limits on labor-saving techniques; ultimately every production process faces this kind of limit.) Whenweobservetheimmensevarietyoftypesoftechnologicalinnova-tionintheartswecanmakesomeinitialcommentsregardingthecostdis-ease. Because quality is never constant, the cost disease does not rule out labor saving and productivity increases in the arts (thesis 54). Moreover, the notion that the arts in general have not experienced much in the way oftechnologicaladvancesandproductivityincreasesisfalse (thesis 55).

There is no True Performance When costs rise the natural response is to look for ways to cut expenses. For instance, when the prices of studio s.p.a.ces go up some painters will start to work at home. This way they can 'stay in business'.

In the performing arts as well, simple methods exist to cut expenses when costs are rising. One of them is performing for larger audiences; another is having fewer performers on stage. If both are altered simulta-neously productivity can be considerably increased. For instance, the music of Jacques Brel can either be performed by a 70-piece orchestra performing for two hundred people or by a solo artist like Mike Almond for an audience of three thousand. In the .rst instance, the cost per con-sumer (or unit of consumption) is approximately three thousand times higher.11 In other words, in this case the solo performer increases pro-ductivity by approximately three thousand times. (Because audience size and the number of performances may vary, it is better to count units of consumption and not units of production like performances or produc-tions.12) If people are not prepared to pay for larger ensembles, the natural solution would be fewer performers and larger audiences. This is what can be observed, although less so in the more heavily subsidized tradi-tional arts. Nevertheless, even in some traditional areas the number of performers has become smaller. For instance, the average cast size over a 30-year period in American theatres dropped from 16.8 to 9.3, a reduc-tion of almost 50 percent.13 Contemporary cla.s.sical music performances have also reduced their numbers of performing musicians. Even if com-posers like Gerald claim they base their decisions solely on artistic con-siderations, it is hard to believe that expenses don't have some indirect in.uence on decisions. (Baumol, who brought the phenomenon of reduced cast sizes in the us to light was doing so to in.uence increases in subsidies. He felt that cutbacks had a detrimental effect on the arts.14 Therefore, it's fairly obvious that Baumol does not believe that these kinds of decreases stem from artistic decisions.) When quality is constant reductions in labor are generally impossible. In the traditional performing arts the true or authentic performance, in which the artist's original intent is approximated as accurately as possi-ble, is a goal that is pursued with almost religious zeal. This is particu-larly true for cla.s.sical music. (But because the composer's intent is not always obvious, small differences in quality or interpretation do occur and these interpretations spark endless debates about a particular per-formance's .delity to the original).

But when is a performance an authentic copy of an original? In the the-oretical approach of Nelson Goodman performances are considered accurate copies of a work only if all the artist's directions are carried out. Wrong notes, altered lines of dialogue, characters or musical instruments not prescribed in the original, means the performance is not an authentic copy: but an adaptation. 15 (If performers claim they are true to the origi-nal, the performance is both a falsi.cation and an adaptation.) However, these are formal distinctions. On the one hand, in music, certain 'adapta-tions' can still be considered as genuine performances.16 On the other hand, theatre performances can be 'true copies' although they tell com-pletely new stories through the use of scenery and the ways of acting.17 What is, in essence, considered true or an adaptation depends on conven-tions.

Moreover, it's unlikely that the accuracy of a performance is solely dependent on what is happening on stage. Chapter 3 argued that modes ofconsumptionareanintegralpartofaworkofart.Alsoa.n.a.lterationin thewayaworkisconsumedchangesthatworkofart.Ifoneeveningthere are only .ve people in the audience, while another evening there are .ve thousand, these are essentially two very different aesthetic experiences.

Even if the conditions of the performances of old masterpieces were copied down to the slightest detail instruments, the performing s.p.a.ce, clothing, and audience size, all being exactly like they were in the days of the .rst performances the works would still never be exactly the same, simply because we are totally different people now. We feel and perceive things differently from the way audiences did in the castles and mansions of the times. These changes plus those in production techniques affect the consumption of art and consequently the work of art itself. Constant quality is an illusion. The truly accurate performance does not exist.

The same goes for art objects. Even though some paintings may have been hanging in museums since they .rst opened their doors, their ambi-ence is continually changing. This is evident from lithographs and etch-ings that depict the halls of museums in the past. A museum's appearance changes drastically, it seems, about every .fty years. Thus, today's museum visitors cannot possibly have the same aesthetic experience as spectators from long ago had. Again, a work of art has no independent existence. Circ.u.mstances in.uence a work of art.

The obsession with an authentic performance, especially in cla.s.sical music, is itself a product of the times. It is related to the aforementioned romantic 19-century notion, which continues to remain the dominant atti-tude in the art world. In this view, artists, especially the old masters, are worshiped as geniuses and their works should be 'respected' at any cost.

The Taboo on Technical Innovation in Cla.s.sical Music is a Product of the Times The authentic performance is not some objective given; it is based on conventions. The att.i.tudes towards change and innovation in the arts are certainly not etched in stone. The notion that change is unacceptable in some of the arts is steeped in the social att.i.tudes of a particular time and place. Nevertheless, these att.i.tudes can become a particular period's dictum. For instance, for more than a century now consumers and pro-ducers of cla.s.sical music continue to insist on a particular constant qual-ity and continue to resist new products.

Unlike jazz and pop music, there's an almost universal taboo against any electronic ampli.cation of cla.s.sical music. It is only quite recently that this taboo in the case of outdoor concerts at least has lost some of its bite. For indoor concerts, this restrictive taboo continues to hold. Never-theless, differences between various countries do exist. In the Royal Fes-tival Hall in London, the orchestra is allowed to perform before an audi-ence of three thousand using electronic ampli.cation in parts of the hall. (In the Netherlands, there have been and continue to be electronic ampli-.cation experiments, but the results are not allowed to be used to lower the prices of seats; the experiments are strictly focused on improving sound quality.18) The change in att.i.tudes over time is striking. Between around 1750 to 1850 new and louder musical instruments began replacing many of the musical instruments used in the ensembles for which Bach and Mozart wrote their music. Many new and louder instruments were introduced, while for instance the violin had its numbers increased. In either case the timbre changed; the sound of an orchestra changed far more than presently by electronic ampli.cation. This is particularly true regarding the replacement of the harpsichord by the piano. Louder newer instru-ments kept replacing the original instruments, a trend that was appreci-ated by most audiences. The innovations that went into creating the con-cert hall, with its acoustically sensitive design, added to overall ampli.cation and also dramatically altered timbre.

The developments in louder instruments for symphony orchestra ceased about halfway through the nineteenth century.19 (Developments continued however, in bra.s.s and jazz orchestras. It can be argued that already by the nineteenth century the romantic notion of the artist-genius, whose work must be respected at any price, was already severely hampering technical innovation in cla.s.sical music. Nevertheless, it is more likely that once the halls were built, the demand for live music could be met for the decades to come. This dampened the spark for tech-nical innovation.) In the twentieth century, the cla.s.sical music audience grew even though labor costs were starting to rise. But this time there were no new technical advances to offset the expenses.20 The art world had changed. The status of the arts had risen and the romantic veneration of the old masters had established a steadfast performance routine and with it, a taboo on technical change.

Because a taboo on change did not always exist in cla.s.sical music, it must be a product of the age. It's not just artists, however, but the entire art world that contributes to the prolongation of the taboo. If the direc-tors of concert halls had started using electronic ampli.cation twenty years ago, their efforts would not have attracted larger audiences. On the contrary, many would have actually stayed home because they would have considered the altered product inferior.

Whether subst.i.tutes are considered inferior depends on the type of consumers being considered. In theory, the gradual losing one type of audience can be compensated for by attracting a new perhaps, younger, audience. Until quite recently, this was apparently not an option in clas-sical music. The taboo on change is so strong that audiences and produc-ers castigate anyone even contemplating reaching new audiences via the introduction of new formats or innovations. It is only now that the cla.s.si-cal music world seems to be opening up a little. This is most clearly evi-dent with the growth of electronically ampli.ed outdoor concerts and in proposals for changes in the repertoire.

The time bomb that cla.s.sical music directors have to take into account is that their audience is dramatically aging and so they need to consider drastic and risky action. For instance, Simon Rattle of the Berlin Philhar-monic Orchestra recently announced that he will include the schmaltzy ('schlager') repertoire with singers like Udo Jurgens in his concerts. (One has to wonder if there aren't more creative alternatives that would make for an artistically more interesting event and that in time would also attract a wider audience.) The comparative integrity of the performances discussed in the previ-ous section and the relative nature of att.i.tudes towards cost-saving inno-vations discussed in this section lead us to another observations regard-ing cost disease. The cost disease does not simply emerge from intrinsic qualities in the artwork. Works of art are man-made and so is the cost disease. The gravity of the cost disease is not .xed. The more reluctant the art world is in subst.i.tuting particular art products for less costly ones, the more severe the cost disease will be and vice versa (thesis 56).

The .rst two rudimentary a.s.sumptions of the cost disease, that qual-ity is constant and that there is no technical progress, are largely untrue. On the contrary, quality changes are common in the arts and the arts have always pro.ted and continue to pro.t from technical progress (thesis 57).

The Cost Disease Contributes to Low Incomes while Internal Subsidization Contains the Cost Disease In Chapter 5 we noted that hourly wages in the arts are relatively low. How can the cost disease be caused by high labor costs, when average hourly wages are low? First, the labor requirements may be so great that relative labor costs remain high despite low incomes. Second, incomes vary in the arts and so does the cost disease.

The .rst point lies at the heart of the cost disease. What matters for the severity of the cost disease is the total labor costs per unit of consumption and not hourly incomes. Hourly income affects labor costs but so does the number of hours required for one hour of consumption. Generally in the arts, labor requirements per hour of consumption are higher than in other sectors. In other words, the labor-intensity of production is high. This means that labor costs can be relatively high, even if the hourly wages are relatively low. For instance fringe production, which depends on low wages, usually involves a high level of labor intensity and is thus also susceptible to the cost disease.

Second, labor costs as a proportion of total costs are higher in the arts than in other sectors, but they also vary among the various art forms. Labor costs are often very high in the established and often structurally subsidized performing arts. Labor costs are lower, but usually still far above average in those areas of the arts where artists in part subsidize themselves or a.s.sist in a volunteer capacity. Labor costs are normal or even low, however, in the areas that involve the technical reproduction of the arts.

This means that the severity of the cost disease varies throughout the arts. For instance, because most dancers do not work for the established companies and thus earn very little, the average income of dancers is low. Nevertheless, a small percentage of dancers who work for structurally funded companies earns less but not that much less than comparable pro-fessionals do.21 Therefore, in this respect the cost disease hits established companies more than the less of.cial companies.

In the opera world as well as some other areas of the arts, the stars earn many times the average income. Here labor costs can be a much larger portion of total costs than in other art sectors that don't have super stars, and so the effects of the cost disease are particularly intense. Moreover, the incomes of the stars rise faster than average incomes.22 Because there is usually only room for a few stars (due to the before mentioned limited star capacity of consumers) their relative incomes can be extremely high. Therefore, the proportion of labor costs per unit of consumption rises as well. This means that the cost disease dramatically affects the traditional performing arts where there is a star system in place, particularly opera.

In the case of structurally subsidized companies, donations and subsi-dies, on the one hand, aggravate the disease, but on the other hand, soften its effects. Because of the extra proceeds that come in from dona-tions and subsidies, structurally subsidized companies can afford to pay higher wages, while keeping their prices relatively low. Moreover, gov-ernments usually only subsidize these kinds of companies on the condi-tion that they pay 'decent' wages. For instance, governments demand collective bargaining agreements between employers and employees.23 This means that labor costs are usually higher than in comparable 'com-mercial' or alternative companies. Therefore, on the one hand, the cost disease is more severe in the case of structurally subsidized companies. On the other hand, however, the government usually compensates the annual wage increases in the form of higher subsidies. Therefore, although the disease is unmistakably present its effects are felt less. The malice of the cost disease is contained by ever-increasing subsidies (thesis 58).

Whereas the income from governments and donors renders the disease less malicious, in the case of established companies, low incomes, thanks to internal subsidization by artists and relatives, helps contain the cost disease in unof.cial and alternative artistic sectors.

IftheamountoflaborperunitofconsumptioncontinuestoG.o.downin the industrial and agricultural sectors while it remains high in the arts, relative incomes would have to continue to go down year after year in order to contain the cost disease permanently. And, as noted earlier, incomes have gone down considerably and continue to do so.24 More-over, the growing signi.cance of second jobs suggests that the limits of internal subsidization by artists and therefore of a further lowering of incomes from art have yet to be reached. Because artists are willing to workforlowincomes,thecostdiseasehaslesseffectontheartsthanit otherwisewouldhave.Withnormalincomespricesofartproductswould behigherandthereforethesectorwouldbesmaller.Onlybecauseoftheir willingnesstoworkforlowerwagesartistscankeeptheirjobs.Itfollows that the cost disease indirectly contributes to low incomes in the arts.25 When average economic productivity rises, certain sectors of the arts that depend more on volunteers and amateurs are less vulnerable. One has to wonder whether over time the rise of the amateur sector and breakdown of barriers that divide amateurs and professionals are going to emerge as some of society's answers to the cost disease. For instance, many professional cla.s.sical music choirs and professional jazz big bands have already been replaced by amateur groups where only the director is paid. The existence of the cost disease has necessitated the slashing of labor costs, which has enabled these forms of music production to sur-vive.

The basic remedy against the cost disease is by replacing labor with capital. This happened in the areas of technical reproduction in the arts. In the production of literature, of music on cd or the Internet, and of visual media like video, dvd, and television, relative labor costs are much lower than elsewhere, sometimes even lower than in the industrial and agricultural sectors. Therefore at present, there is no cost disease in these media. (And yet, the Hollywood mega-movie productions with their elaborate superstar system have experienced an increase in labor costs. It can be argued that eventually relative labor costs will rise in all other media as well. However, even if they rise, it doesn't necessarily rep-resent an example of the cost disease.26) The a.n.a.lysis in this section leads to the following observations. On the one hand, the cost disease contributes to the already low incomes in the arts (thesis 59). On the other hand, internal subsidization by artists relieves some of the effects of the cost disease (thesis 60). The star system among artists only aggravates the disease (thesis 61).

There is no Limit to the Demand for Works of Art Even if the three a.s.sumptions on which the existence of a cost disease rests apply, the disease is not always malicious. It's only malicious when revenues grow insuf.ciently to cover rising costs. In other words, if labor costs rise, but consumers are willing to pay higher prices to offset these costs, there may be a disease but it's not malicious. The arts can then continue to .ourish despite rising costs.

The general notion is that consumers are not prepared to pay higher prices for live performance arts that cover costs. Consumers may instead prefer to spend their money on industrial consumer goods, which have become relatively cheaper over the years. Without subsidies, prices become too high and the live performance arts are threatened with extinction. It seems that these days real-time services in- and outside the arts have fewer chances of surviving in the market.

Nevertheless, not all real-time services have become extinct. Although there may be fewer house servants now than one hundred years ago, the willingness to pay for a prost.i.tutes services has kept pace with rising prices. Psychiatrists, among other professions, have also managed to dis-cover new markets in real-time services. Evidently rising costs do not nec-essarily lead to a decline in demand.

Available .gures show that with rising income, per capita spending on the arts per head has steadily increased since the Second World War.27 An increasing percentage of national income and the workforce is devoted to art.28 This applies to both the .ne arts and to art in a broader sense. Spending on live performances is no exception. For instance in the us, per capita expenditures on the performing arts as a percentage of dis-posable income has more than doubled in the period from 1975 to 1997. In Britain, in the relatively short period of 1980 to 1988 spending both on live art events and on cultural goods and services more than doubled in real terms. As a percentage of all consumer expenditure, the two cate-gories both increased by 30%. In the Netherlands, per capita expendi-tures on the live performance arts rose faster than expenditures for other forms of culture, from television equipment to cds. This means that increasingly prosperous consumers spend increasingly large sums on the arts.

In most countries, increased expenditures more then compensated for rising prices. Therefore, on average, the turnout per capita increased as well, but this doesn't apply to all forms of art. Whereas consumers attended pop-concerts more often, they went a little less often to cla.s.si-cal music concerts, and attended the theatre considerably less frequently.

At .rst glance, this is not such an amazing result. When income levels rise,oneexpectsmorespendingforliveperformancearts.Afterall,artis considered a luxury and so when people have more disposable income they are likely to spend more on luxury goods. On second thought how-ever,thisdoesnotapplyequallytoallluxurygoods.Mostartproducts fromperformingarttoliterature demandacertainamountoftimefrom consumers.29 Andalthoughwell-to-doconsumersmayhavemoremoney tospend,theyoftenhavelessleisuretimetospenditin,becausetheyusu-allyputinlongworkdays.Therefore,itismorelikelythatconsumerswill beattractedtoexpensiveluxuriesthatoffermoresatisfactioninlesstime. If this is true, rising income levels should lead to less rather than more demandforperformingart.(Theincomeeffectthenisnegative.)b.u.t.thus far, this has not been the case with the performing arts, although it is partly true in the case of literature. After all, in Europe the group of people working extremely long workweeks is relatively small, while increasingly many average income earners start to work part time and so exchange income for a shorter working week.30 And even if consumers attend live performances less often because they have less free time, they tend to spend more per event and thus total spending can still increase.

The demand for art and other services like health care could well be in.nite. Whereas consumers need only a limited amount of cars or televi-sion sets, there seems to be no limit to their demands for art and other entertainment. In terms of employment, this could be bene.cial. Even though lower costs in the industrial and agricultural sectors continue to make products cheaper and cheaper, increasing public prosperity, they also offer fewer and fewer employment opportunities. This does not create unemployment however, because more laborers drift over to the labor-intensive service sector, which includes the arts. (Less than a quar-ter of the American workforce is still employed in the industrial and agri-cultural sectors. Therefore, what has been called a disease could just as well be considered a healthy development.

But the transition to a service economy does not always proceed smoothly. Many consumers in the 1950s and 60s must have found the variety and choice of inexpensive manufactured goods overwhelming if not downright disorienting. This rapid and sudden shift from service goods (including live art) to manufactured goods may have been a form of 'over-compensation'. Since then it took decades to come to a more bal-anced choice between services and manufactured goods again. (It can be argued that arts subsidies were needed to survive this dif.cult period.) From this section we can conclude that costs in the arts rise but that revenues from sales rise as well. In some areas of the arts the cost disease is not malicious because market revenues rise at a rate that is equal to costs (thesis 62).

Changing Tastes Can Also Cause Financial Problems People spend more money on art, but not on all art forms. In certain areas of the arts sales do not increase at the rate as elsewhere. The cost disease can cause the lower spending higher costs causing higher prices and less demand but changing tastes can also be responsible. In the .rst case, the cost disease causes a loss in compet.i.tiveness. In the second, con-sumer preferences have changed and so the art products that are no longer favored generate less revenue. It is only when lost revenues follow from higher costs and not from changing tastes, that the cost disease is malicious.

An example can ill.u.s.trate the not-always-clear distinction between changing costs and changing tastes. Over the past .fty years, realistic portrait paintings that necessarily take a long time to .nish have become far more expensive. Labor costs have risen considerably. During this same period, high quality professional photographic portraits have become much cheaper than painted portraits. Presently consumers pur-chase far more photographic portraits than painted portraits. This can, .rst of all, be explained by the increasing difference in costs and prices: photographs are generally cheaper. But it can also be explained in terms of a change in consumer taste. Consumers gradually began preferring the new product photographs. The third explanation is that it is a combina-tion of the two. In this context, it is important to note that costs and taste are not independent from one another. For instance, consumers may have been originally attracted to the lower prices of photographs even though they may have still preferred the painted portraits. Then with the ascendancy of photography consumers gradually became accustomed to the new products and began appreciating its artistic qualities. In the end, many consumers ended up preferring the photographic portraits. Tastes had changed. Therefore, changing tastes are probably more responsible for the present small size of the market for painted portraits than rising costs.

A change in taste can be interpreted in various ways, as the following example shows. Suppose people increase their consumption of recorded music and reduce their consumption of live performances. (1) The narrow interpretation is that the existing consumers have changed their tastes with respect to existing products. People gradually began going out less in the 1970s, and as a consequence attended live concerts less often while increasing their home consumption of music. In a broader interpretation, (2) existing consumers change their tastes because of the introduction of new products. Because cd quality was regarded as much higher than that of lps, home consumption of cds became more attrac-tive and took the place of attending live concerts. Finally, in an even broader interpretation, (3) average taste has changed because new con-sumers with new tastes have entered the market. In this respect, thirty-year-old consumers, who attended cla.s.sical music concerts in the 1950s, clearly had a different taste than today's thirty-year-olds. Today's thirty-year-olds certainly attend cla.s.sical music concerts less often and pop concerts more often. Over time, the tastes of young people have changed. Because total spending is what counts for the success of any particular art product, it is the last interpretation of changing tastes that concerns us here.

Although people in the art world might see the cost disease as a natural disaster, it should be noted that the same technological progress blamed for the cost disease enabled many of the latest attractive art products. For many people cds are a continuous source of pleasure. The same applies to art as seen on television, videotape or dvds. These products have important qualities, which provoke changes in taste.

Because costs, prices, product quality and tastes change at the same times, it is impossible to delineate precisely the cost disease effects from the effects caused by changes in taste. Nevertheless, it is sometimes possi-ble to arrive at a rough idea of the impact of changing tastes. From 1960 to 1985, most European governments helped maintain compet.i.tive prices for the performing .ne arts broadly in line with those of other forms of live entertainment and the cinema. This was possible because governments used subsidies to compensate for increasing losses caused by the cost disease. Nevertheless, despite subsidization spending per capita on cla.s.sical music concerts and theatre went down, while spend-ing on pop concerts and other forms of live entertainment increased. Therefore, it is plausible that the drop in spending on live cla.s.sical music and theatre and their loss of market share is caused by changes in taste and not by the cost disease (thesis 63).

Because, both arts-sector workers and politicians believe it's more just to subsidize the arts because of .nancial problems caused by rising costs than because of changing tastes, the distinction between .nancial prob-lems caused by the cost disease and by changing tastes is more than just academic. In this respect, it should be noted that the presence of the cost disease itself does not necessarily legitimize subsidization. Even though house servants, prost.i.tutes, or barbers continue to have to deal with rising labor costs, n.o.body would argue for their subsidization. This implies that only when other reasons for subsidizing the arts are already in place, the presence of the cost disease adds to these reasons. For instance, if governments want to raise income in the arts because low incomes are judged to be unfair, and the cost disease is perceived as the cause of low incomes, then the need to subsidize artists' incomes becomes more convincing. The same applies when art has special merits that people underestimate and these merits are endangered by rising costs. Therefore, for politicians the cost disease strengthens equity and pater-nalistic arguments for subsidization.

On the other hand, if people visibly change their tastes and lose inter-est in certain art products, politicians are more likely to leave it up to the market. In this case, they probably consider subsidies as particularly meddlesome, more so than in the case of rising costs endangering the spe-cial merits of art. If the producers of traditional art products can't main-tain consumer interest then too bad.

Therefore, it is understandable why rising costs are emphasized by the art world, while changes in taste are often played down. For instance, people working in cla.s.sical music often prefer to ignore the fact that tastes have changed and that most people under .fty nowadays prefer other styles of music. They beg for a.s.sistance and get it because they have framed themselves as victims of rising costs. Evidently the cost disease frequently serves as a panacea (thesis 64).

Culture is never .xed and neither is taste. Art changes. Styles come and go. Therefore, changes in tastes cannot be ignored. Financial prob-lems in the arts seldom stem exclusively from rising costs; changes in taste are often more important (thesis 65).

Pop Music has Attractive Qualities that Cla.s.sical Music Lacks In order for the cost disease to be malicious, tastes must be constant. In practice however, neither taste nor quality is constant. Moreover, they depend on one another. Because changes in taste are almost always accompanied by changing production techniques as well as new products with different qualities, changing tastes not only cause .nancial prob-lems in the arts, but they also offer remedies to these problems. When new art products replace old art products, some art forms may fall into decline, but the arts as a whole survive.

The false notion of a constant quality in the arts rests on the view that there is no room for subst.i.tution in the arts; if new art products emerge they only add to the existing stock of art products. This notion is false. The proportion of total artistic output that society places in its archives is relatively small. The large majority of artworks, from visual art to pop music, have a short life span: meaning that it often ends up in the garbage between ten years and one hundred years after its creation. As shown in the ill.u.s.tration on page 53,ofallthepaintingsthatweredisplayedinthe Netherlands during the Golden Age, less than one percent have survived to the present day.31 Even art that is relatively easy to archive, such as ma.n.u.scripts,scores,plays,etc.,hasbeenforgottenorwillslowlybeginto fade in relevance. For instance, most of the music dating from the 1930s is seldom performed anymore. For the majority of art, the demand with-ersovertime;itisreplacedbynewartwithdifferentqualities (thesis 66).

Often artistic areas initially regarded as low art, have gradually turned out to be innovative and are more compet.i.tive than older art forms. They threaten older art forms, through both artistic innovations and technical innovations. With new art forms comes new strategies in tackling the cost disease and thus costs per unit of consumption is lower, and so is the price. Therefore a lower price accompanies an altered and more attractive art product. In this respect, technical and artistic innova-tions are not independent of one another. This becomes particularly clear when we compare pop and cla.s.sical music.

The introduction of electronic instruments and ampli.cation has made pop music versatile. Live pop music is not dependent on a certain design of music hall nor on an audience with a particular taste. Instead, it can accommodate the tastes of the wealthy through performances in small venues as well as the average consumer through performances held in extremely large venues such as stadiums. Electronic ampli.cation was probably introduced in much the same way as louder instruments were in cla.s.sical music a few centuries earlier. Cla.s.sical musicians had to make themselves heard at noisy gatherings, just as the .rst jazz and pop combos had to rise above the noise of the patrons of bars. Electronic ampli.cation was the obvious solution. When electronic instruments were introduced, they inevitably led to new sounds and interesting new products. Artistic developments and technical developments, which were introduced to increase productivity, have stimulated one another.

The notion of artistic innovation accompanying technical innovation is particularly clear in the case of the human voice. Singers in noisy pubs could not rely on cla.s.sical training. Ampli.cation, however, obviated the need to develop a booming voice. On the contrary, the softest and most intimate sounds became part of the new musical styles. Individual styles of singing based on 'natural' voices could be retained and developed not only in small venues, but also in halls with ever-larger audiences. Thanks to ampli.cation the personal characteristics of each singer's voice remained intact and could be appreciated by audiences. In this respect, a cla.s.sical singer's options are far more limited because their voices have to .ll the hall without any aid. A trained listener can certainly hear differ-ences between Pavarotti's voice and Placido Domingo's, but these are incremental when compared to the differences between for instance Tom Waits's voice and Stevie Wonder's. I believe that the individual voice, which, because of the innovations of electronic ampli.cation, can also be heard in front of large audiences, is a major artistic innovation. It is prob-ably the most important attraction of the new and successful musical styles.

The changes in the use of the human voice are part of a general shift away from composition-based genres in music to, as Tyler Cowen calls them, performer-based genres. At present, the most popular musical genres are all performer-based. "A performer-based genre, like rock and roll or country and western, transmits musical and aesthetic visions through speci.c music-makers. The speci.c interpretation is para-mount."32 When different musicians perform the same compositions the interpretations differ a great deal, much more so than in cla.s.sical music. Singers with individual voices as well as musicians, who respond to their audiences in an original way, inspire their audiences. These kinds of per-formers best serve the need of consumers when we consider authenticity (discussed in chapters 2 and 5). These performers often also have a charismatic stage presence.33 From Romanticism onwards art consumers longed for authenticity. This makes the success of the new performer-based musical genres understandable. Even though these new genres are often viewed as 'com-mercial', in emphasizing authenticity they are more closely connected with the modern romantic notion of art with its belief in the autonomous artist than the cla.s.sical genres. Personalities are essential to pop music; both on the provincial level of countless bohemian artists and on the level of the stars. Who could be more different than Robbie Williams and Kurt Cobain or Madonna and Lauryn Hill. (It is not amazing that even in cla.s.sical music, although it's basically composition-based, performers increasingly become stars. More than before soloists and above all direc-tors try to 'steal the show'. This is probably essential if live cla.s.sical music is to survive at all.) In pop music seeing one's favorite artist perform live contributes to a sense of being in tune with the artist. Therefore, it often feels like a unique and 'priceless' experience. Because many artists improvise while performing, their live performances have unique qualities of their own that often get lost on cd and even on television. Impressive visual effects add to this feeling. In cla.s.sical music, on the other hand, the visual qual-ity of a live performance is even more limited than it was one hundred years ago. It is not so dif.cult to understand why so many modern audi-ences prefer the more vivacious live performances of performers in new musical genres.

Since cla.s.sical music not only has to compete with other live performances, but with superb cds of the same cla.s.sical music, audiences are increasingly disappointed with the performances, which pale in compar-ison to the same music on cd they can listen to at home. These cds, in fact, are often command performances by world-famous orchestras that the average local orchestra cannot possibly compete with.34 Important people in the established art world often have problems with new products, new formats, and new tastes. According to them: 'Music loses complexity'; 'Watching television is not an aesthetic experi-ence.' 'Culture and cultural tastes are becoming more and more super.-cial.' 'These new cultural products signify the gradual decay of culture.' For many people in the cultural establishment indulging in cultural pes-simism appears to be attractive in itself.35 These people also often have an interest in the status quo. Moreover, a person's artistic taste usually doesn't change very much after the age of twenty-.ve; when it becomes more dif.cult to get enthusiastic about new cultural trends. This explains why it sometimes takes a changing of the guards to get estab-lished aesthetic views replaced.

The arguments for and against cultural pessimism is a subjective matter. The increased variety of art products may or may not be viewed as a good thing or even as a manifestation of progress, but for many people, it is a blow against cultural impoverishment and cultural pes-simism.36 Less complex art works however, could be a sign of cultural impoverishment. Nevertheless, it must be noted that the intensity of an aesthetic experience seldom rests on an artwork's complexity.37 Quality is not constant in the arts. The natural remedy of the cost dis-ease in the arts comes from new art products and changing tastes (thesis 67).

10 Subsidies and Donations Exacerbate the Cost Disease Advocates of subsidies for the .ne arts like to pose the rhetorical ques-tion what will happen when the government stops subsidizing the arts. The inevitable answer for them is that the arts will simply disappear. No sensible person could ever want this to happen. Therefore, the govern-ment must subsidize the arts. The arts, of course, stand for the .ne arts, especially the traditional performing arts.

Fear of decimation or extinction is what contributed to the large-scale subsidization of the traditional performing arts that commenced shortly after the Second World War. Apparently rising costs made subsidization inevitable. Although the cost disease does not legitimize subsidization, it does strengthen the paternalistic arguments and equity arguments for the subsidization of art as well as the social justice argument, which states that artists whose income is endangered by the cost disease need a.s.sistance.38 This implies that rising costs partly explain why the gift sphere is large in the arts (thesis 68).

If politicians subsidize art because they are convinced that rising costs lead to low incomes and that rising costs threaten the special merits they believe art embodies, this does not imply that the underlying logic, that subsidies remedy the cost disease, is correct. It can be argued that dona-tions and subsidies do not remedy the cost disease, but actually aggra-vate it.39 The natural effect of subsidies and donations is the partial replace-ment of an orientation towards the market by an orientation towards the government or donors. Whereas cost reductions straightforwardly con-tribute to one's market success, they often have little or no effect on being successful with government committees or funding organizations. Instead, contributions to 'quality' as de.ned by government commit-tees or funding organizations are more important in a.s.suring success. As noted before, often, the more opening nights a Dutch theatre produc-tion has the more successful it is deemed by government committees. Therefore, subsidization and donations can easily lead to a careless atti-tude regarding costs and can further hinder the development of new for-mats and products.

The orientation on government instead of the market is particularly strong when subsidies as a percentage of total income are very high. In that case the orientation on the government is simply a matter of sur-vival. If the government subsidies suddenly stop coming, there are few alternatives b