Artists earnings from the perspective of cultural economics

Transcription

1 Artists earnings from the perspective of cultural economics Trine Bille Associate Professor, Ph.D. Institute for Innovation and Organizational Economics Copenhagen Business School Nordisk populærautorunion Congress, Voksenåsen, Oslo, August 22, 2011

2 Content Are there too many artists? The income of artists Definition of artists Excess supply of artists Why excess supply of artists? Cultural politics, arts politics and artists politics Why must the government support the production of new creative work of arts? The most important schemes for support Art educations How much art must do the public sector support? The contribution of culture to the national economy Summary and discussion

3 The income of artists International, Danish and Nordic surveys of artists income shows in general that: Many artists have non-artistic jobs Many artists have multiple jobs and works freelance A small part of the artists earns a large amount of the total income in the art sector, based on only a very small advantage in talent (superstars) (Mangset et al., Telemarksforskning, 2008)

4 Are there too many artists? Definition of artists The seven art fields: Visual art Visual artists (painters, sculptures etc.) Literature Music Authors Musicians and composers Theatre Film Actors, instructors, play writers Actors, instructors Design and craft Designers and craft workers Architecture Architects Professional versus amateurs? Income Main occupation Talent (peer-review) Membership of artists union Art education

5 Are there too many artists? Definition of artists The amount of time spent on artistic work The amount of income derived from artistic activities The reputation as an artist among the general public The recognition amount other artists The quality of the artistic work produced (which means that artistic quality must be defined somehow) Membership in a professional artists group or association Professional qualification (graduation in arts schools) The subjective self-evaluation of being an artist (Frey and Pommerehne, 1989)

6 Are there too many artists? Definition of artists The number of artists has been growing. Why? The increased average income and educational level among the general population has increased the demand for art The growth in the cultural industries has created a larger labor market for associated jobs for artists Increased interest and acknowledgement for artistic and creative skills in other ordinary industries Artistic and creative skills are more relevant and more demanded than before

7 Denmark, 2007 Are there to may artist? Definition of artists Creative job function Creative industry Creative education Creative edu. 28 pct. 12 pct. - Other edu. 72 pct. 88 pct. - Total (percent) 100 pct. 100 pct. - Creative job func pct. 20 pct. Other job func pct. 80 pct. Total (percent) pct. 100 pct. Creative industry 51 pct pct. Other industry 49 pct pct. Total (percent) 100 pct pct. Total (1.000)

8 Are there too many artists? Who decide how may artists we need in the society? Demand for art Patrons (sponsors: companies, foundations, private persons, spouses, family ) May impact the artistic content The market The product or service must sell on the market. May have an impact on the artistic content and form. The market is unpredictable and due to randomness The selection problem: We know the artists who survived economically in the market. But what about the artists, who had the talent, but not the opportunities? The snowball effect: People buy the same as other people. A little random who make a good start. The public sector The arts counsels: peer-review. Monopoly?

9 Excess supply of artists It means that more people are willing to work more hours at various wage rates than the market can absorb on the demand side. What will happened if the government try to raise the income of artists?

10 Are there too many artists? Different kind of artists The labor market for different kind of artists are quite different: The performing artists: An organized labor market: e.g. classical music, theatre Creative artists: Self-employed or work freelance, typical on short-term contracts

11 Are there to many artists? Excess supply of artists The problem with low earnings and income among artists seems to be a permanent problem in most countries Public support leads to a bigger supply of art, but not to higher income among artists: If an artists get a grant, then the artist will probably react not by being happy about the higher income but by decreasing other irrelevant work. This will increase the total production of art, but will not help the low income problem. If the free and exciting life as an artist were guarantied a solid economic income, the number of artist will explode.

12 Are there too many artists? Excess supply of artists As an economist I think that the effect of more subsidies, more donations, social security and subsidized education, is that more people will become artists and more people will end up earning low incomes. (Abbing, 2002)

13 Are there too many artist? Why excess supply of artists? Why do so many people choose to be artists in a field with so much competition and relative low earnings? Work preference model (David Throsby) Psychological gains (the work is the gain in itself) Artists subsidies to the arts Intrinsic motivation (Bruno Frey) Lottery game (Menger): The dream about the gold and the global fame (superstar) Difficult to assess and understand very small probabilities The influx is big, the exit is small: Some automatic regulators are missing in the arts occupations. It is the world that still don't understand the genius pieces of art. In other occupations: unemployment and earnings regulate the labor market.

14 The demand for superstars Small differences in talent are magnified in larger earnings differences It is the size of the market that is responsible for the huge multiplication of relatively small differences in talent that results in the highly skewed income distribution. Why do consumers have a preference for a few rather that many artists? Bandwagon effect Conspicuous consumption Both these motives for consuming the output of superstars reinforce market demand and snowball their popularity, resulting in high incomes.

15 Are there too many artists? The artists who are financed by the market or by patrons: there is a demand! The artists who are partly or totally financed by the public sector: is there a demand? The question is not if there are too many artists! The question is how many artists the public sector must support and who? Or rather: How much art must the public sector support?

16 Cultural politics, art politics and artists politics Cultural politics has many different goals concerning dissemination, conservation and production of arts and culture Artists politics has the goal to secure the artists a reasonable income Difficult, due to excess supply of artists The official goal may not be to support the artists, but to support the production of new creative art The main goal of arts politics is to support the production of new creative art

17 Art politics Why do the public sector need to support the production of new creative art? Market failure Sometimes the market don't work when it comes to artistic quality at least not in the short run The public sector may support the production of works of art which are not demanded today, but which may be appreciated in the future It is important to have an underground of artists to find the excellent. Trail and error are necessary to find out if the artists talent is sustainable (Menger, Abbing)

18 Arts politics An example (Chr. Hjorth-Andersen, 2011) Year 0 Year million DKK Yearly value of 12 million DKK in 50 year (interest rate 2 percent) 1 billion DKK

19 Art politics How to support the production of new creative art? Creative artists can create large values to be left when they dies Can the values created by one artist make up for the public support to a whole generation of artists? Then it is possible that the arts as an occupation can change from being an economic burden on the society to be an economic gain to the society. There exits no systematic overview of the total values that artists leave in the form of art collections and copyrights to books and music etc.

20 Art politics The most important support schemes Individual support like scholarships and grants Temporary project support Direct support to cultural institutions, where artist are occupied Schemes to stimulate the market (like tax expenses for companies buying art) Regulations (like library compensation, copyright) General welfare schemes (like social security)

21 Art politics Art educations Based on international research it is well known that arts educations in general give less economic return on investment than other educations at the same level Even though a person has complete an art education, he or her has no guaranty for being able to work as an artist) Many people with an art education end up working in support functions for the real artists (like intermediaries, administrators, technicians or teachers) Many people have had great success as artists without a formal art education (in visual arts, literature etc.)

22 The Danish National School of Theatre Rhythmic Music Conservatory The Royal Danish Academy of fine arts, Schools of Visual Arts The National Film School of Denmark The Royal Danish Academy of Music The Danish Design School Art politics Art educations in Denmark Number of applicants Absorbed (in percent) Chr. Hjorth-Andersen (2011). Equal number for Norway (Per Mangset)

23 Art politics Art educations The number of applicant to art educations are much higher than it is possible or desirable for the art educations to absorb. What about the of the applicants who are rejected? Will they apply again next year? Research has shown that the art educations are important for the artists possibilities to get art-related and non artistic jobs.

24 Art politics How much art must the public sector support? Government expenses: 1/3 to production (e.g. support for orchestras, theatres, filmprodution and the Danish Arts Agency) 45 % to dissemination (e.g. concerts, subsidies for tickets, film distribution, libraries, museums, archives and international business) 17 % to education Total public expenses: 18% to production 63 % to dissemination Peter Duelund and Trine Bille (1994)

25 Development in expenditures on culture,

26 Data on the populations participation in cultural activities shows Growing activities: Computer games and the internet Visits to cinema Sports and exercise Declining activities: Classical concerts Museums (cultural heritage) Lectures and debate Visits to libraries Stagnation: Theatre Concerts (popular music) Arts museums Spectator sports Bille et al. (2005)

27 Cultural politics The contribution of culture on the national economy Art and culture have a bigger contribution to the national economy than the primary industries (about 3,5 pct. versus 1 pct.) Art and culture are industries which creates employment, turnover, value added, exports etc. The more industries we counts as part of the creative industries, the bigger the sector! No consensus concerning which industries to count as part of the creative industries! Different countries uses different definitions (Birch, 2008) Creative industries economic size and growth: The first mappings of creative industries from Great Britain(DCMS, 1998, 2001). In Denmark: Denmark in the cultural and experience economy 5 new steps (2002), Danish Enterprise and Construction Authority (2008): Growth through experiences. Norway (Tone Haraldsen) and Sweden (KK-stiftelsen)

28 Figures for the Danish experience economy Turnover in the experience economy 2000/2001 Government 2003: Denmark in the cultureand experience economy 5 new steps Rambøll Mangement 2005: Experience economy in greater Copenhagen area 175 billions DKK 93,4 billions DKK (retail trade not included) Danish Enterprise and Construction Authority 2008: Growth through experiences 86,6 billions DKK (value added) Number of full-time employed

29 Value added Mill. DKK 2006 Growth per year Employment 2006 Growth per year Architecture , ,5 Design , ,5 Books & press , ,6 Art & craft , ,5 Radio & TV , ,1 Film & video 523-2, ,3 Content , ,3 Production Music , ,4 Advertisement , ,5 Gastronomy , ,5 Hotels & tourist , ,7 agencies Events & fun , ,3 parks Sport & leisure , ,7 Culture, total , ,2 Economy, total , ,6

30 Economic value Market value: traded in the market Contribution to GDP Employment, consumption, income Non-market value: value, not traded in the market (option value, existence value, bequest value etc.) Many experience goods are public goods with substantial non-market value, and (partly) financed by public support Example: The Royal Theatre in Copenhagen: the Danes want to pay for the theatre through taxes even thought they never use it themselves Growth in theses areas will lead to growth in welfare (if the population demand the public goods), but not increasing incomes, which the society can live of Total economic value = market value + non-market value

31 Arts and cultural politics The value for society (art as an investment) The arts has substantial impact on human beings and the society What do the arts do to people? Which impact has the arts on the societies development and innovation? Very difficult impossible to quantify!

32 Arts and cultural politics How much art must the public sector support? Difficult to quantify, but: The starting point for valuation must be the value the art represent to society and which is not dealt with in the market Marginal considerations: Will an increase in the subsidies to the arts create a bigger return measured by value to society?

33 I have made the following arguments: Are there too many artists? No clear definition of artists Many artists work in other industries than the creative industries contribute to creative and innovative processes Excess supply of artists is a permanent problem Not relevant to ask if there are to many artists. Relevant to ask: how much art must the public sector support?

34 I have made the following arguments: Art and cultural politics Maybe a to big part of the public support is allocated to dissemination instead of production of new art Creative artists can leave very large values to the society in the form of pieces of art The cultural sectors contribution to the national economy is not a valid argument for the public support to the arts The important argument is the cultural value created and the impact of the arts on society

35 Thank you for your attention!