Why artists confuse economists
Artists work longer hours at higher levels of effort than economists think they should – defining a persistent puzzle for Arts Management practitioners.
In the very essence of poetry there is something indecent:
a thing is brought forth which we didn’t know we had in us,
so we blink our eyes, as if a tiger had sprung out
and stood in the light, lashing his tail.
—Czeslaw Milosz, from “Ars Poetica?” (translated by the poet)
In classical economic theory, workers (on average) decide how much and how well to do their jobs based on marginal benefit and marginal cost. That is, they work longer and harder until the costs of doing so (lost leisure time, for example) meet or exceed the gains. This makes artists rather baffling to classical economists.
Says Richard Caves (2000):
“Economists normally assume that workers hired for some job do not care about the traits and features of the product they turn out. They care about their pay and working conditions and how much effort they must exert, but not the output’s style, color, or features.”
But artists and creative teams often expend more hours and more effort than the money or the marketplace will reward. And they strive for a level of quality that almost nobody but their expert peers will notice. Caves again:
“In creative activities, however, the creator (artist, performer, author) cares vitally about the originality displayed, the technical prowess demonstrated, the resolution and harmony achieved in the creative act… Hence, the artist may divert effort from aspects of the task that consumers will notice (thus affecting their willingness to pay) to those they will neither notice nor value.”
From an economic perspective, therefore, artists work more or harder than they “should.” They could reduce the volume and intensity of their work without most of the marketplace noticing. Of course, from a beauty-of-the-world perspective, we should all be glad and grateful that they continuously make that choice.
As it turns out, a large portion Arts Management strategy and structure is an effort to bridge this gap between the quantity/quality of labor and the value recognized by the marketplace. The nonprofit organizational form, for example, allows contributed income to cover the difference. And in many cases, contributions to the arts are better understood as higher prices paid by those who notice, value, and can afford the “excess” labor. Says Hansmann (1980):
“…contributions are, in essence, a form of voluntary price discrimination, or, in other words, a means whereby different customers can be charged different prices for the same service. And in an industry such as the performing arts, in which fixed costs typically account for a large fraction of total costs, the availability of price discrimination can be the key to survival.”
On the flip side, the willingess of artists to work more hours at greater effort than the market will support makes them vulnerable to exploitation. Much of the nonprofit arts industry was built on the promise and realization of self-subsidized labor.
As we consider and apply for-profit management practices in the nonprofit arts, it’s worth remembering the many different dynamics in play. While economics are an important part of a successful arts enterprise, there are factors beneath and beyond that narrow lens that shape our complex work.
From the ArtsManaged Field Guide
Function of the Week: Program & Production
Program & Production involves developing, assembling, presenting, and preserving coherent services or experiences.
Framework of the Week: Levels of Mastery
The Dreyfus brothers’ “Five-Stage Model of Adult Skill Acquisition” describes milestones on the journey from novice to expert. These Levels of Mastery can provide a useful lens on learning for yourself and your team.
Photo by Phil Hearing on Unsplash
Sources
Caves, Richard E. 2000. Creative Industries: Contracts between Art and Commerce. Cambridge, Mass. ; London: Harvard University Press.
Hansmann, Henry B. 1980. “The Role of Nonprofit Enterprise.” Yale Law Journal 89:835–901.