This document discusses the intersection of art, economics, and cultural policy. It covers several key topics: 1. It defines cultural economics as the application of economic analysis to creative and performing arts, both public and private. 2. It explains different views of capitalism and how economies have evolved from an industrial focus to a knowledge and innovation focus. 3. It outlines Pierre Bourdieu's theory of cultural capital and how social class is stratified based on economic and cultural resources. 4. It discusses different economic philosophies like liberalism, social liberalism, and monetarism and their approaches to the role of markets, the state, and cultural policy.

1. Introduction
Art and Economics
University of the Arts
Rene Kooyman
Jan 2014

2. Economics
• Cultural and Creative Economy
• The holy Trinity; the Arts, the State and
the Market
• Case study

3. Cultural economy
• ‘Cultural economics’ is the
application of economical
analyses within all fields of
creative and performing arts;
both public and private
• Creatives often allergic to
economical analyses; banks
allergic to creative thinking
• Q: what is Capitalism ??
Economy is a social, behavioural science

4. Capitalism
NL: Trade capitalists
• Transport/mobility
• VCO: NV (Joint-stock
company)
Vocational SMEs:
• Master / pupil structure
• Division of labor
Capitalism: economic system, based on:
1. Private ownership of capital goods and raw materials
2. Profit-driven; demand/supply, competition
Production factors:
a. Capital investments
b. Natural resources
c. Labour

5. Europe in crisis ??
Social developments:
• Urbanisation
• From industrial production to knowledge
• Growth falters; is absent
• Small and medium-sized enterprises (SMEs)
of strategic value
• The economic power of the cultural and
creative industry (work CCIs)
• ' Old School ' is no longer valid: innovation

6. The cultural and creative industries
• The ' culture industries ' are those industries, considered
as a specific cultural expressions, regardless of their
commercial value.
• E.g.: film, DVD and video, television and radio, video
games, new media, music, books and press, performing
arts, visual arts.
' Creative industries ' are
those industries that use culture as input,
but whose results is above all functional,
E.g.: architecture, advertising and
design and fashion.

7. Cultural inequalities
 High and low culture;
 ‘real’ art / popular culture
 ‘professional’ and ‘amateur’ art
 Cultural dimensions: Local and global culture
 Cultural, Social & Economic Capital:
– Economic capital: command over economic resources
(cash, assets)
– Social capital: resources based on group membership,
relationships, networks
– Cultural capital: forms of knowledge; skill; education; any
advantages a person has which give them a higher status
in society, including high expectations

8. 19-12-2014 8
Pierre Bourdieu:
• Existence of Social class is a basic social fact
• We live in a high stratified class society
continuously, based on economic capital and
cultural capital
• The society tries to keep the upper class powerful
and the lower classes powerless
• Much happens unintentionally; no conscious
manipulation by the powerful
CLASS, LIFESTYLE AND POWER

9. 19-12-2014 9
Cultural Capital Economic Capital
Cultural bourgeoisie High Intermediate
e.g. artists, academics
Business bourgeoisie Intermediate High
e.g. company directors
Upper professionals Intermediate to high Intermediate to high
e.g. lawyers, higher
civil servants
Lower middle class Intermediate to low Intermediate to low
e.g. primary school
teachers, nurses
Working class
Skilled Low to intermediate Low to intermediate
Unskilled Low Low

10. • Aalborg School: ' learning economy ' – culture as open
secret (Bengt-Åke Lundvall, et al.)
• National innovation systems
• Culture defines the ' open secret ‘, ' concealed knowledge ',
cannot be ' transported ' , nor outsourced, specific
knowledge linked to source and location
Culture as a source of competitive advantage (Michael
Porter, et al.)
• Globalization: makes displacement production possible
• Cultural economy : hard to imitate competitive
advantage (a niche market)
• Cultural differences deliver distinctive products and
services (international specialization)
Culture in contemporary economical theory

11. Liberalisme: Adam Smith
• Production should be done by individual
entrepreneurs, within maximal freedom
• The invisible hand: price mechanisms, supply and
demand arrange the fine-tuning of production and
societal needs
• The State as much limited as possible:
1. National defence
2. Legal justice
3. Collective investments – of relevance for the economy
– where no profit can be made (roads, bridges,
infrastructure, etc)

12. Social-liberalisme: Keynes
• Fiscal policy (government taxing and spending)
can be used to control the economy
• Government can stimulate demand by
increasing governmental spending
• Stimulate employment by public investments
(public projects, improvement of spending
power, labour hours regulations)
• Society should be built up form the grass-roots;
corprorate structures, subsidiarity-principle
• Short-term strategies are important

13. Monetarisme:
Milton Friedman
• It’s all about the money, stupid!
• Regulate the growth of money
• Always fight inflation
• Central banks rule!
• Growth is defined by the amount of money
available
• Thatcher/Reagen: liberalisation of
financial markets, stimulate borrowing

14. The holy Trinity
Arts
Markets
The
nation
state

15. Why are artists poor?
• Vocation: willingness to accept
low income
• At the same time mental
support of society
• Distinction: high/low art
• No link quality/price?
• Aesthetic value = social value
• Government encourages
‘experts' = interference in the
market
• Ideology: Artist = unselfish

16. Five explanations
1. Personal gratification, recognition and status
more important than money
2. Artists poorly informed about incomes
needed
3. Grants deliver more Artists, no higher
income
4. Artists rely on other sources of income
5. Cuts in labor (higher productivity) not taken
place in the arts
6. Myth of the individualistic Artist prevents
organized pressure groups (trade unions)

17. Two cases
• Utrecht Centraal Museum
• Het Huis Utrecht
The assignment: develop a management statement for the upcoming four years

18. That’s
the way
it’s done!
Rene Kooyman Jan 2014
http://cci.hku.nl/ http://cure-web.eu
rene.kooyman@ke.hku.nl
Introduction
Art and Economics