History of schools of economic thought on arts and culture

In the eighteenth century, Hume and Turgot helped to give a more positive image to cultural activities, presenting them as useful incentives for enrichment, and therefore for economic growth.

[3] As a result, cultural activities that detracted from production, defence or religion were generally viewed with suspicion,[4] except by mercantilists, who saw them as a way of improving the trade balance.

Even Bernard Mandeville, for whom the organisation of selfish passions is the driving force behind economic growth, only advises indulging in the arts as a means of avoiding other, more costly extravagances.

Mandeville, for his part, also noted that an artist's reputation and the social position of his buyers had a major influence on the value placed on his work.

[5] In this, he agrees with Jean Bodin and Ferdinando Galiani that the fundamental value of art lies in its ability to highlight and exalt the true nature of its model and to educate viewers about virtue through its power to represent elevated feelings.

[7] Indeed, Hume argued, "innocent luxury" sharpens the capacities of the mind and provides an incentive to work in order to acquire it, thus avoiding idleness.

[7] In the same vein, Turgot links inequalities in development between nations to differences in the way the arts and sciences are treated, thus anticipating the notion of human capital.

He also gave a central role to patronage as the driving force behind artistic progress, citing Lorenzo de' Medici, Leo X, and Francis I as models of patrons interested in art itself, and not in an ostentatious consumer dimension.

On this last point, Turgot notes that when conspicuous consumption dominates, the effects of trends and technical virtuosity take priority over genuine artistic creativity.

His account of how wealthy people use works of art to flaunt their wealth may have influenced Veblen's formulation of conspicuous consumption.

The Age of Enlightenment's questions about the unique and exceptional nature of the arts were therefore hardly relevant to the research agenda that led to Homo economicus.

In his view, the quality of a work of art was purely a matter of individual taste, and the only thing to do was to stay out of it, leaving everyone to enjoy what they liked.

Such views of Bentham's, the emphasis placed only on the sectors designated as 'productive' by Smith, and the prejudices inherited from previous centuries largely explain the period's lack of interest in the economic analysis of the arts and culture.

For the same reasons of scarcity, he refutes Smith's idea that artistic work is unproductive, the payments themselves being a sign that wealth of some kind is being created.

[10] At the same time, however, Mill was concerned that the most common forms of remuneration did not allow most authors, albeit talented ones, to make a living from their creative work, while a few received very large sums.

In his view, the latter had the dual merit of contributing to the moral improvement of the population and creating a greater solvent demand for artists.

Here we find both an idea inherited from the Age of Enlightenment and a foreshadowing of later reflections on the conditions under which market allocation can work as well as the economists of the time thought.

[12] While Arnold questioned the possibility of considering economic relations outside their cultural context, John Ruskin attacked another pillar of classical political economy: that of the stability of individuals' utility functions (in other words, their preferences).

[12] Seldom read by the economists of his time, Ruskin had a major influence on the Anglo-Saxon labor movement as a whole, particularly through Henry Clay, who, in the final chapter of Economics: An Introduction to the General Reader, took up Ruskin's opposition between a nineteenth-century of material abundance but artistic poverty and periods (Antiquity, the Middle Ages) of great material poverty but great artistic wealth.

As a result, the early texts of the neoclassical school make very little mention of the arts, except when they provide striking illustrations of a theory of value in which value is determined by demand.

[14] Rejecting the utilitarianism of Bentham and the rational agent of the neo-classicists, American institutionalism proceeds from a more complex conception of human behavior and seeks to relate it to the organization of the economy.

As a result, we would expect to find arguments highlighting the special character of the arts and the organization of the production of cultural goods.

As early as the 1960s, he tried to launch a seminar on the economics of the arts at Harvard, but met with rejection from artists, who saw it as a deviation from their activity, and a lack of interest from economists.

[17] All the members of the group also shared a fascination for how the artistic representation of mythical events was revealed, and in their view perpetuated perceptions and conditioning that helped to shape political and economic decisions.

In this way, they linked the importance given to the Flood myth in artistic representations to the belief that a catastrophe or revolution must necessarily precede any fundamental improvement in the human condition.

[17] Personally involved in the art markets, the members of the group noted that, contrary to the classical analysis, price did not seem to be the essential determinant of the supply of cultural goods, with authors feeling driven more by inner necessities than by the prospect of gain.

[17] This role was taken up, and indeed considerably extended, with the founding after World War II of the Arts Council of Great Britain, of which Keynes was one of the first directors.

Relying on a literature review by Ruth Towse,[nb 12] he notes the influence of the economic analysis of law stemming from the work of Ronald Coase for the study of transaction costs and intellectual property problems.

[24] On the other hand, the preoccupation with the public policies of the arts and culture remains a major subject within the field,[nb 13] to which contemporary approaches in terms of international trade and geographical economics have been added.

Similarly, the economics of artists' work constitutes a pivotal point between historical thought and the economics of modern culture: while the central questions of resource allocation posed by the contrast between the considerable earnings of a few stars and the modesty of average artistic remuneration remain the same, the tools of labor market analysis in terms of supply, demand, human capital, and asymmetric information are now used to answer them.