THE CONTRIBUTION OF ARTS EDUCATION TO NATIONAL INCOME ... the pattern which sells the things

Harry Hillman Chartrand ©
in The Future: Challenge of Change - A New
Anthology for Higher Education, N. Yakel (ed),
National Art Education Association of America,
Reston, Virginia, 1992.

We have paid a terrible price for our education, such as it is. The Magian World View, insofar as it exists, has taken flight into science, and only the great scientists have it or understand where it leads; the lesser ones are merely clockmakers of a larger growth, just as so many of our humanist scholars are just cud-chewers or system-grinders. We have educated ourselves into a world from which wonder, and the fear and dread and splendor and freedom of wonder have been banished. Of course, wonder is costly. You couldn't incorporate it into a modern state, because it is the antithesis of the anxiously worshipped security which is what a modern state is asked to give. Wonder is marvellous but it is also cruel, cruel, cruel. It is undemocratic, discriminatory, and pitiless. 
Robertson Davies, The Deptford Trilogy: World of Wonders, 
Macmillan of Canada, Toronto, 1987, p. 836.

Introduction

As the 20th century draws to a close, troubling signs cloud the dawning of the new century and millennium.  Three hundred years into the age of reason, opinion polls indicate that nearly half of the population believe in UFOs, astrology and more recently the New age movement. A significant part of society is fundamentalist Christian and accepts as divine truth a book written in ancient Aramaic and Greek, translated into Latin and from Latin into English, French and other modern languages.  Many are creationists convinced the world was created ex nihilo 7,000 years ago and who actively seek equal time in the classroom with what they consider to be the secular myth of evolution.  The drug epidemic (including alcoholism), so close to the hearts of morally self-righteous tub-thumping politicians, infects a population which cannot, or will not, cope with the stresses and strains of modern life except through escape into hedonism and temporary oblivion.  The scientific method, applied to the outer, material world, has taken humanity to the moon and beyond. It has given us a collective vision of the unus mundus - one world, one people, one biosphere.  But the inner world of feeling, intuition and sensation has not been, and perhaps cannot be, domesticated or tamed by scientific reason alone.  In fact, after 300 years of enlightenment and the scientific method, we live in a world riddled by superstition, irrational beliefs and ideological fanaticism.  As noted by the bard of the cultural revolution, Bob Dylan: Something is going on and you don't know what it is, do you Mr. Jones?

And where in this muddled inner world of mind and motivation is university research? It is caught in a web of scientism - of scientific English, political science, the science of political economy and all the other so-called human sciences. But reductionist methods, developed for the study and control of the outer, material world, when applied to the subjective reality of the self have generated few convincing insights to soothe the troubled heart of this postmodern era.

There are few remaining sectors of secular society that continue to address the inner world.  The most important is the arts. Art defines the inner drama of the individual.  It provides meaning in an age without apparent value beyond basic greed. But even our understanding of the arts has been reduced to popular myth like the Gulag and Garret Myth: Great Art is the Product of Economic Deprivation or Political Oppression.  It is only in the last century that this belief has held sway over the public imagination. Before that time, art was an integral part of life, not some separate and mysterious field of human endeavor.

It is this paradox of an age apparently dominated by science and technology in which irrational beliefs hold sway over a significant proportion of the population which provides the context of this paper.  These irrational beliefs cast a shadow on this age of reason and raise questions about the adequacy and relevance of university research.  This paradox represents the other side of the coin involving business and governmental questioning of the performance of universities in job training and application of university research for economic purposes.  To a degree, we are dealing with a situation similar to that identified by Goethe in his rebuttal to Newton's wavelength theory of color. Color is not just a physical phenomenon of photons or waves (yet even in scientific terms, the wave/particle paradox of light must be recalled).  It also is a subjective phenomenon involving how we see and understand the world around us.  Our understanding is incomplete and misleading if we accept only one side of the coin.

The theory of colors . . . has suffered much and its progress has been incalculably retarded by having been mixed up with optics generally, a science which cannot dispense with mathematics; whereas the theory of colors, in strictness, may be investigated quite independently of optics. (Goethe, 1810, para. 725)

WORKING DEFINITIONS

To understand the contribution of arts education to national income, we must understand that art is not only a subjective phenomenon, but also one with extremely important objective consequences for the economy.  We will begin by placing art within the context of those factors generally accepted as contributing to economic growth, specifically science, technology, and information.  Second we will consider the evolution of national income as a concept and, in the process, demonstrate how art contributes to its growth.  Third, we will consider the demographic revolution that is fuelling increasing arts participation.  Finally, we will consider signs of the growing importance of the arts and hence of arts education within the emerging economy.

Science

Science can be defined in many ways.  For our purposes, it is defined as systematic and formulated knowledge.  This permits inclusion of both the natural and social sciences.  In this context, research is the process by which scientific knowledge is discovered, developed and advanced. In contemporary society the focus for scientific research is the university. This has not always been the case, nor need it remain so in future.

Art

Art can also be defined in many ways.

Art, according to some, is an attempt to represent through the use of a sensuous medium the actual or ideal, the things we perceive or the underlying nature of reality, by imitating their appearance or their formal structure.  Others view art subjectively as the manifestation of pleasure or emotion.  At times art is interpreted as psychic symbol; at other times it is seen as the symbol of feeling.  It has been construed as a mode of expression, and it has been rendered as a special language through which communication can take place. It is a free, self-gratifying activity resembling play, the manifestation of the inner workings of the universal Will, or direct, intuitive vision.  Moreover, each theory purports to give an exclusive and comprehensive account of what art is; each seizes upon undeniable features of art and casts them into a meaningful mold.  It would appear almost as if the laws of logic were here suspended, and that all the explanations, however, incompatible with one another, were collectively true. (Berleant, 1969)

For our purposes, art is defined as skill developed through practiced application.  Therefore, art involves experiential as opposed to scientific learning.  In contemporary society the focus for artistic advance is the professional nonprofit arts community including traditional art forms such as opera and ballet.  Unlike science, the new does not necessarily displace the old in art. Thus images and words of artists from long vanished civilizations continue to inspire contemporary artistic creators and consumers.  Artistic knowledge tends to appreciate rather than depreciate as in science (Boulding, 1986).

A number of other contrasts can be drawn.  First, unlike science, the role of the university in professional training and development in art is relatively small and historically recent, except for music (Robinson, 1982, p. 134).  With the exception of music and literature (rhetoric and grammar), art was not part of the ancient or medieval liberal arts curriculum (Cantor, 1969, pp. 66-67).  It was only in the Renaissance that the fine art academy emerged as a formal center for visual art education (vom Busch, 1985, p. 3).  In theater and dance, there were no formal training institutions in the English-speaking world until the late 19th and early 20th centuries (Robinson, 1982, pp. 178-179; 191-192).  The traditional independent status of the music conservatory is also evidence of the separate institutional pattern of learning pursued in art and science.  Second, it can be said the science knows and art does. And, third,

Whereas art begins with desired effects and finds causes to create these effects and no others, Science starts with causes and seeks effects to confirm or negate these causes. Art organizes ignorance by precepts while Science organizes knowledge by concepts. (Nevitt, 1978, p. 7)

Technology

Technology, for our purposes, can be defined as the application of knowledge, either scientific or experiential, for practical purposes. In fact, the word technology is derived from the Greek teckne meaning art combined with 'ology' derived from the Greek logos meaning reason.  Accordingly, both artistic and scientific knowledge are sources of technology.  As will be demonstrated, it is only since the Second World War that university-based scientific research has become the primary source of what is popularly called technological change.

Information

Information can be defined as discreet items of knowledge generated through the scientific method or experience.  Such discreet bits of knowledge can include mathematical equations and musical notation.  Knowledge, in turn, can be defined as systematized and retrievable information.  Beyond knowledge, however, there is understanding which involves the emotional meaning and value of information and how it may be applied.

Scientific research is the most information-rich source of intermediate or producer demand for information in the so-called information economy (Porat, 1977).  Art is the most information-rich source of final or consumer demand for information (Chartrand, 1987a).  Intellectual property rights such as copyright, patents, registered industrial design and trademarks form the legal foundation for the industrial organization of activity in art and science (Commons, 1957).  In the sciences, computer-communications technology is furthering this process, while in art, it is the home entertainment center which currently represents the leading edge of the industrialization process.  Contrary to popular misconception, the emerging information economy does not imply a golden age of free flowing information. Rather, it involves the reification of the economic value of information, that is, the monetarization of information (Naimark, May 6, 1988).

NATIONAL INCOME

Through history, the goods and services that we buy, in which we invest and on which we pay taxes has changed. The total of these final demands on our pocketbook is called national expenditure. In symbolic logic, national expenditure (Ye) can be expressed as:

Ye = f (C, I, G) where,

C= Consumption

I= Investment

G= Government

Similarly, through time, the means by which we earn the income to consume, invest or pay taxes has come from a changing set of factors of production including capital, labor, and technology. Taken together, these income flows are called national income. In symbolic logic (using the conventional expression) national income (Yi) can be expressed as:
Yi = f (K, L, T) where,

K = Capital

L = Labor

T = Technology

Changes in the nature and mix of these factors of production have generally involved crises in confidence concerning previously accepted systems of economic thought (Keynes, 1937).  As will be demonstrated, however, the addition of new factors of production to the national income equation is, in a sense, similar to Maslow's need hierarchy.  The new factor does not displace the old but rather creates a new margin for economic growth based upon a foundation consisting of existing factors of production.

In economics, national expenditure and income represent an accounting identity.  The one is exactly equal to the other, and are said to be identical, or in symbolic logic: Ye = Yi

Pre-Classical Period

From the 16th until the end of the 18th century, it was accepted that only physical capital (K), for example, gold, silver, and land, was productive of an economic surplus.  Through reinvestment of this surplus in primary industries like farming, fishing and mining, it was believed that national wealth would increase.  In fact, these were considered the only productive sectors of the economy. In symbolic logic, the assumption that national income (Y) is a function of capital (K) is expressed: Y = f(K)

European conquest of the New World appeared to confirm this view.  The English Pamphleteers and French economists Quesnay and Tourgot were the dominant exponents of this theory of value (Schumpeter, 1954).  Today, these sectors make up what are called the primary industries of the national accounts.  Monetarists and gold standard advocates continue to echo, in one form or another, this ancient economic dogma of value.

With respect to scientific knowledge, the Royal Society was established in England in 1660 as a focus for the scientific method.  Technology during this period, however, was essentially based on experiential knowledge developed by the guilds.  Scientific information was symbolic of national wealth, in other words, a nation rich in gold could demonstrate its wealth through pursuit of scientific knowledge.  Similarly, art was considered a symbol, not a source of wealth:

. . . the idea of using art as a form of investment was unknown in the eighteenth century . . . . One bought paintings for pleasure, for status, for commemoration, or to cover a hole in the ancestral panelling. But one did not buy them in the expectation that they would make one richer. (Hughes, October, 1984, p. 25)

Classical Period

By the end of the 18th century, division and specialization of labor (L) combined with specialized industrial equipment (K) were accepted as productive of an economic surplus, thus:
Y = f (K,L)

Investment in manufacturing industries was believed to increase national wealth. Smith, Ricardo, Malthus, Marx, and James Mill were the dominant theorists of this period (Barber, 1967). The success of the United Kingdom in the Industrial Revolution appeared to confirm this economic belief.

Manufacturing constitutes the secondary industries of contemporary national accounts.  Today some market economists believe that only the manufacturing of physical goods is productive of an economic surplus. On the other hand, there are Marxists who believe only the worker is productive.  During this classical period, services including scientific research and the arts were considered important social activities, but not productive of national wealth.

In fact, (Adam) Smith's usage of the term "wealth" can, with one important qualification, be translated into modern terminology as "national income."  The point at which Smith and today's national income accountants in Western countries part company turns on the definition of "productive" activity.  In Smith's view, only the outputs of the productive employments of labour should count in calculations of the social product.  Virtually all "service" activities were excluded, on the grounds they failed to yield either tangible products or reinvestable surpluses.  This definition also reinforced Smith's general attitude towards a wide range of policy issues. It followed that all activities of governments were unproductive as well as "some both of the gravest and most important, and some of the most frivolous profession: churchmen, lawyers, physicians, men of letters of all kinds; players, buffoons, musicians, opera-singers, opera-dancers, etc.". (Barber, 1967, p. 29)

To a degree this skepticism was justified because at the time major technological breakthroughs did not result from organized university-based scientific research, but rather from the experience of the individual inventor.

The men responsible for technological innovations . . . during the beginning of the Industrial Revolution were non-conformists who had been excluded from the universities and learned their science indirectly while pursuing their trade. In other words, the coupling between science and technology was very loose and did not rely on the established system of higher education. (Senate Special Committee, 1970, p. 21)

Neo-Classical Period

By the mid to late 19th century, systemic technological change (T) operating through perfectly competitive markets was recognized as productive of an economic surplus.  Investment in improving financial markets, steam-powered transportation and enhanced communications such as the telegraph were believed to increase national wealth, thereby:
Y = f (K, L, T)

The success of the United States in developing a continental economy (Chandler, 1962) appeared to confirm this belief.  The dominant theorists of this period were John Stuart Mill and Alfred Lord Marshall (Mill, 1843; Marshall, 1890).  This type of technology is called disembodied technology, in other words, it does not refer to the application of a specific item of scientific information in a specific product, but rather to general systemic improvement in economic functions like transportation and communications.

Today, finance, transportation, and communications form part of the tertiary sector or service industries of the national accounts.  During this neo-classical period, government was generally considered an impediment rather than a source of national wealth.  This was the period known as laissez-faire liberalism.  Neoconservatives who believe in setting business free through deregulation and shrinking the power and reach of government, accept this economic dogma of value.

With respect to scientific knowledge, it was during this period in England that technology and the applied arts became formalized in institutions of higher learning called polytechnics.  The success of these institutions resulted in their eventual absorption into the tradition universities where the pure sciences and the scientific method combined with the applied sciences to produce the pattern of scientific learning we know today.  Furthermore, in 1870 compulsory primary education was introduced in England which began the process of diffusing scientific and experiential knowledge to a wider proportion of the population than at any time in history.  It is important to note, however, that the major innovations of the period, for example, the telephone, telegraph, and electric light did not result from university-based research but from the insight of independent inventors, who, like Bell and Edison, created their own research institutes outside of the university.

During this Neoclassical period, works of art (including reproduction rights to paintings and drawing), when sold through the emerging bourgeois art market, were considered a source of national wealth.  The emergence of such reproduction rights reflected both the impact of new recording technologies as well as the emergence of new economic institutions such as the limited liability corporation.

The second half of the nineteenth century was, in market terms, the great age of the living artist . . . By this time the purchase price of a work of art included all reproduction rights to the picture.  The ownership of these rights was of vast importance to the Victorian art market. It affected the price of popular pictures in exactly the same way that the market for film and TV rights affects the price of popular novels today . . . . What transformed the popular market for living artists was the steel-faced engraving plate, which made it possible for just about everyone . . . to have a three-shilling print. (Hughes, October, 1984, p. 27)

In fact, it was at the very time that the Arts for Art's Sake Movement (Henderson, 1984, p. 46) withdrew from mainstream industrial society in the 19th and 20th centuries, that new communications media emerged. These included the steel engraving plate followed by the photograph, sound recording, motion picture, radio, television, and video recording. These new technologies permitted the industrialization of art through commercial exploitation of revenue streams implicit in copyright. In addition, the commercial exploitation of these technologies by communications conglomerates has resulted in the emergence of what is called commercial popular culture which eclipsed traditional folk art.

Keynesian Period

The Great Depression of the 1930s convinced most economists and policy-makers that the perfectly competitive market was no longer the dominant form of industrial organization.  Large scale industrial enterprise combined with widespread unionization required government's active involvement to maintain full employment and price stability in the face of imperfect markets.  Therefore, from the mid-1930s until the recessions of the late 70s and early 80s, government (g) intervention was considered necessary to assure growth in national income, that is,
Y = f (K, L, T) ^g

Government fine tuning of the economy and counter-cyclical management of aggregate demand were considered critical in assuring economic growth.  As indicated in the equation, however, government was assumed not to generate wealth directly, but rather to maintain and sustain its growth by assuring the efficient interplay of capital, labor, and technology.  Thus while tax cuts could stimulate growth, growth resulted from the return of resources to the private sector where improvements in the allocation and mix of capital, labor, and technology were possible.  In effect, the government became recognized as responsible for setting the rules of the game for economic behavior.  The role of government is recognized in the national accounts as the public sector.  Lord Keynes was the dominant theorist of this period (Keynes, 1936).  Liberals and social democrats committed to the active intervention of the state continue to hold this Keynesian economic theory of value.

During this Keynesian period of economic thought, art and science were recognized as public goods.  It was accepted that if the social benefits of an activity could not be fully captured by private producers in the marketplace, then government had a legitimate role in ensuring that an appropriate quantity and quality were made available to the general public. 
The arts are public goods whose benefits demonstrably exceed the receipts one can hope to collect at the box office.  It is a long-standing tenet of economics that if the wishes and interests of the public are to be followed in the allocation of the nation's resources, this is the ultimate ground on which governmental expenditures must find their justification. Government must provide funds only where the market has no way to charge for all the benefits offered by an activity. When such a case arises, failure of the government to provide funds may constitute a very false economy. (Baumol, Bowen, 1966)

It was during this period that the university and university-based research became the dominant source of new technology including chemical, electrical, and nuclear technologies. The war years confirmed that scientific knowledge could serve a major role in the development of technology. During this period, the concept of technological change evolved into embodied technological change, meaning that specific items of scientific knowledge were embodied in a specific product, for example, the transistor radio. Conventional wisdom held that the era of the independent, nonconformist inventor was drawing to an end. However, this convention could be quickly swept away by the appearance of another Bell, Edison or Marconi.

Postmodern Period

The success of the world economy from the Second World War through the early 70s led most economists and politicians to accept the Keynesian creed that government intervention was the ultimate guarantor of growth and development. By the mid-70s, however, stagnation, recession, the oil crisis, and growth of public sector debt created a crisis of confidence, a crisis predicted by Keynes himself.

Today, various economic theories and dogma compete for attention and acceptance. To an extent, the 1980s are a time of cultural counter-reformation in which many strive to resuscitate values and beliefs swept away by the turbulent cultural revolution of the 1960s, and the economic crises of the 70s and 80s. This lack of confidence is similar to contemporary architecture in which the certainties of the modern or international style have been replaced by an eclecticism of design known as postmodern architecture. By analogy, we have entered the era of postmodern economics, an era without a generally accepted dogma, an era in which we must begin again a long trek for economic truth, understanding, and public confidence.

At present, no single school of economic thought enjoys general public confidence. Various new schools have, however, emerged in recent years which share a belief that new factors of production have become the source of economic growth. Such new factors generally have been recognized through redefinition of older concepts such as capital (K) and technological change (T):

A strong argument can be made that information capital is as important to the future growth of the American economy as money. Despite this perception, this intellectual capital does not show up in the numbers economists customarily look at or quote about capital formation.... In saying that, I am not arguing that money capital will not continue to be very important; it will. But I am suggesting that the amazing accumulation of knowledge capital in the last twenty years is very substantial and growing every day but it is uncounted. We have little or no control over the natural resources within our borders, but we do have control over our educational and cultural environment . . . . If we want better economic forecasting and better policies, clearly some way needs to be found to crank the growth of knowledge into our equations. (Wriston, 1985)

The importance of breaking out the constituents of traditional technological change is evident when its contribution to growth in national income is considered:

Economists working in this area .. conclude that less than one-third of the growth rate of output per worker over the years from the turn of the century can be attributed to the rise in capital per worker. Over two-thirds of the growth rate of output per worker has therefore to be attributed to all other factors covered by the catchall called technological advance. (Shapiro, 1970, p. 493)

Revision of the traditional concept of technological change permits recognition of new factors of production contributing to growth in national income. From this revisionist perspective, technology, as a factor of production in the national income equation, has evolved from disembodied to embodied to epistemological technological change, that is, changes and differences in the nature and sources of knowledge, specifically the physical and social sciences and art.

Physical Technology

Advances in physical technology (T) result from research in the physical sciences. In the last several generations such research has resulted in creation of the chemical, electrical, and nuclear industries. In this generation, such research has resulted in creation of the electronic and bio-technology industries. It is generally accepted that this type of technological change leads to growth in national wealth. To the best of the author's knowledge, however, there are no empirical studies that demonstrate a causal relationship between investment in physical research and development and growth in national income. Theoretical and political belief in the argument, however, is strong. Various terms have been used to describe what, at any moment, is considered to be the most efficient physical technology. The term leading edge has been used. Ironically, the term state of the art has also been applied.

Organizational Technology

The ways in which workers and managers are motivated and the ways in which they combine with financial capital, plant and equipment to create business enterprise can be called organizational technology (O). Advances in organizational technology emerge from research and development in the social and management sciences. Such advances lead to growth in national income and affect the capacity of a company or a country to effectively innovate new products and processes. The economic impact of improved organizational technology on national wealth has been estimated at 20 to 40% of the net national product of the United States (Liebenstein, 1981). The Economic Council of Canada has also recognized the negative consequences of poor organizational technology in Canada (Economic Council, 1985). The phrase which has become the touchstone for organizational success is in search of excellence.