A staff writer for one of the area’s local paper’s covered a recent appearance at the University of Massachusetts, Amherst by State Senator Stan Rosenberg, D-Amherst. In the article Sen. Rosenberg touts the impact of the arts and culture on the area economy. While it’s true that the arts and culture, like any industry, have economic impacts and it is viable to view those from the perspective of economic development. However, cultivating the arts and culture can come with the social costs of gentrification and economic inequality. While there are many arguments that can be made in favor of enhancing a community’s arts and culture, focusing on the economic impacts is not necessarily where the strongest case can be made.
According to researchers Stern and Seifert, ‘Overall, the creative industries are dominated by jobs with high educational requirements. Empirical research indicates that as culture increases its share of the metropolitan economy, increasing inequality is a much more significant downside than gentrification. The expansion of both arts occupations specifically and the creative economy overall will create more opportunities for highly-skilled workers than for urban residents with modest educational qualifications." (Stern M. J., 2008, p. 3). ‘The proliferation of the informal arts sector, although it generates many benefits, is one symptom of the expanding inequality within the creative sector.’ (Stern M. J., 2007, p. 8). ‘The informal arts sector, in particular, is associated with minority, immigrant, and other out-of-the-mainstream communities. Informal arts include participatory, hands-on creative activity in informal settings as well as the informal economy of under-employed professional and traditional artists. (Stern M. J., 2008, p. 3).
Moreover, the economic impacts of cultivating the arts and culture may be exaggerated. Madden opines that, "Studies of such impacts provide no indication of the existence or extent of market failures, where people’s market decisions inadvertently place costs on or provide benefits to others and generally trigger government intervention (Madden, 2001, p. 170). In addition, studies generally overlook the ‘substitution effect,’ where every dollar local residents spend on culture is a dollar not spent on something else." (Stern M. J., 2007, p. 6)(Brooks, A. et al., 2004, p. 40). "Thus if a community does not export cultural products or import cultural audiences, the net effect of ninety-nine percent of cultural activities is irrelevant from an economic impact perspective." (Stern M. J., 2007, p. 6) (Madden, 2001, p. 167). In fact a 2005 report from Americans for the Arts speaks to the importance of importing patrons. The report finds that from the perspective of a county, local audiences, who live in the county in which the event occurred, spent an average of $19.53 per person, per event in addition to the cost of admission. Nonlocal attendees, those who live outside the county, spent twice this amount, or $40.19 per person. (Lynch, R. L, 2005, p. 16). Typically the difference is due to spending on lodging, restaurants, and transportation (Lynch, R. L, 2005, p. 16).
Stern and Seifert continue that, "The real-world consequences of these flawed studies are a set of major projects that have required on-going subsidies but have failed to deliver the promised economic boost to cities or regions that might justify these subsidies. Indeed, the exceptional economic impact study that actually considers all of the potential costs and benefits of a proposed development often concludes that the mega-project is not justified on economic grounds.’ (Stern M. J., 2007, p. 6). Drawing on the Australian Bureau of Statistics Madden further clarifies, ‘Multipliers show the financial response of various sectors to an increase in demand for their output–Multipliers are designed only to measure the impact on Gross Domestic Product (GDP) of increases in demand that do not require substitution from other sectors. In economic terms, this means they measure the effects of demand increases caused by exogenous (external) increases in wealth, such as an injection of money from outside the economic system. Only then can the impact be seen as extra wealth generated’ by demand increases in particular sectors.’ (Madden, 2001, p. 167). However, "Attracting exogenous revenues is a form of protectionism: it aims to divert their wealth to us. Ignoring the usual theoretical concerns about protectionism, protectionist policies inevitably invite strategic response. Protectionism is an invitation to war-economic war."(Madden, 2001, p. 172).
Stern and Seifert further proclaim, "Advocates have often failed to acknowledge the costs associated with investments in the creative economy. Two possible negative consequences of culture-based development are gentrification (Occurs when artists and creative enterprises are among the first entrants into a low-income district resulting in widespread resident displacement and the destruction of the social fabric of an existing neighborhood.) and the expansion of economic inequality (Artists are part of the “winner-take-all” economy a few “winners” in dance, music, and the visual arts receive a disproportionate share of the benefits. The proliferation of the informal arts sector although it generates many benefits is one symptom of the expanding inequality within the creative sector.) (.” (Stern M. J., 2007, p. 6 & 8). Stern and Seifert quote Davis, "The creative economy is defined as the sum of economic activity arising from a highly educated segment of the workforce encompassing a wide variety of creative individuals like artists, architects, computer programmers, university professors and writers from a diverse range of industries such as technology, entertainment, journalism, finance, high-end manufacturing and the arts.” They further add, "The logic is that attracting the “creative class” to the region will generate jobs and tax revenue, a trickle down of benefits to all citizens. Unfortunately, it appears that growth of the creative economy is exacerbating inequality and exclusion. The creative economy is contributing to both the renewed prosperity of the city and the inequitable social and geographic distribution of its benefits."
Stern and Seifert ask, "So what’s wrong?" and attempt to answer the question, "Public policy promoting the creative economy has two serious flaws: one, a misperception of culture and creativity as a product of individual genius rather than collective activity; and, two, a willingness to tolerate social dislocation in exchange for urban vitality or competitive advantage.” (Stern M. J., 2008, p. 1).
So, are there other reasons to cultivate the arts and culture? Stay tuned…
(Citations available upon request, apologies for formatting problems.)
