1 Cultural Economics and Cultural Policy: How are they Interrelated? David Throsby Professor of Economics Macquarie University, Sydney, Australia Keynote address to conference Cultural Economics: from Theory to Practice, held at Warsaw School of Social Sciences and Humanities, 29 November 2010

2 Economics of art and culture: some highlights Early contributors: Keynes, Galbraith Baumol and Bowen, Performing Arts: The Economic Dilemma, 1966 Establishment of Journal of Cultural Economics in 1977 Biennial international conferences since 1979 Expansion of fields of interest 1980s, 1990s Current concerns with cultural industries, cultural policy, culture in development

3 Development of cultural policy: some highlights UNESCO Conference, Mexico City 1967 Country reports on cultural policy 1970s (Poland report in 1973) Interest in economic impacts of art and culture 1980s UNESCO Conference, Stockholm 1998 UN Cultural Diversity Convention 2005

4 UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions Motivations cultural goods in international trade cultural impacts of globalisation culture and sustainable development Outcomes focus on the developing world importance of cultural policy international relations protection of “vulnerable” cultural expressions

5 Some important links between cultural economics and cultural policy ― Economics can help us understand: where the arts and culture “fit” in the macroeconomy:  what are cultural goods?  what are creative industries? how the cultural production sector works:  the role of cultural capital  the role of creative labour how the financing of culture creates public value:  economic value  cultural value

6 Cultural goods and services (1) Supply-side definition require creativity convey symbolic messages embody some intellectual property (2) Demand-side definition characterised by “rational addiction”– demand is cumulative (3) Value definition possess or give rise to cultural value

7 The Creative Economy creative industries in London in 1980s Creative Nation, Australia, 1994 Creative Industries Task Force, UK, 1997 increased policy interest in Europe and elsewhere, Creative Economy Report, UNCTAD, 2008

8 Core creative arts Literature Music Performing arts Visual arts Other core cultural industries Film Museums, galleries, libraries Photography Wider cultural industries Heritage services Publishing and print media Television and radio Sound recording Video and computer games Related industries Advertising Architecture Design Fashion The concentric circles model of the cultural industries

9 Creative Cities cultural industries as drivers of urban and regional growth the “creative class” hypothesis importance of cultural infrastructure cultural tourism the “Bilbao effect”

10 physical capital: buildings, equipment, machinery human capital: people’s skills, talents, intellectual ability natural capital: renewable and non-renewable resources cultural capital: tangible and intangible cultural assets Types of capital in economics

11 Flow of services Stock of assets Cultural capital Heritage buildings, sites Art works and artefacts Music and literature Inherited traditions Community participation Consumption of the arts Heritage tourism

12 The economic role of artists multiple job-holding work-preference behaviour importance of artists as innovators

13 Cultural ValueEconomic value Public value of the arts and culture

14 Measurement of value: economic value can be measured in money terms cultural value is multi-faceted and has no single unit of account

15 Economic value is created via: direct, marketable benefits of the arts and culture, e.g. in the production and consumption of cultural goods and services indirect, non-market benefits of the arts and culture, i.e. public goods reflecting:  existence demand  option demand  bequest demand The public-good benefits are a case of market failure, providing a prima facie case for government intervention

16 Cultural value : aesthetic value spiritual value social value historical value symbolic value authenticity value