Music as a Metaphor for Social Welfare Systems (Reprint)

On occasion, we reprint a story from the past when/if we believe circumstances dictate that it would be of interest to readers a second time around. After the music/e-conomy story earlier today, we though we had just such a situation on our hands. Following is a reprint of a story from late last year explaining the economics of music industries in places that aren't the US and the UK, where government subsidies, rather than music executives, are the main driving force behind nascent musical groups' development. Apologies to those who may have seen this one the first time it was posted. All I can say is that it is good to be both editor-in-chief and chief contributor...

While it is true that American tax dollars are spent on music programs in schools, and there might be performing arts centers or city orchestras which receive a slight funding boost from their respective local coffers, the federal government does not typically set aside funds for 20-somethings to globetrot in an attempt to increase fandom, and as a result, album sales and downloads.

Indeed there would likely be enough public uproar to establish a congressional sub-committee if it were someday discovered that Jack and Meg White, for example, were able to leave Detroit behind for international stardom on the back of government subsidies (that such a hearing would almost inevitably cost the taxpayer more than the initial handout is another topic for another day). Most politicians spend most of their time attempting to get re-elected, and while doing so would rather discuss local pork barrel projects with voters than explain why tax dollars were spent on kids with tattoos in tight jeans. So, of course, they build bridges instead.


Additionally, and more practically, there is already a well-established market for musical talent whereby bands with potential can contract with labels who obtain studio time, organize tours, and assist with procuring everything from equipment to, well, just about anything so long as the band makes them money. The system is similar in the UK, where for all of the empire-losing they seem to do, they still manage to produce some fine musicians. Though sometimes a band or musician might fall through the cracks, the members of the general public seem satisfied with this arrangement, especially in a world where iTunes and MySpace have made it easier than ever for them to discover new talent.

Because of the prevalence of this model in the States, some Americans might be surprised to hear that this system is not necessarily emblematic of the global approach. In many places, in addition to the record label system, the government does provide assistance to up and coming talent. For example in Sweden, bands are annually able to apply for a piece of a pie worth a few million USD. This can be utilized for various items, such as studio time and touring expenses, with the ultimate goal being the export, both culturally and economically, of Swedish music. And Sweden is far from alone; other countries which actively encourage, and financially support, rising popular musicians include Australia, Canada, Scotland, New Zealand and Sweden's Nordic neighbor Denmark among others. A non-exhaustive list of successful bands from the past few years that have benefited from such arrangements includes The Hives, Arcade Fire and Wolfmother among many other Pitchfork darlings

There are many motivations for these governments to support such cultural spending. One is a sort of new-age Panda Diplomacy, the creation of good relations via the medium of cultural awareness. Another, as mentioned above, is economic. With the ability of consumers to go home immediately after a concert and download the songs they just heard, it has never been easier to increase sales, and therefore profits, for bands in foreign lands. There is also the protection of local culture. Any American who has spent time abroad, particularly in parts of Europe, will know that local radio stations can sometimes fool you into thinking you have never even left the States. Many politicians in places that aren't America feel a need to develop the type of cultural identity that can be formed most easily around music. Other explanations include national pride in a global brand and a more liberal attitude toward spending tax revenues for cultural purposes in more liberal countries.

So, what does all of this matter? Perhaps it doesn't unless you are a Scandinavian musician or of the age/mentality where you are attending music festivals on a regular basis and therefore benefiting from these modern day trailblazers. Even if you aren't, however, the contrast is systems can nonetheless serve as a case study in different approaches to social welfare.

Under the American system, it is clear that the market does the work. Deep-pocketed record executives find the poor talent, the talent makes music the public buys, the execs and bands get rich, and everyone goes home happy. Meanwhile, under the alternate approach, the government, at least in part, funds musicians from taxpayer dollars. This makes more sense where income tax rates are higher as folks have less disposable income to spend on things like albums and, therefore, rather than become upset by government expenditure, might even expect the national government to provide funding for such things. This is more likely to be applicable in places like Scandinavia where tax rates can be as high as 50%. Such a set up would just not be prudent in America, where, for all of the bluster, tax rates remain relatively low.

Without, for purposes of this particular article, passing judgment on either system, the above paragraph does seem to encapsulate different levels of, or perhaps approaches to, social welfare perfectly; tax more and provide more, including niceties like cultural experiences, or tax less and provide less, allowing individuals to choose what their money goes to. Though some tea-partiers might disagree, many of the countries noted above for their subsidization and high tax rates also boast some of the happiest populations on earth. Perhaps then the best way to wrap this up then is to merely say chacun ses goûts...