Estrategia de negocio

David Throsby claims a speech on art and the state presented to the Friends of the City Museum and Art Gallery in Birmingham in 1958 established Lionel Robbins as ‘the first British economist of modern times to analyze the eco- nomic role of the state in support for the arts in financing public museums and galleries’.1 Robbins, a Professor of Economics at the London School of Economics, and a leading economic advisor to the British government dur- ing the Second World War, was deeply involved in the arts, as a Trustee of the National Gallery between 1953 and 1974. He was also on the board of the Royal Opera Covent Garden between 1955 and 1981, served on the Committee of Management of the Courtauld Institute between the wars, and participated in two governmental commissions. Robbins returned from the First World War a socialist but his study of economics ‘completed his disillusionment with socialism’.2 Immediately following the instigation of the Nazi persecu- tion of the Jews, Robbins and Beveridge established the Academic Freedom Committee that helped Jewish and liberal academics and students to escape from Nazi Germany. Working side by side with John Maynard Keynes during the war, including his ‘active support of Keynes’ ideas on how to pay for the war’,3 Robbins, as director of the Economic Section, ‘was actively committed to planning for a better postwar world’.4 Robbins put the doctrine of ‘opportunity cost’ at the heart of his definition of economics and applied this to the arts, say- ing that we are often faced with a choice between material welfare on the one hand and aesthetic interests on the other and that ‘insofar as activity involves the relinquishment of other desired alternatives, it has an economic aspect’.5 Although expressed in the form of a trade off, Robbins understood that art and economics were at odds: ‘Aesthetics is concerned with certain kinds of ends. The beautiful is an end that offers itself for choice in competition, so to speak, with others. Economics is not concerned at all with any ends as such’.6 Hence, he said, ‘both the services of cooks, and the services of opera dancers

1  Throsby 1994, p. 2. 2  Howson 2011, p. 3. 3  Howson 2011, p. 4. 4  Ibid. 5  Robbins 1932, p. 17. 6  Robbins 1952, p. 30.

are limited in relation to demand and can be put to alternative uses’7 which, for him, is decisive in regard to the question of whether art is amenable to eco- nomic analysis. Nevertheless, Robbins campaigned for the public purchase of land to extend the National Gallery and called on the government to purchase ‘national treasures’ to safeguard them from export, among other things. But Robbins did not write a major economic paper on the economics of art. The reports which he authored or signed for the institutions that he served ‘reveal a tension’, Balisciano and Medema say, ‘between respect for the free market on the one hand and a notion that special exception should be made for the arts on the other’.8 This overt tension between the market and the argument for art as a special case of one sort or another haunts the economics of art in the two or three decades after 1945.

Keynes had played a very significant role in the public funding of art and its institutions over a decade before Robbins gave his talk at the City Museum and Art Gallery in Birmingham, but Throsby overlooks this in his assessment of Robbins’s contribution. In 1946 Keynes had even expressed his preeminent role within British art administration by claiming, to a visiting Russian del- egate, ‘I can almost boast that I am Commissar for Fine Arts in my country’,9 for reasons that will become clear very shortly. Throsby gives Robbins a pivotal role in the formation of cultural economics,10 not only because of his ‘essay’, ‘Art and the State’, published in 1963, but also because Alan Peacock, who, as we will see in the next chapter, is a major figure in the formation of Cultural Economics, had been a junior colleague of Robbins at the lse, and William Baumol had been Robbins’s graduate student at lse. Both Robbins and Keynes worked closely during the Second World War, including their participation in high-level discussions with William Beveridge on the economic feasibility of introducing universal social security, including family allowances and pen- sions. Keynes, who was ‘in a state of wild enthusiasm’11 for the general scheme, was certainly the leading economic voice on the committee. The Beveridge Report, Social Insurance and Allied Services, which established the blueprint for the British welfare state, incorporated Keynesian fiscal regulation.

The welfare state was conceived, planned and the major elements of it built in the aftermath of the Second World War, but, before the outbreak of the First World War, several European countries had already established

7  Robbins 1932, p. 16.

8  Balisciano and Medema in De Marchi and Goodwin 1999, p. 275. 9  Moggridge 1992, p. 705.

10  Throsby 1994, p. 2. 11  Moggridge 1992, p. 706.

some form of what would become the core of the welfare state. Germany led the way, through Bismarck’s strategic outflanking of the socialists in the 1880s by guaranteeing national health insurance, a pension, a minimum wage and workplace regulation, vacation, and unemployment insurance. The Bismarckean prototype of the welfare state was followed by Denmark between 1891 and 1907, Sweden between 1891 and 1913 and Britain between 1908 and 1911. Pigou’s Wealth and Welfare, published in 1912, marks the official birth of welfare economics, but welfare economics would be reborn in the 1930s and was already sketched out in the nineteenth century. Marshall had con- sidered the possibility of state intervention for cheap housing, free meals for children, stabilising employment, and old age pensions (supporting Charles Booth’s pension scheme in 1892), as well as fresh air. In an article published in 1907 Marshall argued that the state should be active in ‘providing green belts around cities . . . by bringing “the beauties of nature and art within the reach of ordinary citizens”, and on providing assistance to make everyone . . . truly educated’.12 Pigou examined the limitations of capitalism and various non- market methods for correcting it, focusing on the problems of ‘market failure’ and what have subsequently been called ‘externalities’. Like Marshall before him, Pigou ‘thought it necessary that “an authority of wider reach” should step in and “tackle the collective problems of beauty, of air and of light”, just as had been done for public utilities such as gas and water’.13 In the 1930s, the ‘New Deal’ introduced to American capitalism safeguards and public policies including welfare and jobs creation, which had existed in Europe for some time. The post-war expansion of social security begins in Great Britain during the war, through ambitious plans for reconstruction, leading to the 1942 publi- cation of the Beveridge Report. Alongside recommendations for dealing with poverty, which Beveridge called ‘Want’, the report called for the integration of social security within a comprehensive universal minimum state provision to combat idleness (that is to say, unemployment), disease, ignorance and squa- lor. Consequently, ‘the voice of Hayek and other opponents to interventionism were largely muffled in the post-war period’,14 while ‘Keynes devised forms of intervention that led to his being portrayed as the father of the welfare state and deficit spending’.15

It is in this context that the Arts Council of Great Britain established a new relationship between art and the state. But it should not be thought that the

12  Groenewegen in Backhouse and Nishiwaza 2010, p. 36. 13  Medema in Backhouse and Nishiwaza 2010, p. 48. 14  Beaud and Dostaler 1997, p. 48.

public subsidy of the arts is the result of the extension of the welfare state to the funding of culture, as if the Bismarckean welfare state was nothing but a smaller version of the Beveridgean welfare state. Richard Titmuss distin- guishes two types of welfare state, one that is restricted (to correcting market failure and assisting deserving groups) and a second that is universalistic and comprehensive.16 Gøsta Esping-Andersen identifies three distinct but overlap- ping political economies of the welfare state: one offers only modest guaran- tees against the effects of the market; another confronts both democracy and the market through the setting up of an elite bureaucratic administration that promotes conservative and traditional social relations; and the third estab- lishes widespread de-commodification through social democracy.17 In think- ing about the economics of art after 1945, in particular how the new provision of state subsidies for the arts transformed the economy (and economics) of art, it is important not to muddle up the various kinds of welfare state into one undifferentiated or vulgar conception of the relationship between the welfare state and the market. It is not a matter of identifying the Arts Council, or public subsidy generally, with one version of the political economy of the welfare state, but to remain alert to the tensions and contradictions entailed in combining rival regimes of conservative, liberal and social democratic state intervention.

At the end of 1939 Lord De La Warr, the President of the Board of Education, approached the Pilgrim Trust with the idea of setting up a committee for the arts. The Committee for the Encouragement of Music and the Arts (cema) was soon established and set out to preserve standards in music, theatre and the visual arts. The following year the Committee became a Council when the Treasury got involved. Keynes, who was the most important English econo- mist of his generation, complained to the council that sponsoring tours is more wasteful than guaranteeing companies against loss. Since this contact between cema and Keynes led in 1941 to the economist being offered the chairmanship of the Council, the consequences of this correspondence were far-reaching: it gave Keynes his ‘first opportunity to shape the domestic post-war world’.18 Keynes was arguably responsible for the ‘revolution’ that brought about the birth of macroeconomics. Neoclassical economists before Keynes neglected aggregate data such as gdp, the unemployment rate and the consumer price index, and Keynesian economics effectively replaced the concern with sectors and firms, which had dominated economics before him, with the analysis of

16  Titmuss in Pierson and Castles 2006, pp. 40–8. 17  See Esping-Andersen 1990.

questions related to growth and employment. Keynes’s rejection of laissez faire coincided with the Great Depression, which appeared to many as a concrete refutation of the ability of the market to self-regulate. At the time, only Marxism had a theory of capitalist crisis, so Keynes’s theory of the limits of unregulated capitalism represented the first mainstream attempt to reflect economically on how capitalism ‘is in many ways extremely objectionable’,19 noting that ‘the existing system seriously misemploys the factors of production’.20 However, Keynes argued that ‘[c]apitalism, wisely managed, can probably be made more efficient for attaining economic ends than any alternative system yet in sight’,21 setting himself against Marxism and neoclassical liberalism at the same time. Or, as Paul Mattick puts it, Keynes’s ‘purpose was to arrest capitalism’s decline and prevent its possible collapse’.22

Keynes became the first Chairman of the Arts Council in 1946, preceding the founding of the National Health Service by two years. It provided state funding for the arts in an unprecedented and unparalleled way. Under the stewardship of Keynes, art entered a new phase in its economic history. ‘Strange patronage of the arts has crept in’,23 Keynes said. The Keynesian introduction of state sub- sidy was unprecedented not by virtue of linking art and the state, but rather because it established a new mode of relationship between them. Raymond Williams recognised the nature of this shift by distinguishing between ‘cultural policy as display’, which embellishes the prevailing social order, and ‘cultural policy “proper” ’. ‘The first sense of cultural policy “proper” is characterized by the system of public patronage of the arts set up in Britain towards the end of the Second World War’.24

Before Keynes, there was no such thing as the public funding of the arts strictly speaking. When the state funded art, such as in Prince Albert’s Great Exhibition of 1851, it did so for direct instrumental national purposes. When the state paid for the Coronation of Queen Elizabeth ii in 1953, too, state fund- ing represents ‘the public pomp of a particular social order’,25 as Williams put it, or ‘the ritual symbolization of nationhood and state power’,26 as Jim McGuigan says. The Arts Council that Keynes set up may achieve these goals

19  Keynes in Medema and Samuels 2003, p. 595. 20  Keynes in Medema and Samuels 2003, p. 606. 21  Keynes in Medema and Samuels 2003, p. 595. 22  Mattick 1980, p. 26.

23  Keynes 1945, p. 31. 24  McGuigan 2004, p. 63.

25  Williams quoted in McGuigan 2004, p. 62. 26  Ibid.

indirectly (not through pomp and the explicit symbolisation of nationhood, but through the development of a national culture, perhaps, or the perception of a vital, innovative national contribution to a world culture), but its principal aim was to support art on its merits. What McGuigan neglects, therefore, when he argues that Williams’s concept of ‘cultural policy “proper” ’ was always ‘questionable’ and ‘may now be passé’, is the distinction between state funding for the arts and public funding for the arts. The fact that the Arts Council was from the outset biased towards highbrow culture rather than working-class culture suggests that the values underpinning the public subsidy of the arts need to be addressed, not that the public funding of the arts is indistinguish- able from the state funding of the arts.

Prior to the seventeenth century there was no public sphere independent of the direct control of the state and church,27 and between the establishment of the ‘bourgeois public sphere’ and the founding of the Keynesian welfare state, there was no mechanism for the public funding of art according to the val- ues of the public sphere. What the Keynesian architecture of the Arts Council deliberately set out to do was not only secure funding for art but to establish an institutional framework for that funding that coincided neither with the state nor with the market. The state would supply the funds, but would otherwise have no direct say in how the money was to be disbursed. One of the models for Keynes’s plan for the Arts Council was the University Grants Committee, which ‘acted as a buffer between the government and the academic institu- tions, allocating public funds in bulk grants to the universities and thereby attempting to remove academic research funding from the political process’.28 It goes without saying, however, that such a funding structure for the arts was not only removed from the political process, but was protected from the mar- ket mechanism too. The quest was to devise a funding structure for the arts that supported the independence of art and the independent assessment of its quality. And if such a quest can be accomplished, the question must be raised as to whether, under these circumstances, we must regard art as economically exceptional in a new way.

The transformation of the relationship between the state and art inaugu- rated by Keynesianism, in fact, established, for the first time, a distinction between public funding and private funding that not only changed the style of state funding, as Williams understood in his distinction between ‘cultural pol- icy as display’ and ‘cultural policy proper’, but established the state as a source of funding unlike any other: public funding. When patronage was the primary

27  See Habermas 1961. 28  Upchurch 2004, p. 213.

means by which artists made their living, money was received from the state and the church in exactly the same way as it was received from wealthy indi- vidual patrons. It was not possible before Keynes to divide arts funding into three categories, the state, the public and the private. In principle, the differ- ence between private and state, on one side, and public funding, on the other, is that between the arbitrary interests of the sovereign, the sovereign state, and the sovereign consumer, on one side, and the interests of all, on the other. Art collectors had never actually enjoyed this sort of sovereignty in the art market (artists had always found ways to resist the market and remain independent) and the state had never represented the whole of society in an impartial or genuinely universal way. There was a long tradition of markets that dealt with rare and precious objects, including paintings and sculpture, but these were not markets for works produced speculatively by living artists. Between the historical emergence of art and the artist at the end of the fourteenth cen- tury, and the development of a market for artworks by living artists in the eigh- teenth century, the production and circulation of art was controlled by guilds and funded, for the more successful artist, by patrons.

It is important to trace the changing relationship between artists and patrons between the fifteenth century and the middle of the twentieth, not only to take note of the distinctive features of each but also, as we will see below, how Keynes’s unprecedented construction of the Arts Council, in fact, had very deep roots in the history of patronage. Ernst Gombrich points out that the ‘emergence of a deliberate patronage of “art”, such as Vasari celebrates, is impossible without the idea of “art” ’.29 This means that there is no patronage of art prior to the mid-fifteenth century. Before this, patronage existed but was not directed at art or artists, but only at certain kinds of eminent religious proj- ects. The Medici family, for instance, were patrons in this earlier sense before they became patrons of art. Initially, the Medici family became patrons by contributing funds to the construction of religious buildings, and their patron- age was organised socially by the church alongside the patronage of the other wealthy families in the town. Patrons in fifteenth-century Italy, Gombrich tells us, were naturally regarded as deserving the full credit for every aspect of the buildings that they funded. Under such circumstances, in which the architects, painters and sculptors who were enlisted to produce the work were credited to the patron, patronage was not a means by which money could be advanced to support the independence of individual producers. To us, and to art histori- ans, the works produced under this form of patronage are attributable to and bear the trace of individual makers. To Florentines at the time, however, the

phrase ‘iste perfecit opus’30 refers to the patron, not the artist. ‘To the fifteenth century this would have been obvious’, Gombrich says: ‘The work of art is the donor’s’.31 Or, in Michael Baxandall’s pithy phrase, ‘in the fifteenth century painting was still too important to be left to the painters’.32 Some artists in fifteenth-century Italy worked for princes who paid them a salary. (Mantegna worked for the Gonzaga Marquises of Mantua for the last 46 years of his life). Most, however, were commissioned to produce individual works according to contracts which, in the first half of the century, specified the subject of the