The Formidable Economic Presence of the Arts

If you are a regular reader of this blog you will immediately sense from my title that I am waxing sardonic. This is inspired by an article someone just sent me titled: "Federal analysis: Arts, culture add more to economy than thought." Here is a sample:

WASHINGTON — Creative industries including Hollywood and broadcasting contribute more to the U.S. economy than previously thought, the government said Monday in its first official analysis of the arts and culture sector’s economic value.

The report from the National Endowment for the Arts and U.S. Bureau of Economic Analysis shows arts and culture contributed more than $698 billion to the economy — about 4.32 percent of U.S. goods and services. The study of the creative sector’s contribution to U.S. gross domestic product is based on 2012 data, the most recent figures available, and includes nonprofit, for-profit and government-funded programs.

You should read the whole thing. A couple of things occur to me right off the top: they are using the weasel-word "culture" to sidestep the criticism that what they are mostly talking about is Hollywood movies and television shows, popular music, architectural services, book publishing and anything else that could be categorized as part of the "creative industries". In the headline "Arts" is emphasized but if they were just to measure what could legitimately be termed artistic activity: painting and sculpture, composition, literature and anything else that could be analyzed as an art form from an aesthetic point of view, the numbers would be quite different, wouldn't they? The total they come up with is $698 billion dollars, or more than the entire budget of the Pentagon in 2015 of $598.5 billion.

Six industries account for the bulk of arts and culture production, according to the analysis. They include broadcasting, movies and videos, publishing, retail sales, performing arts and advertising. Analysts found 4.7 million workers were employed in arts and culture production.

What number do you think would result if you subtracted Hollywood blockbusters, television shows, best-selling novels and all the other entertainment industries? What would be left?

My understanding of economics is partial at best, but I can never quite get my head around these sorts of arguments. For one thing, what is the purpose? If we add up all the cultural and entertainment industries we find that it is a large number, bigger than some industries, smaller than others:

In 2012, arts and culture surpassed construction by $112 billion, as well as transportation, travel and tourism and agriculture. But the creative sector was smaller than the health care and retail industries when compared with their economic production.

What is goal of this sort of study? To get more government funding for the "arts"? It seems as if they don't need any. Economic analysis is all very well, but shouldn't there be some sort of goal? If you analyze securities (stocks and bonds) the goal is to decide which are the best bet to put into your retirement portfolio. There is some sort of practical end to the exercise. But what could that be here? To encourage the cultural industries? To discourage them?

But without some sort of aesthetic component, I regard the whole thing as a sterile exercise. Correct me if I am wrong.

Let's ask ourselves this: what did the fact that Vienna was the nexus of the musical world from the mid-18th century to 1900 add to its economy? What did the compositions of Haydn, Mozart, Beethoven, Schubert, Alban Berg, Johannes Brahms, Anton Bruckner, Gottfried von Einem, Christoph Willibald Gluck, Emmerich Kálmán, Anton Karas, Erich Wolfgang Korngold, Joseph Lanner, Franz Lehár, Franz Liszt, Gustav Mahler,  Otto Nicolai, Antonio Salieri, Franz Schmidt, Arnold Schoenberg, Max Steiner, Robert Stolz, Oscar Straus, Johann Strauss senior and junior, Richard Strauss, Antonio Vivaldi, Hugo Wolf, Carl Michael Ziehrer and many more contribute to the economy? And who cares? (Yes, Vivaldi did work in Vienna, in fact, that is where he died.)

I can certainly understand why cultural "workers" and bureaucrats would always want to inflate the economic statistics of the arts by sweeping everything entertainment and culture related into the same category, but it is fundamentally deceitful. I'm not quite sure how to measure it in the US, but we might have a glance at Canada for a hint. Unlike in the US, many artists in Canada receive some sort of support, directly or indirectly, from the Canada Council. Their recent annual budget was $182 million Canadian which is about $142 million US. The total GDP of Canada for 2012 (the year that the US study used) was $1,839,000,000 in USD. Call it 1.8 trillion dollars. Now lemmesee, $142 million is 0.77% of the GDP. Now of course, this is not economic "production", this is what Canada spends as an "investment" in the arts.

But whatever numbers you have and however you crunch them is pretty much irrelevant in my view. What is the value to the economy of, say, Schubert's Unfinished Symphony? If you said it was zero or some high number, that would make no difference to me either way.