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.

 

Content

Introduction

Working Definitions
    Science
    Art
    Technology
    Information

National Income
    Pre-Classical
    Classical
    Neoclassical
    Keynesian
    Post-Modern
       Physical Technology
       Organizational Technology
         Design Technology
       The Quaternary Sector

Demographic Revolution
    Urbanization
    Education
    Women
    Aging

Signposts to the Post-Modern Economy

The Artist: From Anonymity to Celebrity
       Arts Employment
       Arts Labour Force
       Arts Industry Labour Force
       Artists
       Arts Administrators
       Arts Technicians
       Related Non-Arts Occupations

  Advertising
  Consumer Research
  Health Care
   Invention & Innovation
   Narrowcast Marketplace
   New Production Skills
   ReDecade

Conclusions  

References

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.

 

Design Technology

Just as the physical and social sciences are the source of physical and organizational technological change, art is the epistemologic source of improved product design (D). Unlike the sciences, however, advances in art do not generally take place in the university but rather emerge from the professional nonprofit fine arts where art for art's sake is the dominant motivation (Chartrand, 1987a).

The contribution that design brings to the marketplace can be called elegance. This term is also used in mathematics, the physical sciences, and economics where it expresses Occam's Razor a guiding principle of the scientific method: Fewest assumptions for the maximum explanation. Elegance can be defined as "ingeniously simple and effective" (Sykes, 1985, p. 311).  This also catches the sense of economy as frugality.

Aesthetic design is fundamentally different from technical or functional design such as a more fuel-efficient automobile engine. Its impact on consumer behavior involves what has been called "the best looking thing that works" (Cwi, 1985). If a consumer does not like the way a product looks, he or she may not try it. Similarly, a rich endowment of natural resources does not guarantee a nation will develop up-scale value-added products. For example, Canada is the largest timber producing country in the world and yet imports Swedish IKEA furniture. This is not because Swedish pine is better, but rather due to superior design.

The importance of art to international economic competitiveness was first recognized in the English-speaking world over 150 years ago in the United Kingdom with the establishment of the first school of design in 1836. Until 1814, the Statute of Artificers had regulated training and employment of artisans in the craft guild tradition. In that year, responding to deregulation or laissez-faire economic policies, Parliament abolished the statute. In short order, the guild system collapsed and the labor market became flooded with unskilled workers. By 1835 the quality of British production, particularly textiles, had declined to the point that the British Board of Trade appointed a select committee to investigate the problem and recommend remedies. The committee called for the direct application of art in manufacturing in order to maintain competitiveness with European rivals. The result was creation of schools of design (Savage, 1985, pp. 94-97).

Similarly, in 1870, the Commonwealth of Massachusetts became the first American state to make art education a requirement in the public schools with passage of the Drawing Act. The Act originated through pressure by Boston manufacturers who argued that European students were trained in design and drawing and therefore American manufacturers suffered a competitive disadvantage (Freedman, 1985, p. 21). Within two decades, the same argument served to introduce art education in Canadian schools (Chalmers, 1985, p. 108). During this period, the most eminent of contemporary economists, Alfred Lord Marshall, explicitly recognized the importance of art to economic life, even if he questioned the moral results of art education:

Education in art stands on a somewhat different footing from education in hard thinking: for while the latter nearly always strengthens the character, the former not infrequently fails to do this. Nevertheless the development of the artistic faculties of the people is in itself an aim of the very highest importance, and is becoming a chief factor of industrial efficiency . . .. Increasingly wealth is enabling people to buy things of all kinds to suit the fancy, with but a secondary regard to their powers of wearing; so that in all kinds of clothing and furniture it is every day more true that it is the pattern which sells the things. (Marshall, 1920, pp. 177-178)

Since the Great Depression of the 1930s, however, the economic importance of design, and therefore the contribution of art to national income, has, in effect, been forgotten. Partially this reflects the perceived dubious morality of the artist reflected in Marshall's words. It also reflects the pedagogic triumph of the Pestalozzian rational for art education, namely to develop creativity and expression, which displaced the economic rationale in the 1930s (Betenas, 1985, pp. 99-101). It also reflects the traditional dis-ease concerning art felt by political philosophers since the time of Plato:

We must remain firm in our conviction that hymns to the gods and praise of famous men are the only poetry which ought to be admitted into our State. For if you go beyond this and allow the honeyed muse to enter, either in epic or lyric verse, not law and the reason of mankind, which by common consent have ever been deemed best, but pleasure and pain will be the rulers in our State. (Plato, The Republic. Book X)

It also reflects, however, a general shortsightedness on the part of contemporary economists and other social scientists concerning the nature and implications of the Industrial Revolution. The Industrial Revolution not only transformed economic production, it also transformed the nature of consumptions making phenomena like advertising, the department store, fashion, and the mail order catalogue critical to the modern economy (McCracken, 1988, p. 4). This lack of study has resulted in little empirical evidence concerning the impact of art on economic competitiveness. But while the impact of improved design has not been quantified, its impact on competitiveness is again being recognized:

There is, then, another aspect to culture, namely good taste, good design and creative innovation, that should enable smaller industrial economies to compete effectively in the world economy .... In this endeavor, higher quality implies an organic relationship between business and engineering, on the one hand, and design and craftsmanship, on the other.... High quality products, technologies, plants, homes, cities and locales require the presence of creative artists of all kinds. To increase the long-run supply of artists ... governments must support the artists and the arts. The long-term return from investment in artists and the arts is real and substantial. In the absence of strong public support of this sector, Canada will not reap these benefits. Governments at all levels should increase their contribution to their respective arts councils. (Royal Commission, 1985, pp. 115-116)

Today the importance of design in international competitiveness can be seen in the United States and Canada where higher quality consumer products tend to come from abroad, particularly from Europe. Why? Given that capital plant and equipment in North America is as good as that in Europe, the answer is not superior European production technology. In fact, it results from a feedback between skilled consumption and production resulting in superior design. As noted by Tibor Scitovsky in his path-breaking book, The Joyless Economy:

The North American buyer of European imports benefits from the high standards which careful European shoppers' finicky demand imposes on their producers; he does not have to be a careful shopper himself. In other words, he can be what is known as a free rider, enjoying the benefits of other people's careful shopping without paying his share of the cost, in terms of time and effort, that careful and aggressive shopping involves. That explains why producers find it unprofitable to cater to his demand by trying to out-compete high quality imports, despite the often exorbitant ?price they fetch. Consumers seem willing to pay a high price, in terms of money, for the reputation of European imports; that is we pay cash to obtain high quality without having to pay for it in terms of careful shopping. (Scitovsky, 1976, p. 178)

When the design advantage of European producers, and increasingly that of Japanese producers of consumer electronics, is combined with the wage advantage of offshore or Third World producers, then the North American producer is left with a narrowing mid-range market. This combination of design and wage disadvantages may explain the apparent deindustrialization of North America. Improved productivity through robotics and other new technologies may lower costs of production, but only improved design will secure for North American producers part of the growing up-scale consumer market.

The importance of enhanced design is becoming apparent to some major North American corporations including SCM, Teledyne, Black & Decker, and J.C. Penny. This change reflects a bottom-line awareness that if a consumer does not like the way a product looks, then he or she may never get close enough to find out how well it performs, and therefore there is no chance for a sale. Growing awareness of this basic principle is resulting in increased recognition of the importance of industrial design and the role it plays in helping companies meet sales and marketing goals. More and more marketers are now enlisting the aid of design-consulting companies or setting up their own in-house design departments (Skolnik, October, 1985, p. 46). From where do design skills come? They come from the practice of art.

 

The Quaternary Sector

Changes in physical technology resulting from research in the physical sciences (T), improvements in organizational technology (O) resulting from social and management science research, and improvements in design (D) resulting from advances in the arts (Shapiro, 1970, p. 495) are now major sources of growth in national income, thus:
Y = f (K, L, T, O, D) g

Advances in physical, organizational, and design technology are legally protected by intellectual property rights legislation including: patents (emerging from the physical sciences); registered industrial design (emerging from the physical sciences and the arts); trademarks (emerging from the arts) and copyright (emerging from the physical and social sciences, humanities, and the arts). Managerial and industrial know-how also fall into this category of abstract goods and services. At present such abstract goods and services constitute what can be called the quaternary or fourth sector of the economy.

At any point in time, there exists a stock of capital and labor which embodies current and past technical and educational attainment. Advances in physical, organizational, and design technologies are flows that become embodied in new products, industrial processes and equipment, organizational methods, styles, and fashions.

In dollar terms, research, both scientific and artistic, involves a tiny amount of resources compared to the existing capital stock and labor force. However, its role in economic growth is that of a catalyst stimulating changes and improvements in the quality and efficiency of capital and labor (Shapiro, 1970, pp. 490-491). The information economy is based on the buying, selling, and licensing of abstract intellectual property rights which result from advances in physical, organizational, and design technologies.

The importance of such abstract goods and services can be demonstrated in two ways. First, in external trade a proxy for their importance is Ónvisible exports. In the United States, for example, it was invisible exports that minimized the impact of enormous price increases in petroleum imports during the 1970s and 1980s:
These "invisible exports," preponderately the yield from human capacity, particularly organizational and managerial capabilities, nearly offset the increased expenditure for petroleum imports that put the foreign-exchange account $7 billion in the red. (Ginzberg, Vojta, 1981)

In the domestic economy, the importance of abstract goods and services, and more specifically the contribution of art to national income, can be demonstrated by the size and nature of the arts industries and the applied arts. There are four distinct segments of contemporary art, namely the fine arts, the commercial arts, the amateur arts and the applied arts. In each, the creative source is the individual artist. The fine arts are a professional activity which serves art for art's sake just as knowledge for knowledge's sake is the rationale for pure research in the sciences (Chartrand, 1980). The commercial arts are a profit-making activity which places profit before excellence. The amateur arts are a recreational activity that serves to re-create the ability of a worker to do his or her job, or a leisure activity that serves to self-actualize a citizen's creative potential, and thereby permits him or her to more fully appreciate life. The applied arts involve, as their name suggests, application of art in the day-to-day activities of all businesses and the public sector, for example, interior and product design, illustrating art, and copy writing and editing.

Each art activity is intimately interrelated. The amateur arts, in actualizing the talents and abilities of the individual citizen, provide an educated audience and initial training for the fine and the commercial arts. The fine arts, in the pursuit of artistic excellence as an end in and of itself, provide research and development for the commercial and the applied arts. The commercial arts, in the pursuit of profit, provide the means to market and distribute the best of the amateur and the fine arts to an audience large enough and in a form suited to earn a profit. The applied arts borrow talent and technique from the other three forms of artistic endeavor and apply the experiential knowledge in all non-arts industries.

Collectively the fine, commercial, and amateur arts make up the arts industries which include advertising, broadcasting, crafts, motion pictures, performing and visual arts, publishing, sound, and video recording. Compared to all manufacturing industries, the Canadian arts industry in 1985 was the largest with respect to employment, the 3rd largest with respect to salaries and wages of more than $3.8 billion and the 9th largest with revenues of $11.3 billion or 2.4% of G.N.P. (Research & Evaluation, November, 1988). It is important to note that between 1982 and 1985, the rank order of the arts industry's salaries and wages jumped from 7th to 3rd, indicating the growing employment importance of the arts in the postmodern economy.

Perhaps the most significant economic contribution of art to the economy is employment. Between 1971 and 1981 the Canadian labor force grew by 39%. The arts labor force, or individuals using arts- and crafts-related skills in their day-to-day jobs, increased by 74%. With respect to the applied arts, almost 65% of all artists, employed full-time as artists, were employed outside the arts industries in 1981 than were employed within them. The majority of artists in fact work in other industries as designers, illustrators and decorators. Their skills are used in all primary, secondary, and tertiary industries (Research & Evaluation, 1987a). Artistic skills and talent are like scientific skills, they pervade and permeate all sectors of the contemporary economy. Taken together the arts industries and the applied arts employed more than 414,000 workers in 1981, or nearly 4% of the total labor force, making artistic employment larger than the primary agricultural labor force and larger than total federal government employment in Canada.

 

THE DEMOGRAPHIC REVOLUTION

There are four fundamental demographic changes that are contributing to growth in arts participation and the emergence of the arts as a significant factor of economic production. These are: rapid urbanization, rising levels of education, increasing participation of women and the aging of the population.

Urbanization

In the last century the world has changed from a predominantly rural to an urban society. Artistic activity has always concentrated in cities. The city provides the necessary threshold and concentration of population required to support an integrated network of cultural facilities, pools of artistic talent and a rich spectrum of audiences. These facilities, talent, and audiences are spread out across the country in a hierarchy of regional and national centers of excellence which collectively constitute national civilization (Litwick, 1970):

The polis is the place of art .... The magus, the poet who, like Orpheus and Arion is also a supreme sage, can make stones of music. One version of the myth has it that the walls of Thebes were built by songs, the poet's voice and harmonious learning summoning brute matter into stately civic forum. The implicit metaphors are far reaching: the "numbers" of music and of poetry are cognate with the proportionate use and division of matter and space; the poem and the built city are exemplars both of the outward, living shapes of reason. And only in the city can the poet, the dramatist, the architect find an audience sufficiently compact, sufficiently informed to yield him adequate echo. Etymology preserves this link between "public," in the sense of the literary or theatrical public and the "republic" meaning the assembly in the space and governance of the city. (Steiner, 1976)

Successful professional arts activity in a given city tends to be translated into national culture, that is, the city is the testing ground from which shared national artistic goods and services emerge. In turn, national culture tends to set the standards of excellence against which regional culture is judged. Thus an intimate linkage exists between regional and national culture which, in turn, links with multinational culture. The arts thereby transcend political and geographic boundaries of cities, provinces, and nations. The advent of the media arts has amplified, not inhibited, this tendency.

The arts also play a direct role in enhancing the economic viability of cities. They contribute, for example, to urban revitalization and industrial location. The arts assist in urban revitalization in two ways. First, the arts enhance one of the built-in advantages of the city, that of urbanity (Perloff, 1979). They increase excitement and variety and thereby draw large numbers of people from the suburbs as well as tourists who in turn support business development. An example is the Lincoln Center built in 1959 in a depressed neighborhood in New York. Some 14 years later the center was surrounded by $1 billion worth of new office buildings, apartment complexes and restaurants, thereby increasing the tax base of the city (Backerman, 1983).

Second, through "artists' colonies," the arts can revitalize run-down neighborhoods. In most cases the low income of artists forces them to live in cheaper areas of a community. When they concentrate in such areas, they change the ambiance and image of the neighborhood. By enhancing the district's image, an artists' colony causes "gentrification" by attracting young middle class professionals to share in the artistic ambiance.

Generally, an artists' colony is associated with improvement in housing and commercial building stock resulting in increased rents and taxes. Eventually artists can no longer afford to live in the neighborhood and move on. Examples include Yorkville in Toronto and the Soho area of New York City (Jeffri, 1982, p. 44).

Traditional industrial location theory suggests that companies locate plants in a particular community for reasons such as access to markets, raw materials, and energy supply. During the 1960s, however, many companies began to locate their operations according to the amenities available in a given community, such as good weather, easy access to cultural, educational, and recreational facilities, and so forth.

The tendency to make industrial location decisions according to a community's amenities has been amplified by the shift from traditional "smokestack" manufacturing to high-tech industries. Some observers suggest that jobs now follow people in high-technology industries rather than people following jobs. To attract and retain scarce, highly trained high-tech workers, companies and communities must offer an attractive quality of life including the fine arts (Sellner, 1982, p. 82).

 

Education

The average level of education has risen dramatically in the last generation. In 1961, approximately 11% of adult Canadians had some postsecondary education compared to almost one third in 1985. By the end of this century, it is projected to be almost 40%. Within the labor force, that is, the taxpayers, the average level of education is forecasted to grow even faster. Between 1977 and the year 2000, members of the labor force with at least some postsecondary education will double from 3.4 million, or 32% of the labor force, to 6.7 million, or 45% of the Canadian labor force (Research & Evaluation, December, 1987a, p. 2).

Studies conducted around the world, and across Canada, indicate that the fine arts audience is characterized by high levels of education (McCaughey, 1984). A proxy for the size of the fine arts audience is the number of adult Canadians who have at least some postsecondary education. Accordingly, the fine arts audience no longer constitutes a small statistical elite. Rather it represents a significant plurality of the adult population at present, and by the year 2000 it will represent almost half of all taxpayers, taxpayers who are the most socially active, politically aware, and economically powerful members of society.

The impact of rising levels of education can also be seen in the growth rate in participation in alternative leisure-time activities. Between 1977 and 1985 the adult population grew at an average annual rate of 1.6%. Participation in arts-related activities grew significantly faster, in fact significantly faster than all other leisure-time activities. Attendance at museums and art galleries grew at an average annual rate of 2.6%; use of libraries at 2.4%; and attendance at live theater at an average annual rate of 2.1%. On the other hand, attendance at sports events increased at an average annual rate of 1.3, and television viewing at 1.4% (Research & Evaluation, December, 1987a, p. 3). Through to the year 2000, growth in arts participation will exceed growth in both the adult population, and alternative leisure activities.

 

Women

The second significant demographic trend during the last generation has been the entry of women into the economic and political life of the community. This has had a dramatic impact on family structure and employment patterns. In 1971, 1 household in 3 was the traditional one in which the wife stayed home with the children; by 1981 only 1 household in 5 fit this description. By 1985, more than 70% of Canadians were employed in the service sector. This represented a 31% increase in service jobs in a decade. There was virtually no employment growth in manufacturing. Growth in service sector employment contributed to increasing participation of women in the work force. The participation rate of women rose from 42% in 1973 to 54% in 1985 and is forecasted to reach 57% by 1995 (Clarkson Gordon, Woods Gordon, 1986).

Women in North America have traditionally been considered the carriers or guardians of culture. In fact, next to level of education, sex is the best demographic indicator of arts participation in North America. Women tend to be more exposed to, and involved in arts and creative activity in childhood than men, thus forming an adult taste for the arts. In North America, women make up 60% of the audience. This sex bias, however, is not apparent in Europe where the arts audience is roughly 50% male (McCaughey, 1984, p. 4).

Another indication of the important role of women in the arts can be seen through three comparisons of women's employment in the labor force as a whole and in arts-related employment. First, according to the 1981 Canadian census, women represented 40% of the labor force but almost 50% of the arts industry labor force. Second, 48% of all women in the labor force had some postsecondary education compared to 65% of women employed in the arts industry.

Third, only 1% of women in the labor force had a Master's degree, while 11% of women employed in the arts-related occupations had at least a Master's degree. In fact, no sector is as dominated by women as the arts industry. No car company or major manufacturing firm has been founded by a woman. But many ballet and theater companies, galleries, and music festivals have been established by women.
Accordingly, domed sports stadiums appeal to a part of the population, young males, which, at least in relative terms, is of declining political and economic importance. Opera houses, galleries, and other cultural facilities, as well as other social institutions such as day-care centers, should form the basis of the political Ídifice complex of future politicians if they wish to appeal to the increasingly important women's constituency. The increasing role of women in the economy and politics will, in and of itself, lead to increasing political and economic recognition of arts and culture.

 

Aging

It is widely known that the demographic structure of Western countries is being fundamentally altered by the aging of the baby boom generation. In fact, by 1996, nearly 8 million Canadians will be over 50 years of age, and this age bracket will represent 28% of the population, up from 22% in 1976. The over-65 age group will account for 13% of Canadians in 1996 compared to 9% in 1976. There will also be a 7% decline in the number of people under 35 (Clarkson Gordon, Woods Gordon, 1986).

It is not generally recognized, however, that after education and sex, age is the best demographic indicator of participation in most arts-related activities. The older one grows the more likely one is to participate in arts-related activities, at least up to retirement age (McCaughey, 1984, p. 6). Now that compulsory retirement at age 65 has been abolished and if the work week continues to decline, then older members of society will have more time and financial means to participate in arts-related activities. This trend will, of course, be reinforced as the highly educated baby-boom generation of the 1950s and 1960s becomes the Geriatric boom after the year 2000.

SIGNPOSTS TO THE POSTMODERN ECONOMY

These fundamental demographic changes are also having a dramatic impact on the nature of the economy, which, in turn, has a relationship with the arts. Demographic changes are altering consumption habits of the population, and the marketing behavior of producers in at least eight ways. First, there is the transformation of the status of the artist from anonymity to celebrity. Second, there is the rapid growth in arts-related employment in the last decade. Third, there is the changing nature of advertising. Fourth, there is the increasing role of the arts in consumer research. Fifth, there is the growing importance of art therapy in the health care system. Sixth, there is the role of art in fostering a more inventive and innovative economic structure. Seventh, there is the emergence the narrowcast as opposed to the mass market. Eighth, there is near universal access to the fashions and styles of previous historical periods, a phenomenon which has been called the ReDecade (Shales, March, 1986).

 

The Artist: From Anonymity to Celebrity

In traditional societies awe and mystery surround the created object into which the creator projects spirit and soul. In Japan, for example, reflecting an ancient tradition of animism a sword, being a product of mental work, is regarded not merely as a material object, but as imbued with the author's living spirit. Furthermore, objects of worship are not limited to visible and concrete things. Even a word can have a spirit (Koisumi, 1977). In the Occident, only vague hints of ancient animism remain in concepts such as the moral rights of creators.

The numinosity (Jung, 1964) of artifacts among preliterate peoples reflects an investment of what Carl Sagan calls extra-somatic knowledge, that is, knowledge carried outside of the body (Sagan, 1977). Such knowledge can, by analogy, be considered the social genetic which directs the evolution of human society. It is the knowledge passed from one generation to another. Today, it is embodied in books, recordings, computer software, and other contemporary ways of transmitting know-how to future generations.

In preliterate societies, such knowledge is transmitted orally through the mnemonics of ritual and chant enforced through religious practice and taboo. The association of rhythmic or repetitively patterned utterances with supernatural knowledge endures well into historical times. Among the early Arabic peoples, for example, the word for poet was sha'ir - "the knower" a person endowed with knowledge by the spirits (Jaynes, 1978).

In such societies, innovation depends upon the insight of the creator and his or her ability to insure the integrity of mnemonic instruction, whether in the form of incantation or epic poem. Cause and effect are not distinguishable. It is through the unchanging enactment of ritual that desired results are achieved. Science and art are one. How to make something and the something made are mystically unified. Process and product are identical. To name a thing is to magically control it.

In fact, the distinction between economy and culture does not exist in such societies. To the Balinese, for example, artistic knowledge is not restricted to a special intellectual class. In fact, the Balinese have no words for art or artist. Making a beautiful offering, carving a temple gate, or playing a musical instrument are all tasks of equal aesthetic importance, produced anonymously, and done entirely in the service of society and religion with no thought of personal gain (Morris, 1982).

How different the case has become in contemporary Western Civilization. In the ancient world and during the Middle Ages, the identity of the artist and craftsperson was seldom known. The great cathedrals were built anonymously by artist engineers who combined the mystical arts and sciences of the guilds. The crafts have a long and noble history within Western society. In the Middle Ages craft guilds held a monopoly of knowledge in the production of many of the articles and artifacts of daily life including the great cathedrals. The mystery and magic of these guilds is remembered in the term the craft which refers to the Freemasons. The secret methods of the guilds represented what today we would call industrial "know-how".

In the Renaissance, while the scientist and artist were still one and the same, personal identity became attached to the works of the proverbial Renaissance man. With the Enlightenment and Republican Revolutions of the 18th and the Industrial Revolution of the 19th centuries, a divergence appeared between scientific and artistic ways of knowing. It was, however, the craft guilds together with commercial merchants who, by the end of the Renaissance, formed a relatively large and influential middle class between aristocrats and peasants, the secular estates of medieval times. It was this middle class which led the Reformation in northern Europe, including England, Holland, and the Hanseatic League which gave birth to modern concepts of democratic government. An irony of history is that the craft guilds who contributed so much to establishing the political rights of the individual citizen were primary victims of the Industrial Revolution.

Furthermore, the role of the arts in the great awakening of Western thought cannot be underestimated. The first engine of mass production was not the steam engine but the printing press innovated in the 15th century. With it there emerged the first modern industrial craft union. The printing press revolutionized the world and set the stage for the religious and political revolutions of the next 500 years. This critical role of the crafts in the intergenerational transfer of knowledge has continued. By way of example, the number of Sound and Video Recording Equipment Operators (Occupation 9555) increased 474% between 1971 and 1981, compared to 39% for the overall Canadian labor force, and 74% for the arts labor force as a whole (Research & Evaluation, January, 1984, p. 37).

The contribution of the arts can be summed up briefly as the encoding or the fixating in material form, of the collective wit, wisdom, satire, sadness, skill, and changing styles and fashions. The arts represent the ways of doing as opposed to the ways of knowing in the sciences. The means and medium of recording, and thereby passing on to future generations, appears to affect the extent and duration of a civilization. Through his study of communications media, the founder of the only indigenous school of Canadian economics, Harold Innis, identified a fundamental relationship between culture and media of communications. A culture is extensive in time, that is, it has duration to the extent its dominant communications medium is durable, namely, stone, clay or parchment. Alternatively, a culture is extensive in space to the extent its dominant communications medium is easily transported, for example, papyrus and paper. Using this hypothesis, Innis attempted to explain the rise and fall of empires through history.

One of Innis' colleagues, Marshall McLuhan, took this relativism, first to the medium is the message and then to human consciousness altered by the emergence of new electronic communication media (McLuhan, 1978). The linkage between duration and mobility of a medium of communications and the state also involves enforcement of rights to the content and integrity of communication. If culture is defined as the intergenerational transmission of information, then the power of the state can be measured by its ability to enforce the integrity of such transmissions. For example, the ancient Harappan culture of prehistoric India maintained constant and rigorously enforced building codes for over 1500 years and also successfully imposed a ban on technological change in the form of socket-headed weapons, even though this ultimately lead to the conquest of India by the Aryan peoples of the Vedas (Piggott, 1950). The relationship between the transmission of culture through time and its fixation in different communications media is an integral part of the information economy.

Three examples demonstrate Innisian analysis. First, acidic paper has been used for more than 100 years. Books, newspapers, periodicals, and other written records fixed in this medium are now disintegrating in libraries and archives around the world (The Economist, February 27, 1987, p. B-1). From an Innisian perspective, this implies that European expansion and colonization of the last century would be short-lived because the dominant communications medium was cheap and easily transportable. In fact, the second British Empire on which the sun never set, was, in historical terms, one of the most extensive in space, but shortest in duration of any major historical empire.

Second, the dominant communications medium today is television which spans the world in an instant, namely, it is extensive in space. Television takes the average citizen around the world to spaces and places of which his ancestors never heard. A question, however, has arisen concerning television's impact on attention span. Some argue that children do not read because their attention span has been reduced by commercial television; that is, the medium while extensive in space, affects the psychological duration of time.

Third, new communications technologies, such as video recording are unusual in terms of Innis' dichotomy between durability and transportability. First, the new media hardware including direct broadcast satellites, fibre optics, magnetic recording technologies, and the compact disc player are based upon silicon and iron oxide, namely, stone, which will endure for more than a century. Production of consumer home entertainment hardware is dominated by the Japanese. Second, the messages conveyed through these technologies are as ephemeral as a ray of sunshine, but cross the globe in the twinkling of an eye. Programming is dominated by the American entertainment industry. This combination of Innisian characteristics and the division of labor with respect to production of the medium (by Japanese companies) and message (by the Americans) suggests the emergence of a new culture unlike any in human history. This division of labor is currently breaking down. Recently, Sony Corporation of Japan purchased CBS Records while German and French publishing houses have bought into the US marketplace becoming respectively the largest and the third largest publishers in the world. Like previous communications revolutions, the emergence of a new communications medium is accompanied by a breakdown of old ways of communicating, and by a heightened sense of societal dis-ease.

Arts Employment

Employment data does not permit distinction between the fine arts and the commercial arts. Furthermore, arts-related workers cross back and forth. Accordingly total arts-related employment will be reported. There are two distinct arts-related employment populations. Together they included 414,000 workers or 4% of the Canadian labor force in 1981 (Research & Evaluation, January, 1984). In fact, arts-related employment was as large as the agricultural labor force and federal government employment including crown corporations and larger than any manufacturing industry in Canada.

Arts Labor Force

The first group is the arts labor force made up of workers who use arts-related skills in their day-to-day jobs such as artists and arts technicians including curators, librarians and camerapersons. According to the Canadian Classification and Dictionary of Occupations 1971 (Manpower & Immigration, 1974) there are at least 278 arts-related occupations including artists, technicians, and administrators. Using 1971 definitions, between 1971 and 1981 the arts labor force increased 74% from 156,455 to 272, 640 or 2% of the Canadian labor force which, as a whole, increased 39%.

Arts Industry Labor Force

The second group is the arts industry labor force made up of workers employed in arts industries such as advertising, publishing, motion pictures, live staged events, fine arts schools, libraries, etc. Only 35% of the arts labor force was employed in the arts industry in 1981. The rest of the arts labor force worked in all other parts of the economy, for example, product designers employed in manufacturing industries and window designers employed in the retail trade industries. Thus arts labor force occupations are similar to scientific and technical professions in that arts-related skills are used throughout the economy, not just in the arts industry.

On a comparative 1971 census basis, between 1971 and 1981 the arts industry labor force increased 58% from 150,080 to 236,610. Using 1981 definitions, the arts industry had a total labor force of 234,280 or 2% of the Canadian labor force. Of this total, 52% were men. Women in the arts industry also represented 2% of all women in the labor force.

In the airline industry a large number of ground personnel are required to keep an airplane flying. Similarly in the arts industry a large number of technical and administrative personnel are required to keep artists on stage, in front of the camera, in print or in galleries. In fact, artists made up only 24% of the arts industry labor force, other arts-related occupations such as librarians, camerapersons and projectionists 18%, arts administrators represented 8%, and support personnel 50%.

Artists

On a comparative 1971 basis, between 1971 and 1981 the number of Canadian artists increased 102% from 65,445 to 131,930. By contrast, the number of artists reported in the Census of the United States of America between 1970 and 1980 increased only 51%, that is, only half as great an increase as in Canada (Bradshaw, 1984). In addition, the number of Canadian artists increased more than two-and-a-half times faster in relative terms, than the total Canadian labor force. As a per cent of the total labor force, artists increased from 0.8% in 1971 to 1.1% in 1981.

In 1981 artists represented 0.8% of the adult population over 15 years of age. However, artists represented 1.1% of employed Canadians and only 1% of unemployed Canadians. In 1981, artists had an average unemployment rate of 6%, compared to 7% for the labor force as a whole.

Artists were significantly better educated than the Canadian labor force as a whole. Only 48% of the labor force, but 73% of artists had some postsecondary education or more. Similarly artists were, on average, younger than the labor force as a whole. Approximately 60% of artists but only 53% of the labor force was between 15 and 34 years of age. In addition, 3% of all artists worked after 65 years of age compared to 2% of the total labor force.

In 1981, only 55,525 or 41% of artists actually worked in the arts industry. The remaining 79,130 (59%) were employed in other sectors of the economy. Only in the performing arts did the majority of artists (73%) work in the arts industry. The majority of fine and commercial artist (81%) and writers (56%) were employed in other sectors of the economy.

There are two distinct groups of artists working in Canada. The first is artists who are self-employed. The second includes artists who are employees. According to Revenue Canada there were 9,778 self-employed artists in 1974 of which 5,983 or 61% had taxable income and 39% had no taxable income. In 1983, there were 16,202 self-employed artists, a 66% increase in 10 years.

Between 1974 and 1983 the number of self-employed artists grew at an average annual rate of 5%. In 1983, some 7,919 or 49% of self-employed artists had taxable income, and 8,283 or 51% had no taxable income. In 1983 self-employed artists paid $18.3 million in federal and $6.9 million in provincial income tax. Average income of self-employed artists, measured in constant 1981 dollars, fell from $11,447 in 1974 to $10,496 in 1983, making them second only to pensioners as the lowest paid occupation recognized by Revenue Canada.

In 1981 there were 108,000 fine and commercial artists who worked as employees. The artist as employee was, however, as financially distressed as the self-employed artist. On average, no artistic profession such as dancer, musician or actor provided a working season of sufficient length or with sufficient salary to support a family of four above the poverty line (Research & Evaluation, January, 1984).

Arts Administrators

In 1981 there were 18,780 arts administrators employed in the arts industry. Administrators represented 8% of the arts industry labor force. Some 10% of all men in the arts industry were in administrative occupations while 6% of women were in administrative occupations (Research & Evaluation, January, 1984). Arts administrators are highly mobile between industries. In light of the fact that the arts industry and particularly the fine arts offer relatively low income job opportunities, the ability of the arts to attract and retain administrative personnel is limited. The need for good arts administrators, particularly in the fine arts, is greater than in other industries due to the "cost disease" of the fine arts (Baumol, Bowen, 1966).

Arts Technicians

Within the arts industry there are a number of technical occupations that are critical to production of artistic goods and services. In 1981 there were at least 27,945 technical personnel or 12% of the arts industry labor force. This included 7,350 library, museum, and archival science personnel; 13,315 printing and related personnel; 6,065 electronic and related personnel; and 1,215 other craft and equipment operating personnel in the arts industry. Furthermore, arts technicians are also employed in other industries, for example, 70% of librarians, 82% of printing and related personnel, 41% of electronic and related personnel and 88% of other crafts and equipment personnel were employed in industries other than the arts industries.

Related Non-Arts Occupations

In 1981 there were some 117,015 non-arts workers employed in the arts industry, or 50% of the total arts industry labor force. These included electricians, carpenters, clerks, transportation and maintenance workers among others, as well as some technical personnel for which detailed statistical evidence is not currently available. These included other product fabricating, assembly and repairing occupations such as instrument makers, tuners and repair persons as well as make-up artists and hoisting occupations such as riggers and flymen (Research & Evaluation, January, 1984).

 

Advertising

It is generally forgotten that within the ecology of capitalist realism, advertising is the lubricant of the market economy. And advertising, to a great extent, is the application of the literary, media, performing and visual arts to sell goods and services. Actors, dancers, singers, musicians, graphic artists, copywriters, and editors are employed to sell everything from fruit to nuts; from cars to computers; from beer to toilet paper. In fact, the production cost of a 1-minute commercial on national American television equals or exceeds the cost of an hour-long episode of Dallas.

In some cases, advertising expenditures of major corporations such as Proctor and Gamble account for more than 1/3 of total production costs of such undifferentiated consumer products as soap and shampoo. These companies spend millions in advertising to differentiate their products, one from the other, even though in objective scientific terms there may be little to choose between them.

From where does advertising talent and technique come? From the arts. Thus with respect to design and advertising, the arts are analogous to research and development in the physical sciences. The arts in the postmodern economy are no longer just a symbol, but also a source of national wealth. In fact, more artists work outside the arts industry than inside. The majority of artists work as illustrating and graphic artists, designers, copywriters and editors, and decorators for companies in sectors as varying as manufacturing, finance, insurance, and retail trade (Research & Evaluation, January, 1984).

The fine arts also play an increasingly direct role in the advertising and marketing strategies of corporations. The up-scale nature of the arts audience, that is, high levels of education and income, is an attractive market for many corporations. Corporations increasingly sponsor fine arts activities, not as charity but as a major marketing technique. In this regard a survey by the Institute of Donations and Public Affairs Research (IDPAR) showed that 47% of corporations sponsored sports events, but 59% sponsored arts-related activities in 1984 (Hopkinson, November, 1985, p. 61).

Sponsorship reflects the correspondence of a corporate target market and the arts audience. Sponsorships are made from public relations, not from donations budgets. Problems have, however, been reported. Specifically, the control required by commercial sponsors to insure that public relations objectives are achieved, may, from time to time, clash with the artistic objectives of an arts organization. No dollar figures are currently available concerning the scale of corporate sponsorship of arts-related events and activities.

 

Consumer Research

Beyond the role of the arts in advertising and marketing, trends in consumer research also suggest that the arts are playing an increasingly significant role in consumer research. Many researchers have begun to question the dominance of the information-processing model in consumer research. This model essentially views consumer behavior as a question of a consumer with a problem, searching for information concerning the best product or service to solve his or her problem. This model, however, is increasingly seen as neglecting important consumption phenomena such as playful leisure activities, sensory pleasures, daydreams, aesthetic enjoyment, and emotional responses. Thus consumption is increasingly seen as involving a flow of fantasies, feelings, and fun. This perspective regards consumption as a primarily subjective state of consciousness with a variety of symbolic meanings, hedonic responses, and aesthetic criteria (Holbrook, Hirschman, 1982).

Drawing upon the pioneering work of Holbrook at Columbia University, one can identify six differences between traditional consumer research and what is known as consumer aesthetics. These differences serve to highlight how the arts can enhance our understanding of consumer behavior (Holbrook, 1986).\

First, traditional consumer research focuses on the buying behavior or purchasing decisions of consumers at the expense of studying the consumption experience. By contrast, almost everyone accepts that aesthetic consumption entails an appreciative experience quite different from conventional market behavior. This experience may range from simple pleasure to profound responses comparable to self-transcending states of spiritual ecstasy (Holbrook, 1986, p. 4).

Second, conventional consumer theory generally assumes a means-end relationship between the purchase of a commodity and some end objective. For example, one buys a hammer and nails to build a house. By contrast, aesthetic experience is intrinsically motivated and produces intrinsic values as an end in itself, and pursued for its own sake (Holbrook, 1986, p. 5).

Third, consumer research generally views buying behavior as a rational decision-making process that begins with the desired goal leading to an assessment of the efficacy of alternative means which then leads to the intentional act of buying a given product or service. By contrast, aesthetic experience fits an arational paradigm of emotional reaction involving appreciative responses. Though emotions may occasionally be brought under intentional self-control, they generally reflect nonintentional responses to uncontrolled aspects of the environment. Such responses can be characterized as being moved. Furthermore, an emotive response involves not only a reaction to cognitive elements but also physiological changes, expressive behavior, and phenomenological feelings (Holbrook, 1986, p. 7).

Fourth, conventional research focuses on external factors affecting the exchange relationship such as price, advertising, distribution, support services, and consumer demographics. By contrast, consumer aesthetics focuses on design factors internal to the product or event of interest such as tempo or complexity in visual design.

Fifth, traditional consumer research tends to use field-survey research to study the link between brand choices to external marketing variables such as price and packaging. For example, on the shelf of a grocery store does red packaging sell better than blue? By contrast, aesthetic responses can best be studied by techniques of laboratory experimentation, many of which were developed by psychologists (Holbrook, 1986, p. 9).

Finally, consumer research, as generally practiced, tends to view a product or service as consisting of a series of distinct but additive components such as color, weight, size, and so forth. By contrast, consumer aesthetics provide a fertile ground in which to study interactive or configural phenomena. Artworks are universally regarded as Gestalts in which all parts interact to produce a sense of organic wholeness or unity-in-variety. Hence research on consumer aesthetics must focus not just on additive cues, but also on the overall impact of a product (Holbrook, 1986, p. 11).

 

Health Care

Education through the arts also has significant economic implications for the rehabilitation and healing of an aging and increasingly informed population. In fact, the relationship between the arts and medicine is very ancient indeed. As noted by Granaat:

Asklepios, the Greek god of health, was worshipped in temples, to which patients repaired to be cured. In the medical wards of these temples, beautiful votive reliefs are found, thanks offerings for received cures. In this connection, attention must be drawn to a series of frescoes made by Domenico di Bartolo in the 15th century in the hospital of Santa Maria della Scala in Siena, or to the paintings of Mathias Gruenwald in the former monastery of Isenheim, where the painter also worked as male nurse.

These examples of famous works of art illustrate the close relations among religion, art, and medicine. The most famous physician of all times, Hippocrates, said "Life is short, and art is long ...." Today religion is not all-important as it was formerly, but the link between art and medicine is still important. (Granaat, 1983, p. 105)

During the last 50 years, the use of the arts for medical and rehabilitative purposes has been formalized in virtually every art discipline including dance, music, theater, and the visual arts. Academic programs, certification procedures, professional organizations, and international associations of art therapists have evolved (Spencer, 1983, p. 2). National and international systems for the classification of occupations now identify arts therapy as a distinct profession (Research & Evaluation, January, 1984).

The role of the arts in health care involves both healing in the sense of facilitating recovery from illness, and rehabilitation in the sense of improving physical function. However, the arts have a medicinal role beyond physical healing and rehabilitation. As noted by Spencer:

The term "healing" implies illness as well as the implication that something can be "cured." In many human service settings, this is not often the case, for example, among terminally ill cancer patients, inmates of prisons, the physically handicapped, and those who are economically or socially disadvantaged or isolate.... such people are in "crises," are "troubled," and are suffering psychologically and emotionally by virtue of their circumstances. For such people, "healing" is synonymous with "improvement," with the overcoming of psychological and emotional barriers within the individual and with others. The art therapist goes still a step further to sharply "focus" the energies of the arts to help "dissolve" the barriers to improved function. (Spencer, 1983: pp. 3-4)

Within the health care system, the arts play a formal therapeutic role. In view of the aging demographic profile of the population and the escalating health care costs associated with an older workforce, it is likely that the therapeutic use of the arts will increase dramatically in the next few decades.

Society's ability to keep an aging work force active and productive will thus become more and more important as the baby boom generation of the 1950s and 1960s becomes the geriatric boom after the year 2000. In this regard, Tibor Scitovsky has noted that:

Another important - and tragic - example of our economy's failure to provide adequate stimulation to the unskilled consumer is the problem of the aged. When people retire they are suddenly deprived of the stimulus satisfaction their work has given them, and, naturally, they try to fall back on the other sources of stimulation accessible to them. If they are unskilled consumers, they soon find their sources of stimulation inadequate; the result is the heartrending spectacle of elderly people trying desperately to keep themselves busy and amused but not knowing how to do so. Boredom seems inescapable, and boredom is a great killer. That may well be part of the explanation of the male's relatively low life expectancy. Women are better off in this regard, for they have housework and cooking to keep them occupied and alive. The remedy is culture. We must acquire the consumption skills that will give us access to society's accumulated stock of past novelty and so enable us to supplement at will and almost without limit the currently available flow of novelty. ... Music, painting, literature, and history are the obvious examples. ( Scitovsky 1976: 235)

 

Invention and Innovation

It is increasingly recognized that the psychology of the creative process is an area of commonalty between the arts and sciences (Meyer, 1984).  In both, creativity occurs when an individual steps beyond traditional ways of knowing and doing and making. We have come to recognize that the process which brings about creative advances in science is identical to that involved in artistic creation (Jantsch, 1975, p. 81).

It is also recognized that creativity has an empirical basis in neurophysiology. Recent research in brain physiology suggests that the creative process is rooted in the lateralization of brain function.

The left hemisphere is generally thought to be primarily responsible for traditional cognitive activities relying on verbal information, symbolic representation, sequential analysis, and on the ability to be conscious and report what is going on. The right brain, on the other hand, functions without the individual being able to report verbally, and is more concerned with pictorial, geometric, timeless, and nonverbal information (Hansen, 1981, p. 23).

In a sense, the arts can be considered the most developed right-lobe sector of contemporary society. Education through art should serve to enhance creativity in other sectors, and balance the over-development of left-lobe nature of Western society. In this regard, the noted economist Geoffrey Vickers has said:

I welcome the recent findings of brain science to support the common experience that we have two "styles of cognition," the one sensitive to causal, the other to contextual significance. I have no doubt that the cultural phase - which is now closing - restricted our concept of human reason by identifying it with the rational, and ignoring the intuitive function, and thus failing to develop an epistemology which we badly need, and which is within our reach - if we can overcome our cultural inhibitions. (Vickers, 1977)

Education through the arts fosters and promotes a creative psychological and social climate in which invention, innovation, and diffusion of new technologies can more readily occur. It can sensitize entrepreneurs, managers and employees to the context of change, and enhance their ability to respond to change in a positive and constructive manner. In this regard, the need to increase the innovative capacity of the Canadian economy has been recognized by the Economic Council of Canada as critical to future economic growth and development (Economic Council, 1983).

 

The Narrowcast Marketplace

The emergence of the narrowcast market is the most significant marketing development of the 1970s and 1980s. The growth of numerically small, but economically viable markets has resulted from an unprecedented average level of education, an unparalleled division and specialization of labor, and an unrivalled degree of urbanization. If the industrial revolution produced standardization throughout society, then what Alvin Toffler has called the Third Wave is reversing the process. There is a rising level of diversity, a demassification of the marketplace with more sizes, models and styles, a demassification of tastes, political views and values (Toffler, 1979).

Fragmentation of the mass market has had significant implications for producers, implications driven home by two recent recessions with their stranglehold on consumer spending. This forced producers to try to understand what made the domestic market tick. They soon discovered demographic and lifestyle changes had delivered a death blow to mass marketing and brand loyalty. A North American economy that once shared homogeneous buying tastes had splintered into many different consumer groups - each with special and differing needs and interests (Business Week, November 21, 1983).

Among First World nations, the emergence of the narrowcast marketplace can also be identified with two developments: one technologic; the other demographic. First, there is the introduction of cable and pay television services which has fragmented the traditional, lowest common denominator broadcasting systems of North America during the last decade, and which promises to do the same to European broadcasting in this decade. It is from this development that the term narrowcasting has been derived. The most developed form of narrowcasting, however, takes the form of direct mail services.

Second, there has been the emergence of a new class of consumer, the Yuppies: young, urban, upwardly mobile professionals. This group is attracting the attention of both producers and politicians (Business Week, July 2, 1984, pp. 52-62). In essence, the Yuppie is a consumer with a high level of education and income who demands high quality and sophisticated, often unique or specialized goods and services. It is also the Yuppie with whom we can identify the rapid increase in arts participation during the last generation.

And it is also the arts which serve as the historical leitmotif for the general market trend towards differentiation in consumer taste. Examples of highly differentiated taste in the fine arts can be seen in alternative styles of painting such as impressionist vs. expressionist vs. realist vs. abstract vs. conceptual vs. minimalist painting. What is a prize to one collector is valueless to another.

Manufacturers and other producers are learning from the experience of the fine arts to succeed in the narrowcast marketplace. As noted by former CBS president, Frank Stanton:

The essential values of the public are most clearly evident, and in some instances only, in the arts - in music, the drama and the dance, in architecture and design and in the literature of the times. It is through knowledge of peoples' values that corporate marketers know what goods and services to provide and how to motivate consumers to buy their products. (Sellner, 1982)

 

New Production Skills

Since the introduction of universal compulsory education in North America during the last century, production-skills training has progressively crowded out education in the arts and humanities, the traditional sources of "consumption skills." This crowding out partially reflected the puritan and republican traditions of North America in contrast to the catholic and aristocratic traditions of Europe (Scitovsky, 1976). It also reflected an initial need, in the 19th to mid 20th centuries, to develop repetitive industrial skills among a relatively uneducated, rural work force.

In the late 20th century this is no longer the case. The new production skills required in the emerging postmodern economy are nonrepetitive, adaptive, and judgmental, characteristic of traditional consumption skills developed through training in the arts and humanities. Education through the arts can play a crucial role in the emergence of what Marshall McLuhan called electronic man:

In terms of our education, the entire establishment has been built on the assumptions of the left hemisphere and of visual space. This establishment does little to help in the transition to the electronic phase of simultaneous or acoustic man. Our educational procedures are still oriented towards preparing people to cope with specific industrial products and distribution of same. Electronic man, on the other hand, is in need of training in ... empathy and intuition. Logic is replaced by analogy, and communications are being superseded by pattern recognition. (McLuhan, 1978)

There are three indicators of the changing and growing importance of education through the arts. First, over one fifth of all continuing education courses offered by American universities are in the fine arts, the largest set of courses available in American continuing education (The New York Times, August 30, 1981, p. 6). Data from the latest Canadian survey of continuing education in universities reveal that in 1986, registrations in fine, applied and performing arts noncredit courses (that is, not for credit towards a university degree) were higher than all other courses, representing about one sixth of all university continuing education registrations. In addition, registration in university, continuing education, fine and applied arts courses grew by 70.1% between 1976 and 1986 (McCaughey, 1988). Continuing education in the fine arts is creating a more sophisticated audience which demands rising artistic standards as well as better designed goods and services from manufacturing and other industries.

Second, university recruitment by major corporations is beginning to favor arts and humanities graduates in preference to MBA's. Recruiters are finding that arts and humanities graduates are more rounded in terms of social and communications skills and more flexible in terms of career development than business administration graduates.

Third, there is a negative side to the emerging narrowcast economy. The concept of a cultured person in the European tradition is one who is well rounded. The cultured European is one who is interested in, and knowledgeable about literature, painting, cuisine, dance, and theater, not just about work. The North America tradition, however, is characterized by specialization, particularly with respect to production skills. The result is the one-dimensional person who knows everything about his or her business, and little or nothing about life in general. Even when the North American decides to enhance his or her cultural appreciation it tends to be one dimensional. One tends to specialize in selected activities such as wine-tasting, or specific types of theater or painting. Rounding is not generally the objective. Increasingly, however, major corporations are becoming aware that a rounding of perspective is essential if executives are to become leaders, not just managers. Corporations are spending more and more on liberal arts programs to ensure that their executives can talk to both staff and customers about life, not just about business (Gutis, 1985, F17).

 

The ReDecade

Another change in consumption behavior has resulted from the introduction of new technologies in combination with demographic change. Through new recording technologies, especially video tape, consumers now have nearly universal visual access to the styles and tastes of all historic periods, at least as presented on television and in motion pictures.

Does one want to watch the gangster movies or musicals of 1930s? Or does one want to witness the French Revolution or Moses on the mountain? Does one want to replay it, time after time, or erase it to capture the images and sounds of another time and place?

This access to the fashions and styles of historic periods has produced what Thomas Shales has called the ReDecade, a decade without a distinctive style of its own, a decade characterized by the pervasive stylistic presence of all previous periods of history. The impact of this phenomenon on consumer behavior is, at least in the short term, confusion and disorientation. Time has now become a significant dimension of consumer behavior. As noted by Shales:

It does seem obvious that here in the ReDecade ... the possibilities for becoming disoriented in time are greater than they have ever been before. And there's another thing that's greater than it has ever been before: accessibility of our former selves, of moving pictures of us and the world as we and it were five, ten, fifteen years ago. No citizens of any other century have ever been provided so many views of themselves as individuals or as a society. (Shales, 1986: 72)

Interestingly, the art critic Robert Hughes (1981), in his book and television program entitled The Shock of the New, has pointed out that since the turn of the century modern abstract painting has been increasingly concerned with the fourth dimension, time, in contrast with the traditional dimension of space. Thus abstract painting can be viewed as a precursor of the increasing disorientation in time so characteristic of the ReDecade.

It is not yet clear what will be the long term impact of the ReDecade on consumer behavior. It is likely, however, that there will be a growing market for historic fashions, period piece furniture and reproductions as well as other consumer cultural durables.

 

CONCLUSIONS

We live in an age of paradox. On the one hand, science has become the hope and glory of our era. On the other, a significant part of the population, perhaps a majority, live in a world riddled by superstition, irrational beliefs, and ideological fanaticism. Similarly, the arts, generally thought to be intangible and a frill in a bottom-line economy, have become (due to a fundamental demographic revolution involving rising levels of education, the increasing participation of women and the aging of the population) a major force contributing to the competitiveness of national economies.

The evolution of art from a symbol to a source of national wealth parallels the evolution of our concept of national income. Through time, there has been a progressive expansion in the sources of national income. In this century, technological change has become recognized as the most important source of economic growth. However, our understanding of technological change has also evolved and changed. Today, there are three epistemological sources of what is popularly called technological change. Research in the physical sciences leads to improvements in physical technologies, the most obvious form of technological change. Research in the social sciences and the humanities leads to improvements in organizational technology, namely, the ways and means available to organize and motivate capital, labor and physical technology. Research in the arts leads to improvements in advertising, consumer research, marketing and product design. Physical and social science research is centered in the university. Research in the arts is focused in the nonprofit professional fine arts community.

Research, in dollar terms, represents a small amount of resources compared to existing capital stock and labor force. However, its role in economic growth is that of a catalyst stimulating changes and improvements in the quality and efficiency of capital and labor. Research results become embodied in abstract intellectual property rights including copyright, patents, registered industrial design, and trade marks. It is the buying, selling, and licensing of such rights that constitute the quaternary sector of the postmodern or information economy.
In this new economy, art education plays a more and more important role as arts-related skills increasingly pervade and permeate the entire economy. This fact is indicated by signposts such as the changing status of the artist; dramatic growth in arts-related employment; increasing reliance of advertising and consumer research on the arts, the role of the arts in the health care system and in fostering an inventive and innovative economic structure; and the emergence of the narrowcast marketplace in which style and taste are critical competitive factors and in which the arts are playing a basic role in developing the new production skills required in a postmodern economy.

 

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