IntroductionArt and Economics

University of the ArtsRene Kooyman

Jan 2014

Economics

• Cultural and Creative Economy

• The holy Trinity; the Arts, the State andthe Market

• Case study

Cultural economy

• ‘Cultural economics’ is the application of economical analyses within all fields of creative and performing arts; both public and private

• Creatives often allergic to economical analyses; banks allergic to creative thinking

• Q: what is Capitalism ??

Economy is a social, behavioural science

Capitalism

NL: Trade capitalists

• Transport/mobility

• VCO: NV (Joint-stock company)

Vocational SMEs:

• Master / pupil structure

• Division of labor

Capitalism: economic system, based on:1. Private ownership of capital goods and raw materials2. Profit-driven; demand/supply, competition

Production factors:a. Capital investmentsb. Natural resourcesc. Labour

Europe in crisis ??

Social developments:

• Urbanisation

• From industrial production to knowledge

• Growth falters; is absent

• Small and medium-sized enterprises (SMEs) of strategic value

• The economic power of the cultural and creative industry (work CCIs)

• ' Old School ' is no longer valid: innovation

The cultural and creative industries

• The ' culture industries ' are those industries, considered as a specific cultural expressions, regardless of their commercial value.

• E.g.: film, DVD and video, television and radio, video games, new media, music, books and press, performing arts, visual arts.

' Creative industries ' are

those industries that use culture as input,

but whose results is above all functional,

E.g.: architecture, advertising and

design and fashion.

Cultural inequalities

High and low culture;

‘real’ art / popular culture

‘professional’ and ‘amateur’ art

Cultural dimensions: Local and global culture

Cultural, Social & Economic Capital:

– Economic capital: command over economic resources (cash, assets)

– Social capital: resources based on group membership, relationships, networks

– Cultural capital: forms of knowledge; skill; education; any advantages a person has which give them a higher status in society, including high expectations

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Pierre Bourdieu:

• Existence of Social class is a basic social fact

• We live in a high stratified class society continuously, based on economic capital and cultural capital

• The society tries to keep the upper class powerful and the lower classes powerless

• Much happens unintentionally; no conscious manipulation by the powerful

CLASS, LIFESTYLE AND POWER

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Cultural Capital Economic Capital

Cultural bourgeoisie High Intermediate

e.g. artists, academics

Business bourgeoisie Intermediate High

e.g. company directors

Upper professionals Intermediate to high Intermediate to high

e.g. lawyers, higher

civil servants

Lower middle class Intermediate to low Intermediate to low

e.g. primary school

teachers, nurses

Working class

Skilled Low to intermediate Low to intermediate

Unskilled Low Low

• Aalborg School: ' learning economy ' – culture as open

secret (Bengt-Åke Lundvall, et al.)

• National innovation systems

• Culture defines the ' open secret ‘, ' concealed knowledge ',

cannot be ' transported ' , nor outsourced, specific

knowledge linked to source and location

Culture as a source of competitive advantage (Michael Porter, et al.)

• Globalization: makes displacement production possible

• Cultural economy : hard to imitate competitive

advantage (a niche market)

• Cultural differences deliver distinctive products and

services (international specialization)

Culture in contemporary economical theory

Liberalisme: Adam Smith

• Production should be done by individual entrepreneurs, within maximal freedom

• The invisible hand: price mechanisms, supply and demand arrange the fine-tuning of production and societal needs

• The State as much limited as possible:

1. National defence

2. Legal justice

3. Collective investments – of relevance for the economy – where no profit can be made (roads, bridges, infrastructure, etc)

Social-liberalisme: Keynes

• Fiscal policy (government taxing and spending) can be used to control the economy

• Government can stimulate demand by increasing governmental spending

• Stimulate employment by public investments (public projects, improvement of spending power, labour hours regulations)

• Society should be built up form the grass-roots; corprorate structures, subsidiarity-principle

• Short-term strategies are important

Monetarisme:Milton Friedman

• It’s all about the money, stupid!

• Regulate the growth of money

• Always fight inflation

• Central banks rule!

• Growth is defined by the amount of money available

• Thatcher/Reagen: liberalisation of

financial markets, stimulate borrowing

The holy Trinity

Arts

Markets

The nation state

Why are artists poor?

• Vocation: willingness to accept low income

• At the same time mental support of society

• Distinction: high/low art• No link quality/price?• Aesthetic value = social value• Government encourages

‘experts' = interference in the market

• Ideology: Artist = unselfish

Five explanations

1. Personal gratification, recognition and status more important than money

2. Artists poorly informed about incomes needed

3. Grants deliver more Artists, no higher income

4. Artists rely on other sources of income

5. Cuts in labor (higher productivity) not taken place in the arts

6. Myth of the individualistic Artist prevents organized pressure groups (trade unions)

Two cases

• Utrecht Centraal Museum

• Het Huis Utrecht

The assignment: develop a management statement for the upcoming four years

That’sthe way

it’s done!

Rene Kooyman Jan 2014

http://cci.hku.nl/ http://cure-web.eurene.kooyman@ke.hku.nl

IntroductionArt and Economics