New. Not Normal. | Featured Speaker Presentation | Tyler Cowen

Hello everyone, and thank you for coming and listening to this talk. I would like to discuss the prospects for the arts, and I know there's so much bad news now, but I want to consider what are the possibly optimistic scenarios, and even those scenarios have some bad news embedded in them, but still it's worth considering, might there be at least some silver linings in the cloud of COVID-19? Keep in mind also, in my country, the United States, There is a separate yet still forceful issue of all these riots going on in our cities. As I speak, we don't know how long this will last, but this is possibly another serious economic penalty for a lot of the live performing arts, which very often are held in cities. Now, one way of addressing economic problems that the arts are facing during a pandemic is to try to work out ways of doing spacing. That is, you have someone sitting in a theater only once every 2 seats, once every 3 seats, separated by 6 feet. Whatever the rule is going to be. I'm pretty pessimistic about spacing as a solution. If you take these performing arts venues to have pretty high fixed costs, at the very least rent, if they have only half the crowd, third of the crowd, whatever that fraction is going to be, ultimately they still cannot pay the bills. They may in the short run hit up their donors for more money, but donations also might dry up somewhat with the weaker economy, lower stock market, So I don't think spacing is the answer. So what then do the optimistic scenarios look like? There I turn to this notion of disrupting or remixing current artistic media of delivery and current artistic genres. Let's say you hold— and again, this is a hypothesis, this is speculation, I'm not saying it's true— but let's just say for the moment you believe some artistic and cultural genres you have too much inertia, too much status quo bias. Artists explore some styles too long for too many years or too many decades, and it actually might in some cases be better to have more churn or more turnover in artistic styles. I don't find that a totally implausible thing to believe. If you think about the economics of innovation, well, consumer surplus often is highest from the newest goods, yet due to reasons of agency or inability to get funding, it may turn out to be the case that what performers and creators can do is just get funded doing things in very familiar styles. If you look at, you know, productions on Broadway or sequels in the movies or what gets played on the radio, you can see that in a lot of the arts, there might be this bias toward the status quo and toward an inertia of styles. So, how does this idea of remixing fit in? If you imagine that what the coronavirus is doing is making a lot of previous methods of delivering the arts to people economically non-viable, in essence artists will be going out and looking for new media of distribution, new styles, simply different ways of doing things. And what is that going to mean? Well, it's going to mean actually a lot of innovation. In the short run, it won't be the case that consumers are getting what they want. Obviously, the pandemic is hindering those transactions, but we might in some regards get more innovation, artists doing new and different things online, and just more generally rethinking what the arts are about. So if you consider, for instance, the New York gallery scene, and you think of that as having a well-established series of methods of bringing together sellers and buyers. Well, with New York in such bad shape, that gallery scene is very much disrupted. It might be hard for galleries to have an opening and fit in 70 or 80 people because of social distancing. So if galleries become less important as a method of delivery and other ways of reaching potential buyers become more important, again, you're going to have this disruption of who are the most prominent artists, What are the most prominent styles? And you can work through all of the different arts, whether it be what is played on the radio and how that music gets to be known, what becomes a Broadway show, what becomes a movie shown in mainstream theaters. I think the presumption will be just radical rethinking in many spheres of the American arts. And again, I'm really not suggesting that in the short run, by the standard of an economist, selling to people what they want, this is going to be good, clearly not. Again, I think it is possible it will induce more innovation. If you look at the broader history of the arts, plausibly it is the case that when you have major disruptions, people have to do things in a different way, they rethink what creativity means, and again, at least possibly sometimes, you get more innovation. A key question here is, what is the appropriate normative benchmark to apply to all this change going on in the arts? I've already mentioned the economist's standard of consumer sovereignty, but another way you might think about the problem is that in the arts, perhaps for aesthetic reasons or for meritocratic reasons, we value diversity as an end in and of itself. So let me give you a simple parallel with diversity across geographic space. If you go to the island of Bali, part of Indonesia, obviously a lot of Balinese people play gamelan music. And the question is not, well, is gamelan music better or worse than the Rolling Stones? I mean, you can ask the question as an economist, but as an appreciator of the arts, you might very well decide you prefer to have, say, the Rolling Stones coming out of Great Britain and gamelan music coming out of Bali, And there's something intrinsically valuable in that diversity over space. And you don't really want everyone in Bali to be trying to mimic the style of either the Rolling Stones or Taylor Swift or free-form jazz or whatever, you know, it might be that you're interested in. So, there's a longstanding presumption that we somehow express more different sides of the human condition or help people, you know, etch themselves out more in terms of identity, their own culture, the meaning of their lives. What you can take in as an outsider if you have some kind of contact with Mali, either visiting or through recordings. And again, there's this case for diversity as some kind of intrinsic good. You've heard this from UNESCO for decades. You can debate how we should weight the value of diversity versus the value of consumer sovereignty standard, but simply, if you think diversity has some independent value, you might then also value diversity over time. And diversity over time is going to mean that, say, for the United States, you don't actually want the art to every year maximize exactly how consumers wish to spend their money. You want the arts at times to be more innovative or changing more or more disruptive because over time you will get a greater diversity of styles. And by disrupting what artists are producing now for consumers, you may end up what is in some kind of meritocratic fashion possibly a better outcome. I'm also struck by how cinema may be working. So as you probably know right now Hollywood is not really producing movies live, is not filming, but there are some countries, two I know of are South Korea and Iceland, and they are filming movies. So imagine that when movie theaters in the United States do reopen or say in Europe, and there's not that much new domestic product to show. What are theaters going to show? Well, possibly they're going to show more movies from South Korea and more movies from Iceland. This could very much be a good thing over the longer run. If someone tells you, would you voluntarily press the button to remove all Hollywood movies for a year and give people South Korean movies, Icelandic movies, you know, they show Casablanca again on the big screen. I don't know that you would choose that as a preferred outcome, but if it happens for exogenously driven reasons, could it be that you end up thinking 20, 30 years from now, this was not such a terrible thing? Again, it seems pretty plausible to me. So, I think cinematic disruption we will see, in part because temporarily it is spread unevenly around the globe. It will be a kind of temporary deglobalization of cinema. And it may stimulate local creativity in a number of places. I worry about the movie sector as a whole in the United States. There's a lot of jobs and revenue at stake, but still, aesthetically, could I possibly see some good outcomes to this? I would say I can. We're also moving to a world with much, really much less tourism. We're not sure for how many years. It's a common charge that tourists corrupt the indigenous arts in many locales. As I've written in the past in my book Creative Destruction, this claim to me seems seriously overblown. Tourists also support a lot of diverse creations around the world, because they bring more money and they can spend it. But still, if you just have, say, a 5 or 10-year period where the steady rise of tourism is halted and reversed, and in the longer run it will snap back to normal, just as a kind of artistic, aesthetic experiment, There will be very high economic losses. Many livelihoods will be damaged. Again, I think you can make a case there will be some silver lining to what is happening here. There will be some possible upsides. Another trend I see in the arts coming very soon is just a lot more of performing arts outdoors. There seems to be good evidence that the coronavirus spreads much more readily indoors than outdoors, and indoors often are more cramped. So especially in areas where the climate allows, it's quite easy to imagine, say, there'll be a big comeback for outdoor theater, outdoor concerts, poetry slams, maybe done on pretty small scales, maybe in a lot of local county parks, maybe often in the suburbs, a lot more in rural areas, very small staged mini operas or excerpts of operas. How good will this be? Again, don't know. But my purpose in these remarks is to outline what is some possible upside from the coronavirus for the arts. And I think having more outdoor productions, you know, not just in Manhattan, not just in New York City or Los Angeles, but around the United States might bring something interesting over the longer run. We will have to see. I also would say that how cities themselves evolve are likely to change because of coronavirus and also because of the recent riots. So it seems to many people that living, say, in New York City has suddenly become much less attractive. This will hurt the city in many ways. Running an expensive arts institution in Manhattan or New York City was already very hard, but it now will be much, much harder. The city itself spent a lot of money supporting the arts. Revenue in the city already is way down. We're not sure when it will come back. Foreign tourism will be way down. That's been a major supporter of New York arts institutions. People who see performances less often may support them less often with donations. And if a lot of donors are older, and if older people are more afraid to go to the concert, the long-term support base for the Metropolitan Opera or New York Philharmonic it's pretty easy to see that either drying up or just weakening significantly. But again, if you think what is the upside, younger people are much less vulnerable to the virus. So New York City over time probably will become a somewhat younger city. It might be a cheaper city. It could be more like the Berlin of say 10 or 15 years ago. It could in some ways be more dynamic. You would have more of a kind of cheap, small-scale creativity. The major arts institutions and tourism-driven art and masses of people from the Midwest coming and seeing Broadway shows, all that could be much less important, and independent creativity could be more important. Again, I'm not trying to say per se is that a good thing or a bad thing, but at least again there is a possible upside. America's cities will become poorer, cheaper, younger, probably more diverse, arguably more dynamic in some ways, but of course not in all ways. Overall, I see this as a highly complex picture. I don't in any way wish to minimize the human tragedies, not just the lives lost, but the jobs lost in the arts world, the organizational capital destroyed, bankruptcies, the insolvencies, the nonprofits that cannot will not continue. I think as always, we should just ask the question, what does the more positive scenario look like? And without trying to minimize all the downsides, I know you're hearing so much bad news about the arts right now and the economics of the arts. I just thought I would try to lay out what I see as the possible scenarios for at least some things in the arts world going better rather than worse. With that, I believe my time is about up, but I thank you all for listening and coming to this event. Look forward to hearing from you. And thanks for coming. And my thanks also to the organizers of this. Take care, everyone.