Friday , April 20 2018
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Prices don’t lie, even about art

Summary:
Something that all too often needs reiterating - prices are information. Not only are they not just random numbers assigned that we can change at will, they're information we should be using to guide our decisions. So it is, yea even with respect to art and artists:The head of a leading arts organisation has warned that London’s status as a world-class creative city is at risk because artists are being forced out of the capital.Anna Harding, the chief executive of Space studios, which provides premises for nearly 800 artists including three Turner prize winners, blamed rising property prices and shrinking studios for dramatically squeezing the time and space available for creative activity. Artists now face a choice between working full time to pay the rent and fitting in a few hours in

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Tim Worstall considers the following as important:

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Something that all too often needs reiterating - prices are information. Not only are they not just random numbers assigned that we can change at will, they're information we should be using to guide our decisions. So it is, yea even with respect to art and artists:

The head of a leading arts organisation has warned that London’s status as a world-class creative city is at risk because artists are being forced out of the capital.

Anna Harding, the chief executive of Space studios, which provides premises for nearly 800 artists including three Turner prize winners, blamed rising property prices and shrinking studios for dramatically squeezing the time and space available for creative activity. Artists now face a choice between working full time to pay the rent and fitting in a few hours in their studios at weekends, or giving up entirely, she said.

It's entirely possible that London's status as a leading creative city is important to some. But the evidence we've got here is not important enough, or not important to enough people. For consider what this price information is actually telling us.

That the property currently - or in the past perhaps - being used as artist studios now has greater value being used to do something else. That's why rents are higher in those alternative uses. Or, the same information, rents are higher than artistry can pay.

OK, shrug, that's just the universe telling us that we'll all be richer if those properties are turned over to such alternative uses. Note that this information isn't saying that we should or should not support the arts, that landlords should or should not preferentially treat such studios. It's entirely neutral information. Art doesn't pay enough to cover the costs of the inputs into it. 

Arts and culture contribute about £11.8bn to the UK economy, according to the Arts Council,

Super. But we've that evidence that art doesn't cover the costs of the inputs into it. We might have turnover therefore but we've actually got value subtraction. Not enough people value the output enough to cover the costs of doing it.

What we do about that is up to us, but we really should be using that information the price system is giving us, for that's rather the point of having the price system in the first place.

Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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