Kevin Drum thinks I’m a crank. He is almost certainly right. But on this narrow point, let me riff a bit further. He writes:
The insane wealth of socially worthless Wall Street zillionaires helps provide a living for trapeze artists and experimental fiction writers? That doesn’t even strike me as “high-end consumption,” for starters. Do rich people really go to Cirque du Soleil and read Michael Ondaatje? I suspect that better examples would be gold-plated bathroom fixtures and Damien Hirst artworks. Both of which, frankly, the world could do without pretty easily. Especially the Damien Hirst monstrosities.
It depends on which rich people we’re talking about. But it’s pretty clear that the fiction industry in the modern US and UK relies on a constellation of MFA programs, fellowships, writers retreats, and reviews that are, in various ways, supporting by artistically-inclined rich people, or by the trusts they established at some point in the past.
Maybe this is just class envy talking, but America’s wealthy class doesn’t strike me as much like the Medicis of old, at least when it comes to support of great art. For the most part, it also doesn’t strike me that support of great art requires dense agglomerations of rich people anyway. Those agglomerations probably help support great museums and great opera houses, but that’s about it. And in any case, all that great art would still exist somewhere even if MOMA and the Met monopolized less of it.
I’m pretty sure there isn’t a fixed quantity of great art. Rather, I think artists respond to incentives. It’s pretty clear to me that Kevin and I disagree with what constitutes great art, but I feel as though decentralized, unequal, market-driven societies have done a pretty good job of producing a lot of it, particularly commercial art, decorative art, etc.
Many, many points to raise:
(1) I actually do think agglomerations of rich people matter. Kevin and I disagree on Damien Hirst. Perhaps we can agree that the arts are a pretty broad category. I would include fine dining in the relevant category. Having lots of affluent people who eat out frequently can help fuel creativity in this space. It might not be food that Kevin or I would enjoy eating in every instance, but I am, for aesthetic reasons mainly, very glad to have access to lots of culinary innovation.
(2) Kevin I disagree on the social worthlessness question. It’s not clear to me that “real economy” innovators who make vast sums selling what my friend Rory Sutherland calls “Veblen goods” — think jewel-encrusted refrigerators, or luxury sedans — are that much more noble than financiers. I find the idea of social worth incredibly subjective, and I prefer to steer clear of me. It is possible that we need stronger leverage and capital requirements and speed bankruptcy laws (I support all of these things), but my position on these issues has nothing to do with social worth.
(3) All that said, it is pretty clear that many members of the financial elite really are great patrons of the arts and civic groups, etc. Mark Gorton is a terrific example. He plowed money from HFT into advocacy for bicycle lanes and much else.
(4) Berlin is a great city for culture, and it’s not exactly an agglomeration of the ultra-rich. London has a much better theater scene and arguably a much better arts scene overall than New York, yet London and New York are roughly comparable on the agglomeration of the rich front. High rents can drive the creative out of town. All of this is true. It is one of many reasons I oppose building restrictions in our great cities. In Germany, the state is the great patron of the arts.
But I think we need a broader understanding of what we mean by cultural patronage. Berlin has become an artistic workshop, but it is not the sole site of consumption for Berlin-created art and Berlin-created ideas. Indeed, many things created in Berlin are sold in London, and without the London market those things would dry up. So why does the London agglomeration matter? Because wealthy Londoners will compete to outdo each other — how novel and thrilling is your consumption, etc. (On an unrelated note, I’m also comfortable with state and local governments supporting the arts provided they do so transparently.)
(5) Basically, I’m a believer in the importance of cultivating eccentricity. I see dense wealth concentrations as enablers of eccentricity.
(6) Let me underline that absolute incomes at the bottom are an important issue. I just don’t think it’s closely related to top incomes, per Lane Kenworthy:
Would the incomes of low-end households have grown more rapidly in the absence of the top-heavy rise in inequality? If we look across the rich nations, it turns out that there is no relationship between changes in income inequality and changes in the absolute incomes of low-end households. The reason is that income growth for poor households has come almost entirely via increases in net government transfers, and the degree to which governments have increased transfers seems to have been unaffected by changes in income inequality. (For more detail, see my piece in the November-December issue of Challenge.)
There is much more to say about the Kenworthy thesis, but we’ll live it there for now.