Culture Makes All The Difference: Reclaiming the Culture of Economics


Andrew Thompson
Director, Centre for Imperial & Global History
History Department, University of Exeter

An earlier version of this article appeared in the Conversation

Last week I attended the final “Provocation” of the Warwick Commission on the Future of Cultural Value. Several such enquiries are currently in train. Together they promise a major re-examination of the UK’s arts and culture as one of the country’s greatest assets. They will no doubt touch on many things. But it will be particularly interesting to see what they have to say about the influence of culture on the economy. For this is the holy grail of the quest to quantify cultural value – a very old question yet one stubbornly resistant to an answer.

Culture, as described by one celebrated critic, is among the most awkward words in the English language. The broad and diffuse nature of the concept has meant that many economists have long been reluctant co-opt culture into their debates about development. Yet the case for spending public money on culture is greatly weakened by this failure to get to grips with its relationship to the economy.  At a time when the Institute for Fiscal Studies’ warns that up to 60% of public sector spending cuts are yet to be implemented, the arts and cultural sector more than ever needs to make its case to government in a manner commensurable with claims made by other competing calls on the public purse.

Historically, the benefits of investing in culture have been articulated along two broad fronts. The first is the ‘intrinsic’. The intrinsic presents public institutions such as museums, galleries and libraries as things created for the common good whose true value is in illuminating and enriching our inner lives. It centres upon the humanising influence of the arts: advances in medicine may mean we all live longer, a thriving cultural sector makes those lives worth living. What, after all, are we listening to or reading on our smartphones and tablets? By themselves they are simply electronic devices. It is the emotional and imaginative landscapes which we access through the arts and culture which sustain these mobile technologies – and which in turn sustain us. As Peter Bazalgette, Chair of the Arts Council, remarks: regardless of whether or not they can be quantified, we cherish the arts precisely because of the personal pleasures they bring.

The impossibility of mounting the intrinsic case by numbers – “the ineffable in pursuit of the unmeasurable”, as John Tusa declared at the above seminar – does however present problems in the context of a comprehensive spending review. Hence the other way of framing the case – the instrumental. The instrumental asserts the value of cultural heritage and the creative arts as vital and vibrant parts of the economy. It counts the number of jobs generated by tourists visiting heritage attractions, or the money people spend when they visit museum exhibitions, or the number of craft businesses located in historic buildings, or the turbo-charged, recession-proof growth achieved by the creative industries. Built heritage tourism accounted for £5.1 billion of GDP in 2010. The museums and galleries supported by the Department for Culture, Media and Sport generated £100 million in addition to their annual government grant, according to the last report of the National Audit Office. Meanwhile a recent press release from declared the creative industries to be worth £8 million an hour to UK Plc – that’s £71.4 billion a year. By any reckoning, these are numbers to reckon with.

The ‘intrinsic’ and ‘instrumental’ each have a role to play in building support for public investment in culture. They also suffer from limitations, however. The first is prone to assume the general value of the arts and culture to society. Culture’s status as a public good is treated as if it were a self-evident truth. The second, if more Treasury-friendly, runs the risk of oversimplifying the benefits of culture while confining culture as a part of a much broader economy – an economy comprised of many types of activity with which culture has to compete to prove its credentials.

To express cultural value in a more cohesive and compelling way these limitations have to be addressed. The intrinsic separates culture from the economy, the instrumental treats culture as a sector of the economy. Neither leaves much scope for exploring culture’s importance for the economic life of the country as a whole.

To push back on the idea that the arts and culture are a luxury rather than a necessity requires us to develop a very different type of dialogue about the relationship between culture and the economy. We might start with a proposition: namely that economically successful societies are invariably culturally confident ones.

It is a frequent refrain among today’s politicians, of whatever stripe, that creativity is driving the world’s higher performing and more technologically advanced economies. Creative societies can expect to generate greater growth, higher levels of productivity and more inward investment. Even economists – who fight shy of messy concepts like culture – acknowledge that economic factors alone are insufficient to explain why some countries get themselves on to a development trajectory and others do not. Adding more capital does not always generate the hoped for growth. The braver among them go further and try to capture the macro-economic effects of culture. Following in Max Weber’s footsteps, the best-selling economic historian, David Landes, has argued that it is people’s attitudes, beliefs and values that ultimately explain why some groups or societies have succeeded economically where others have failed.

Such efforts to reclaim culture by economists are welcome but hardly mainstream. Modern neo-classical theory has not proved at all well disposed to those who would try to study the economic value of culture. The vagaries of human behaviour are such that they does not easily generate testable hypotheses; equally they refuse to be squeezed into the requisite econometric models. Our intuitions may tell us that culture and the economy are strongly intertwined. Demonstrating this in an analytically convincing way is another thing.

One way forward may be to look at what we can learn from a few of the negative scenarios: cases where culture far from promoting growth has actively hindered it. In a world increasingly consumed by sectarian conflict, new wars of religion and changing forms of urban violence we do not have to look very hard. In fact, by far the biggest challenge for many societies as they enter the twenty-first century is precisely how they make cultural diversity work in favour of economic growth. This is not merely a challenge for less stable and less prosperous states. We can observe the adverse economic consequences of culturally driven conflict much closer to home.

Take, Northern Ireland. If ever there was a case of the problems of the past infecting the present and laying traps for the future, it is surely the recurrent costs to the economy of policing the annual parading season. The former US diplomat Richard Haass goes as far as to suggest that the very stability of institutions upon which Northern Ireland’s economy rests is dependent on how the related issues of the past, parades and flags are managed. He has good cause. According to the latest figures from Northern Ireland’s Policing Board the cost of policing parades over a six month period in 2013 totalled £22.8m. One parade alone cost £6.25m to police. These figures represent the security costs and physical damage associated with “post-conflict” violence in Northern Ireland. They do not begin to account for the wider costs of missed tourism, investment opportunities, or the impact of violence on health and social well-being.

A piece of research recently undertaken by the university of Ulster provides fascinating new data on the violence triggered by commemoration after the Good Friday Agreement in 1998. The research correlates commemorative-related violence to levels of deprivation and poverty and to other forms of crime and disorder while mapping the places where violence is declining and persisting. The potential for this type of analysis to support those charged with managing the friction and tension around marching and parades has not been lost on the public authorities. Likewise the role the performing arts are playing in recovery from conflict is somewhat belatedly beginning to be recognised. A case in point is Northern Ireland’s Kabosh Theatre company, which has just celebrated its 20th birthday. Their striking new play “Those You Pass on the Streets” is testimony to how the arts can help people to deal on a personal level with the complex legacies of collective violence in a way formal political processes cannot.

The World Bank has tellingly observed that: “no low-income or conflict-affected state has yet achieved a single Millennium Development Goal” (2011). Because conflict can inflict such deep wounds on the fabric of society it is also hugely debilitating economically. Political solutions – when forthcoming – are targeted toward the ending of conflict. They rarely address what happens after conflict ends.

Open the door to cultural interventions. In South Africa, Argentina, Bosnia and Northern Ireland, to name but a few, growing prominence is being given to the contribution made by artistic and cultural practices to processes of peace building and reconciliation. Societies trying to work through difficult and divisive pasts are turning to the restorative power of drama, music, film and literature to break down walls of silence about atrocities, to allow victims to share their stories of suffering, and to rekindle the ability to imagine again. The therapeutic value of the arts in releasing powerful emotions previously repressed is increasingly apparent. The upside economically merits more attention. But the potential is clear. A study of the global economic costs of conflict estimates that GDP in 2007 would have been 14% higher if there had been no conflict since 1960 – equivalent to $9.1 trillion. The study further highlights how the costs of conflict linger on – in terms of the lowering of GDP – well after hostilities cease.

The question of conflict raises a further problem when rethinking the relationship between culture and the economy. In “post-conflict” societies we see very clearly how, for better and for worse, culture is as much part of the economy as the economy is a part of culture. Yet the study of conflict calls for a much more nuanced understanding of culture. Historically those who have linked culture with prosperity have frequently done so by essentialising culture. When the West was economically ascendant a particular set of cultural traits were widely held to have been responsible for its success.

With China poised to overtake America as the world’s leading economic power (based on domestic purchasing power), and the BRICs making up a quarter of the global economy, things look rather different today. The idea that Western societies are culturally programmed for a better worth ethic, or to be more competitive, entrepreneurial and risk-taking, simply seems far fetched. The relationship between the culture and the economy is clearly more complex than that. But as Western hegemony is increasingly regarded as a chapter in world history a new narrative about culture’s relationship to the economy becomes possible now in a way it was not twenty or thirty years ago.

“Political economy” is our shorthand for the interplay between the political and the economic. Why not  a “cultural economy”?  In every society the economic is embedded in culture. In economic terms this means that culture counts, even if it can’t always be counted. Yet a general field of cultural economy has yet to to be properly scoped out.

We need to better understand how attractive cultural environments lay the foundations for economic prosperity. We need to establish more firmly the link between cultural diversity and economic creativity. We need in-depth analysis of what is really happening when cultural activity kick starts economic regeneration. We need to open our minds to the freedom to engage in cultural activity as a necessary counterpart to the economic (and political) freedoms which we rightly prize – and, it might be added, which are worth more than money. We need more examples of how the arts as much as politics can bring about economic change. In a globalised economy we also need to be alert to how the arts and culture can provide a way of thinking about ourselves as a country and the challenges of adapting to a rapidly changing world. In short, we need to devise better ways of bridging the divide between culture and the economy. Only then will we be in a position to understand those dimensions of culture that affect economic success.

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