Artists are good for all kinds of things. They are, for example, good for producing art (which is, in turn, good for all kinds of other things). They also turn out to be able to be good for urban generation projects.

We find outstanding examples of the latter in New York. When I came to New York the first time, in 1977, Soho was the place to avoid. It was run down, with lots of abandoned factories and provided perfect hiding places for bums. Already in 1978 things began to change. I then visited students of the New School who had discovered SoHo as a neighbourhood with cheap and large spaces to rent. They were called lofts. They shared those spaces with artists, so I discovered. The entire area radiated a sense of excitement, as if something was brewing right there and then.
A year later I returned to visit an artist friend. He, too, had rented a large space, and was brooding on a plan for a gallery. There were galleries all over then. The bums had mostly moved over to the Greenery, a few streets further. Cafes had opened up as well as some eating places. There were even a few shops.
The area developed into the place to be. The established and prestigious galleries were still to be found on 57th street and thereabouts, but the really interesting, the adventurous galleries had found each other in SoHo. Castelli had his gallery there as had Mary Boon and Peter Blum. Saturday’s were especially busy.
In the 80s the area underwent a complete transformation. The newly won reputation of Soho attracted first the well to do, interested in new art and in their slipstream followed investors who saw great business opportunities for up scale stores. SoHo had become the place to be, and to be seen. The result was a rapidly increasing rent; most galleries were forced out. Castelli closed, Mary Boone and Peter Blum moved. SoHo has transformed within 20 years from a run-down nightmare to a posh area, a whet dream for the rich and famous.
The key for this transformation was the take over by artists. They simply saw great opportunities, and were able to bring the area to life. Urban regeneration was not on their mind and was not their objective. Yet, it was the kind of impact they had.
Economic impact? The last decade we have witnessed a keen interest in the economic impact of the arts. Governmental organisations and cultural organisations have commissioned numerous studies to calculate the economic impact of museums, festivals, artist colonies, creative clusters and the like. They undoubtedly have examples like Soho, or the Guggenheim museum in Bilbao in mind. The policy implication seems obvious: move in the artists and the regeneration will follow. But that is not how it works.
The problem is the understanding of economic impact. It shows in the studies into economic impact. Such studies are dubious and problematic in various respects. For starters, their methodology is dubious. Cause and effect are usually hard to distinguish. Did the arts bring about economic growth or was it the other way around and did the arts follow the flow of money? Who knows. (In the SoHo case the causation is clearly from the arts to economic growth and that is why it is so often cited; the Dutch golden age is an example of the reverse causation.)
Be in particular cautious when large multipliers are claimed. They suggest that every dollar or euro put into the arts generates an extra income equal to that multiplier, because that money will be spent on other things like art supplies or restaurants and shops. What is usually not mentioned is a) what the multiplier would be for other activities (they may be larger) and b) where that dollar or euro comes from. If it comes from taxes, it is withdrawn from another sector with a negative multiplier effect as the result. The end result may be even negative.
The negative effect would be reduced when the dollar or euro comes from outside the local area, by way of visitors. In that case there is no concern with the effects elsewhere. But wait, who is pocketing those extra expenditures that the arts attract? When a large hotel chain is one of the benficiaries, the money may be transferred to the headquarters elsewhere and the effect is lost. And why should artists, or politicians for that matter, be working for the benefit of the commercial sector even if that implies an economic impact?
A similar question arises when artistic activities turn out to increase the value of real estate, as was the case in SoHo. Landowners will benefit, and there is no guarantee that the local area will benefit from their increased resources.
As it turns out, economic impact studies have served especially the wishes and ideas of policy makers and civil servants, eager for arguments for their support of the arts. If the arts are good for the economy, we should support them. But that argument is backfiring. For if private enterprises stand to benefit from the arts, they have good reasons to support the arts themselves.
In short, placing all their chips on the economic impact is a risky strategy for the cultural sector and its supporters. The advice is to focus on the core of what the arts are all about.
Art has value in and of itself. The artists moved into SoHo because they wanted to their art. The Guggenheim in Bilbao was about realizing exceptional architecture. Great art has apparently the capacity to galvanize other activities, but those are the unintended consequences. Great artists are about realizing great art.
When artists are willing to dedicate themselves to social or economic causes, their profession changes. They become urban regenerators who use their arts as an instrument, or community workers. Their motivation is first to contribute to the improvement of the local environment and then to make art. The effectiveness of such work, however, is not always clear. The impact will certainly be less noticeable than what great artists and architects have been able to realize. We actually do not have the methods yet to determine the effectiveness of artist’s involvement. For what we know the advice is not to expect too much of the economic and social impact.
Even so, in the interest of the arts, advocacy of the involvement of the arts in urban regeneration is a good thing, regardless of the outcomes.

Arjo Klamer

Professor of cultural economics at the Erasmus university