DO ARTISTS SUFFER FROM A COST-DISEASE?
Abstract
We consider the Baumol-Bowen cost-disease argument from the perspective of an artist's occupational choice. Both theory and evidence suggest that the incentives to create art do not diminish and probably increase in a growing market economy. First, countervailing factors may check or limit the operation of the cost-disease. Second, artists can increase their productivity by generating new ideas. New ideas provide the base for all productivity improvements, whether in the arts or in industry. Third, the arts are not necessarily labor-intensive, as cost-disease proponents allege. Fourth, the available statistical evidence implies that economic growth has favorable effects on artistic production.
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The author wishes to thank Daniel Sutter, Alex Tabarrok, Katarina Zajc, the editor and three anonymous referees for useful comments.
1.
1. For a survey of these views, see Cowen (1995).
2.
2. Baumol and Bowen (1966) originated the cost-disease argument; Baumol, Blackman and Wolff (1985; 1989, Ch. 6) offer two later statements; see also Baumol and Baumol (1984a). Blaug (1976), Grampp (1989), Frey and Pommerehne (1989), and Towse and Khakee (1992) offer good introductions to the economics of the arts. For additional essays on aspects of the cost-disease argument, see Grant, Hendon and Owen (1987), Hendon, Shaw and Grant (1984), and Netzer (1978). Heilbrun and Gray (1993, Ch. 8) and Throsby (1994b) survey the cost-disease debate; see also the essays in Hendon, Shaw and Grant (1984). Many of the specific points made in these articles are presented in more detail later. For a related argument about the increased difficulty of enjoying leisure in a growing economy, see Staffan Linder (1970), and the symposium in the Quarterly Journal of Economics; e.g. Baumol (1973) and Wolf (1973). These writings focus on whether consuming artistic products is labor-intensive from the demand side.
3.
3. We discuss the benefits of recording and other capital-intensive innovations in more detail later. Cost-disease proponents do offer a counter to the claim that recording makes the quartet more productive.
4.
4. Baumol and Bowen's neglect of income effects has been cited by Peacock (1976, 75), Heilbrun and Gray (1993, 133-4), Throsby and Withers (1979, 51-2, 170-1, 291), and Throsby (1994a, 1994b).
5.
5. Throsby (1994a, 1994b) cites survey evidence that most artists have given up more lucrative opportunities to pursue their desired projects. We never hear of individuals who work at art to support a side interest in bookkeeping, but we often hear of the contrary.
6.
6. Data from the 1990 census report suggest that only 55.7 percent of all American artists worked full time as such during the 1989 year; see Trends in Artist Occupations: 1970-1990 (1994).
7.
7. For documentation of the role of day jobs and family wealth in supporting famous artistic creators, see Cowen (1995, Ch. 1).
8.
8. The importance of the wealth buffer decreases to the extent that consumers know exactly what kinds of art they wish to buy. The preferred art is immediately commercially viable and requires no financial cushion.
9.
9. On the early application of the theory of division of labor to the arts, see Adam Ferguson (1980 [1767], 171-9), and Samuel Johnson, cited in Boswell (1935 [1786], 272; 1966, 514). For a more formal treatment of the incentives for artistic diversification, see Cowen and Tabarrok (1995).
10.
10. On the brain-drain argument, see Bhagwhati and Hamada (1982), and Baumol (1982). For a survey of empirical work on the benefits of international trade, see Gould, Ruffin and Woodbridge (1993).
11.
11. This point is implicit in most contemporary models of endogenous growth; see, for instance, Romer (1986).
12.
12. For data on the geographic agglomeration of artists, see Heilbrun and Gray (1993, 304-9).
13.
13. Jean Renoir quoted his father Auguste as saying: `Without paints in tubes, there would have been no Cézanne, no Monet, no Sisley or Pissarro, nothing of what the journalists were later to call Impressionism.' On the role of artistic materials in Impressionism, see Bomford et al. (1990, 21-6, 30, 34-7, 39-41, 51-2, 55-6). The Jean Renoir quotation is from p. 41.
14.
14. The citation of recording and radio is one of the most common criticisms of the cost-disease argument. See, for instance, the survey piece on the arts by Throsby (1994b, 15). These writings, however, do not rebut Baumol's subsequent responses; see below.
15.
15. Heilbrun and Gray (1993, 136) endorse this response as well. See also Baumol and Baumol (1984b).
16.
16. Recording, of course, does change the nature of received musical services to some degree. A recording, for instance, may have greater accuracy but less spontaneity than a live performance. Many economists who write about the arts adopt a curiously sentimental attitude towards live performance, defined narrowly. Heilbrun and Gray (1993, 16), for instance, claim: `No one who has developed a taste for live ballet is likely to find ballet on television an adequate substitute for the real thing.' Economists are unlikely to make comparable statements about a Mercedes-Benz and a Volkswagen. Furthermore, many consumers (and some performers, like Glenn Gould) prefer electronic reproduction to live concerts. A recording can be started, stopped and paused at will, and consumers can choose a superior recording easily by using guides and expert opinion.
17.
17. For other studies, see Baumol and Baumol (1984a), Gapinski (1980, 1984) and Felton (1987). Peacock, Shoesmith and Millner (1982) is one study of this nature which does not support Baumol's prediction of stagnation.
18.
18. On the difficulties in measuring productivity in the arts, see Schwartz (1987).
19.
19. It is even subject to question whether the live performance of the classics has stagnated. From 1965 to 1990 America grew from having 58 symphony orchestras to having nearly 300, from 27 opera companies to more than 150, and from 22 nonprofit regional theaters to 500. See Bolton (1992, 266). Admittedly, some of this expansion has been financed by government funds, but private giving far exceeds government grants.
20.
20. On the general link between prosperity and the arts, see Cowen (1995). Kavolis (1989) surveys numerous historical studies that have a strong link between economic prosperity and cultural achievements. See also Simonton (1984, 142).
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