the bother and humiliation of going through awkward committees to get subsidy. Still, much of
subsidised culture does not (want to) realise that they will loose significance unless they reach out to new
and more diverse audiences and make use of modern marketing techniques. The subsidised arts cater
largely for white, higher educated audiences and not to the huge influx of immigrants in many parts of
Europe. In addition, technological advances change the character of many cultural goods and question the
rationale of government support for the arts. Why (if at all) and how should the government subsidise
production and showing of contemporary arts? Why and how should it finance the collection, upkeep and
display of cultural treasures? How does the political process influence public support for the arts?
Culture pessimists criticise the `market', because it encourages a money-oriented and culturally
impoverished way in which people live together. They fear a world where people, artists and cultural
organisations are merely treated as buyers or sellers of goods and services. The market demands
purchasing power, not background, education or culture. Who pays, joins in. Market forces dumb down
expressions of high culture in order to get mass attention. Culture thus becomes part of the entertainment
industry. These critics prefer culture to be expressed in ivory towers for refined elite audiences that make
an effort to understand what it is all about. Using economics to understand cultural policy is considered
philistine. Ministers of culture are treated with contempt unless they bring more cash and no opinions on
culture or cultural policy are offered. Cultural pessimists share with medics the zealous emphasis on
professional autonomy. Professionals, not politicians must decide which artistic expressions are worthy.
Professional autonomy is valuable until it is abused to defend or boost government subsidies. Economists
tend to count the blessings of the market. The market mechanism often works better and generates higher
welfare than central planning (as often is the case for allocation of arts subsidies). Cowen (1998) argues
that the market produces a great variety and quality of culture, not just homogeneous pulp. It produces
plenty of low culture, but that is what many people want and the market does produce high culture niches
for the elite. Globalisation and Internet allow economies of scale and enable the market to produce
diversity and variety. Robbins (1963) and Peacock (1969) derive the case for cultural policy from
concern with the public interest and the need to correct markets that fail to deliver Pareto-optimal
outcomes. Public goods, externalities, natural monopolies, information asymmetries and frictions thus
need to be considered. One also needs to consider equity, and non-economic issues such as distinction,
connectivity, security and internal motivation.
Some shy away from government interference as this may conflict with creativity or, worse,
artistic freedom. 'State Art' has connotations with the Third Reich, some dictatorships today and even
present-day Italy. Culture may be better served by socially responsible entrepreneurs and civic
responsibility, which has a long tradition in the US and Europe. Grampp (1989) rejects even this. He
claims that the public interest is not served by cultural policy at all, since subsidies only serve the self-