Discussion paper: the ‘economic’ benefits of art

The phrase the ‘economic benefits of the arts’ has gained currency in arts sectors around the world, largely as a result of a new ‘economic’ rationalism in public policy. As with all areas of public policy, arts and cultural policies have come under the scrutiny of economics. But popular economic models have translated uneasily into the artistic sphere. The relatively young subject known as ‘cultural economics’ is only just beginning to mature. It is hardly surprising, then, that much of the application of economics to the arts has been less than satisfactory.

Some interpretations of how to apply economics to the arts have been at odds with acceptable economic and analytical practice: ‘economic benefits’ and ‘economic impacts’ arguments are an example of this. In their application to the arts, these analyses are only partial economic analyses and are typically associated with exaggerated claims. The word ‘economic’ has been misrepresented and the tools of economics misused with perverse results; the concentration on the financial elements of arts economics has distracted attention from more useful discourses on arts policies, has weakened arts advocacy and has caused undesired policy responses.

This paper is intended as a discussion document as part of Creative New Zealand’s project to outline the benefits of the arts. The overall objective of the paper is to clarify the phrase ‘economic benefits of the arts’. In doing so, the discussion illustrates many of the analytical weaknesses in focussing on the financial aspects of artistic activity. The paper formed the basis of my article Using economic’ impact studies in arts and cultural advocacy: a cautionary note, published in Media International Australia Incorporating Culture and Policy, no.98 (February), 2001.

This paper looks at both art and economics separately, investing particular attention on building a simple notion of economics. The paper then attempts to combine systems of economics with systems of art, as petitioned for cultural economics by Throsby (1996). A number of important lessons are highlighted in the process. The following structure is adopted:

• a definition of ‘economics’ (and an examination of the term ‘economic benefit’)
• a definition of ‘art’
• a integration of the two into the ‘economics of art’
• an investigation of the economic benefits of art, theory and practice

Read the full paper:
Discussion Paper: The Economic Benefits of Art
Christopher Madden
Published by Creative New Zealand, 1998

About the discussion paper
Back in 1998 I wrote this paper under contract to Creative New Zealand, New Zealand’s arts council. It stayed online until the Council re-jigged its website. Creative New Zealand has kindly allowed me to reproduce the  paper on this blog. The usual disclaimers apply – that the opinions are my own and don’t reflect Creative New Zealand policy etc etc.

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