Archive for the ‘Capitalism’ Category

Artists: Do You Feel Compelled to Work for Free or Barter?

Monday, April 12th, 2010
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I found this conversation-starter on ArtsBizBlog to be a good one and enjoyed reading the comments that rolled in. The dilemma:

Sometimes it’s great to trade your art for a service or other product.

Then there are the times when you don’t really want what the other person is offering.

Matthew Kowalski wants to know: “What is the polite, friendly way of saying you would prefer to be paid with money?”

I particularly liked commenter “Carla’s” approach:

I have a barter policy written, and I can refer to it for these conversations. It is not posted for the public, but it reminds me of my boundaries.
The high points include:
Barter agreements are for no more than 50% of the price of the work.
I will discuss barter only if I am in profit that month.
I have a limited number of barter sales I will consider in the calendar year.
If I do not want what the other person is offering, I suggest a payment plan. In fact, that option is part of any barter discussion.

She’s one smart cookie. An unofficial or official barter and sales policy could go a long way to making those awkward “So, how much do you charge for something like this?” or “Would you be willing to reduce your price/barter/do this for free?” conversations go much more smoothly.

I barter my voice teaching services (in fact, that is how I scored this lovely web design as well as some incredible martial arts lessons from an Olympic athlete!) – so I think barter is appropriate in many situations where you really feel the value received meets or exceeds what you are offering (the definition of free and fair trade, actually).

However, I find truly valuable barter propositions are few and far between, especially when they are framed as “exposure.” Commenter “Erika” shares my annoyance at being asked to perform at events for mere exposure,

I get this all the time with the exchange being use of my art for ‘exposure’. I don’t want any more exposure – I want money! But they always seem to find an artist willing to do the freebie (I used to do that too, until I learned better).

Don’t get me wrong, exposure is great and incredibly important for artists who have no resume and are trying to build a reputation – but I’m not. I’m no superstar, but I have reached a level of involvement in teaching and performing where I’m satisfied and I do not need to do a bunch of free gigs to get my name out.

Furthermore, I already do a lot of free singing for things I think are important based on principle (part of my unofficial policy I suppose) – from volunteering my services for arts organizations trying to raise money, to celebrate and/or represent my ethnic heritage at a music festival, or for funerals and memorial services in particular – I often don’t feel right accepting money when I am  asked to sing for these types of events.

However, I feel that all too often, artists are undervaluing themselves and are afraid to put a high enough price tag on their talents, even though the competition can be fierce – with so many other artists willing to gig for free – at a certain point you need to start charging adequate prices for your services, especially if you are a proven talent.

A friend who is an accompanist quoted his rate to me once and I know he saw my eyes turn into giant saucers. He responded with, “Look, I’m not charging to put on a tux and show up for the 2 hour gig. I’m charging for the years I’ve spent practicing, the uniqueness of my repertoire, and the debt I’ve amassed educating myself – I am charging for my expertise, not just my body on the piano bench. That’s what doctors do!” All artists should have that kind of confidence to assess their skills and charge adequate prices for their services.

But pricing can be a confounding thing and there is no one-size-fits-all-artists solution, so if you are interested in more advice about pricing, I highly recommend some pages out of my favorite micro-business and entrepreneurism blogger’s playbook, Naomi Dunsford of IttyBiz, who writes about pricing strategies:

How Do I Figure Out Pricing?

Goldilocks on Pricing, or Why You Might Not Want to Charge $5 for your Ebook

Remember, as an artist, you are also an entrepreneur as you are often a one man or one woman show trying to prove yourself and your art/talent as a product in a mass market. You need to not only learn business skills but have the guts to implement them by assessing, then asserting your worth to potential buyers in the marketplace.

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Arts and Economics Links of Interest

Sunday, April 11th, 2010

With today’s dysfunctional families you need to do things different,” Xvala stated, “so instead of making useful furniture and meaningless art, I made meaningless furniture and useful art.”

One of the artist’s most well-known works is the recent construction of “The Brangelina,” a 4,000 sq. ft. house, covered in graffiti and hosts the ceiling piece, “Brangelina Forever” by sculptor Daniel Edwards.

The Government Hates Young Workers, Especially Women

Saturday, April 10th, 2010
LANSING, MI - MARCH 17:  Michigan Democratic P...
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I had no idea the topic of unpaid internships was so contentious when I first blogged about it on Let’s Level the Playing Field by Ruining Everyone’s Chances, as it elicited vociferous and emotional responses from readers and fellow arts bloggers alike. I assumed it was clear that by forcing arts organizations to pay set wages for specific periods of time, it would reduce the availability of internships and ultimately hurt the pool of hopeful interns trying to get their foot in the door. In the already-competitive world of the arts, depriving interns of choices just makes it that much more difficult to get necessary experience and resume-building opportunities.

Since then, the unpaid internship debate has been making some headlines, with pro and con opinions abounding online.

Wall Street Journal, “War on Interns: Making It Illegal to Work for Free”

While the Department of Labor may insist the world owes these kids a living, the truth is that many young workers are willing to trade free labor for a chance to demonstrate their skills and build a resume for the next job. Especially in a bad labor market, the choice college students face may be to work without pay, or hang by the beach.

This isn’t exploiting young people. It’s letting young people exploit an opportunity.

The Washington Examiner, “Obama’s war on internships (and female employment)

Pricing interns out of the market proves especially salient for women, who make up 76 percent of the internship pool nationwide, according to the American Psychological Association. When opportunities evaporate for would-be unpaid interns, women will be the hardest hit.

The Future Majority “Unpaid Internships Bridge on Slave Labor

Despite the overall con opinion, even Future Majority writer says,

I’ll admit I did unpaid internships while in college full time and working part time and many of the innovative online experiments I run in campaigns I am only able to do with the support of a staff of unpaid internships because campaigns don’t want to pay their staff to try new things. So I rely very heavily on interns both for support staff and for new and sometimes crazy ideas.

To be clear, it appears the administration is only cracking down on unpaid internships with for-profit organizations, which seems it would not greatly affect non-profit arts organizations, but who knows what the future holds.

The major flaw in thinking with those who want to crack down on unpaid internships is they believe organizations will replace all previous unpaid job opportunities with paid opportunities and pull from the same pool of unexperienced workers. Like it or not, most internships often include a component of “real” work in addition to the educational experience that is supposed to be provided, and employers offering internships are likely to be more discriminating about the prior experience of applicants when they have to pay for it. Furthermore, it seems odd to have to pay a student to give them an education – this model is unlike any educational model I’ve seen – which all require payment by the student for their learning experience (either through tuition or taxpayer support).

The most amusing response I read on the topic shed light on the ultimate hypocrisy of our government in this debate. From Donald Boudreaux of Cafe Hayek:

It’s unclear, however, why the same young people whom the President judges to be unfit to choose for themselves whether or not to work as unpaid interns at for-profit firms are fit to choose for themselves whether or not to work as unpaid interns at not-for-profit organizations.  So I urge this administration, which is ever-vigilant at protecting us from our irrational and helpless selves, also to prohibit young people from working as unpaid interns at not-for-profit outfits – such as political campaigns.

Indeed, Mr. Obama should not only apologize to the thousands of young, unpaid volunteers whom he exploited in 2008 for his own profit – namely, to win his election to the highest pulpit in the land – he should also give to each and every one of them back pay (with interest) for their efforts on his behalf.

The bottom line in this entire debate is that people should be free to work for free if they want to. End of story.  The argument that young people are too stupid to make the decision to work for free and are being exploited because they are afraid to call out evil would-be employers is just laughable! I’m assuming they are equally free to quit the job? The argument that only rich kids can afford to work for free is equally comical.

Again, increasing the wage of internships will not increase their availability and many people need to work for free to gain experience. If someone truly cannot afford to work for free, their path may be longer and more indirect or they may need to work two jobs (one paid in an unrelated field and one unpaid) in order to gain experience. The reality is, an unpaid internship is simply a formalized extension of the oldest business and networking advice, “Do people favors for free.” This puts you on their radar, shows you are a go-getter, and makes you far more likely to get a paid position when it becomes available.

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The Artist as Entrepreneur

Thursday, April 8th, 2010
Salvador Dalí 1939
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I do not know why I did not think to post this earlier, but due to popular demand and some of the great commentary my recent post received on Brazen Careerist, I’m posting one of my graduate essays on the topic of The Artist as Entrepreneur. This is something I have tried to impart to my students as a private voice teacher and something that inspires me both as an artist and an economist. There are ample examples of commercially successful artists throughout history. Learn from them.

While I know it’s bad form to quote oneself, I only do so to entice you into reading all 20 pages of The Artist as Entrepreneur,

As an artist studying economics, I’m often met with exclamations of incredulity when someone learns of my academic pursuits.  Comments usually have to do with the misconception that artists are not of the mind to bother themselves with matters of economics and money – they must be too busy creating, inventing, and dreaming…While many artists I know also think this way, I aim to show that to be a successful artist, in addition to holding a certain level of artistic competence, an artist must develop the business and finance skills that lead to successful careers for artists and non-artists alike.  The ability to market oneself, take advantage of economies of scale, utilize commercial dissemination of one’s work, and career skill set diversification are critically important to long-term fiscal viability.  As any entrepreneur will tell you, taking risks can increase career reward, and artists are often known for taking risks creatively and in their careers.  However, there is a difference between risks that can lead to growth, and risky professional behavior that does not lead anywhere.

The story of Salvador Dalí is one of many examples of artists throughout history achieving commercial success during their lifetimes…Because Dalí welcomed the popular demand for his style of work in the market and promoted it to gain profit, he was eventually ostracized from a community of surrealist artists he associated with who felt he was straying from their cause. Artist Mark Vallen quotes the following passage from Philadelphia Museum’s Dalí exhibit catalogue,

“[Art critic Andre] Breton had long thought Dalí’s art had become too commercialized and that Dalí’s growing fame threatened the unity and agenda of the Surrealists. His growing disgust with Dalí’s financial success as an artist led him to dub Salvador Dalí with the anagrammatic nickname ‘Avida Dollars,’ describing what he perceived as Dalí’s greed for money and fame.” (Vallen, 2005)

Other [commercially successful] artists include: Rubens, Tiziano, Rembrandt, Lenbach, Stuck, Picasso, and Beuys.  Composers and musicians include Mozart, Beethoven, Verdi, Wagner, Domingo, Pavarotti, Carreras, and Callas.  Authors and playwrights include Shakespeare, Goethe, Dickens, Hauptmann, Brecht, Thomas Mann, and Jane Austen.  All of these artists became wealthy due to commercial success during their lives (Frey, 2000 and Cantor, 2006).

There is no panacea that will solve the many difficulties of pursuing a career as a creative artist.  Though author Miguel de Cervantes is well known for his work Don Quixote, he struggled to find commercial success during his lifetime and was poor for most of his career.  However, his quote from Don Quixote, “It is the part of a wise man to keep himself to-day for to-morrow, and not to venture all his eggs in one basket” is apropos when thinking about one’s career or investments.  The approach to diversify and mitigate risk that has served great commercially successful artists and private sector entrepreneurs can serve today’s artists as well.

In the discipline of finance, it is common for investment professionals to speak of portfolio diversification, which is a method of allocating one’s investments among a variety of styles and vehicles based on an individual’s risk profile or tolerance in order to choose investments that match an individual’s willingness to bear a certain amount of risk.  “The principle of diversification tells us that spreading an investment across many assets will eliminate some, but not all, of the risk” (Jordan and Miller, 2009)

In the paper I elaborate on all these ideas and more! There are pictures too! There might be typos (I’ve already caught one, can you?)! Mainly, I hope what I’ve written can serve as inspiration for artists and fodder for debate on this important topic.

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Music Industry Profit Pie Chart

Saturday, March 27th, 2010

This is a pie chart breaking down where profits go in the music industry…I’d like to see a cost pie though.

Economic Evidence of Atlanta’s Hip-Hop Dominance

Saturday, March 27th, 2010

I get very excited when I see things like economic analysis of the hip-hop and rap industry.

From the article, “Urban Economics: Atlanta, the Rap and R&B Capital of the World,”

A preliminary analysis of our 2007 MySpace dataset shows the MSAs whose Hip Hop and Rap bands have captured the most fans on myspace.com. Atlanta’s urban artists and groups have the third-most fans in the country – 6.4 million – behind only Los Angeles and New York. This is roughly 7.5% of the 83.7 million fans of the two MySpace genres, which, incidentally, are the most popular genres on MySpace.

Atlanta is an elite producer of one of America’s most widely consumed cultural products: radio-friendly rap and R&B. Atlanta is indeed a skilled city. But it is doubtful that the proportion of four-year college graduates is much of an indicator of the songwriting, arranging, and performance skills that some of Atlanta’s most successful entrepreneurs practice at world-class levels.

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Music Pricing and The Free Market

Wednesday, March 24th, 2010
Compact Disc
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Oops, the free market did it again. That is, made goods cheaper due to competition and innovation. Why we think this model only works in the music industry but not in others is beyond my comprehension, but hey, apparently it should make you think twice before downloading full albums on iTunes.

From Billboard,

The Universal Music Group could rewrite U.S. music pricing when it tests a new frontline pricing structure, which is designed to get single CDs in stores at $10, or below.

Beginning in the second quarter and continuing through most of the year, the company’s Velocity program will test lower CD prices. Single CDs will have the suggested list prices of $10, $9, $8, $7 and $6.

For those of you who like to watch “Big Business” squirm, check out competitor reactions,

On March 16, executives at the other majors were nervous about the UMG move, calling around to accounts for information on the move. Privately, some appeared annoyed by the move. “Why does Universal feel the need to get below $10?” a senior distribution executive at a competing major asked.

I’d ask him, “When was the last time anyone bought a physical CD other than because it wasn’t available for immediate download for less?”

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Arts and Econ Links of Interest

Tuesday, March 23rd, 2010
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Artists who Give Artists a Bad Name

Sunday, March 21st, 2010
pacman food bank display
Image by eyesplash Mikul via Flickr

We know art school grads are trained to have expensive taste, so why ask them to compromise when everyone else has to? Check out the nouveau hedonism for today’s poor epicure, from Salon’s Hipsters on Food Stamps,

In the John Waters-esque sector of northwest Baltimore — equal parts kitschy, sketchy, artsy and weird — Gerry Mak and Sarah Magida sauntered through a small ethnic market stocked with Japanese eggplant, mint chutney and fresh turmeric. After gathering ingredients for that evening’s dinner, they walked to the cash register and awaited their moments of truth…

Magida, a 30-year-old art school graduate, had been installing museum exhibits for a living until the recession caused arts funding — and her usual gigs — to dry up. She applied for food stamps last summer, and since then she’s used her $150 in monthly benefits for things like fresh produce, raw honey and fresh-squeezed juices from markets near her house in the neighborhood of Hampden, and soy meat alternatives and gourmet ice cream from a Whole Foods a few miles away.

“I’m eating better than I ever have before,” she told me. “Even with food stamps, it’s not like I’m living large, but it helps.”

Mak, 31, grew up in Westchester, graduated from the University of Chicago and toiled in publishing in New York during his 20s before moving to Baltimore last year with a meager part-time blogging job and prospects for little else. About half of his friends in Baltimore have been getting food stamps since the economy toppled, so he decided to give it a try; to his delight, he qualified for $200 a month.

“I’m sort of a foodie, and I’m not going to do the ‘living off ramen’ thing,” he said, fondly remembering a recent meal he’d prepared of roasted rabbit with butter, tarragon and sweet potatoes. “I used to think that you could only get processed food and government cheese on food stamps, but it’s great that you can get anything.”

What are these so-called artists learning in art school? How not to make an honest living and how to mooch off others? Apparently, I should not be so judgmental, and assume these highly-educated artists are entitled to this support because of their creative output.

“At first, I thought, ‘Why should I be on food stamps?’” said Magida, digging into her dinner. “Here I am, this educated person who went to art school, and there are a lot of people who need them more. But then I realized, I need them, too.”

I’m really quite appalled at her rationale. Even from a graduate just out of school, I might understand, since this is the worst economy in decades. But these people are just a few years older than I am, plenty of time post-graduation to realize they might need to diversify their potential streams of income. I’m also an educated person who went to music school. Once I realized that I, too, was unwilling to eat ramen to make ends meet, I did not seek ways for others to subsidize my chosen career path. I found additional work and education that allowed me to support myself and my family while maintaining a level of artistic output I am happy with.

Am I totally alone in thinking other (admittedly) able-bodied, educated artists should find honest work, even if not in their chosen field – and save the food stamps for those who really can’t afford to live?

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More Fun with Arts Labor Markets

Tuesday, March 16th, 2010
A panoramic scene of Covent Garden, London and...
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In a move sure to make many in the arts cheer, Prime Minister Brown launches a new program to help arts “graduates break into showbusiness“. According to BBC News, “The Creative Bursaries Scheme is designed to help graduates secure what would otherwise be unpaid internships.”

So, what is it that will keep these talented artists in fiscally viable positions once their paid internships run out? Does the availability of government-sponsored internships have any historical correlation to the availability of long-term life-sustaining work in an artist’s chosen field? As I’m sure we all know, talent is no guarantee of a payoff in life or in the arts. I’m sure any of us can point to dozens of supremely talented colleagues that have not yet gotten the lucky break they deserve so much. At the same time we could point to supremely financially well-off artists whose level of talent leaves much to be desired. (A coloratura who pointed to the ceiling each time she hit a high-E in a Michigan Opera Theatre production of Die Zauberflote comes to mind.)

Could these paid internships be sending the signal that a life in the arts is not only super fun, but more affordable than it really is?

I would say so. As I argued in my recent post, subsidizing an otherwise already desirable activity means you will get more people wanting to do that activity, not less. Even subsidizing less desirable activities (like low income home-buying) means you’ll get more of it (and more of the supposedly unforeseen and unintended consequences). This is public policy 101.

Furthermore, compensating differentials ensures the arts market will always be flooded with shiny, happy, eager labor – subsidy or not. Just ask any dozen or thousand fledgling sopranos looking for work if they would like to sing at Covent Garden for free. Don’t you think they would all beg, borrow, and steal to make sure they were on that stage? Do you think they would consider themselves as being exploited? Perhaps after a certain amount of time, but the evil, evil market would ensure that at some point, no soprano would be willing to sing for free forever. That is, unless she was Florence Foster Jenkins.

To quote Professor and Economist Bryan Caplan, from his econ syllabus,

A. Do people always choose the highest-paying occupation open to them?  No.  “Man does not live by bread alone.”

B. Conversely, does everyone refuse to do the truly miserable jobs (like garbage man)?  No.

C. Easy to analyze this using S&D: the funner the job, the more labor supply increases; the more horrible the job, the more labor supply decreases.

(And yes, this is the theoretical textbook effect, and yes, this is keeping all things constant.) So when subsidy is thrown into the mix, i.e. Fun Job with Higher Wage Than What the Market Demands – everyone gets really excited about it and compensating differentials ensures a steadily increasing stream of labor to the newly subsidized arts market.

As far as I can see it, there are roughly two sides of the argument. One says, “Good for the artists that get the jobs and the government probably should subsidize more. No worries about the other effects, as long as some people are better off.” The other, “A life in the arts is hard. That’s about it. No amount of subsidy will permanently change the labor market. The more you subsidize, the more enticing it becomes, and the steady stream of unemployed artist hopefuls will just keep rising.”

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