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In some European countries the government relies on the advice of the experts of the Arts Council
when allocating subsidies. A danger is that there is a bias in favour of the established cultural
organisations, hence it is important to ask the Arts Council or the Arts Fund to make room for new
cultural initiatives and to support applications that appeal to broader audiences and, if possible, new and
more diverse audiences. An extra requirement is that the performing arts should obtain at least a certain
percentage of their income from the box office. For example, in the Netherlands cultural organisations
must obtain at least 15 per cent from outside income. Table 4 shows that this is easily satisfied for the
well loved classics played by the baroque orchestra's and to a lesser extent by the symphony orchestra's,
musical ensembles, opera and puppet theatres, but dance, theatre and mime may have difficulty in
satisfying this requirement. The public pays only a small part of the true cost of the performing arts.
People may find an opera ticket of 34 euro expensive, but rarely realise that the full cost is 154 euro.
Similarly, people might pay 8 euro for a theatre ticket without realising that that there is 49 euro subsidy
on that same ticket. This seems hard to justify, since performing arts are neither non-rival nor non-
excludable and thus do not qualify as public goods unless one relies on the social cultural capital
argument. In particular, the social value of theatre may derive from keeping the language alive.
Fifth, there is a strong case for government subsidy for cultural goods with existence, option or
intergenerational value, especially if they contribute to the social stock of cultural capital and are shown
to the public. This applies to subsidising restoration and maintenance of monumental churches, farms,
castles, bridges, locks and landscape values. It also applies to other heritage such as archives of history,
photographs, films and performing arts, libraries, museums and archaeological treasures, particularly if
they are on display to the public. Each of these adds to the social stock of cultural capital and, if they
deteriorate, harm is done to the welfare of future generations. The option value argument says that, even
if one never visits certain parts of the country, one does not want the heritage in those parts to go to the
dogs. Some argue that the opera provides option value and adds to the social stock of capital as well.
Obviously, this is also true for funding experiment and research & development, especially as
fundamental innovations in the arts are very difficult to protect and to make money on through patents
and/or author rights - see the Schumpeterian arguments in Wijnberg (1994, 1995). There is also a strong
case for government support for architecture, spatial planning and arts objects in public spaces, because
these clearly add to the social stock of cultural capital and often to civic pride as well.
Sixth, failures on the supply side may merit government intervention. Cultural goods industries
may have difficulties in being set up, so there may be a case for temporary subsidy. This is the infant-
industry argument. Since many poor countries often have a rich and unique cultural tradition in both
visual and performing arts, there is a case for temporary cultural aid in economic development
programmes. This may boost tourism, yield foreign currency and act as a lever for sustainable growth -