Measuring intrinsic value – how to stop worrying and love economics

Munich Personal RePEc Archive, April 2009, England

Measuring intrinsic value – how to stop worrying and love economics by Hasan Bakhshi
Alan Freeman and Graham Hitchen

Abstract
This paper seeks to transcend entrenched misunderstandings between economists and arts
policymakers, leaders and funders. These misunderstandings, which have long dogged discussion
on arts funding in the UK, are most evident in the long-running debate about ‘instrumental’ and
‘intrinsic’ approaches to public expenditure on culture and the arts.

As a general theory of public choice, economics provides tools for measuring the intrinsic as well
as instrumental value of art in a way that is commensurable with other calls on the public purse. The
reluctance to use rigorous economic methods has hindered rather than helped the case for the arts.

This paper offers a provocative reconsideration of the outdated and poorly-informed prejudices
which lie behind this reluctance.

This is a prepublication draft. A version has been published electronically by Mission Models
Money and can be accessed at http://www.missionmodelsmoney.org.uk/page.php?id=34

• Hasan Bakhshi is Research Director for the Arts and Innovation at NESTA, and an independent consultant to the film industry. Alan Freeman is a Principal Economist at the Greater London Authority (GLA). Graham Hitchen is an independent consultant. The authors are grateful to John Holden, Sam Jones and Jon Kingsbury for their insightful comments on an earlier version of this paper. The views expressed in this paper are those of the authors and nothing in this paper implies endorsement either by NESTA or by the GLA.

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