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Footnotes
While the arthor has benefited from discussions with Douglas R. Bohi, Ruth Haas, William C. Ramsay, and Robert B. Shelton, all of the Resources for the Future, Inc., Washington, D.C., the opinions expressed in this paper remain his responsibility alone.
Note that the existence of social benefits from art does not mean that increments to art expeinditures add to those benefits; even less does it mean that those expenditure increments add net social benefits, once the costs of foregone alternatives are considered (opportunity costs).
The form of the subsidy and the characteristics of the market for artists and for art services will determine the distribution of the benefits between artists and art consumers and between price and expanded services. Depending on these characteristics, some art consumers may be made worse off (as other consumers bid specialized art services away; as congestion costs increase, etc.) as many some artists. As to the latter, the lowering of the threshold for professionalism may attract other artists from alternative employments. These new entrants may on net, absorb some of the previously successful artists' income. The dynamic adjustments may be even more perverse for some participants as the size of the market expands.
The artist's contribution is difficult to interpret in a market framework because, though many “earn” less in wages than in their next best alternative occupation, this difference cannot rightfully be counted as a “contribution” to the art enterprise. The other satisfactions the artist receives, and the prospects for great (even monetarily great) success, must compensate the person voluntarily choosing an art career.
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Russell, M. Comments on art subsidy: Distribution effects and the public purse. J Cult Econ 4, 75–80 (1980). https://doi.org/10.1007/BF02580851
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DOI: https://doi.org/10.1007/BF02580851