catallaxy files

catallaxy in technical exile

Repost: A cultural issue with economic consequences

with 2 comments

This was my first piece for Catallaxy, and for that reason alone I’m rather attached to it. It too went the way of the blue suede shoe when our server died. It originally ran on August 29. Feel free to start stoushing once more.

While in Melbourne last week, I spent a fair bit of time at one session talking about the problems I think Australia Council funding of certain literary genres and authors generates.

In brief, the Australia Council’s Literature Fund funds both publishers and writers. Publishers are funded for individual titles, typically when the book in question is written by an Australian writer operating in a fairly ‘literary’ genre. SF authors need not apply. Whole publishing houses can also be funded if their entire ‘list’ falls into an appropriate genre – the indigenous publisher Magabala falls into this category. In turn, authors (and this will make many libertarians wince) apply to a board made up of fellow writers for grants. They supply a sample of unpublished work, a CV of published work, and fill in a lengthy government form. The form asks if the writer in question is indigenous, of an ethnic background (which goes back as far as grandparents) or disabled, along with other information. The panel members both know who the applicants are and (generally) have personal knowledge of them.

In my view (and with my lawyer’s understanding of economics, as opposed to an economist’s understanding of economics) this system produces both market distortions and rent-seeking. More Australian fiction is produced than the market can bear, resulting in poor sales. Likewise, authors write for the OzCo panel, rather than for the market, producing work that is at best anodyne and at worst unreadable. Even assuming the panel is made up of entirely honest people, it is difficult to imagine work that is genuinely innovative getting past first base.

When pressed, the best argument that my (uniformly non-libertarian) opponents could come up with was that cultural production is somehow ’special’ or ‘more important’ than other forms of production. I suggested that subsidizing one form of output at the expense of others is nonsensical, to which one woman – even more economically illiterate than me – suggested that all Australian industries should be subsidized by the government. At this point I wanted to run out of the room.

My economic questions are simple: is cultural production somehow more important than other kinds of production, and if so, how? Is there another subsidy system – audiences, say, rather than authors – that is likely to generate better outcomes more efficiently? And should we even be funding artists and their institutions at all?


Written by Admin

October 20, 2006 at 2:38 pm

Posted in Uncategorized

2 Responses

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  1. The correct term, so I understand, is ‘merit goods’. This post is also germane to Jason’s ABC piece.


    October 20, 2006 at 3:06 pm

  2. To get more of these ‘merit goods’ or cultural artifacts of what have you……. The plan would be to look for all those libertarian-style moves we can expedite to:

    1. Enhance the availability of part-time work.

    2. Reduce living costs.

    One can even go the way of The Republic of Ireland wherein I believe things like income from copywrites might be tax free.

    I think we should leave a bit of room to maneouvre for electoral demand. But we want to weed out anything that actually increases government depredation.

    So these grants have to go.

    And those people who get to choose who gets the grant and who gets turned down they’ll have to go get a REAL job and stop bludging and make some sort of contribution to society just for a change.

    The thing is that if we have obsession in terms of reducing living costs there is just a helluva lot of work to get on with in this project.

    And same with making part-time work more available.

    A lot of libertarian moves to make or moves to make that are at least ACCEPTABLE from a libertarian viewpoint to get cracking with.


    October 20, 2006 at 4:32 pm

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