The Demise of the Arts in the Downturn

One of the perhaps forgotten victims of the economic downturn is the arts. A recent article in the Philadelphia Inquirer wrote of severe staff and salary cuts at the Philadelphia Orchestra Association, which has been hammered financially due to lagging giving and an endowment fund which has plummeted in value. The article also outlines a number of "self-inflicted wounds" and missteps by the Orchestra, including a poor perception from music critics and the messy past with former music director Christoph Eschenbach.

The crisis faced by this orchestra as well as other organizations dedicated to the arts does not surprise me. It never escapes me that whenever I go to a Lincoln Center concert, the Playbill has traditionally listed major financial institutions as members in it's highest ring of honor for benefactors. Given the pounding these companies have taken, as well as the trickle-down effect upon consulting companies and other traditionally generous benefactors, I'd assume that giving is constrained.

And then there's the box office phenomena. I was talking to a friend after church on Sunday and somehow the conversation led to the funding of the arts. The discussion actually originated around how free markets, through supply and demand, revealed the true value that society and people place upon certain areas of life. The friend, who is a teacher, pointed out that educators are ridiculously underpaid. I told that I agreed, but felt that people often would say one thing with their lips, and act completely differently with their wallet. If people truly valued education more and showed a willingness to pay more for better services, teachers' salaries would increase.

To reiterate an example from our conversation, let's take the arts. Certain people can say that they value, let's say, classical music, but when push comes to shove, would they rather shell out $100 to go to a Lang Lang concert with a significant other? Or would they rather go to four movies at the theater the same price? Or rent 40 movies at the same price? Or see a Yankees game at the same price? Aggregate that decision for a given population, and you'll see some definition of true market value. There are parallels in education, in terms of people's willingness to pay for supplemental education instead of X, Y and Z. It's a fundamental issue of people "putting their money where their mouth is", and despite lip service from people around how much they support their kids' education and the arts, their money ain't going there.

To clear, I'm not saying that this is how areas such as education and music should be valued. I'm just saying that discretionary income invested really exposes how much society actually does value a given area. And going back to the original point, I think when push comes to shove in a lousy economy, getting people to invest in the arts is tougher. If you argue that non-free market adjusters (essentially subsidies which are not indicative of true market demand) such as government endowments and corporate charitable giving will also decrease, the near-term outlook looks even worse.