White paper on creativity - ebla center

Part IVLastly, the intangible goods of the historical and artistic heritage – such as those in theperforming arts – have strong connotations of meritorious public goods. Publicintervention or private donations thus seems to be one of the most appropriate strategiesfor the optimal production of these goods.Performing arts, for example, are victim to “Baumol’s cost disease”, i.e. rising wages forwork with stagnant productivity in response to wage rises in sectors with growingproductivity. When performing a concert of classical music, an orchestra has the sameproductivity today as in the 19th century. But over the years musicians have been awardedpay rises not on the grounds of productivity, but simply because in one overallintercommunicating labour market increases in productivity in one sector (e.g.manufacturing) spread to non-progressive sectors (e.g. music) by simple contact, becauseof the egalitarian union policies and the presumed effect of the mobility of workers. Thisphenomenon thus leads to continually rising costs in the sector of performing arts withstagnant productivity. That is why the production of many performing arts – such astheatre, opera or concerts of classical music – may not be very profitable or make losses. Infact, several of the performing arts are heavily subsidised by public authorities in almost allcountries. Without this aid, many forms of art would be greatly impoverished or wouldeven disappear.WHITE PAPER ON CREATIVITY 253