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Foundations, Market Failures and the Funding of New Music

Published online by Cambridge University Press:  04 March 2022

ERIC DROTT
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Extract

In 1965, a short article entitled ‘On the Performing Arts: An Anatomy of their Economic Problems’ appeared in the American Economic Review, the flagship journal of the American Economic Association.1 Written by two Princeton-affiliated economists, William J. Baumol and William G. Bowen, the article laid out in eight short pages a powerful explanation for why the operating costs of so many performing arts organizations consistently overran their earnings, and why this tendency had become more pronounced over time. The problem was not that lavish budgets were being spent on productions, nor that musicians’ unions had wrung too many concessions from management. Rather, the problem was more prosaic, having to do with ‘differential rates of growth in the economy’.2 To illustrate the argument, Baumol and Bowen asked readers to perform a thought experiment: ‘Think of an economy divided into two sectors: one in which productivity is rising and another where productivity is stable.’3 For the sake of simplicity, they explicitly assumed a number of useful fictions: that labour can easily and frictionlessly move between the two sectors; that wage increases across the board will keep pace with productivity growth (a standard if problematic assumption in modern economic theory);4 and that the monetary supply is sufficiently controlled to maintain overall price stability. What, given these assumptions, is the outcome of such a stark split in the economy? In the productive sector, the increase in wages that workers receive will be offset by increased productivity. In the stagnant sector, wages will rise but output will not. And if an organization is to avoid bankruptcy, the only way to do so is by raising prices to cover the rise in labour costs. (Remember, one of Baumol and Bowen’s working assumptions is that wage increases will keep pace with productivity growth, in both productive and stagnant sectors.) Yet this solution to the problem creates another one, since over time prices in the unproductive sector will increase at a much faster rate than those in the productive one, making the products of the former unaffordable to an increasing number of workers.

Type
Review Article
Information
Journal of the Royal Musical Association , Volume 147 , Issue 1 , May 2022 , pp. 283 - 296
Copyright
© The Author(s), 2022. Published by Cambridge University Press on behalf of The Royal Musical Association

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Footnotes

Many thanks to Sumanth Gopinath, John Turci-Escobar and Marianne Wheeldon for their helpful feedback on this review article.

References

1 Baumol, William J. and Bowen, William G., ‘On the Performing Arts: The Anatomy of their Economic Problems’, American Economic Review, 55/2 (March 1965), 495–502 Google Scholar.

2 Ibid., 499.

3 Ibid.

4 As Jason Smith has observed, the standard model that presumes that wages will rise in tandem with productivity increases entered into mainstream economic thought during the decades after the Second World War, when such a tight coupling of wages to productivity did in fact hold. However, with the passage of time, this has appeared less and less as an iron law of economics and more as a historical exception, the result of labour’s relative power during the post-war period. But as Smith notes, this did not prevent mainstream economists from viewing ‘the hard-won correlation between wages and productivity not as an orchestrated social artifact, but as a norm’. Smith, Smart Machines and Service Work: Automation in an Age of Stagnation (London: Reaktion, 2020), 68.

5 Baumol, William J. and Bowen, William G., Performing Arts – The Economic Dilemma: A Study of Problems Common to Theater, Opera, Music and Dance (New York: Twentieth Century Fund, 1966), 164 Google Scholar.

6 Ibid.

7 Of course, there are technological fixes to the cost disease, with both amplification and sound reproduction offering significant increases to the ‘productivity’ of musical labour. But importantly, such fixes radically redefine music, both ontologically and aesthetically, in ways that may run counter to the prevailing norms of a given genre; and this is indeed the case with much Western art music (including new music), whose continued allegiance to live performance distinguishes it from much post-1955 popular music.

8 For the purposes of this review article, I am using the term ‘new music’ to refer to works of concert music newly composed in or around the time period examined in the three books under consideration (roughly 1950–2000). In brief, this repertoire is defined by a complex and ambivalent relation to the Western art-music tradition, often departing from many of the latter’s inherited aesthetic conventions while adhering to many of its social conventions (for example, a clear division of labour between composer and performers, a reliance on the score as the principal medium of music’s circulation, performances that maintain the trappings of traditional concert music, and so on). The category of new music is of particular concern to the three books reviewed in this article, although it is somewhat less central to Uy’s examination of music patronage in the USA in the 1950s, 1960s and 1970s, which casts a wider net. While specialist composers and performers of new music leaned heavily on new sources of foundation and governmental support then coming online, they were just one group among many that benefited from the increase in patronage in the decades following the Second World War.

9 Michael Sy Uy, ‘The Big Bang of Music Patronage in the United States: The National Endowment for the Arts, the Rockefeller Foundation, and the Ford Foundation’ (Ph.D. dissertation, Harvard University, 2017).

10 Furthermore, this incentive increased over time, as the amount of income eligible for tax deduction rose from 15% in 1917 to 50% by 1969. See Giving in America: Toward a Stronger Voluntary Sector ([Washington DC]: Commission on Private Philanthropy and Public Needs, 1975), <https://archives.iupui.edu/bitstream/handle/2450/889/giving.pdf?sequence=1&isAllowed=y>, 104.

11 Gabrielle Fack, and Landais, Camille, ‘Philanthropy, Tax Policy, and Tax Cheating: A Long-Run Perspective on US Data’, Charitable Giving and Tax Policy: A Historical and Comparative Perspective, ed. Fack and Landais (Oxford: Oxford University Press, 2016), 61–114 (p. 85).CrossRefGoogle Scholar

12 It is worth noting that this dichotomy can (and should) be problematized. After all, a group that possesses ‘interactional expertise’ with respect to a particular field of knowledge (for example, music researchers) may still exhibit ‘contributory expertise’ with respect to the day-to-day activities of their chosen profession (for example, by writing research papers, giving presentations, and so on).

13 Torcuato S. Di Tella, for instance, later served as ambassador to Italy and as Minister of Culture (p. 86).

14 Brenner, Robert, The Economics of Global Turbulence: The Advanced Capitalist Economies from the Long Boom to the Long Downturn (London: Verso, 2006)Google Scholar, chapter 8.

15 On the moral coding of inflation within both neo-liberal and social conservative discourse, see Melinda Cooper, Family Values: Between Neoliberalism and the New Social Conservatism (New York: Zone, 2017), chapter 2.

16 These are points Hilda Baumol and William J. Baumol make in the essay ‘The Family of the Arts’, Inflation and the Performing Arts, ed. Baumol and Baumol (New York: NYU Press, 1984), 3–24 (p. 5).

17 Adkins, Lisa, Cooper, Melinda and Konings, Martijn, The Asset Economy (Cambridge: Polity, 2020), 35 Google Scholar.

18 Inflation and the Performing Arts, held at the University of Nevada at Las Vegas, 6–7 August 1981. The proceedings were published as Inflation and the Performing Arts, ed. Baumol and Baumol.

19 Hilda Baumol, and Baumol, William J., ‘On Finances of the Performing Arts during Stagflation: Some Recent Data’, Journal of Cultural Economics, 4/2 (December 1980), 1–14 Google Scholar (p. 5).

20 Ibid.

21 Tim Barker, ‘Other People’s Blood’, n+1, 34 (2019), <https://www.nplusonemag.com/issue-34/reviews/other-peoples-blood-2/>.

22 Peterson, Richard and Simkus, Albert, ‘How Musical Taste Groups Mark Occupational Status Groups’, Cultivating Differences: Symbolic Boundaries and the Making of Inequality, ed. Lamont, Michele and Fournier, Marcel (Princeton, NJ: Princeton University Press, 1992), 152–68Google Scholar. See also Drott, Eric, ‘What Inclusiveness Excludes’, Journal of the American Musicological Society, 65 (2012), 827–32Google Scholar, and Blake, David, ‘Musicological Omnivory in the Neoliberal University’, Journal of Musicology, 34 (2017), 319–53CrossRefGoogle Scholar.

23 ‘Unearned’ is an unfortunate misnomer for such income, since as anyone who has ever written a grant proposal or engaged in fundraising will know, a lot of work is involved in these activities.

24 <https://live.bangonacan.org/?fbclid=IwAR1o5M7Btu5SuEBgo-fkux6IUFgO9SeK3rS4Ros_kQbdgDgdduxanoqAes0>, accessed 3 October 2021.

25 Ritchey, Marianna, Composing Capital: Classical Music in the Neoliberal Era (Chicago, IL: University of Chicago Press, 2019)CrossRefGoogle Scholar.

26 Moore, Andrea, ‘Neoliberalism and the Musical Entrepreneur’, Journal of the Society for American Music, 10 (2016), 33–53 CrossRefGoogle Scholar; Megan Steigerwald Ille, ‘Bringing Down the House: Situating and Mediating Opera in the Twenty-First Century’ (Ph.D. dissertation, Eastman School of Music, 2018), chapter 3.

27 Vandagriff, Rachel S., ‘ Perspectives and the Patron: Paul Fromm, Milton Babbitt, and Perspectives of New Music’, Journal of the Royal Musical Association, 142 (2017), 327–65CrossRefGoogle Scholar.

28 Not really; this is something of an exaggeration. But there has been a progressive ‘tortoisification’ of the global economy since the early 1970s, as overcapacity in key manufacturing sectors has led to underinvestment in fixed capital and a shift of a growing share of workers into service and informal employment. For a concise discussion of these trends, see Aaron Benanav, Automation and the Future of Work (London: Verso, 2020).