New Music Gathering talk on Baumol’s Cost Disease

10915240_10100740120339704_411970700128032138_nUsually, I like to write out my talks completely in advance. It forces me to clear up my thinking, and lets me publish everything at the same time I give the talk. I’m a big fan of sharing thinking as widely as possible. But at the New Music Gathering, I couldn’t do that.

The New Music Gathering has been written about in some cool places, and it was actually pretty cool to boot. Three days of composers, performers, and the die hardest of die hard fans meeting, discussing, and performing. A lot of the conference sessions were given over to actual performances, instead of regular conference content, which, as the new president of the San Francisco Conservatory noted, was awesome. All that music also helped create a tone of working musicians working together, rather than the business folks talking business, or the arts folks putting on their uncomfortable suits and trying to be businessy for three days. It was a remarkable event, and I can’t wait for the next one.

But why don’t I have my slides, or the text of my talk ready to go?

Because that was a super experimental talk, and I haven’t cleaned up all my thinking yet. I gave a 45 minute talk that stretched into an hour-long discussion about Baumol’s Cost Disease, and its impact on the life of an individual working artist. Yes, I went to an arts conference and talked about nitty gritty economics. Why? Because nobody knows what an arts career is supposed to look like, and a lot of the training that is available boils down to teaching individual skills. That’s super valuable; you can’t do stuff unless you know how, after all. But knowing lots of individual skills doesn’t help you decide when to do what sort of thing. It doesn’t help you plan your career years in advance, or compare really unusual or dissimilar opportunities.

My hypothesis is that a better understanding of the broader economic forces that push on artists in their careers can help people make better high-level decisions about how to work as an artist.

And for my money, and that of a lot of actual economists (I have no formal training in economics), Baumol’s cost disease is the main economic force to deal with. Cost disease explains why healthcare, education, and the performing arts get so much more expensive, while computers and manufactured goods get so much cheaper. It’s about relative productivity gains from technology, and how some things are increasingly automatable, and some aren’t. Since Baumol put this forward in the 60s, it’s been remarkably predictive, and remarkably consistent in its effects.

Usually it’s invoked in the arts in cursory explanations of why we have to cut salaries for orchestras. “Can’t keep paying you all that money. Costs are rising. Baumol, you know.” But the implications of cost disease are a lot more complicated than that. And there are tricky implications on both sides – the personal services and the robot factories – of the equation.

Baumol wrote a new book about cost disease a few years ago, appraising the literature since he put forward the disease fifty-ish years earlier, and framing the disease in particular with regards to the Obamcare debate. The book is great. Go read it.

The book, though, talks about economy-wide forces and large companies. It doesn’t talk about individual artists or solo entrepreneurs at all. It doesn’t engage with the weird economics of community management and resource sharing with fans. So my talk, pretty much, tried to understand the implications of Baumol for the people in the new music community. I tried to make some pretty crazy economics useful to some pretty awesome musicians.

I’ve been getting a lot of requests for slides, write-ups, text, etc., since the talk, and a lot of really kind comments. I’m incredibly grateful for that. I wish I had something firmer to give you, but right now, I don’t. That talk was an experiment in how to make this useful, and the reactions I got helped me a lot. But I’m not ready to publish yet. First I’ve got to give the talk a few more times to a few more audiences, and keep iterating a bit more.

Eventually, I hope to have something useful for a lot of us in thinking about our careers.

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