Monday, February 14, 2011

How We Make Our Case

Isaac lays down a challenge:

So here's the challenge. Mother Jones blogger (and widely respected left-of-center policy wonk) Kevin Drum [...] says he's "open to being persuaded" but at the same time:

For what it's worth, I'd actually be happy to get rid of both the tax deduction for charitable contributions and federal subsidies for the arts. On the former, an awful lot of charitable contributions seem to me like "charity" only in the most technical sense, and I don't especially see why you should get a tax break for, say, contributing money to your own church or giving money to your alma mater for a new basketball arena to be named after you. Besides, I suspect that if this tax break were done away with, we'd reach a new equilibrium fairly quickly in which charitable donations weren't affected very much.

As for direct federal subsidies to the arts, I agree with Jon Chaitthat there really isn't much of a market breakdown here: the current market for art, broadcasting, and entertainment seems pretty robust to me without government help. The United States isn't the Florence of the Medicis, after all. I'm going to annoy my sister for repeating this, but direct spending on the arts is mostly a subsidy to the upper middle class and CPB funding is mainly a way for the upper middle class to avoid the indignity of having to listen to ads. I'm not sure that's a group that really needs this special treatment. The money could be better spent elsewhere.

To respond directly to Kevin Drum's points. Point 1:
For what it's worth, I'd actually be happy to get rid of both the tax deduction for charitable contributions and federal subsidies for the arts.
The reason behind the tax deduction and federal subsidy systems is because the government has decided that it wants to sponsor certain public endeavors (spelled out in the tax code as being cultural, educational, or literary). Those public endeavors are in line with the goal laid out in the Constitution to "promote the general Welfare" -- the government recognizes that although some of its programs (e.g. public schools) can be directly run, other cultural, educational, or literary programs should be run elsewhere.

In order to avoid the United States having to play Medici, it has created a democratic system where American citizens can earmark a certain portion of their tax dollars to go towards an approved purpose (again: cultural, educational, or literary). In this way, it democratizes the flow of support for those purposes.

When the government wants to further our welfare, then, they have four choices:
  • Government runs a direct program, such as it does with the Public Schools system.
  • Government gives money directly to organizations that it feels can do the work for it, such as it does with (cue the censorship argument)
  • Government allows citizens the right to choose where the government spends its money (because that's what the tax deduction really is)
  • Government gives up its goal.
At various points, different goals can be pursued in different ways; different tools are appropriate for different situations. I think we can agree that a mixture of tools will be necessary.

Now, the question is, do these goals really promote the General Welfare? Which comes to Point 2:
On the former, an awful lot of charitable contributions seem to me like "charity" only in the most technical sense, and I don't especially see why you should get a tax break for, say, contributing money to your own church or giving money to your alma mater for a new basketball arena to be named after you.
I think it's worth noting that there are some legitimate concerns about the way this money is spent, and if we want to convince Mr. Drum we should probably acknowledge them. We in the arts community have been saying the same about some of our larger theaters (when they charge high ticket prices or fail to even gesture at diversity).

Imagine, for instance, if we added a requirement that 501 (C) 3s demonstrate not only that they are working towards cultural, educational, or literary goals, but in addition that they are working towards those goals with a predominantly low income or otherwise disadvantaged communities?

So for instance, a massive not-for-profit with jacked up ticket prices that serves a predominantly affluent audience members? Not a 501 (c) 3. 826 Valencia, that provides literary services for free to a mostly low-income student population? 501 (c) 3.

I bring this up because of the next point:
As for direct federal subsidies to the arts, I agree with Jon Chaitthat there really isn't much of a market breakdown here: the current market for art, broadcasting, and entertainment seems pretty robust to me without government help.
The purpose of cultural, educational, and literary support is that so that there will be art, broadcasting, and entertainment; it's clear that there will always be plenty, regardless.

The question, however, is whether the market will meet the breadth of needs, not just the amount of needs. For instance, if we had no publicly-supported education, clearly the wealthy would get educated -- Kaplan proves that there's a for-profit market for education. The question is whether those students who rely on 826 Valencia would have their needs met by a private company.

Our culture would survive without publicly supported cultural institutions. But would public interest cultural institutions, ones that serve the disadvantaged, survive without non-profit support? To put it another way, would those whose needs are hard to meet be served?

An example in health care, for instance, is the Orphan Drug problem of the 1980s. There were people who had diseases that had cures invented by drug companies in Canada, but could not be imported, and would not be produced in the United States because the market for the drug was not big enough. Thusly, although clearly our pharmaceutical industry is by no means sick, and is quite able to meet our need for pain-killers, anti-depressants, and diabetes medication (all of which are palliatives, and not cures), they were not meeting the needs of a specific, disadvantaged community. In this case, the government had a different recourse (the Orphan Drug act), but I hold that the same is true for culture; there's a certain kind of cultural, educational, or literary need that can be provided for by the free market.

Lastly, a lot of culture in the United States exists frankly because people like me are willing to continue making it for no money. If there was no subsidy system, it would exacerbate the sort of situation in which people who work with kids in difficult situations (e.g. the good folks at 826 Valencia) continue to do so as volunteers, while the jobs that pay will be the ones that invent newer and better ways to risk everyone's money.

But it's important to note that Mr. Drum's following point is an indication that the current system is failing:
The United States isn't the Florence of the Medicis, after all. I'm going to annoy my sister for repeating this, but direct spending on the arts is mostly a subsidy to the upper middle class and CPB funding is mainly a way for the upper middle class to avoid the indignity of having to listen to ads. I'm not sure that's a group that really needs this special treatment.
I agree. I don't think it's an argument against the "direct arts spending" or "tax breaks for donations" as tools in the government's belt, I just think those tools are not being used well at all. And if we want to convince critics like Kevin Drum, we need to start by addressing their concerns.

If we want to get specifically into the Corporation for Public Broadcasting, I happen to think NPR serves a really critical cultural need; it's often the source of a lot of public interest news and information that it's difficult to get in other sources. I think WNYC's Radiolab is (after Mythbusters) one of the greatest things in America for the sciences, which we sorely need. I think that WBEZ's This American Life spreads the stories of people who wouldn't normally have a venue to engage in public culture.

PBS as well has (particularly for people who don't have money to spend on expanded cable) a lot of educational and children's programming. Is it for everyone? No. The whole point, as mentioned before, is that it should be aimed at niche markets -- niche disenfranchised markets.

If it's going to the wealthy, then it should look at its programming. If they can't demonstrate that low income or even middle-class families, then I'm not hugely opposed to sunsetting its government funding.

But there are plenty of organizations that should have direct or tax-deduction support, by virtue of the fact that they serve predominantly under-served demographics. We need to refocus our efforts on making sure that those are the groups that get the government's support.

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