Making a Case for Government Arts Spending

  • Public-Policy Reform
  • 1965

Founded by businessman Edward Filene in 1919, the Twentieth Century Fund (rechristened the Century Fund in 1999) shaped the course of arts philanthropy by sponsoring the work of Princeton University economists William Baumol and William Bowen. In a 1965 academic paper, they described a phenomenon that has earned the nickname “Baumol’s cost disease.” A society’s rising wealth threatens its artistry, they argued, because the wages of artists increase but not their productivity. “The output per man-hour of the violist playing a Schubert quartet in a standard concert hall is relatively fixed.” To continue flourishing, the professors contended, the art world would require subsidies from the government.

Baumol and Bowen turned their Twentieth Century Fund work into a 1966 book, The Performing Arts: The Economic Dilemma, that became a kind of bible for advocates of public spending on the arts. A few other philanthropists were promoting a similar line: The Rockefeller Brothers Fund underwrote a study led by Nancy Hanks (who subsequently became the second chairman of the National Endowment for the Arts) that also pressed for federal funding of the arts.

The NEA had just been set up by the federal government in 1965. Its initial appropriation of a mere $3 million immediately spiked upward. The endowment’s budget reached $175 million in 1992. Its involvement in political controversies later reduced its annual funding, but in 2014, the NEA received more than $146 million in federal support.

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