Friday, April 22, 2011

Artists' Externalities

Richard Florida repeatedly argues that the presence of "bohemians," which of course includes artists and literary writers, positively correlated with the presence of the creative class that provides the driving force of most economic growth. The interactions among artists/writers and other creative people, ranging from programmers to advertisers, thus create the conditions for creative-based economic growth. Thus, the presence of artists/writers acts as a positive externality.

How might artists and writers gain a return on their contributions? Or are externalities inherently impossible to "cash in" on?


  1. I made a very similar point on my blog the other day:

    I spoke more broadly of "culture". I think part of the answer is that because culture is an input to its own production you're likely to have non-linearities in its provision, and that will provide a set of multiple equilibria. Institutions that encourage collective action in culture production are going to set a virtuous cycle in motion, but unfortunately collapse to a lower equilibrium is likely as well.

    Krugman talks about these sorts of issues as they related to the business cycle in his book "The Self Organizing Economy", and I think a lot applies here too. Non-linearities and multiple equilibria would certainly explain "Golden Ages" and collapses into "Dark Ages".

  2. Some interesting ideas that could use more investigation, I think. Which of course raises the question of how to get the virtuous rather than the vicious cycles. I'm unsure about "collective action," as I don't see that at work in artistic production, but perhaps you could elaborate.

  3. I reblogged you:

    And queried my readers on it - there may be some interesting thoughts in the comment section.

  4. On collective action - artists' cooperatives would be an example. I'm currently reading the collected letters of H.P. Lovecraft and he talks a lot about his work helping other writers (and others helping him) for free of course - sharing the costs of art production and presumably taking advantage of scale economies and network effects.

    Ultimately I think altruism and philanthropy play a role too (not really collective action in this case). Making someone elses utility part of your utility is a sure way to internalize costs and benefits.

  5. I really wouldn't call that "collective action." The artists may get together and talk and discuss and criticize, but in the end, it is each individual artist working on the work themselves. The presence of feedback is of course social, but not collective.

    An example of collective action would be a crowd of people who are able to pick up a car because they are all working together as one. Art is not produced that way.

  6. I often think about artists, having spent some time in theatre and playing a stringed instrument.

    But I always invert Florida's question:

    Why are there so many people that learn instruments, acting, painting, and other habits which have huge externalities which exceed salaries as music teachers, art teachers, and coaches of many types?

    Another way of addressing this issue: Where does the marginal dollar go? Will spending $100 more on art education change the career decision for an art teacher who is already forgoing high opportunity costs for that chosen profession? If not, then I doubt we will have an increase in quality of the arts or impact of the arts. Patronage might be a good solution to providing continuity of work, but is there any evidence that there are marginal artists whose productivity is unrealized because of bad information for willing but unrealized patrons?

  7. The question of why various artists and teachers of the arts choose to do what they do is more of a Darwinian question than an economics one. Humans are a mixture of things. Homo economus and Homo aestheticus are but two aspects -- and they rank differently in different people. The artist, musician, or literary writer of today would have been a shaman in earlier millenia. And in many ways, they still perform that function. The artist who sticks with the art, who feels like they must produce art, have that very high in their value rankings. One can get into the psychological reasons for this, which is what is needed to really address your question, but we can simply take a Mengerian approach and look at values rankings. Different artists rank their artistic production differently, and even among those who rank it first, there are those with much higher value of that #1 ranking. It takes a lot for some people to stop producing -- and some find they cannot even survive without creating art.

    It seems that the market has mostly taken over where patronage once dominated. I have little doubt that I would be able to produce far more plays if I had a patron than I can now. I don't know of anyone, though, who engages in direct-to-artist patronage. Not even the federal government does that. Their moneys go to institutions. And basically the artist has to succeed in the market before anyone pays him or her any attention, at which time, they are already successful in the market. That's hardly a complaint -- just a reflection of how things are. And one should expect it to be that way, as there has to be some judgement regarding the quality of one's work. Still, there are arts, like poetry, where you can be spectacularly successful and not make a dime. The average poet has to have a day job -- which is, again, not a complaint. I fear that if poets were cloistered away from the real world, their poetry woould suffer tremendously, as it indeed has with those poets who are in fact cloistered away in university English departments, writing postmodern verse nobody reads but other English department poets (if they are lucky).