55: Liberal arts
Sponsorship without the state
The problem: culture costs cash
In many countries the arts have been effectively nationalized. In the United Kingdom, for example, not one of the national opera, ballet or theatre companies turns a profit: they survive on taxpayer subsidies. Regional companies are even more dependent on handouts. On the continent of Europe, opera and ballet is even more reliant on state subsidy.
The idea: private sponsorship
The arts do not have to be heavily reliant on taxpayer support, justifying themselves as a 'public good'. Instead, policy makers should encourage sponsorship of the arts by businesses, individuals and charities through tax incentives.
Examples: sponsored opera, dance, museums...
In the United States there is virtually no government funding of the arts. Helped by tax allowances, private sponsorship fulfils this role. Even television is supported in this way: PBS (the 'Public Broadcasting Service) works as a private, non-profit media enterprise, owned and operated by the nation's 349 public television stations. It provides children's, cultural, news, nature, education, history, science, and public-affairs programming to 100m people each week. Its billion-dollar budget comes largely from the subscriptions of private members and from business and foundation support.
In the United Kingdom since 1984, under the Business Sponsorship Incentive Scheme, the taxpayer matches donations made by corporate sponsors. The sums raised now amount to over £80 million a year. It also helps that, in the UK, gifts to artistic foundations are tax-exempt.
Opera has traditionally been associated with heavy state subsidy, particularly on the continent of Europe. However, for decades the UK's Glyndebourne Opera has shown that it possible to attract audiences without the need for state subsidy. Taking advantage of the economic recession of the early 1990s, it entirely rebuilt the opera house for £33.5 million. Production costs are half those of the state funded Royal Opera House.
Glyndebourne's success has been emulated by several small country-house opera festivals in England. Garsington, near Oxford, is probably the best known - its tickets are sold out years ahead, and Grange Park in Hampshire, the brainchild of entrepreneur Wasfi Kani, has proved very popular. None receive taxpayer support, yet corporate sponsors have responded enthusiastically to fundraising appeals.
In the world of drama, the Almeida Theatre in London's Islington district is an outstanding example of a theatre which relies on individual, corporate and charitable support. The Laura Pels International Foundation and AT&T are two major supporters. All actors receive a minimum weekly wage. Yet its artistic reputation has attracted stars of the quality of Ralph Fiennes, Juliette Binoche, and Kevin Spacey. Its productions transfer to the West End in London and Broadway in New York.
The Scottish Ballet performed in Japan as part of a campaign by United Distillers to influence the Japanese government to reduce high tariffs on Scotch whisky. Magnus Linklater, Chairman of the Scottish Arts Council, observed: "It was a highly commercial undertaking, but an artistic success".
Private sponsorship has even been attracted to former Communist countries. In Russia, Finnair sponsors the Hermitage Museum in St Petersburg. It has also established a 'Friends of the Hermitage' group with commercial sponsors including IBM, Coca Cola and Honeywell. The Hermitage is engaged in a ten-year project which aims to attract $160 million in sponsorship.
Assessment: setting art free
The arts have suffered from being welfare-dependent. Between 1950 and 1994 public expenditure on the arts in Britain increased twentyfold in real terms. In contrast, public expenditure as a whole merely (!) trebled. By 1996, each seat in the Royal Opera House, Covent Garden was being subsidized to the tune of £28. As Dominic Hobson points out in the National Wealth: "All too often the quality of subsidized art is low, the cost of producing it is high, and the prices charged to consumers are excessive."
State support tends to lead to the bureaucratization of the arts and an obsession with form-filling and performance indicators that stifles artistic vision. State subsidies allow producers to raise their costs which, perversely, means that ticket prices are driven up too - just as farm subsidies drive up the price of farm land (see the chapter Farming for Profit).
Good art attracts visitors. London has long benefitted from its unrivalled theatre, while Edinburgh now acts host to the largest International Arts Festival in the world. But the locations can also be cities that have suffered from previous neglect. The new Guggenhiem Museum, sponsored by the private Guggenhiem Trust in co-operation with the government of Spain, was built in the run-down sea port of Bilbao. Today, it is the country's second largest tourist attraction after the Prado in Madrid.
Scottish arts chief Magnus Linklater commented in the Scotsman newspaper: "I would like to see a range of small and medium-scale arts organizations being market-orientated and unstuffy about it. They should have no hang-ups about re-labelling themselves in association with a commercial company in what can be a very rewarding partnership for both sides."
Private support for the arts reintroduces some much needed customer sovereignty into what is exhibited or put on the stage. It also provides valuable employment opportunities for young, creative talent, some of which will not appeal to politically correct state arts bodies.
For further information:
- The unsubsidized Glyndebourne Opera can be found at www.glyndebourne.com.
- Hermitage Friends' Club can be emailed at email@example.com.
- There is a wide range of websites providing guides to sponsorship support. In Canada, for example, The Sponsorship Report is focused exclusively on corporate support of the arts and events: www.sponsorship.ca/p-whoweare.html.
- For a discussion on nationalization of arts in the UK, see Hobson, Dominic (1999) The National Wealth: Harper Collins.
- Pick, John, et al (1989) The Art of the State: Adam Smith Institute (London) www.adamsmith.org.
- Mason, Douglas (1987) Expounding the Arts: Adam Smith Institute (London) www.adamsmith.org.
- For historical reference see Jardine, Lisa (1996) Worldly Goods: a New History of the Renaissance: Macmillan, which explains the entrepreneurial forces at work which led to the flowering of great art in Europe in the fifteenth and sixteenth centuries.
Copyright 2002: Adam Smith Institute
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