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see the World Culture Report, 1998, UNESCO. Tibetan horn players, Balinese dancers and Cape Verdian
singers have unique selling points, which can be popularised through the global media, modern
reproduction methods such as CD's and DVD's and life performances. These artists can help brand their
own country, like the Beatles and Abba did, and thus boost their economies.
Finally, the market tends to avoid risk unless high profits are expected. Avant-garde cultural
activities face bigger credit market constraints than more profitable, run-of-the-mill cultural activities
(musicals, cabaret, bestsellers, etc.). The government should thus stimulate the provision of risk-bearing
capital for risky, valuable cultural activities. Government-funded participation companies may help
getting risk-bearing capital from the market, especially if combined with fiscal incentives. Governments
can also stimulate cultural investment by granting interest rate incentives for cultural projects. Friends of
a particular museum or theatre may then be willing to lend money in the form of soft loans.
4.2 Fallacious demand-side arguments for cultural subsidies
One fallacious argument is that demand for cultural goods depends on their supply and that the
government should thus subsidise supply. Otherwise, people will never know the value of the supply of
cultural goods that may never materialise. Without subsidies for the opera, people will never know that,
say, Gluck's work existed and thus demand will not occur. Still, this does not justify subsidising supply of
high culture unconditionally. It does suggest a boost to the demand for high culture through cultural
education, vouchers for parts of the population that normally do not go to expressions of high culture,
action programmes reaching out to new and more diverse audiences and programming subsidies.
Another fallacious argument is that cultural goods should be for equity and efficiency reasons
affordable to everyone and not only to rich art lovers. The sensible response seems to enforce price
discrimination (e.g., asking season ticket holders to pay more per seat than those who buy last-minute
individual tickets). However, the cultural lobby typically argues that one should lower the price for
everybody by subsidising these cultural goods. This way one reduces the price for everybody, but higher
incomes profit much more from these subsidies than lower incomes. The dead-weight burden of lump-
sum subsidies for the supply of cultural goods may be very high. It is much more efficient to boost
demand among lower incomes or children through education, vouchers, action programmes or other
means. This is an effective way to ensure that people can choose themselves which culture they want to
experience. If one is concerned about a tendency for middle of the road taste at the expense of avant-
garde culture and niches of high culture, teachers and programmers of venues might try to gently
cultivate a taste for experience goods. Supply subsidies allocated by committees of experts typically
stimulate high culture for the elite. Although this seems in line with the moral theological ideas of
Thomas Aquinas that the prominence of someone's position in the community should imply a larger