Gains Crisis and Gains Enhancement in the Arts

Increasingly, I see myself as a defender of the state, or as I prefer to call it an advocate of the dignity of the state. While the state is an indispensable precondition for freedom - the source of its dignity -, it is being abused in countless ways. It behooves the classical liberal to defend the state against efforts at denaturating its proper functions as when it is instrumentalised as the monopolist of education or the patron of the arts, incidentally both capacities that may have been socially conducive in the past.

As for the latter, I never looked at the issue quite the way Tim Worstall does - see below. But I do feel that the public purse should not be in the business of subsidising art and playing the generous patron effectively at the expense of large parts of the public.

Take, for example, the mythical Vermeer, "Girl who has lost her ears let alone her pearl earring". This is worth, in these days of Russian oligarchs, $100 million. It is also hanging in a public museum in London, owned by some arm of the State.

So, how much does it cost for people to look at this picture? A reasonable discount rate might be 5%. That's what we could get if we flogged the piece and stuck the money into a stock market fund concentrating on yield. Maybe 3% for FTSE as a whole. But with 5% that means that not selling it costs us £5 million a year.  Or £13,700 a day, which if museums are open for 10 hours a day means £1,370 an hour. A period of time in which this one picture might have, what, 10 people look at it? Thus, the cost to us of this one picture hanging in a gallery in London is £137 per viewer.

At which point we have to ask whether this is worth it. And we've a method of working that out to. Do we think that we could charge those 10 people an hour £137 each to be able to view the painting? No, clearly and obviously, we do not. Therefore the costs to us as a whole of our possession and display of this painting are less than the benefits that come from our owning and displaying this painting. Having costs higher than benefits is also known as destroying value, something which is properly known as "making us all poorer".

We should therefore sell off all such art and close down the museums.

If those who purchase it then wish to show it to the public all well and good. But they'll be doing that on their dime, not our.

The source.

My argument in favour of leaving activities in the areas of art, culture and leisure largely to civil society is based on a long-term evaluation, rather than a case by case cost-benefit assessment.

Let us discern two terms: "gains crisis" and "gains enhancement". By gains crisis I mean a situation whereby there is a notable net loss or reduction in gains for the public if we switch from one regime (of dealing with arts e.g.) to another. Gains enhancement denotes the opposite, i.e. an increase in gains to the public.

The typical argument in defense of massive state involvement in cultural affairs picks out personal favourites that are not certain to be provided in the same way by civil society - say, the perennially loss-making theatre in my home town.

The defenders of the present system can point to what they have and ennoble it by feeling better off in its presence, while the opponents are at pains to make their case with the help of counter-factual arguments. Mind you, the internet beats any public library, in fact, it represents a cultural revolution of epochal dimensions; not to mention the connection between great, now canonical art and the rise and reign of capitalism which has directly produced or made possible the ascendancy of art as we tend to see and admire it today. But these aspects are of no great currency.

The defenders of the present system tend to have a considerable advantage, especially among people who prefer the concrete to the speculative - or worse: the abstract.

There are countless other ways in which the status quo is easier to defend, not least because the state does have resources and privileges that make it easier for it to play the magic fairy - i.e. present itself as the benefactor of the public, subsidising yet another museum or concert hall etc. At the same time, it is easy to insist on forms of special treatment (unprofitable public swimming pools in every town) that possibly only the state can enforce, owing to its ability to ignore the type of economic constraints every private firm is facing. Public benefactions look nice or impressive or are simply regarded as inalienable parts of "our culture", but who gains from such "bestowals" at whose expense is not clear at all.

It is hard, impossible or impractical to sum up gains and losses on a case by case basis. Instead, you have to look at the big picture. I would argue, in a broader context, there is no need to fear a gains crisis in cultural matters when the state withdraws from the scene of cultural bestowals. There will be change; some things will be provided in better ways, there will be new offers, and some things will disappear. But if culture is returned to civil society it would be surprising if the overall result would differ from the pattern set by a comparison between civil capitalist society and state-run socialist society. Civil capitalist society is notable for a far better performance in terms of figuring out and serving human needs.

We should expect considerable gains enhancement rather than a gains crisis.

However, in a free society, the state is a complex set of institutions that are courted and contested by many disparate groups. It is unlikely, and ultimately perhaps even not desirable that my point of view win out entirely.

Comments

[Ed Stevens]

Fascinating post, Georg; I have long wrestled with the complex set of questions surrounding the concept of "value", especially in situations where said value seems to mysteriously derive from traits that do not at first glance seem to inherently imply great worth. I speak of features such as Age (as in the case of antiques), or Scarcity (as in gold or diamonds), or Uniqueness (which is a subset of scarcity, I suppose).
Art is a bit easier for me to understand, since Beauty (which is implied by virtually all art) would seem to warrant value by definition. Things that are pretty are inherently more pleasant/valuable than those that are not. Same goes for Utility - an object or concept that is inherently and more or less permanently useful has definite value - the more Utility, the higher the value. But sometimes Beauty and/or Utility get mixed in with Age and Scarcity (such as a Chippendale desk which is not only useful and beautiful, but also old and very rare).
It all makes my head hurt sometimes.
As far as whether or not the state should involve itself in the ownership, preservation and display of great art, I tend to come down on the side of private ownership (which, as you note, would very likely do a better job of "husbandry" than do the politicos), but that, as they say, ain't gonna happen. Too many public officials see themselves as not only conservators, but also arbiters, of taste.
In the end, I suppose we should just be grateful that, for those who are so inclined, items like the Mona Lisa and the Pieta are available for viewing, and those who are not interested aren't forced to go see them.
Having said all that, if anyone ever figures out why an ugly old clay pot, shaped and painted by an Appalachian denizen with no sense of proportion, form or color could be thought worth many thousands of dollars, or why a rusty old weather vane is worth more than a new Audi, I hope that person will take the time and trouble to explain it to me.
Thanks for your postings - always stimulating, interesting and often make me re-think what I thought I already knew.

[Georg Thomas]

Thanks, Ed, for your attention and your discerning commentary.

I, in turn, am a regular reader of your inspiring blog "A View from the Middle Border", which I have again referred to only recently in my post

An Eye for Freedom

http://redstateeclectic.typepad.com/redstate_commentary/2014/03/freedom-and-unfreedom.html