Dumas got the economics of art all wrong

THE EDITOR: In her series on “The Culture of Cultural Development,” Sonja Dumas attempted to apply an economic analysis to the development of the arts in TT. Unfortunately, her misunderstanding of economics undermined her entire argument.

Dumas starts by saying that “I had figured out since my days of business school that the arts really held a comparative advantage for us in the Caribbean.” This is erroneous. The theory of comparative advantage, which was first propounded by David Ricardo, holds that Country A can profit from trade with Country B even if Country A is better at producing everything.

This theory applies readily to manufacturing, where production and exchange can be measured; it is not so readily applicable to the arts. At best, Dumas might have argued that the Caribbean has a competitive advantage in the Carnival-related arts.

Then, using a screenplay project she is working on, she asserts that “this investment of time and effort is a bigger risk than most deals on Wall Street.” She bases this claim on the long odds of her screenplay getting sold.

The comparison is invidious, however, since financial risk is, by definition, measured in money whereas “time and effort” can only be judged risky relative to some deferred opportunity cost whose returns can be estimated.

Lastly, Dumas argues that “the arts are labour-intensive, with few economies of scale and no guarantee of a consistently appealing product or one that is long-lasting. But society would suffer greatly if there were no performing or visual arts in our lives.”

Herein is revealed her fundamental misconception of economics. The main function of the market is to reveal people’s preferences and how much they value those preferences. But Dumas is, in essence, asserting that people’s preferences should be dictated to them for the good of “society.”

In this context, it is perhaps appropriate that she featured in her articles a photo of herself conducting a dance class in Communist Cuba.

ELTON SINGH, Couva