John Kay on Cost-Benefit Analysis and the Arts

(8-17-10) In a recent Financial Times column, John Kay outlines the sometimes overlooked (or skewed) factors in determining the economic benefit of the arts. An excerpt:

But bad economics has been allowed to drive out good. I am sympathetic to the well-intentioned people who commission studies of economic benefit, though not to those who take money for carrying them out. They are responding to a climate in which philistine businessmen assert that the private sector company that manufactures pills is a wealth creator, but the public sector doctor who prescribes them is not.

Extolling the virtues of manufacturing, they value the popcorn sold in the interval, but not the performance of the play, arguing that the vendor of consumer goods creates resources, which the subsidised theatre uses up. People who work in the theatre, hospitals or education are often forced to listen to this nonsense. It should be no surprise that so many of them despise business and the values such business espouses. If these values were truly the values of business they would be right to despise them.