A big hats off to Joe Patti over at Butts In The Seats for posting an absolutely terrific article on 12/3/2012 that casts a pragmatic eye on Baumol’s cost disease. And if there’s ever a topic in this field that is all but assured to raise hackles and inspire heel entrenchment, it’s Baumol’s cost disease.
If you’re not up on the epidemic, here’s the quick and dirty description: it denotes an unsustainable business model for businesses that don’t benefit from an increase of labor productivity to offset increases in labor costs. The common example is it takes the same number of musicians to perform Beethoven’s Fifth Symphony is it did 100 years ago so the business of orchestra’s have no way to control costs by means of improved efficiency such as the auto industry employs.
Throughout the Season of Discontent, Baumol’s cost disease has entered the equation to one degree or another in every economic crisis driven labor dispute in addition to serving as a cornerstone for cries of new model restructuring.
Patti’s article is useful in that it picks itself up from the gutter of circular logic that defines most discussions on this topic to make two particularly useful points.
It simply isn’t fair or accurate to say that the field doesn’t benefit from efficiency.
In some respects, I think that non-profit performing arts have done a great job of employing technology to keep their costs under control…in comparison with the movie industry where technology has resulted in sky rocketing costs.
Pounding a square efficiency peg into a round artistic hole is a slippery slope.
Right now the focus seems to be on how much of the product can be trimmed back before people notice and become concerned with the drop in what they value.
While this is translating into seeing how many musicians an orchestra can cut before people figure the music is suffering, you see the same thing manifesting in other areas of your life as well. Just try to buy a half gallon of ice cream these days. You will find it is 1.75, maybe 1.5 quarts.
The field would do itself some good by abandoning the cult of Baumol’s cost disease and its apocalyptic dogma that purports regulating expense structures by way of blunt force governance.
In the end, there will never be a shortage of meaningful topics centered around balancing costs against artistic activity. However, the solutions will remain out of reach if we fool ourselves into thinking that in order to remain competitive, we have to make supposedly difficult decisions to give our audience less, charge them the same, and try to fool them into thinking nothing has changed.