“X is good.  Therefore, we (the government) should fund X.  If X is not funded, then X will not exist.”  As somebody who has several friends and colleagues in the artistic world, I see this argument constantly as a justification for continued government funding of the arts.  To them, the National Endowment for the Arts is of the utmost holiness and should not ever be touched, even if it has long outlived any sort of usefulness it may have had.  I on the other hand do not consider it to be holy, and in its current form, the National Endowment for the Arts is in desperate need of at least reform, if not, outright abolishment.

In 1965, President Lyndon Johnson created the National Endowment for the Arts as part of a larger effort known as “The Great Society.  Its original purpose was to provide government funding for worthy artistic endeavors.

What exactly are “worthy artistic endeavors?”  Is it fair to have government bureaucrats determine what should be supported and what should not?  Well, of course not.  Art is one of the most subjective things in the world.  What constitutes art to one person, does not to another.  For example, some believe the best art came from over 100 years Others believe the best art to be as modern as possible, for art can act as a way to shape the future.  Others still just go by the adage: “If it’s good, then it’s art.”

I enjoy listening to and playing the music of Richard Strauss, Gustav Mahler, and Anton Bruckner.  Somebody else might prefer Arnold Schoenberg.  Another might prefer the theater, or visual art, or a myriad of other thing.  There is no way a government bureaucrat can accurately decide what is art, and what is not, when there are millions of differing opinions– even more so when an artist tries for “shock value.”

Take for example, the case of the “Piss Christ.”  Conservatives often cite the “Piss Christ” as a reason for why the NEA should be defunded– it promotes bad art.  Now photographer Andres Serrano did not intend for it to be offensive, yet for many, especially conservative Catholics, placing a crucifix in a glass of urine, and then passing it off as art is deeply offensive.  That offense is then amplified when their tax-dollars went to support it.  It then serves to divide people even further.  As a baby, I was baptized into the Catholic faith, and spent nearly 18 years of my life in the church.  While I am no longer a member, I do not believe that somebody should be forced to fund something that offends their sense of morality.  If you want to support something like the “Piss Christ,” then do so of your own accord.

Cases like the “Piss Christ” are extremes though.  Rather than an organization that promotes “bad art,” the NEA primarily acts as a subsidy for the more well off.  The people who partake in the sort of “high art” promoted by the NEA on average financially better off than the rest of the country.  Supporters of the NEA often critique that statement, mentioning that there are NEA funded organizations in less well off neighborhoods.  For instance there is a study by Southern Methodist University the claims the NEA benefits rich and poor alike.  A little bit of digging however, reveals a very flawed methodology.  The authors of the study took the ZIP Codes of NEA funded institutions, and found that some were located in or near low-income areas.  Obviously, that means the NEA benefits poor people too, right?  Wrong.

Michael Rushton, an economist who focuses on arts administration notes that the study’s methodology is an “ecological fallacy.”  To explain the fallacy, Rushton uses politics, noting that the richest states tend to swing Democrat, while the poorest states swing Republican.  Obviously, just because somebody is rich or poor does not mean they are a Democrat, Republican, or neither.  Essentially, an ecological fallacy is a variation of the old broken window.  Using the NEA’s own numbers, Rushton notes that people of higher income values tend to have a greater participation in the arts.  Even in areas where the income level is lower, Rushton points out that it is still the wealthier members of that community who support the arts.

“If the opera company in a city of average income receives a grant that, on a per capita level, is much the same as the grant received by the opera company in a city with a higher average income, it might still be the case that in each city the opera attendees are primarily from the top income quartile.”

Not only that, but charitable contributions to the arts in the United States has always been more than what the government does.  The NEA typically has a budget of around $150 million.  Private contributions in 2015 alone were more than $17 billion.  Despite the claim by many artists that “without government grants, the arts could never survive in the free market,” there is clear evidence for a market demand of the type of art promoted by the NEA.  On the whole, if the NEA were to go away, the arts would not be impacted.

However, it’s not all roses and violets.  David Marcus, Director of Blue Box World, a Brooklyn based theater project points out the following:

“American participation in the arts has declined dramatically over the past two decades. According to the NEA’s own numbers, in 1992 41 percent of American adults attended an “arts activity”; by 2012 that number was 33 percent. Arts institutions, which receive the bulwark of NEA funding, are failing badly at reaching new audiences, and losing ground. This is a direct result of the perverse market incentives our nonprofit arts system creates, and the NEA is the godhead of that broken system.”

Marcus continues, writing:

“I have personal experience in this area. As the artistic director of an unsubsidized theater company in New York City for more than a decade, I had to compete in a closed marketplace, where wealthy gatekeepers and the government rather than ticket sales pay the bills. Many theater companies, even the country’s most “successful,” get barely 50 percent of their revenue from ticket sales. Much of the rest comes from tax-deductible donations and direct government grants.”

In summary, that means for an arts organization to succeed, they need to keep their wealthy audiences, as well as government bureaucrats happy, instead of trying to attract a wider variety of audience members.  This, along with high ticket prices can lead to people of less financial and political means being effectively shut out, even if they might have a desire to do so.  More importantly, this isn’t a sustainable model.

Theater companies aren’t the only ones effected by this current model.  A study by Stanford economist Robert J Flanagan entitled ““Economic Environment of Symphony Orchestras” found that for many orchestras, the costs of production regularly exceeds what is reaped in ticket sales.  For example, during the 2010-11 season, the Minnesota Orchestras  budget found that just one-third of the organizations revenue came from ticket sales.  Many end up surviving on a combination of government grants, individual and corporate contributions, as well as their own endowment funds.  Eventually though, economic reality begins to sink in.  Facing budget shortfalls, management teams attempt to make cuts in the budget to allow the organization to continue to exist.  However, what often results in that attempt are  symphony strikes.  The often times unionized musicians will refuse to perform until management gives into their demands.  Sometimes the disputes are resolved, and the show goes on.  In some cases however, the budget is so far into the red, the orchestra is forced to shutdown.

The reason for this is quite simple: government intervention has led to a market based on an unsustainable model, where there are attempts to shield arts organizations away from economic reality.  The world however, is not static, and the sooner the arts community realizes this, the better off it will be in the long run.

Economist Tyler Cowen, author of Good and Plenty even gives a couple of steps the NEA could take to improve itself.  They are:

  1.  End the transfer of 40 percent of the NEA budget to state arts councils; and
  2. Restore NEA funding for individual artists

Cowen points out that a significant portion of the budget going towards state arts councils ends up going towards the construction of arts centers.

“My first suggestion is to cease such transfers, thereby saving money for arts support at the federal level. Many of the grants to state arts agencies end up channeled to regional development initiatives, such as the construction of arts centers. There is arts support embedded in those projects, but a lot of it is actually stimulus and job creation. Some of those projects may be good ones, but they should not be the business of federal arts policy.”

Continuing his case, Cowen points out that historically speaking, autocracies support the arts quite well, such as the Medeci Family, Catherine the Great, and the Hapsburgs (mine), though does not use that as justification for increasing autocracy, writing:

That’s not sufficient reason to have autocracy, nor am I suggesting that the Trump administration will bring autocracy to the U.S. Nonetheless, tolerating some arbitrary political control over arts spending, at the expense of regular bureaucratic control, could be a plus rather than a negative, especially over successive administrations. Artists typically produce many mediocre creations, and only a small percentage of enduring ones, so bureaucratization along mainstream lines may not be the best method for identifying and boosting creativity.”

His second recommendation is more controversial.  Cowen writes:

My second recommendation is to restore fully the ability of the NEA to make grants to individual artists, thereby undoing changes that were made in 1994. That would diminish the role of the middlemen and support artists rather than art museums. This too has the potential to boost creativity, as large institutions with overhead tend to be more artistically conservative than individual artists or arts groups. Such a change would take the NEA back to its earliest and arguably most effective period near its origin in 1965, when it supported creators such as Alvin Ailey, Merce Cunningham, George Segal, Ed Ruscha and William Gaddis (all grant recipients in the first year alone), among other luminaries.”

On the other hand, Cowen points out that the reason the NEA went away from that model was that some of the art produced was very offensive to some people.  In order to keep constituents happy, Congress changed how the Endowment distributed its funds.  Yet that made it more bureaucratic in nature.  Is there perhaps another way?  Yes.

To quote Adam Huttler, founder of Fractured Atlas, “We must abandon the notion that a strong arts policy begins and ends with public funding.”  In a November, 2012 interview for Reason TV, Huttler explains why so many people are adamant about tax-payer funding of the arts.

“If you want to kind of boil the whole thing to one number, that an arts advocate can focus on, and pay attention to, and say ‘okay, the NEA’s budget, did it go up or down this year?’  It’s the simplest, most glaring metric out there, and you know, its a little reductionist to say: ‘that is the symbol of our government’s support, or lack thereof for the arts.”

Interviewer Kennedy then asked the following question: “Outside of government, what do you think can be done to encourage children in the arts?”  Many in the arts community are continually frustrated by the fact that politicians and bureaucrats place far more emphasis on the STEM portions of the world.  Huttler’s response to the question was brilliant.

“It’s tempting to say ‘oh, we’re falling behind in math, we’re falling behind in reading, you know we’ve really got to double down in our efforts in those core areas,’ and that stuff certainly is important, don’t get me wrong.  I am not claiming the arts are more important, but I think the arts play a really critical role in helping to educate sort of well-rounded citizens.  And especially as the economy is transitioning from emphasizing manufacturing, to services, to sort of, you know what is talked about as the ‘creative economy,’ having citizens and entrepreneurs, who have trained their brains to think creatively, and to you know be in touch with different ways of processing information, and relating to other people, I think is a strategic asset for society.”

Huttler then gives more reasons to be optimistic.

“I think there’s a lot to be optimistic about, actually out there.  I think younger artists, and sort of scrappy, ‘DIY’ smaller organizations are kind of breaking away from a lot of the old models of funding, and they’re finding new tools like: fiscal sponsorship, or crowd funding, or any number of other tools that are out there, social media driven or otherwise that are allowing them to get the resources they need to make their work.  They’re also increasingly tax-status agnostic.  They don’t think of themselves as ‘commercial’ or ‘noncommercial.’  They can sort of move fluidly between those worlds, and I think that’s a good thing.”

On a more personal note, this gives me some hope that I’m not completely wasting my time pursuing a music degree (with an entrepreneurial emphasis).  As much as I can dream of playing professionally, I always have to ground myself in reality– the spaces are limited, and the competition is very fierce, but that doesn’t mean I am sentenced to a life as a barista, (not that there’s anything wrong with baristas).  As a musician, I have to be able to be creative in my thinking.  I have to be able to switch seamlessly between working independently, and working in a group.  When I am in a group, I have to be able to switch between horizontally organized ones, to vertically organized ones, and all in the same day, but back to the topic at hand.

At it’s core, a non-profit, such as an arts organization is still a business.  In order to stay afloat, more money has to come in than comes out.  At one time, single, wealthy patrons were the primary supporters of the arts.  That evolved to an unholy alliance of government grants, and wealthy patrons.  In a changing economy, it is time for arts organizations, and the artists that compose them to continue to evolve methods of producing revenue.