This one goes out to Simon, Patrick and Jack.
I have to be honest guys: I was furious. The absurd increase to the arts council is below the rate of inflation and therefore is a cut in real terms, following on from a year when it was effectively frozen (another real terms cut). These year on year cuts only mean that the infrastructure of arts centres, galleries and independent production companies – the things that are responsible for the vast majority of public engagements and most of the contracts for artists of all persuasion – will either contract, or will try to sustain their output in the face of ever rising prices and start to bankrupt themselves by spending down their reserves. Freezing (cutting) funding in a sector in which prices rise faster than the rest of the economy can only ever have one result. And then to try and hide this managed decline behind the basic income (the rollout of which has been pretty shambolic lets be honest) does not inspire confidence. Yes, giving money to people who don’t have any is a really good economic policy regardless of what the person does, but the basic income simply reduces deprivation from three times the national average to twice the national average, is already worth significantly less than it was in the first year of the pilot, and – gosh – because you’ve frozen the funding to the arts council the wider sector will be less able to provide opportunities to artists who are on BIA. And then you announce a €6m capital allocation to a sector that really needs something like €50m (at a modest guess). Oh yes, and then you promise to “consider” some tax incentives at some point in the future.
So I may have said some things in the heat of the moment, and I apologise for that, You guys are doing your best under a lot of pressure.
I assume this pressure you’re under means that you don’t get the luxury of second guessing, so I thought I might do that for you.
Since the arts council was founded the way the arts have been funded in this county has been built on single concept from a particular school of economics: the arts are a market that cannot pay for itself because there is a gap between what it costs to make a piece of art and what audiences can pay for it. For example, the majority of people can’t afford to buy a painting by a professional artist so we bundle work together into a gallery and let the public spend some time with it – if they have time, desire and capability. In other words the state fills the gap between what the art costs to make and what the public can afford to pay. This is the market failure concept, and almost everything in Irish Arts and Culture Policy flows from it : the subsidy, the grant, the annual anxiety about whether the gap has grown or shrunk. And fair enough: Baumol’s Cost Disease is real – the cost of making theatre, dance, music, literature, visual art, music goes up every day and peoples disposable income simply cannot match these rising costs – so without subsidy the whole thing collapses.
Now, guys, lets just take a time-out, a policy breather as it were, and lets look at the assumptions that sit underneath the market failure model. The moment we say that a market has failed then we must have assumed there was (or could be) a natural, self-correcting market there to begin with – one that, if left alone, would have reached an efficient price through the free rational choices of well-informed people. This is the classical economic model of markets. In that model public money is an intervention into an otherwise self-sufficient system, a necessary distortion we tolerate because culture is simply worth it.
Now that’s fine except for the fact that its not unreasonable to expect that either you or your staff really should know that several decades of economic research have demonstrated that the model of the efficient market – rational actors, each in possession of full and equal information, trading freely to maximise their utility – really describes almost nothing in the real economy we all actually live in. Herbert Simon and later Daniel Kahneman dismantled the rational actor; Joseph Stiglitz won a Nobel Prize for showing what happens once you admit that no two parties ever hold the same information (information asymmetry). And guess what? Karl Polanyi (of all people) made the point long before any of these people that the self-regulating market was never a fact of nature that politics interrupted: rather, markets are bult through law, through enclosure, through deliberate state action. “Laissez-faire,” as he put it, “was planned.” The brilliant Cambridge economist Ha-Joon Chang says the same thing more bluntly: there is no such thing as a free market. Every market that exists runs on rules – property, contract, licensing, standards, subsidy, tax – that we have just stopped noticing. I’m curious: have any of these names or theories every cropped up in policy conversations as you build your budget? Or are you just working on outdated assumptions and pressure from lobbyists?
Let’s repeat it – the research and the thinking in economics over many decades has made the point that a market is a designed thing, brought into being by legislation, regulation, investment and incentive. And here’s the kicker: if a market is designed, then its inequities and its failures are not accidents of nature to be patched over. They are features of the design. The poverty of professional artists, the hollowing out of our infrastructure of arts centres and production companies, the dependence on unpaid labour – these are the predictable results of a system arranged, mostly by accident rather than intent, to produce them.
Now, guys, that’s just careless. I wouldn’t want a heart surgeon to operate on me who wasn’t familiar with the research and developments in the field for the last several decades. I think its fair to expect the same of a national policy maker.
Also, by the way, the Government made a commitment to designing better public services a couple of years agao in its embrace of service design, of starting from the problem and the user rather than the existing position. If we’re honest, this is an admisssion that public systems, including markets, are designed artefacts and can therefore be redesigned.
The great economist of the common good, Mariana Mazzucato, has spent a career arguing that the State shapes markets deliberately and therefore can do it ambitiously rather than apologetically. So I don’t want to complain about the current design that you keep supporting, but I want to ask what would we build if we took that responsibility for market shaping seriously and designed an arts sector to produce quality work and to look after the people who make it?
So, here’s an approach that you can take, and you can take it now, and you can start delivering it in the course of this year (testing and prototyping) before rolling it out for the next budget. Assuming we’re all still around.
Start with the problem guys! Be clear! what problem is the policy/funding tool solving, and whose problem is it solving? A properly designed arts sector would answer each problem with a specific policy instrument. So, here we go, some spitballing for you, free of charge.
An income floor that returns value to those who create it. Yes I know you’ll point at BIA but its a clumsy and unreliable instrument and it doesn’t address the causes of poverty and precarity, However, if we agree that the arts generate enormous value – in wellbeing, in education, in tourism, in the national brand etc.- but most of the value is captured downstream from the artist, leaving the artist to absorb this as unpaid overtime and precarity, then a properly designed sector treats this as a distribution problem and fixes it directly: a reliable income floor for professional practitioners. This is located in Social Protection and designed along the lines of Farm/Fish assist programmes. Both of these programmes already accept that freelance people are free to engage in work of choice that fails to guarantee a liveable income. The mechanism is there so simply expand it. It means that the welfare challenges that artists have experienced over decades simply vanish, and the income floor is absorbed in the wider social protection budget and can’t be voted out of existence (Lets be frank, you guys made great noise about how funding for BIA was secured for this year – which is strange seeing as you had already said it was permanent).
Stable core funding for the infrastructure. This can be delivered through the Arts Council and local authorities, and it guarantees adequate and predictable funding to maintain and develop the infrastructure of the sector – the arts centres, galleries, producing organisations, the places were people actually make and show work – and to sustain a baseline of production and public engagement and real work opportunities for the artists.
A purchasing arrangement between departments. Health, education, tourism and others draw real, actual and costable benefit from cultural activity – and right now they largely take it for free, leaving the arts budget to subsidise other departments’ objectives. A properly designed system would price this honestly: where a department wishes to buy a valuable outcome, it pays for it at a proper rate. This reframes a great deal of spending from “subsidy” to procurement of value, which is both fairer and far easier to defend.
A tiered structure of tax expenditures and incentives. Private money in the arts sector right now is negligible. However, we can design a suite of tax expenditures and incentives that could give each kind of giving a deliberate route: reliefs designed for local small-business sponsorship to grow local creative economies, mechanisms for large-scale national sponsorship, and progressive reliefs for private investment and giving – designed so that lower-income households can both take part and back local and family ambitions, rather than schemes that quietly reward only those who already have the most.
Each of the ideas above is aimed at a specific problem and collectively they produce a robust system that delivers real public value, and guarantees sustainability of the wider sector. They deliver an ecology, where each piece reinforces the other rather than competing for the same shrinking pot.
Now look, none of this is simple. Costing cultural outcomes is really hard and is genuinely contested across the research. Baumol’s cost disease does not vanish because we have acknowldged it. The cost of an arts sector will continue to increase faster than other sectors – its inevitable. Taking a design approach does not make the trade-offs disappear, but it does mean that we can own them deliberately, instead of allocating a lump sum and hoping something sticks.
So, Simon, Patrick, Jack, apologies for any harsh words I may have used in response to your budget nonsense around the arts. I hope you understand now where the persistent anger comes from, and what you can actually do to deliver some real public value, Which is, after all, a part of your job.
