Art Hates Economics

Economists and business leaders talk about the ‘symbiotic relationship’ between art and business: art gains funds and businesses gains prestige, an improved corporate image and whatnot. All that matters, economically, is that the seller has the right to sell, the purchaser wants the goods at the given price and has the funds to pay for them: if these conditions are met, and all other things being equal, then the transaction takes place. It is irrelevant that a third person disagrees with the price, or that a fourth disputes the reason for the purchase. All that matters is that one value – the perceived value of the product to the purchaser – is exchanged for another value – the price set, or negotiated, by the seller. Just as with the example of the artist selling an artwork to a collector, the transaction seems normal, fair and uncontroversial. How could this win-win scenario be controversial? Well, if we examine the transaction not only in terms of what each party takes away from it, but what each brings, then, like all transactions, it can also be described as a ‘lose-lose’, or at least a mutual payment: in principle, art pays what the corporation gains, while the corporation pays what art receives. This is normal: money is exchanged for goods: goods are exchanged for money. The seller gains money but loses goods; the purchaser gains goods but loses money. If the exchange is ‘fair’, that is to say, if the value of the goods is equal to the value of the money, then both parties are assumed to be happy with the transaction. In economics all transactions are assumed to be voluntary, so why wouldn’t both parties be happy?

Let’s look at this transaction between art and business a little more closely, by examining what each, as buyer and seller, gain and lose from the transaction. From the point of view of the corporation, the purchaser, money is exchanged for a good. This is quite normal. Now let’s turn our attention to the seller. Normally, in economic theory, the seller in an economic transaction is regarded as offloading something that they do not need (eg a farmer grows more wheat than she can use) and this is exchanged for money, with which she can buy something that she lacks (eg an ipad). However, this cosy picture is inaccurate in the case of art’s transactions with corporate sponsors. In the example of a corporate sponsor part-funding a ‘blockbuster’ exhibition, for instance, we cannot assume that the museum is selling something that it doesn’t want anymore. What’s more, If we assume that the corporation purchases prestige from the museum, we cannot assume that the museum needs to offload its prestige, as if it has stores of ‘surplus’ prestige that it can take to market. No, if the museum sells prestige to the corporate sponsor, then it hopes to retain its prestige – or as much of it as it possibly can – after the transaction has taken place. And would the corporation be interested in sponsoring an arts organization or event if the very act of sponsoring it eliminated the prestige that they hope to purchase? Clearly not. So, it seems as if the transaction is not straightforward after all. Maybe the museum can only sell the top slice of its prestige, like interest on a mortgage, to protect its value as an attractor of sponsorship? Or maybe the museum’s prestige derives from the works it houses and the exhibitions it hosts, so that it is more like a bureau de change of prestige? The parlour game of devising analogies for the museum’s economic activities can be suggestive but I want more clarity. Let me say, therefore, that strictly speaking, the museum does not in fact sell what the corporate sponsor buys. What the museum has to sell, and has a limited supply of, is best understood as the rights to sponsor various events, buildings, refurbishments, rehangs and so on. Unlike the farmer who sells wheat to somebody who wants wheat, the museum director does not sell the prestige that the corporate sponsor buys; the museum sells the right for a company to be associated with the museum’s activities. The sponsor, in effect, buys something that is not for sale.

As a ‘win-win’ scenario, the sponsor receives proxy prestige and the museum receives funds. By inverting the ‘win-win’ scenario we are able to notice something that is missed by the simple economic analysis of exchange: the sponsor does not buy what the museum sells. This leaves us with a curious result. As a ‘lose-lose’ scenario, the sponsor pays money and the museum pays nothing and loses nothing, parting with nothing except the ‘rights to sponsor’, which they can sell at no cost to themselves (other than the ‘cost’ of not being able to sell the exclusive ‘rights to sponsor’ to another client). The museum does not get off scot free, however. The ‘association’, which the sale of the ‘rights to sponsor’ cements, is potentially a dangerous liaison. So, even while the transaction does not include the sale of the museum’s prestige, we can say that the museum’s prestige is threatened by this transaction, nonetheless. “As corporate sponsors and private sponsors seemingly take control of decision making processes regarding such things as exhibitions, the need or demand for a stronger enforcement of an explicit code of ethics within museums has been voiced from people within the arts industry and other sources. The increasing pressure for art museums to reach out to corporate sponsors for financial support has created the need to meet the market oriented goals of corporations and sponsors, often compromising the integrity and goals of the art museums as exhibitions tend to increasingly serve more the purpose of public relations rather than art and education for the public per se.”[i] But this is only one of the dangers. ‘Art Not Oil’ is an organization that both protests against the involvement of oil companies such as BP and Shell in the arts, and promotes the role that art can play in counteracting the damage that these companies do to the planet. It might be worth considering the possibility of countertransference taking place in the association between museum and sponsor, so that while the sponsor acquires the prestige of the museum, the arts institution in turn is coloured by the prestige or notoriety of the client.

Several preliminary observations can be made. First, the controversies that beset the economic transactions of art are not registered by considering these transactions merely as economic relations. Second, the controversies are the result of the collision of different values attributed to art. Third, the repression of the controversies within standard economics is made possible by the absence – or absenting – of what people within the arts regard as the ‘value of art’ from the analysis. Fourth, the controversies about art’s funding demonstrate that economic analysis cannot be isolated from cultural and political analysis. As indicators of the difficulties facing an economic analysis of art, these four observations suggest two principles for proceeding: the analysis must not be restricted to mainstream economics but needs to engage in ‘political economy’ in a much wider sense, encompassing social, political and cultural analysis; and, the analysis of art’s economy must not exclude questions about art’s value that are external to standard economics.

[i] Stefanie Little, ‘The Business of Museum Ethics and Sponsorship Relations’,


Here is a personal consideration of Mute’s 100% cut by ACE by co-founder Pauline van Mourik Broekman

We are very sad to announce that, on Wednesday, Mute Publishing found itself in the category of ‘losers’ as these emerged from ACE’s National Portfolio Organisation decisions. The magazine had presented to ACE a programme that combined a web and print magazine, books and events, community self-publishing, education, and digital strategy support and advocacy work, but faltered in the second stage of the assessment process, where its financially precarious position and ‘weak’ governance structure – as well as the perception other organisations were better placed to deliver to ACE’s strategic goals – proved fatal, resulting in a 100% cut to core funding.

We regard the process of being placed in competition with other arts organisations as poisonous and distracting: while we will privately question the sizeable uplifts granted to large, established organisations (which, in the greater scheme of things, need further funding about as urgently as Paris Hilton needs another handbag), in the end we recognise it as a familiar part of the divide-and-rule principle that has long marked the operations of support agencies like ACE, where a chronic reliance on the parent body for the basic apparatus of organisational reproduction nurtures fear among the ‘dependents’ – slowly but surely stripping them of all sense they can do anything for themselves, let alone together… The spectacle of slavish gratitude for the spoils of public funds, in which even organisations cut or killed felt compelled to reiterate the basic tenets of ACE’s funding paradigm (excellence, innovation, global leadership and creativity), were truly depressing in this regard – not one voice standing out for offering a different vision or lexicon of practice.

For us, the relevant story is elsewhere, as it has always been, and is effectively being obscured by a smoke-screen of rhetoric: it is said that ‘adventurous and risk-taking programming is being rewarded’, and a ‘resilient’ arts portfolio composed. Although we concertedly participated in the process, adapting our organisation’s operational model to that demanded by ACE’s ‘Achieving Great Art for Everyone’ agenda (within which we happily chose to deliver to the Excellence and Innovation Aims), the relevant story lies in the devastation being wrought upon the social in general. Here, in the name of prudent economic management, Government’s disinvestment in art and education (two fields with which Mute interfaces most intimately) appears as a symptom of a larger programme of creative destruction, launched in the name of an aggressively kickstarted, entrepreneurial Britain that we all know is doomed to fail, but not without wrecking the lives of millions.

To be a ‘winner’ in the arts variant of this competition (and that means those who, as The Guardian dubbed it, ‘won big’; not the hundreds kept on on a shoestring), several kinds of compliance are required. Firstly, a near religious belief in the power of art to ‘deliver’ personal transformation. Second, a normative and by now entirely standardised model of art-organisational development, where success is measured via the ability to diversify funding sources (via trading activities, rights management, sponsorship, philanthropy and a variety of non-public sources), have ‘reach and impact’ (loose catch-alls combining audiences, media reception, influence), and offer ‘engagement’ – all of which, it is reiterated, can only be achieved by bodies in possession of larger executive boards, which have represented on them ‘experts’ from the realms of Finance, Legal, Development and Artistic Vision, and who watch Income and Expenditure lines like hawks, assuring they mitigate risk, execute their mission and stay on a number of targets, as these encompass financial, audience and strategic partnership projections. As Mute – and many others, such as the Scottish based Variant magazine (another ‘loser’ of late) – has attempted to discuss in a series of articles stretching back decades, the backdoor this structure has offered to an entirely corporatised version of art, wherein genuine diversity and antagonism is replaced by superficially different versions of doing the same thing (and many platforms for critical discussion gradually desist from analysing culture as a whole to discussing the ins, outs, rights and wrongs of particular art forms), is one of the great untold stories of mainstream contemporary culture.

As a critical platform seeking to understand culture in the round – i.e. in the many and various ways it exemplifies, illuminates and engages with larger processes (be they, to put it cheesily, part of the ‘macro’ dimension of global economics, or the ‘micro’ level of subjectivity) – we have attempted to shore up our core editorial work with a range of others that could help subsidise this. OpenMute, our consultancy and tools agency, through which we also facilitate the publishing activity of many other independent producers, has been the most visible result. But the free-content economy of the web, which felt like a natural home for our discussions, eventually became Mute’s nemesis, as sales and subscriptions decreased at the same speed our web readership grew, and a growing international community of readers slowly and unwittingly dealt our ‘business model’ a death-blow.

We must now figure out what to do about this, as all of us who’ve worked on the magazine for so long have no intention of stopping our work because of a funding decision. Many different working models can and are already being imagined. Others in the many small to medium sized digitally-led organisations which have been cut will be trying to figure out their futures similarly, as will, it seems, many comparable small organisations whose governing remits aren’t deemed essential in the current round. We are particularly perplexed by the blow dealt to diversity-led organisations, who engage with questions we imagine will increase rather than decrease in urgency in ‘Austerity Britain’.

We will attempt to continue the discussion in a number of places. One, on our website,, which publishes weekly and where we will open space for responses to ACE’s funding decisions, on Mute Publishing as well as other organisations, as well as the Googlegroup, acedigitaluncut and media arts discussion list CRUMB*, where many are hoping to marshall a more specific discussion about the apparent disinvestment in the still badly understood area of digital practice. ACE’s decisions reflect a presumption digital has been ‘dealt with’ by conceiving of it as integrated in routine organisational development processes, rather than demanding to be explored as a highly self-reflexive area of work with a long and rich history linking into video, performance, independent publishing, installation art, software development, literature and more. Given the consolidation, surveillance and privatisation happening in the digital realm as we speak, now seems exactly the wrong time to be making such a move. The fact that ACE (and partner organisations like the BBC) are seeking to align themselves with digital innovation and broadcasting at exactly the same time just demonstrates further ignorance and shortsightedness.

Yours sincerely,
Pauline van Mourik Broekman

Director and co-founder of Mute, with Simon Worthington, and writing on behalf of brilliant staff, Editorial and Advisory Boards, namely Josephine Berry Slater, Caroline Heron, Howard Slater, Darron Broad, Laura Oldenbourg; Omar El-Khairy, Matthew Hyland, Anthony Iles, Demetra Kotouza, Hari Kunzru, Mira Mattar, Benedict Seymour, Stefan Szczelkun; Sally Jane Norman, Andrew Seto, Sukhdev Sandhu and Andy Wilson.