Economics.org.au

— The following 11 essays are the second best compilation of writings on government arts funding in Australia. The best compilation — which is at https://economics.org.au/2011/11/is-australian-culture-a-soft-boring-begging-sheltered-obedience/ — also happens to contain Paddy McGuinness columns. That compilation is even better in light of this one, as this one shows McGuinness to be genuinely open-minded and non-dogmatic in searching for the best research and stance on arts funding.
— The compilation below is also noteworthy for its unusually frank admission as to why McGuinness disagreed that the arts could be funded without government assistance. The click-to-expand section in the middle vertical column of Economics.org.au, titled “What about freeloaders, free riders, externalities, the public goods problem and the necessities of life and markets?,” counters the classic fallacies McGuinness parrots below in favour of government assistance in his otherwise great articles. The later articles in this compilation build on that false premise to claim that certain taxes are necessary and just.

1. Film industry’s attitude is to give the public rubbish (May 1975)
2. The lively arts aren’t so lively in justifying their $20m a year handout (June 1975)
3. Why subsidise the arts? (October 1976)
4. A case of put up or shut up (November 1976)
5. The case for reform in subsidising the arts (July 1978)
6. The economics of the arts (September 1979)
7. [Untitled “McGuinness” column. On creative fellowships, aka “the Keatings”] (May 1989)
8. [Untitled “McGuinness” column. On authors demanding handouts and bookshops of the future.] (December 1989)
9. Righting wrongs of public patronage (September 1990)
10. Scroungers who claim to be artists (February 1993)
11. Put GST on books (September 1998)

1.
P.P. McGuinness, “Film industry’s attitude is to give the public rubbish,”
The National Times, May 5-10, 1975, p. 38.

It is always difficult to identify the dimensions of unemployment in an industry like the film industry, or in any branch of the performing arts (which are currently being investigated by the Industries Assistance Commission), because the nature of the industries is such that there will always be an over-supply of would-be performers.

The loudness of the complaints to be heard at the recent public meeting of people interested in the film industry about unemployment was, therefore, in itself not entirely convincing; especially since the most vocal critics of the Minister for the Media made it quite obvious that they did not give a damn about what the public wants.

Give the public any kind of rubbish so long as it makes money for us and we are protected from the superior, or more appealing, overseas products is the attitude which is prevalent — thought fortunately not universal — among Australian actors and film and television producers.

There is a legitimate case for Government assistance, and indeed for screen and television quotas — but in exchange for such assistance the industry needs to be able to show that it is willing, even if not yet able, to produce worthwhile material, not just indulge their own hobbies at the expense of the public. […]

***
2.
P. P. McGuinness, “The lively arts aren’t so lively in justifying their $20m a year handout,” The National Times, June 9-14, 1975, pp. 39, 47.

Along with all other areas of Government spending, assistance to the arts is going to have to face up this year to the possibility of cuts, not just in the rate of growth of spending (so large was the 1974-75 increase that that would happen in any case) but in real terms. A simple freeze on the present level of appropriations to the Australia Council (formerly the Australian Council for the Arts) at the present figure of $20 million would mean a substantial reduction in its real capacity to assist the various art-forms which come under it at present.

It is therefore rather disturbing to find that with regard to one of the most important, and expensive areas of assistance to the arts, the live performing arts, the council has gone before an official inquiry with what seems to be an ill-prepared case for any subventions by Government to the performing arts. In this they are not alone; the list of submissions to the inquiry makes it quite clear that just about none of those bodies in direct receipt of, or benefiting from, assistance to the performing arts is able to put up any strong argument as to why they should get their subsidies.

The inquiry is that being conducted by the Industries Assistance Commission, and so has much greater significance than just the budgetary difficulties of the present time; the IAC report will have great influence on future Federal Government policies towards the funding of the performing arts — opera, ballet, music and theatre.

A similar inquiry into the assistance needed to promote the production of motion-picture and television programs was conducted by the IAC (then the Tariff Board) a few years ago. It was not surprising that the various bodies, unions, employers, Council for the Arts, etc, were ill-prepared at that time — it was an interesting innovation to refer such an industry for objective investigation of its economic aspects.

So, in effect, the case for assistance and in particular the case for institutional changes had to be argued by default by the board itself. Very little useful analytical work was put up to help it.

One would have hoped that the organisations concerned, particularly those which overlap with the present inquiry, would have learnt from this experience and begun to establish the basis for a case for assistance which did not depend upon simply extending a begging bowl. But this is not the case. Actors’ Equity, for example, has made no submission; and many of the requests which have been made by organisations in the performing arts field have been naïve to the point of sheer absurdity.

Even the executive officer of the Australia Council, a body which has not been short of funds in the last year and which could well have afforded a little investigation into how and why those funds are being dispensed, did not apparently comprehend the basic issues which the presiding Commissioner of the IAC, Mr Richard Boyer, was raising at the opening hearings of the inquiry in Sydney last week.

Now the whole question of the raison d’être for Government support for the performing arts is a difficult one, but it has been discussed from time to time in terms of economic rationality and the fact that spending priorities must be established.

There are two major issues involved: first, whether any Government assistance by way of subsidy or other means should be afforded to the performing arts (which in this context are defined as the arts of high aesthetic standard which, unlike pop concerts, are not normally a profitable commercial enterprise); and second, if assistance is afforded, whether the assistance is “cost-effective” in the sense that the money spent can be shown to be achieving results of the kind desired.

On the first issue, probably the best discussion is that in the book Performing Arts — the Economic Dilemma by W. J. Baumol and W. G. Bowen (New York, 1966). In considering the arguments for government support of the arts it is necessary to have some idea of who gets the benefit of this support, since if only the wealthy benefit, then there is no reason why they should not pay direct the full costs of the art form they enjoy.

Baumol (a very well-known economist) and his colleague conducted a series of surveys of typical audiences in the United States for the various forms of performing arts and found that:

The audience is drawn from an extremely narrow segment of the American population. In the main, it consists of persons who are extraordinarily well educated, whose incomes are very high, who are predominantly in the professions, and who are in their late youth or early middle age.

This pattern was tested against British experience, which proved very similar. It thus seems probable, without substantial evidence to the contrary, that the pattern would be similar in Australia also. If so, the usual arguments about subsidies to the arts benefiting the less well-off must simply be abandoned. A different approach to justifying them must be found: there is no strong case for the public as a whole paying for the pleasures of a tiny elite, unless there can be argued to be a spin-off to the community as a whole.

Baumol summaries the four main types of general benefit which flow from the Arts. There is the consideration of national prestige deriving from the excellence of a country’s performing artists (most Australians are proud of Joan Sutherland, for example).

There is the benefit to future generations: to provide for a flourishing performing arts industry in the present is to lay the basis for improvement in the future. This is connected with the educational contribution — what might be referred to as the enhancement of the quality of life and the maintenance of high standards as a touchstone by which to judge all efforts in the related arts.

All this boils down to saying that if support for the arts is to be justified, it must be in terms of their role as “public goods.” Life defence, the arts must be paid for collectively or not at all. If we want them, public subsidy is necessary to supplement or replace private patronage, since the latter alone would violate the criterion of equality of opportunity of access.

This relates to the second major issue in the present IAC inquiry, the cost-effectiveness of Government subsidies. It is important in this respect to remember that tax deductibility of donations to arts bodies is in itself an indirect subsidy. In this connection an exchange between Dr Battersby of the Council and Mr Boyer of the IAC is important. Dr Battersby: “The motives of people who subsidise the arts are not relevant.”

Mr Boyer: “They are for us.”

If the Council has not realised that the direction of subsidies, direct or indirect, is a matter of public concern then it has not yet even begun to seriously approach its basic responsibility to direct subsidies to those areas which both raise performing standards and disseminate as widely as possible the benefits of the arts to the lower income groups and the relatively deprived areas. (One could cite the disproportionately high subsidy to the ballet as a concrete example of this.)

It is not alone in this failing, which is apparently shared by the British Arts Council. In an article by Mark Blaug, Professor of the Economics of Education at London University in New Society, January 1974, this body’s failing are discussed.

Blaug (and his co-author Karen King, also of London University) conclude:

“Ultimate ends are a matter of value-judgments, but means to achieve ends are capable of being objectively assessed. Often, in public expenditure analysis, the difficulty is that of discovering what the goals really are. The Arts Council, however, as we have emphasised, has in fact declared its objectives, though not always with sufficient precision. But having taken the plunge of being quite specific about its aims, the council has failed to investigate the degree to which its grants have succeeded in achieving the stated aims. It has neatly avoided the issue of self-evaluation up to now by assuming that the arts cannot be assessed “objectively”. This confuses aesthetic judgments with the question of measuring the consequences of disbursing funds in one way rather than in another.

This is precisely the problem which is before the Industries Assistance Commission.

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3.
P.P. McGuinness, “Why subsidise the arts?,”
The National Times, October 18-23, 1976, p. 73.

Now that the initial shock-horror reaction to the Industries Assistance Commission report on assistance to the performing arts has had time to cool a little, it might be worthwhile to consider just what the IAC had to say, and what the argument is about.

In the first place, we can dismiss the accusations of philistinism directed against the two people who conducted the inquiry. The true philistines are those who refuse to accept that serious intellectual discussion of the desirability or otherwise of present subsidies to dance, drama and music is even possible, and who know nothing and want to know nothing about the applicability of economic and welfare criteria to the subsidisation of the arts.

Any serious economic, engineer, mathematician, or businessman is deficient if he is ignorant about, or uninterested in, the arts. But this cuts both ways. The performers and consumers of artistic endeavour are no less blameworthy when they profess their ignorance of scientific, technical or economic matters. An ignoramus is an ignoramus, whether artistically or mathematically talented.

So when there is an unreasoning attack on a body like the IAC which attempts to conduct a rational discussion on the question of how, and to what extent, the performing arts should be subsidised by government, then one must wonder just how much the attackers actually understand or wish to understand what the IAC is talking about.

Of course, abuse of the IAC is a popular Australian pastime among businessmen who do not want the forms of assistance by way of tariffs and other import restrictions called into question. The unions also share this tendency, since it is much easier to screw a wage increase out of an industry if the cost of that increase can be passed on to the community as a whole in the absence of import competition.

The outraged scream of the injured hip pocket nerve is something which economic commentators find only too familiar in Australia; but of course those with intellectual and artistic pretensions do not think the rationale of all this concerns them. Their own handouts, they hitherto had thought, were beyond question.

So now the IAC has committed the dreadful blasphemy of pointing out that the arguments which have been advanced in favour of public subsidies to ballet, opera, theatre and music are not terribly strong, that there must be a limit to how much is spent in this way, and the limit ought to be a matter of public debate, and what is actually spent might possibly not be spent in the best possible way.

Why the small minority of high income earners who are the principal beneficiaries of public subsidies to the esoteric arts such as classical ballet should expect their pleasures to be subsidised out of general tax revenue can only be explained in terms of the history of such pursuits. It was common a century ago for opera and ballet to be very much the idle pleasure of the wealthy, leisured aristocracy.

These made little distinction between the enormous revenues which they derived from landed estates, and the disbursement of public funds. As the former has diminished, their heirs have expected that the difference will be taken up by the latter.

And, with all the talk nowadays about the pursuit of excellence and high artistic standards, it is as well to remind oneself of the attitudes of such traditional patrons of opera and ballet to those artforms. The performances were primarily a social occasion, and the female performers were the sexual prey of the aristocrats.

In the case of the ballet, the inferior social status of the performers was emphasised by the fact that the physical training of the ballerinas was a crazy perversion of normal human development, which had to be begun at an extremely tender age. Anybody who has read Zelda Fitzgerald’s description in her autobiography of how she attempted to become a professional ballet dancer will realise the truth of this.

This is not to deny the great artistic merit which can be found in ballet; but even this is not an unmixed good thing. Naturally the highly trained performers, like swimmers, are too immersed in their gruelling lives to realise what a ride they are being taken for until they suddenly find themselves no longer able to perform at their peak.

Classical ballet is of course an extreme case; the same strictures do not apply, or at least much less so, to other forms of dance, to theatre and to large-orchestra music. But it is not possible to ignore the social context from which all these artforms sprang — their indefinite perpetuation is not necessarily a matter of public concern.

There are other forms in which artistic excellence can flourish. These accidental forms are not the sole vehicles for such excellence. And, as the IAC points out, there may be better ways of disseminating such excellence than spectacular and sumptuous performances in lavish buildings accessible only to a few.

However, this is not to say that the IAC’s arguments are altogether convincing. In particular, their rather naïve endorsement of a free market model for the arts, in which consumer preferences as expressed by a willingness to pay the full costs of performances in the seat price is the major criterion, cannot be accepted.

First, it is simply the case that there are many areas of Government expenditure which most people do not want to be subject to market influences. They feel that the individual expression of preferences through spending will not give the overall result that they want. Many of the adherents and advocates of the “consumer sovereignty” notion are expressing an ideological position, not an analysis of how markets actually work.

There is an important difference between the proposition that whether we like it or not legal or illegal markets will always exist and cannot be ignored, and the proposition that markets are both desirable and efficient. The former is always true, the latter is only sometimes true.

Thus it is a pity that the Industries Assistance Commission seems to have given very little attention to that area of economic analysis which is often referred to as the theory of public goods, or theory of public choice in non-market situations. Owing to the ideological preconceptions of most orthodox economists, the large non-market sector of the economy was for years not subject to rational analysis, and even now there is a strong temptation to import much of the trivial analytical apparatus of theoretical micro-economics into the subject.

Essentially, the theory of public choice recognises the fact that there are certain decisions which might not be taken if they are left to individual spending decisions, but which a community can agree collectively are desirable. The classical example is defence; a better one is that put forward by the great Scottish economist and philosopher, David Hume in 1740 (in his A Treatise of Human Nature).

Hume cited the example of a meadow, the value of which could be increased by drainage to a much greater extent than the cost of the drainage works. If the meadow is owned by one person, there is no problem. If, however, it is owned by 20 persons, one of them might not agree that the works are worth his expenditure, and will hope for a free ride on the expenditure of others. Clearly the decision to undertake the works and finishing them by a levy on all owners must be a collective one.

Now, it is not enough for the IAC to argue that it is possible for the performing arts to be financed in the market, and the result of individual spending decisions will determine whether people want them sufficiently to pay for them. For in cases like Hume’s, the market mechanism cannot operate. It is a matter for decision by the political process.

And this is really what the argument is about. Some of the critics of the IAC’s report do not really want the political process to determine the spending decision as regards the existing spending pattern on the performing arts to be made in a calm and rational atmosphere, with the merits and demerits of the various items carefully considered.

The utter dearth of substantial argument offered to the IAC inquiry by the defenders of the existing system is evidence of this. Given their refusal to enter the arena of open and sensible political discussion, the IAC had to operate almost in a vacuum, and not surprisingly it can often have made judgments which on balance might not be convincing.

Nor was it helped much by economists. There are very few academic economists in Australia familiar with the intricacies of the theory of public choice, and even fewer — I can think, apart of course from Dr Coombs, of only one who has written on the subject of the economics of the performing arts in Australia, and that is Professor David Throsby of Macquarie University — who are familiar with the topic of this inquiry.

Nor, glancing through the list of witnesses, could I find evidence that any independent economist had even given assistance to the inquiry. So, although the report represents the best efforts of two intelligent and cultivated men plus the work of IAC staff, it is not surprising that it cannot be said to be the last word on the subject.

But it would be a pity if the hysterical philistine response to a serious attempt to deal with a serious subject should vitiate the constructive discussion on the content of the draft which they have presented.

***
4.
P.P. McGuinness, “A case of put up or shut up,”
The National Times, November 8-13, 1976, p. 62.

The arrogant little mandarins of the arts probably do not realise it, but the Industries Assistance Commission inquiry into the performing arts — which they are currently reviling or boycotting — has the power to compel witnesses to appear, to give evidence, answer questions, open their books, and treat the commission with respect.

Non-compliance can incur a penalty of $1,000 or three months’ imprisonment.

These extensive powers of the IAC were inherited from its predecessor, the Tariff Board, and have been on the statute book for many years, but they have never been used.

Naturally, the IAC would prefer not to use such powers.

This is because the representatives of industry who have appeared from time to time before the commission seeking increases in tariffs, protection from alleged dumping by overseas suppliers to the Australian market, or other protection, have been aware that a refusal to give evidence before the IAC would not lead the Government to look kindly upon their requests.

There have been numerous complaints about the IAC and its approach to the question of assistance, and much severe and hostile criticism.

This is perfectly legitimate in a free community, and the commission chairman (both the present one, Mr Bill McKinnon and his predecessor, Mr Alf Rattigan) has not been averse to entering into public controversy.

But, much as many industry interests would like the IAC to be closed down, emasculated or muzzled, they have sufficient commonsense to realise that as long as it exists in its present form, and they are appearing before it with requests, they had better treat it with respect.

If a company simply refuses to appear before the IAC, it knows it would simply be asking for the obvious recommendation — that no assistance should be given, since the company had no case to put in support of it.

Thus the general manager of the Australian Opera, by deciding not to appear before the IAC last week, was endangering his pocket (or freedom) and, more seriously, the public funds which at present go to support the opera.

For, if he feels that he has no case to put on the draft report of the IAC, then why should the opera receive a public handout?

The IAC inquiry is a properly constituted public inquiry which was charged by an elected government to investigate an aspect of public expenditure.

It ill-behoves a mendicant body to treat with contempt such an inquiry.

The matter of behaviour towards government-appointed inquiries goes beyond the issue of the IAC. Another case in point is the inquiry into the environmental aspects of sand-mining on Fraser Island. Here the company, D.M. Minerals (Dilinghum-Murphyore) refused to give evidence before the (reconstituted) committee of inquiry.

Whatever case they might have for continuing their mining activities, the fact that they were not prepared to present it in public must ease doubt on its strength.

And further, since the Government had appointed this inquiry precisely to evaluate the case for and against sand-mining, the refusal of the company to present a case must simply mean that it does not wish to co-operate.

Thus, in Parliament last Wednesday, the Prime Minister, Mr Fraser, very properly pointed out that, with respect to Fraser Island, interested parties had had the opportunity to present their views, and that was an end to it.

“I urge caution,” said Mr Fraser, “against creating circumstances in which by one means or another, after an inquiry has been properly constituted and has sought evidence from all those who might be available to give evidence … people are given a second go at the conclusions.”

If that were to happen, the business of the Commonwealth would be “clogged up with inquiry after inquiry on top of inquiry.”

Thus, although the Prime Minister did say that he did not agree with the IAC draft report on the performing arts (rather hastily and before he had seen it) this does not mean that he will be sympathetic to those who refused to participate fully in the IAC inquiry, and who then subsequently presented demands to the Government.

Still less would he be inclined to view with favour those public servants who tried to obstruct an inquiry into their own stewardship of public funds.

And the minister assisting the Prime Minister in the arts, Mr Tony Staley, also made it quite clear in an interview last week that he was concerned that there should be oversight of spending on the arts.

He said: “People who are subsidised will try to get away with murder.”

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5.
P.P. McGuinness, “The case for reform in subsidising the arts,”
The National Times, week ending July 29, 1978, p. 50.

The Industries Assistance Commission 1976 report on the performing arts aroused considerable anger among those supporters or performers who believed that the arts have an unquestionable claim upon public funds.

But at no time was there any serious attempt by the critics of the IAC report to present a reasoned critique of its arguments, so as to provide a better guide for public policy towards subsidy of the arts. Rather, the preference seemed to be for a continuation of large subsidies to the traditional performing arts, with log-rolling as the major method of determining the allocation of funds.

Much of the more sensible discussion of the report centred around the thesis put forward in a 1966 American book, Performing Arts: the Economic Dilemma. The authors of this book, W. J. Baumol and W. G. Bowen, pointed to the main cause of the difficulties of the performing arts in financial terms as arising from rising labour costs.

The performing arts, like other service activities, are labour-intensive, and unlike office work for example, there is little prospect of substituting capital for labour. So as productivity, and the wage level, in the economy as a whole rises — so do the costs of the performing arts. But there are reasons why productivity cannot rise — and so admission prices must rise. Because rising prices discourage attendance, without subsidy the performing arts would, therefore, decline.

The IAC report treated this argument with some reserve. And a recent re-examination of the Baumol-Bowen thesis in the American context tends to support the IAC position. This is a new book by Professor Dick Netzer, The Subsidized Muse — public support for the arts in the United States (Cambridge University Press).

Netzer’s word tends to lead to the following major conclusions. Additional assistance to the performing arts has led to very little increase in the output or the accessibility of the arts. Rather, it has given rise to an upsurge of militancy on the part of claimant bodies and performers’ unions, with the result that there has been an increase in the employment of administrative staff, average wages for performers, and the proportion in full-time employment.

That is, the benefit of the increased subsidies has accrued to the producers and not the consumers. There may indeed by good reasons why this should take place — but it was not the intended result.

On the matter of admission prices and attendances, Netzer calculates income and price elasticities — that is, the effect of rising incomes on spending on admissions, and the effect of rising admission prices when income is constant — and concludes that there is scope for a substantial increase in prices.

That is, price increases would reduce audiences by an amount insufficient to offset the increase in revenue — on the basis of his calculations he suggests that an increase of ticket prices by 21.5 per cent more than the general increase of prices in the economy might cause a 5.4 per cent decline in attendances.

“Neither this estimated rise in relative ticket prices,” he writes, “nor the decline in attendance seems large enough, in the absence of other considerations, to constitute an iron-clad case for public intervention.”

Netzer also points out that the spread between minimum and maximum ticket prices has often not been large — maximum prices have been quite low, such that most of the effective subsidy on ticket prices benefits high rather than low-income audiences. There is a case for very much higher maximum ticket prices, accompanied by more direct subsidies to encourage “audience development.”

On the Baumol-Bowen argument with respect to productivity in the performing arguments [sic: I think instead of “arguments” it is meant to read “arts”; a Freudian slip?], Netzer points out that there is in fact considerable scope for increased technical efficiency in the arts, in that production costs can be reduced by more efficient design of theatres and control of storage; and more importantly broadcasting and recording of performances can greatly increase the dissemination, and therefore the productivity in terms of audience penetration, of individual performances.

This is a point which the IAC made very strongly in its report. That there are definite economies of scale in the performing arts, and relatively inelastic demand, is pointed out in a piece on the performing arts by David Throsby in a recent book, Economics of the Australian Service Sector (Croom Helm, edited by K. A. Tucker).

There is, according to Netzer, a strong case for public support of the arts. But there is also evidence that public policy towards the arts with respect to subsidies has often involved wasteful and unnecessary spending, which has often been misdirected and has not in fact benefited those groups upon which the general argument in favour of the arts as a “merit good” depends.

Rather, there has been a tendency for the subsidies to benefit a relatively small number of high-income earners, to the extent that they are not merely swallowed up in higher wages and administrative costs. And often public funds have favoured “visibility,” in that bricks and mortar can at least be pointed to as material evidence of subsidy.

The resulting high operating and maintenance costs can tend to impoverish the arts groups using them. The Sydney Opera House is a classic example of this kind of misdirection of public subsidy funds.

Netzer argues that one area in which public subsidies, which cannot grow indefinitely, to the arts might be well spent is in encouraging experiments in pricing policies so as to achieve an optimal mix of box-office revenue and accessibility of performances to those not habitually in contact with the arts.

Thus the initial resistance of those high-income habituees who believe that low ticket prices are a “right” can cause an initial fall in revenue against which companies could be given a cash guarantee. (In Australian terms, this belief that the privileged have a special right of access is bolstered by the subscription system which could well be abolished.)

To point to such problems is not a matter of philistinism, but is rather an attempt to put a case for public subsidy to the arts which will be effective and not so subject to abuse as to provoke a public backlash. Such a backlash is partly evident in Australia in the move to extend tax concessions for gifts to art galleries and museums — which is one way of ensuring that the taste only of the high income and privileged prevail.

Netzer concludes:

Today affection for and experience of the arts in the United States is clearly widespread but shallow. This shallowness suggests the need for care in the nurture of what is rather a new thing, public support of the arts, lest the majority without a strong commitment to the arts decide this use of tax money is not such a splendid notion after all.

My hope is in fact that this study will bolster the case for continuing public support. The arts are not on the verge of general collapse; instead they are flourishing. Limited amounts of public funds should be deployed to forestall the occasional true financial crises in worthy undertakings and, generally, to foster arts activities whenever marginal infusions of subsidy are not merely desirable but really essential for the preservation, enhancement and diffusion of our cultural heritage.

The pity of it all is that the IAC’s arguments, and Netzer’s, are virtually the opposite of the firm beliefs of the proud little mandarins of the arts in Australia. It is they who constitute the true threat to public subsidy and the flourishing of the arts.

***
6.
P.P. McGuinness, “The economics of the Arts,”
The National Times, week ending September 29, 1979, p. 66.

There is a painting in the Kenwood House gallery on Hampstead Heath, London, entitled Venus Chiding Cupid for Learning to Cast Accounts. It sums up neatly the attitude of the arts establishments to any attempt to evaluate what they do, and determine whether and to what extent they are deserving of public funds.

At one time, any questioning of subsidies paid to, for example, the ballet was met with a flurry of behind the scenes lobbying, abuse of the “accountants,” and oceans of high minded and more or less eloquent prose on the importance of excellence. Sometimes this prose has been eloquent and moving; it still rarely provides any answers.

However, the climate has changed considerably, throughout western countries at least (the autocratic governments are the only remaining unquestioned builders of artistic monuments, which is one of the reasons they are so admired by the idle patrons of the arts who sit on committees).

Even the Australia Council, which used to be a bastion of the arrogant assumption that it was entitled to dispense public money without accountability (as distinct from getting the accounts right) has shifted its position.

The Council last week issued an interim review in which it declared its intention of carrying out a major review of the costs and results of its various funding programs over the next twelve months.

Perhaps the most interesting feature of this review is that the Australia Council has decided that the Opera is getting too much money.

Probably because they are the most expensive, most of the attention has been paid to the funding of the arts and related activities has been concentrated on the performing arts specialising in live performances — dance, music, opera, theatre.

It is very far from being a coincidence that these are also the arts which in their most “excellent” versions are the least accessible to, or patronised by, the general public.

This was one of the issues which concerned the Industries Assistance Commission in its 1977 report on assistance to the performing arts.

It is clear that the distributional effect of much of the expenditure on these arts is tantamount to using general taxation revenues to subsidise the pleasures of the relatively well-off. (At this point the patrons of the ballet, etc., usually start talking about students and other low income earners — but the weight of the evidence is against them.)

Despite the angry reaction which it provoked, the IAC report has contributed a great deal to the improvement of the standard of the argument about the level, allocation and purposes of arts funding in Australia.

To it must now be added a new book on The Economics of the Performing Arts, by David Throsby and Glenn Withers, of Macquarie University (Edward Arnold Australia, HB $37.50).

This is a comparative study of the funding of the performing arts in the USA, Britain, Australia, and some other countries with emphasis on Australia.

It is one of the most thorough examinations of the issues yet to have been published, and ought now to be compulsory reading for all those who want to participate in the debate on public policy towards the arts (given its extraordinary price, it will probably require a special budget allocation in itself).

Throsby and Withers go over the whole range of arguments about the costs and benefits, the attendance, the methods of funding,, the reasons for funding and the economic efficiency of the performing arts.

Being academic economists, they also include some careful technical digressions of great triviality which, fortunately, can be ignored since they have no bearing on the central issues.

Certain omissions are, however, important. One of these is the assumption that it is sensible, or even possible, to discuss the performing arts without including the areas of film, television and recording.

This arises out of the kind of snobbishness which refers for example to the “legitimate” theatre.

It has some basis, in that theatre and film are two very different arts, and that there is a special quality of audience participation (sometimes) in live theatre — but the overlap between film and theatre is so great as to make discussion of the latter without taking account of the former, especially in Australia, totally inadequate.

One of the reasons for this is in the extensive overlap of performers. And here the book suffers from another major deficiency as an economic study, in that it totally ignores the labour market aspects of the performing arts (live and recorded).

Unless another mention has escaped my notice, the word “unions” appears only ones in the book (on page 242), and then only in the context of imported performers.

The role of unions like the Actors’ Equity and the Musicians Union is of considerable significance for any analysis of the economics of the arts in Australia — it is a role which has been ambiguous in its impact, both beneficial and harmful.

Related to this is the failure (and, to be fair, the statistics are probably not good enough, or even available, to be suitable for the kind of number-crunching which is the core of the authors’ method) to raise the question of how the increase in arts funding in recent years has been spent — has it really increased output (in quantity and quality), or has it simply increased performers’ (and technicians’) incomes?

That the latter has been a major effect on increased funding in the USA has been pointed out in another recent economic study of public support for the arts, Dick Netzer’s The Subsidized Muse (Cambridge University Press, 1978).

Although this is included in Throsby and Withers’ bibliography, it is not discussed, evidently because it came too late.

It may be, of course, that improvement in performers’ incomes contributes directly to improvement in the overall standard of performance.

This issue is central to the discussion of the funding, and economics, of the arts generally — and to the reasons for expecting that the contribution of the taxpayer may increasingly have to supplement direct payments for attendances.

However, Throsby and Withers contest the now orthodox belief that the “funding gap” of the performing arts must necessarily increase as a result of the labour-intensive nature of their product. Rising real incomes and changing tastes tend to offset this factor.

And, interestingly, they produce evidence that far from the arts doing badly with respect to public funds, it has been much faster than GNP in give English speaking countries examined. In all but one of them, Canada, funding for the arts has risen faster than overall government expenditure.

Like the Australia Council, the authors believe that the opera is probably getting more than it deserves, and they argue for an increase in the funding for forms like modern dance, drama and chamber music at the expense of opera, ballet and orchestral music.

This problem of the allocation of public funds is of course one of the most sensitive, and least susceptible to the application of methods of economic analysis.

It basically comes down to matters of judgment regarding the importance of the art forms, the benefits which they give to the nation which could not be obtained without subsidy, and their special merit. Income distribution is also highly relevant.

The authors argue that taxation concessions are an under-utilised form of assistance to the arts in Australia. Studies elsewhere indicate that for every dollar of tax revenue forgone by way of concessions to donors to the arts, more than a dollar is forthcoming from the private sector.

Against this, of course, it can be pointed out that the direction of such funds will greatly favour the higher income groups’ tastes.

Like the IAC report, the authors also favour an expansion of education spending directed towards education in the appreciation of the arts. They do not, however, seriously consider in this respect the bearing of Fred Hirsch’s comment (in his book The Social Limits to Growth) on “positional goods.”

It could be argued that a great part of the value of ballet and opera to the people who argue for greater public funding is precisely their positional value, that is the fact that their enjoyment is an elitist matter, from which the vast majority of the population is (necessarily) excluded.

Despite its deficiencies, this book is the most careful and thorough examination to date of the economic, and many related, issues involved in public policy towards the arts.

Certainly, after this we need never again experience the spectacle of the sustained impertinence of the arts administrators shown to the IAC during its inquiry into the performing arts.

What we need now is an equally thorough and well-researched work on the politics of the arts.

***
7.
Padraic P. McGuinness, untitled “McGuinness” column,
The Australian, May 31, 1989, p. 2.

It was inevitable that the announcement of the new Creative Fellowships in the arts would be followed by a chorus of whingeing, knocking and complaints.

That is how the world of literature and the arts in Australia, and its critical hangers-on, operates.

The scheme, announced recently by the Treasurer, Paul Keating, will guarantee an income of $50,000 a year for a minimum of four years to artists and writers of international calibre making their home in Australia. Seven recipients were named.

The first lot of complaints was predictable: where are the ethnics, the women, the Aborigines … and, no doubt, the next lot will be supposed to have due representation of lesbians, new-agers, animal liberationists or whatever. In fact, as was smartly pointed out, one of the seven, Jack Davis, is in fact an Aborigine.

So why no women, etc? One obvious answer is that the scheme has only just begun, and there are up to 13 more fellowships to be awarded. Another is that no group should have a right to representation on the basis of irrelevant characteristics such as race, sex, ethnic origin, etc, in a set of awards that are to be made on merit.

This is the best thing about the scheme, and what will earn it the most flak. It is unashamedly a scheme designed to select writers and artists who are clearly of the first rank, not just in Australia but in the world. Doubtless there are some women in Australia who meet these criteria. But it would have been invidious in the extreme to begin by misrepresenting the whole point of the scheme by attempting to obtain a balance in the first group.

The purpose of the scheme, which Mr Keating described as “only just for the stars”, is to pay a guaranteed income, totally without conditions, for four years (and maybe more) to creative artists and performers who are known high quality producers. It is not to encourage or seek out merit, but to provide an assured income to established merit.

These are all known and proven producers. They can be trusted to continue to do what they are doing without any bureaucrats breathing down their necks, and without any requirement to design, submit and complete a particular project. Does anyone think a poet such as Les Murray will stop writing poetry that is acknowledged all over the world as some of the best being written in English simply because he will have a rather higher living standard for a while? And if one day a writer or musician simply takes the money and gives up work, so what? They have already justified themselves.

The point is that all those selected so far are people whose talent is such that they could easily earn much more in more commercially oriented activities, or, even just in ordinary jobs such as school-teaching, with much less effort and more security. But for whatever reason they have chosen paths that require hard work and dedication with little in the way of financial rewards. We need such people in Australia, and they ought to be encouraged to stay here — as ought many who hitherto have given up in despair and become expatriates as the only one to earn a decent living. And $50,000 a year (before tax) is not such a high income, especially with no guarantee of extension beyond that.

Second rate academics often earn much more; the best academics, unfortunately, also often do not earn much more. It is accepted that the best scientific researchers should not be burdened with teaching while they get on with their work; literary and artistic work of a high order is worth as much at least as scientific work.

These fellowships, too, have the advantage of having no conditions as to work or place of residence. The universities and colleges have in recent years set themselves up as patrons of the arts, sponsoring various kinds of poets with titles such as writer or artist in residence.

It is probably better for the most creative talents to be away from the universities, so that they do not have to risk contamination by the petty bureaucracy and jealousies of such institutions, and the inevitably patronising attitudes that academics have towards those whose talent is more natural and greater.

The scheme is imaginative and generous in conception. It also bypasses to a large extent the bureaucratic processes that have grown up within the Australia Council, and the demands made upon that body. Mr Keating made his lack of respect for the council very obvious when announcing the fellowships; but was Machiavellian enough to place them under the aegis of the council so as to give it an interest in protecting the scheme.

However, it is clear that the Australia Council has willy-nilly become a hotbed of conflicting claims on other than literary and artistic grounds. There are absurdities such as the counting of awards, to see whether the sex balance corresponds with that of the community as a whole, or claims that Sydney is favoured over Melbourne.

There is no way of achieving a “fair” balance — talent is intrinsically unfair in the way in which it is distributed. To take considerations of sex or race in to account is to set up a sheltered workshop for writers and artists of the “protected” classifications, not to benefit them in the long run, and above all not to benefit the community that is paying.

No amount of gobbledegook about affirmative action, about gender-bias, about institutional racism, about the hegemony of the dominant culture, can overcome the basic fact that talent is elitist and needs to be fostered regardless of other criteria.

The people awarding the new fellowships will, of course, be criticised for favouritism, for nepotism, for pushing the barrows of their mates. This is unavoidable — the last thing those who wish for the awards and do not receive them want to admit is that they might have been refused them on grounds simply of relative merit.

That Donald Horne, chairman of the fellowships panel as well as of the Australia Council, arranged when he was editor to pay Frank Moorhouse as a struggling writer $50 a week for contributions to The Bulletin is not, however, evidence of favouritism, unless it is favouritism to recognise and encourage talent.

However, the only real criticism of these fellowships is that they encourage people to think of artistic and literary merit as necessarily incompatible with the market place. This need not be so, as writers and musicians have often shown. And at least the judgments of the market place are not subject to personal favouritism, jobs for the boys, or the rorting of public funds.

Patronage of the arts by rich individuals and by the State has, however, always played an important role in the development of the arts. There is nothing at all wrong in this new small intervention to compensate for what is seen as market failure. It is after all compensating also for the failure of other types of government intervention.

***
8.
Padraic P. McGuinness, untitled “McGuinness” column,
The Weekend Australian, December 9-10, 1989, p. 2.

If there is one lesson which political parties ought to have learned from the electoral experience of the last 15 years it is that the massed ranks of writers, artists and so on have very little influence over the thinking of the electorate — which may perhaps be a pity.

But it does mean that the Hawke Government ought not to be worried about the campaign presently being conducted by Australian writers against proposals to abolish the subjection of the Australian book market to the whims of British publishers through territorial copyright deals, by allowing free import of United States editions of books.

However, it is the way of governments, especially Labor governments, to be impressed by distinguished authors who start demanding this or that privilege in the name of culture.

The grasp of politicians on the realities of culture is never firm.

The Prices Surveillance Authority, headed by an economist with long experience in the analysis of markets, has argued that there is no good reason for maintaining the British publishers’ right to exclude US-published books from our market. Donald Horne, chairman of the Australia Council, had to resort in yesterday’s Australian to denigrating the competence of that body in economics — something which he is ill-qualified to judge. Moreover, clucking like a Victorian egg producer, he asserted that it did not know enough about “culture” to make the judgments it did.

But, as was pointed out many years ago, you do not have to be a hen to know a rotten egg when you come across one.

The protection racket shared between British publishers and a small number of Australian authors who join in exploiting Australian readers is doomed anyway. Typically, it is rapidly advancing technology which will finish off the book monopoly, just as it is eroding the communications monopolies.

Let us indulge in a little exercise in science fiction. Consider the bookseller of the 21st century. He (or she — we must not forget those in the trade such as the excellent Eve Abbey) will be faced with a publishing industry which has been bypassed by computer and desk-top publishing technology. In my ideal bookshop of the future, most books will be kept in full text on CD-ROM (compact disc read-only memory) or similar computer memory devices, or in the memory of a central computer like that which will eventually be owned by the great libraries, like the State Library of NSW.

In the libraries books, especially rare and old ones, will not be kept on the shelves, but preserved in the bowels of the earth in rooms in which the atmosphere which causes paper to decay will be replaced by preservative gases. Their texts will have been read into the central computer, and readers will either access this on screen or read printouts. Only specialists would ever need to see original editions.

Bookshops might hold on their shelves only a single copy of each book they stock, for inspection by browsers. When a decision was made to buy a book, it would be printed out on a laser printer, and bound on the premises.

Printers which could produce a perfect print-out of standard book size in a matter of 10 minutes will be available within a couple of years. Binding in paperback-style covers will be equally easy. In the case of popular books, of course, a bookseller might decide to order physical copies from a publisher, or do the work himself.

A new boom in the craft of producing fine books will take place — customers who want a book for keeping on home shelves or for a gift will be able to order a special design, special paper and quality binding. The production and design of books will once again become a cottage industry.

In the case of books which are out of copyright, the situation will not be very different from that at present. You can find in Abbey’s bookshop in Sydney, for example, several paperback editions of Jane Austen’s books, several relatively cheap collected editions with an expensive high quality special collected edition. (Once when I was there a staff member was ringing a Sydney lawyer to tell him that his order for such an edition had just arrived.) Obviously, for readers like myself who do not care much about appearance, but more for convenience, booksellers will print out what is wanted from their CD-ROMs.

Ultimately, deals will be done with the State Library, and the really great libraries of the world like the British Library, or the Lenin Library in Moscow, or the Library of Congress in Washington, or the new great library which President Mitterand has planned for Paris, to go on-line for a fee to their computers and print out anything they hold which is out of copyright.

The booksellers who know their business will have the costs of holding stock slashed to virtually nothing — they will be selling their expertise in using catalogues and on-line downloading from libraries.

But once readers can buy books like this they will not be too happy with the cosy protection arrangements of authors and publishers. A black market in books will grow up — it will be easy to scan any text into a computer and print out multiple copies. Readers in Australia will be able to access data-bases in the US which UK publishers are trying to keep from us, or to overcharge us for. Or you will be able to order a diskette from overseas and print out your own copy, or privately (and illegally) sell small editions of new books.

The point is that copyright as we know it cannot survive long into the next century. It will either be changed to accommodate the new technology or it will be bypassed by it. While established writers are trying to keep the traditional market closed, new writers will be happy to sign deals which will ensure that their work is disseminated widely by all obtainable means.

So in the not too distant future, the bookshop as we know it, and the whole economic structure of the book publishing industry which presently exists, is going to be revolutionised. Meanwhile, Donald Horne, Morris West and others in the name of cultural protectionism will go on bleating about the need for controls, protective barriers, and more and more subsidies. These enlightened people who would hasten to denounce aggressive or chauvinistic nationalism are stuck in the oldest and narrowest nationalistic groove of all.

Of course they would not suggest that the writers who benefit from this racket should stay in Australia to spend their ill-gotten gains, would they? Or do they propose to stop Australian writers who strike it rich from going to live in Italy, or the South of France, or Norfolk Island?

There are indeed good reasons for fostering Australian writing (and other arts and crafts) through subsidies, Australia Council handouts, even tax concessions. The scheme set up by the Treasurer to pay substantial stipends to successful practitioners in the arts who have proved their worth and productivity is also a good thing.

But a protection racket, like the UK publishers’ stranglehold on the Australian market because of the deals they do with US publishers on territorial copyrights cannot be justified. It rips off Australian readers to the benefit of a few Australian writers, and in a way which not only makes it impossible to measure the cost (which is the idea) but also rewards the successful writers of bodice-rippers and airport novels most.

Is that what Donald means by cultural independence?

***
9.
Padraic P. McGuinness, “Righting wrongs of public patronage,”
The Australian, September 13, 1990, p. 11.

The literary awards season is upon us again. Once again we are witnessing the way in which a small coterie of writers, the majority of them minor fiction writers, have conned the politicians and each other into believing that for literature to prosper it is necessary to hand out awards which the public itself, through purchases, never would.

The whole literary set-up which has evolved in Australia since the 1960s reminds me inescapably of the activities of the Soviet Writers Union in it worst Stalinist days and pretty much as it still survives. That is a club of mediocrities, placemen and scribblers who have insufficient talent or energy to prosper on their own merits.

Of course, the problems of the Soviet Union are greater than ours; but it is nevertheless the truth that the great contribution made by Soviet writers to the revolution which is taking place in that country derived not from the sponsored journals, not from the official subsidised publishers, not from the officially applauded and rewarded writers, but from the underground samizdat authors, the self-publishers who took enormous risks. (Our writers have for the most part been sycophants of Left dictatorships.)

Many of these underground writers became known outside the Soviet Union not because of subsidies by the United States Government, or any other government (and especially not the United Nations), but because of the independent publishers operating in highly competitive markets who were prepared to take a punt on the intrinsic merit and interest of the works which could only circulate in tiny illegal editions in the Soviet Union.

Thus, Solzhenitsyn’s works after One Day in the Life of Ivan Denisovitch were published in Russian first by émigré publishing houses, totally without assistance, and only then recognised as the immensely important contribution they are.

Meanwhile, the members of the Soviet Writers Union continued to churn out unreadable rubbish, published by heavily subsidised State publishing houses, and with access to all kinds of special facilities like accommodation, writers’ houses, dachas, holidays, etc.

It seems that we are in Australia now well established on the worst model for encouraging writers that is possible. The Australian literary industry has convinced the various political establishments that writers officially recognised by their peers are worth lavishing public money on. This became very evident at the NSW State Library Awards last week, when the two speakers were Richard Walsh, publisher at Australian Consolidated Press and formerly chief executive of Angus and Robertson, and Peter Collins, the NSW Minister of the Arts and Health.

As it happens, I have no objection to any of the awards made on this occasion, and some of them were richly deserved. In this it was an unusual occasion.

Mr Collins could not wait to tell the audience at the State Library that he was eagerly ripping off the Health Ministry for the benefit of the Arts. Increasingly, the old Callan Park mental hospital in Sydney’s inner-west, with its beautiful grounds and water views, is being taken away from the people for whom it was intended (and there is, arguably, a breach of trust involved in this as far as the intentions of the original donor are concerned) and being turned over to bureaucrats and the new aristocracy of mediocre art and literature.

Yet another building is to be turned over to unsuccessful writers instead of the relaxation and healing of the sick.

They, of course, have been thrown out into “the community” to swell the ranks of the homeless.

Mr Walsh complained pathetically about the generally antagonistic attitudes of writers to publishers. This, he felt, was unfair, and he seemed to be arguing that instead of fighting among themselves the two interests could join in a conspiracy against the public, with both benefiting from patronage endowed out of taxpayers’ funds and charges imposed on the reading public.

Now I find it hard to be too critical of Mr Walsh’s remarks in his speech, since there was at least one passage which struck a strong chord of sympathy in me. This dealt with the impact of new technology on publishing and bookselling.

“Imagine going to the bookshop of your choice, being able to order any title you desire, and having it printed and bound while you wait. This will mean that bookshops will be able to offer the buying public immediate access to more titles than it is physically or financially possible for even the largest bookstore to carry at the moment.” And so on.

This sounded familiar. Not surprisingly, since in a column in this paper on December 9, 1989 I wrote about publishing, and among other things wrote: “In my ideal bookshop of the future, most books will be kept in full text on CD-ROM or similar computer memory devices, or in the memory of a single computer like that which will eventually be owned by the great libraries, like the State Library of NSW. When a decision was made to buy a book, it would be printed out on a laser printer, and bound on the premises. Printers which could produce a perfect print-out of standard book size in a matter of 10 minutes will be available within a couple of years.” And so on.

Now I am not at all upset to find that Mr Walsh and myself are thinking on parallel lines, even if his thinking is a little behind mine. For it means that despite the total divergence between our views on the literary industry, there is a chance that at some time in the future I will find him expressing similar views to mine on the undesirability of public literary patronage and support for the British publishers’ rip-off of the Australian reader for the benefit of mainly mediocre Australian writers.

But not yet. His speech was entitled One or Two Words in Favour of Barabbas, and springs from the famous comment: “Barabbas was a publisher.” (For the benefit of the large proportion of young writers without benefit of a Christian education, and who have not read the Bible, let me remind everyone that Barabbas was the robber whom the populace of Jerusalem insisted should be freed so that Christ could be crucified.)

“Patronage, either private or public,” Mr Walsh says, “has always been the only way creative people can survive. However imperfect patronage is, it must continue. In the absence of private foundations in Australia — one of the many unfortunate sequelae, I should add, of the absence of any death duty — the Government must be the patron.”

Of course, when private patronage was at its height there was no such thing as death duties — so that proposition is nonsense. So is the conclusion that there must be public patronage. There is indeed a case for some public sponsorship of the Arts, and indeed of writers. It does not follow, however, that this should involve any protection for or subsidy to the publishing industry. But like most publishers, he is really only trying to enrol gullible writers (and would-be members of the local equivalent of the Soviet Writers Union) in support of a racket to support his own industry.

This involves the absurd proposal that public-domain literature (that is, works out of copyright) should be charged a royalty at the expense of readers to “redistribute some of the wealth produced today by the great literature of the past” to writers.

Sorry, Richard: you pay your own writers, and if you can’t make a buck at it, and pay them well, that is your failure and theirs.

***
10.
Padraic P. McGuinness, “Scroungers who claim to be artists,”
The Australian, February 25, 1993, p. 13.

What a shabby lot our writers, artists, actors, book publishers and book sellers are! Suddenly they have all emerged from the woodwork to declare not only that they are supporters of the Labor Party, a perfectly legitimate position, but that the goods and services tax will be a disaster for them and for Australian culture.

It is not surprising to find that they are pro-Labor. After all, it is well-known that artists, intellectuals and those who claim to be such tend to support the political left — whatever that may be these days. Such people have a long history of support for Left-fascist dictatorships all over the world, especially the murderous Stalin regime. What makes them think that the Labor Party is in any way “Left” is a mystery — there is nothing to choose these days between the parties on economic policy, except in one respect.

This is, of course, the fact that the Labor Party is the party which promises the most generous handouts, subsidies and advancement for the quasi-professionals and the lumpen intellectuals, together with the causes which they support; and these devote a good deal of their government-financed time to the capture of the inner-urban Labor machine. If you want to see the real Labor constituency of this type, walk down Lygon Street in Melbourne or Glebe Point Road in Sydney, and many comparable streets, any Saturday morning.

The new anti-GST lobby has little interest in the welfare of the poor, or in the design of a truly equitable welfare and tax system. They take no interest in economic matters except to denounce “economic rationalism” in the same tones in which creation scientists denounce evolution theory, because it leads by a process of reasoning and factual analysis which they cannot understand to conclusions which they find uncomfortable.

Rather, they are concerned with unprincipled advocacy of forms of government expenditure and taxation which they see as benefiting them, or minimising the impact on their own pockets.

There is little logic involved. To impose a goods and services tax as a universal consumption tax, with compensation to low income earners through a combination of increased social security payments, higher income tax thresholds and exemption for essentials like food, is a tax reform which makes a lot of sense.

What does not make sense is to exempt the pleasures of a particular group. Why should books (and indeed magazines and newspapers) not be taxed in just the same way as other goods.

By far the greater part of book sales in Australia is of books that have no educational value or artistic value whatsoever. Airport novels, romances, New Age rubbish, how-to-books — there is a huge volume of worthless books which are bought for entertainment or reassurance, but which deserve no tax exemption. To impose a GST on such literature, as with the huge number of hobby magazines, the pornography industry, the gossip and royal scandal magazines, the make-up and fashion guides, has no adverse educational or artistic implications whatsoever.

Similarly, why should theatrical performances of all kinds be exempted from such a tax just because a tiny minority with artistic pretensions is fearful that they might suffer along with the rock groups, the strip shows, the massage parlours, the hairdressers and every other provider of personal services?

What the artists, writers, etc are most afraid of is that they might have to justify themselves in the marketplace; not only do they want generous direct public subsidies, or better still public subsidies directed through a body like the Australia Council which can be absorbed into the milieu of “the arts” — there is a whole new class of professional arts administrators of no talent whatsoever who can now make a living out of being hangers-on of the publicly-funded arts — but also they want a host of other subsidies disguised through tax exemptions, concessions and other special deals.

That the system which has grown up in Australia is not really conducive to the emergence of quality in the arts is all too apparent. It has become an elaborate system for subsidising the artistic “milieu”, which is increasingly hermetic, uninterested in coming to terms with its “public”, but rather self-sustaining and self-justifying on the government teat.

It is a system which our best living poet, Les Murray, has decided has become intolerable and unjust in its operation. While he has been a benefactor of the system, he says it has yielded him an income which is pitifully small. By comparison with the salaries which arts administrators, teachers, university lecturers and other parasites on the arts and literature receive, the actual rewards of most creative artists are pathetic.

There is a case for subsidising the genuinely creative. At the times of high flowering of the arts this has usually been a matter of private patronage; but it needs always to be remembered that there have always been exponents of the highest levels who have been able to make a living from public audiences. Far from having a common interest with the educational establishment nowadays, these find themselves continually ripped off by way of the photocopier, the tape recorder and the video recorder in the name of education.

What we have created is a system whereby coteries of practitioners, generally distinguished only by their mediocrity, swap public monies around among themselves on the basis of “peer review”; what Murray calls an “annual setting of the fate of writers, by their rivals and their colleagues alike, in a frantically-hurried mass trial-in-absentia conducted in an atmosphere of social engineering and allowing of no appeals”. Such a system is quite comfortable for the great mass of mediocrities who thrive in a form of the Soviet-style State-sponsored writers’ and artists’ unions, but it is not conducive to genuine individual creativity.

There is a case for continued funding of the arts and literature. But it will not be usefully achieved by indiscriminate tax concessions like exemptions from taxation, especially taxation at the point of sale to the public. The claims of the booksellers and publishers for such exemptions have no merit, and their campaign against the GST is only a matter of the meanest self-interest.

Perhaps Murray’s suggestion, a form of salary for clearly productive writers linked to their actual sales and readership, could produce better results. But what the Soviet-style State artists want is a system where merit is judged solely by themselves and their bureaucratic patrons.

Unhappily, even if there is a change of government on March 13, I would not be too optimistic about seeing an radical change in the present system. Far from it being under threat by the Coalition, nothing of any great significance will be done. A bit of tidying up around the edges, perhaps the loss of two or three jobs for the present top bananas, that is all.

The really astute arts administrators know this. After all, as the opera shows, the wealthy and powerful are good at getting public money spent on their pleasures and social meeting places.

***
11.
Padraic P. McGuinness, “Put GST on books,”
The Sydney Morning Herald, September 26, 1998, p. 40.

There should be a goods and services tax (GST) on books. I say this as someone who has always held books in great affection, sometimes even reverence, has collected them, still collects them like a dog collects fleas and spends a substantial amount every week on them. I read fiction and non-fiction of all kinds, believe that books are one of the symbols and glories of our civilisation, and even have had a library named after me.

Partly because of this it seems to me that those writers, publishers and booksellers who are adding their voices to the campaign against the GST generally, and in respect of books in particular, are merely acting short-sightedly and out of the narrowest self-interest. First of all, not all books are equal. Why should the immense amount of escapist, pornographic, titillating and worthless literature be treated as if every word were sacred? The truth is that books in general, like all other publications, should be subject to tax in exactly the same way as all other commodities — they have no special value as such.

What makes a book special is when it contains the finest creations of the human spirit in the form of the written word. Sometimes to this can be added the beauties of illustration, design, binding, paper and printing, which make a book a collector’s item rather than just a vehicle for words. There is a thriving rare and old book trade which clearly has no difference in principle from the trade in antique furniture.

Writers and booksellers are not exempt from income tax, nor are they exempt from existing wholesale sales taxes on everything from toothpaste to television sets, nor from excise taxes on alcohol and tobacco. None of these taxes has been treated as a tax on learning or a tax on knowledge — they are taxes on people as citizens. Why exempt printed matter? If it is a matter of encouraging creativity, writers and publishers are already subsidised through a myriad of grants and fellowships and the book bounty. In principle, such subsidies are based on the special merits of the writer or his creation, though often enough today there is little discrimination except by buyers.

In the case of learning and knowledge, these are already heavily funded through the education system, especially at the tertiary level and through libraries. Academics are still paid — in the case of the best far too little but on average far too much — to devote their lives to learning and knowledge, of which publication is an essential element. They, too, are expected to pay income tax — and why not a GST on books which they buy for both professional reasons and for pleasure? In the case of books bought for professional reasons, there is already the possibility of tax deductibility (though the rules need to be brought up to date since so many books are purely ephemeral).

One of the main reasons for a single rate of GST levied on virtually all goods and services is its simplicity. This has sometimes been described as the “two shoebox” principle. You put all the receipts for your payments for inputs — paper, computer disks, electricity, etc — into one box and all revenue from sales in the other. You add both up, and pay the GST on revenue, less the GST already paid on inputs, to the tax office. If the rate of GST is 10 per cent, that is, your tax bill is 10 per cent of revenues minus 10 per cent of your purchases. Simplicity itself. Setting up a computer accounting system to handle this is easy, and the time involved in processing very small.

It is only when multiple rates and exemptions proliferate that it becomes more complicated. Then you have the problems of John Hewson’s birthday cake — how to classify a complex product for tax purposes? Is a cake a basic foodstuff, a confectionery or a processed food? If all these have different rates, there will be classification problems. Is there a difference between bread, a plain cake and a fancy cake with icing and candles?

To return to books, are we to exempt from GST all books from Mills and Boon bodice-rippers through serious pornography, inferior scunge fiction and on to Hegel’s Phenomenology of Spirit? If no distinctions are drawn, there is an enormous implicit subsidy to the trash industry. In the case of newspapers, can we exempt them and not journals and magazines such as Hustler and Penthouse — which are not bought primarily for learning or knowledge? Many cases have been fought to avoid classification of serious erotic fiction as low-grade porn — and the only possible solution compatible with freedom of speech is to leave the distinction to the individual.

The Australian Booksellers Association has no doubts that it is standing on high principle when it opposes a GST on books, and has declared that “knowledge should be free to all people”. I hope booksellers take this into account the next time they find a shoplifter liberating a package of knowledge from their bookshelves.

In fact, of course, much valuable knowledge is already virtually free. You can go to a public library and read as much as you like for no charge. Or you can download from the Internet an ever-growing body of knowledge, including a growing number of books and journals held in electronic form. The major tax on knowledge levied these days is through the copyright laws. Again, not too many authors are likely to be keen on making their products available free either in book form or over the Internet. It is a funny thing about writers and artists — they have a low opinion of private property and profits except when it comes to their own work.