No (is a one word poem)

In the words of Jimmy Porter in Look Back in Anger, “the injustice of it is almost perfect”.

Last week, Jason Potts argued here that the cuts made to around 60 cultural organisations under the Australia Council’s four-year grant program were warranted as, “public funding of the arts should always be temporary”. This contention is not new – it can be found in the 1976 Industries Assistance Commission’s Inquiry into the Performing Arts – and it is not persuasive. As his position may be said to reflect a central current in the neo-liberal critique of cultural subsidy, it is worth examining in detail.

Partly, the problem is a matter of language. The remorseless econometricizing of neo-liberalism – “distributional consequences”, “costs of capture”, “effective long term strategic planning” – disguises the way the arts sector actually operates in a modern nation like Australia, and fudges the responsibility artists and the government have for maintaining it.

For in no way do the recent cuts represent a principled response to long-considered policy problems. Arts minister Fifield’s statement that “it was always intended that slightly fewer companies would be funded at a higher level” is an opportunistic reference to a process of review that started in 2006 with Make It New? - a process in which his government has shown precisely zero interest.

I will sketch this history, which is important to know when looking at the cuts and ask the only question that matters: do they make sense? Not “can they be justified by reference to an abstract economic principle?”, but “are they the right ones?”

There is no dispute the Council can cut subsidies to these arts organisations. But should it? What evidence exists that they are beneficial? This is the ultimate aim of cultural policy: to improve future outcomes.

The limits of the economic analysis

Firstly, let’s not split the difference between “grants” and “investment”, as Potts does, and throw the “hand out” shadow over discussion. It is clear enough that arts and culture are an important source of wealth for Australia, and will only become more so. The “hand out” shadow is not helpful.

His main objection, however, is to the notion of artists’ “expectation of perpetual funding”, which paints all pushback against the cuts as the neglect of basic economic principle.

Is there really an expectation of endless support among the small to medium organisations the Council cut from its client base? If there is (which I doubt) it is much less than among the major organisations it did not defund.

There, the expectation continues. And why wouldn’t it? Why should defence, health and education be “permanent wards of the state” (another Pottsian rhetorical flourish) and not culture?

Neo-liberalism is a limited view of existence that reduces complex forms of behaviour to simplistic and contestable assumptions. One of these is that culture is a private good with little public value.

Try applying this approach to related areas. Why shouldn’t academic research, for example, be restricted in this way? Why shouldn’t failure with an ARC submission incur a penalty, and money to researchers be capped to “incentivize organisations only to put their very best work forward”?

Because it wouldn’t work and it would be wrong. There are many factors in applying for an ARC grant (yes, they are grants too) - but mainly, we don’t think of research as something to be manipulated in this way. Good research is publicly valuable. Researchers are a means of achieving good research. Each submission should be judged on its merits. Only with significant evidence can we say that an individual researcher’s next application is likely to be unworthy.

Of course the crux of this issue is having an effective evaluative mechanism. Choices in cultural policy often involve incommensurable organisations and activities (journals vs. dance companies, community projects vs. research and development). They also involve assessment of contrasting qualities.

An established organization will have a track record, a new one won’t. Decisions are between “achievement” and “potential”. This is not a problem of “asymmetric information” but of assessing different kinds of creative worth. The task is arduous and fraught with error – one reason large cuts to the Council’s client base should prompt our wariness.

In achieving optimal outcomes Potts puts forward a “pump priming” view of cultural subsidy, arguing the government is “much better suited to a temporary seed funding approach”. This was one adopted by the Australian Elizabethan Theatre Trust, the predecessor to the Australia Council, in the 1950s and 1960s. Its history of meddle and muddle does not bear his claim out. Nor am I aware of any international research that lends credence to it.

The claim that “on-going patronage is more suited to corporate or private funding, where building a close relationship… invites mutual monitoring and reduces transaction costs” is similarly bogus.

To mention only the most obvious objection: state support for culture, which in Australia adopts the so-called “patron model”, is mediated by an arm’s length, independent arts agency that attempts to balance creative ambitions, audience wants, and government priorities.

Corporate support is not scrutinised this way, and arises in a commercial context that makes it quite possible that private need will be put before public interest.

The need for a historical analysis

Art is not a widget. Artists and cultural organisations are not abstract factors in a benefit algorithm, endlessly substitutable one for the other. There are limits to their replaceability, comparability, and marketization.

A long-standing problem in cultural subsidy has been finding the right balance of support between new and established artists. This concern can be found as far back as the early 1980s, in Australia Council annual reports.

The numbers of grant submissions had jumped significantly, creating two problems. First, there were more artists to cater for at a time when the Council’s annual allocation was falling in real terms. Second, many projects were small-scale, demanding pernickety decisions from peer reviewers.

During the 1980s various solutions to this problem were attempted. In 1982-3 the Rotherwood Plan tried to specify the type and number of companies to be supported in each major capital. In 1984-5 so-called ceiling funding capped annual federal allocations to organisations at A$300,000. Neither strategy worked.

Then in 1986 the House of Representatives’ Patronage, Power and the Muse (the McLeay Report) made the fateful recommendation to establish a major organisations unit and within a few years the Performing Arts Board, as it was then, lost 80% of its disbursable funds.

This decision has been the chief structural determinant of the distribution of cultural subsidy over the last 25 years. It effectively created a two-tier system: major organisations on the one hand, smaller organisations and independent artists on the other. Through inadvertence or low cunning, governments have often played off one group against the other. The present cuts are a classic example because they only affect the small to medium sector.