Wednesday, 24 April 2013

Valuing Culture

Picture: Evening Standard

Britain's cultural institutions have been told that they must justify themselves in economic terms.  Maria Miller, Secretary of State for Culture, Media and Sport, thinks it's the job of museums and theaters to stimulate economic growth (which some of us might have thought was a job of government).  In a speech today she said that the only justification for public funding of the arts is on the basis of economic return on investment.  Aside from a few platitudes about the value of culture, she seems mainly to esteem culture for its economic contribution.  But measuring culture in money is stupid as well as philistine; it's like trying to measure height in ounces.  It's really hard to articulate the value of culture (although most people intuitively understand it), but it's actually even harder to make a convincing case for public subsidy of the arts on the grounds of financial return.

A theatre makes a direct economic impact by selling tickets and programmes and gin and tonic in the interval.  That impact is multiplied because the actors and ticket collectors and cleaners who work at the theater buy other things too, stimulating the wider economy.  But these are really measures of cost rather than value, accounting for the economic resources that are expended on staging plays.  There's no reason for the multiplier to be greater in the cultural sector, so it's no basis to justify state subsidy.  You might as well pay people to dig holes in the ground.  This argument still leaves the biggest question unanswered - what is the value of culture that justifies targeting of public money to that sector rather than to the hole-digging sector?

Miller talked about tourist revenue, but again it's not a compelling argument for subsidy.  Is she asking British taxpayers to subsidise holidays for wealthy foreigners?  Isn't there a more cost-effective way of promoting tourism?  Maybe some of the biggest national museums that are the biggest tourist magnets could stand on their own by charging high admission prices, and the smaller attractions can be closed.  If our only criterion is financial, that might be a better business proposition than current subsidies.  Then there's the wider effect; maybe companies will be tempted to locate in London because of the cultural opportunities it affords.  This effect is the most ethereal and the most stubbornly resistant to measurement.  It's really just a kind of proxy for the ineffable value of culture.  

In a superb critique of this kind of reasoning, John Kay writes that, "The only intelligible meaning of 'benefit to the economy' is the contribution - direct or indirect - the activity makes to the welfare of ordinary citizens."  That benefit cannot always be expressed meaningfully in pounds shillings and pence.  Adding up the money spent on culture doesn't tell you anything about its value.  I've seen lots of peculiar judgments in theatre reviews, but I've never heard it said that one play is better than another because it cost more to stage.  I particularly enjoyed John Kay's article because it lays bare the way that these arguments corrupt economics as well as culture.  


  1. I read your post, and agreed enthusiastically; then I read John Kay's piece, and agreed with that too, although some of it was surprisingly vague. Then I read Maria Miller's speech, and found myself wondering what all the fuss was about. It seemed like a perfectly sensible approach to take, when doubtless Treasury ministers are pouring over her department's budgets and asking if they really need to spend such and such a pot of money.

    Her argument is not that it is the job of museums and theatres to stimulate economic growth, but that talking up the economic growth, which is one of many by-products of what museums and theatres do, is the most effective way of protecting public subsidies. She seemed pretty clear on the intrinsic value of culture; but do we expect a culture secretary to waffle on about that? That, surely, is what Neil MacGregor is for. No, it's her job to champion the cultural sector within government, so that it can ride out this austerity without sustaining lasting injury, and the speech was her attempt to articulate the argument she is making.

  2. I'm not so sure. The business logic that she applied would be considered out of place when discussing lots of other things that governments pay for. No one expects an economic return from military spending (we don't plunder any more!). And some people find any mention of value for money downright offensive when discussing healthcare. Even sport - part of Miller's remit - is generally understood as a Good Thing rather than something that might stimulate the economy. To me the fine words about the value of culture rang hollow in that context.

    Miller was very direct in telling the cultural sector to focus its argument single-mindedly on economic return. My argument - and I think John Kay's too - is that this is self-defeating, because much of the economic 'research' is spurious, and robust assessment would probably justify deeper cuts rather than greater subsidies. It puts me in an odd position. I passionately believe in the public benefit of culture, and I believe that government should contribute to its cost. But unlike most who hold that view, I don't think it will do much to stimulate the economy. If that's the goal, it would be better to spend more on training and infrastructure.

  3. A lot of this is about terms: how narrowly are we defining economic benefit? In the speech, Miller makes a point of saying that she is interested in both the direct and indirect economic impact of the arts, in fact she says the benefit "goes far beyond its direct economic impact." She is not saying that "artistic endeavour needs... to bring in turnover and profit – that is neither appealing nor sensible. But a proper grasp of the potential economic impact of culture would serve us all well." She is in the middle of a big spending review, in a government whose core goal is the return of positive economic growth. Given this, surely her strategy of positioning the arts within a context of economic growth must be sensible? Because if not, sure as hell her budget will be threatened. As she concludes, "I do not disagree with those who argue we should value the arts for their own sake. We should, and as a country we do but, now, in these tough economic times we need to make a broader case."

    I'd guess too that she wouldn't claim to be able to measure the indirect economic impact of the arts; indeed her speech, as much as anything, was an appeal for help in discovering how to do this better. John Kay too says that good economics is difficult, and it's hard to measure the value. I'd imagine that Miller would agree with you that it is difficult to measure the role that arts play in decisions by companies to relocate to London; but that doesn't make it any less real an economic benefit. I guess she would agree with John Kay that ultimately the only way of measuring the economic benefit is the contribution to citizens' welfare. That is a straightforwardly Cameronian statement, of course, about the ultimate purpose of government. True, it cannot always be measured in money terms, or measured easily. John Kay, it seemed to me, was attacking not Miller but the authors of poorly-constructed reports that claim to measure the economic benefit of the arts, but which in reality only measure the gross cost of the arts - they've done the first, easy bit, but not the trickier bit of measuring the benefit.


  4. .....

    On your specific points, I cannot help but disagree. Military spending is very much about protecting UK economic and other strategic interests: keeping the peace prevents the disruption of trade, safeguards the delivery of essential items - however you want to look at it, the potential cost of not spending money on guns is measured in economic terms. Sport, too, is routinely measured in health and economic terms. To quote John Kay's article, "The economic contribution of sport is in the pleasure participants and spectators derive, and the resulting gains in health and longevity." In healthcare, I'm not sure who these people who feel it's "downright offensive" to discuss value for money in healthcare. But you will know that NICE does exactly that - and thank goodness for that. In education, too, governments debate where best to invest - primary, tertiary etc - on grounds of which will produce the best economic benefit for the least expenditure. In the home office, judgments about reoffending, drugs treatment etc are all made in the context of the money that would be saved from the crimes that won't be committed in the future, and the money that will save.

    But in a sense all of this is irrelevant because, as you say, you believe in government spending on the arts but do not believe the arts can be justified as 'value for money'. Why not make the case for government spending on the arts in your own terms. Instead of criticising Miller's approach - it's the easiest thing in the world to call a cabinet minister 'stupid' - why not offer up a positive line of argument of your own, in terms that address the realities of the spending review? Would the DCMS budget be better protected if Miller was not pointing out to the treasury all these less tangible economic benefits? If she just said: the arts are a Good Thing and you've got to cough up?

  5. It's about how you measure value for money, not whether you should measure value for money. In a business, you're looking at measures of profitability. In the NHS, you're looking for cost-effective ways of returning people to health (quality adjusted life years in their jargon). Some people despise even this level of economic reasoning in the NHS, usually when a local hospital is being closed or a preferred treatment denied. Applying Miller's logic, we'd have to ask instead how the NHS can promote growth - instead of quality adjusted life years, we'd be measuring cost of treatment against the economic potential of the patient.

    Cultural spending is justified because culture is a Good Thing, not because it is an economically productive thing. There is no credible evidence I know of to suggest that the arts have an especially high economic multiplier effect. Spending on transport, infrastructure and training all have a better claim on resources if they are all competing for a pot of money marked 'economic stimulus' rather than a pot marked 'culture'. Of course I agree that the cultural budget should be spent wisely, which means applying criteria for value for money. But that value shouldn't be measured in terms of economic output, or in terms of branding or marketing for the British economy.

    The John Kay article is quite old and was written in response to an economic report written well before Miller's day. I just think its reasoning is useful. You're right that the tag 'stupid' is a lazy way of disagreeing with cabinet ministers, but in this rare case I think it's justified. I really think she has failed to grasp the debate. I wouldn't say that about many other cabinet ministers, past or present, even when I've disagreed with them (although former Labour Culture Minister David Lammy is another).

    Trying to protect the DCMS budget on the basis of spurious claims about economic impact is suicidal, because those claims are easily refuted and provide an argument for cutting the budget further. So actually I'll go with the other option - she does indeed need to make a positive case for the arts being a Good Thing. And I don't think that's politically unrealistic. Michael Gove has been one of the least economically instrumental Education Secretaries for a very long time, for example.

  6. I've also tried to answer your challenge about what she should have said in a new post above.