Americans for Arts has a new study out on the alleged economic impact of Big Art in Mecklenburg County. I say alleged for a reason, as its methodology is loopy.
More broadly, such studies exist for only one reason — to justify public expenditures for government and non-profit arts organizations. JLF head John Hood wrote about this recently:
Arts groups have concocted all sorts of preposterous arguments and economic “studies” to obscure this basic fact. For example, they hire an economist to count up all the tax money spent on the arts in a given community, the total budgets of arts organizations, and the number of people who receive income from those organizations directly or indirectly. Then they claim that the initial expenditure of tax money causes the total budgets, which then creates a certain number of jobs.
It’s beyond silly. Arts organizations would exist without the tax dollars. They might be smaller, but you can’t attribute total arts spending or employment to having been caused by the tax subsidy. Moreover, such an analysis ignores the other side of the equation. What firms or organizations would have gotten the money if it hadn’t been taxed and spent on the arts? How many jobs are associated with those industries? To argue a net economic benefit, arts lobbyists would have to show that more jobs, income, and value would be created by the arts than would be created by alternative uses of dollar (e.g., dining, entertainment, sports, or outdoor recreation).
They can’t do that. The empirical evidence isn’t friendly to their argument. For example, a 2009 paper in The Review of Regional Studies examined the relationship between state spending on the arts and economic performance. The researchers found that an increase in arts subsidies “leads to an overall reduction in state economic growth,” in that the taxes required harm the economy more than the arts spending improves it.
