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ECT- Article Assignment 2 Kirsten Kaman(164491)
In section 2 “Tourism as a mixed industry” in the article "Tourism as a mixed
industry: Differences between private, public and not-for-profit festivals" several
arguments for government intervention are given. Mention two arguments and
explain them in more detail in your own words, using arguments from the book
(Chapter 11 and/or Chapter 14) and the lectures.
1. “Argument against private-sector provision of arts and culture is that it
results in “commodification”, turning something of intrinsic social and
cultural value into a mere product for sale. This is somewhat equivalent to
the use of the term ‘festivalization’ when applied to the overuse or misuse
of festivals in place marketing, although often it is local governments that
promote and develop festivals in this way.”
Commodification is turning a product into a product which can be sold on a
market. If an externality, like a private sector, interferes with an arts or
culture event, private decisions will be made. The private decision to take
the action, reflects the private calculus of private costs and benefits. These
are internalised in the decision making process. Furthermore, if the action
generates externalities, individual self-interest does not produce the best
allocation of resources. More and more ideas will be put in the event from
the externalities (Triple P approach) like the private sector and will cause a
negative externality. If all input will be levelled, local governments can
profit from the now positive externalities. When externalities are present,
the individual pursuit of self-interest will not result in the largest possible
economic surplus and so it will be inefficient.
2. The social equity argument considers principles of fairness, justice and
need when government subsidize or provide arts or entertainment.
Cultural celebrations and the arts in general are often viewed as ‘merit
goods’ which, for ideological reasons, are judged to be beneficial to the
public or some target groups, regardless of expressed economic demand.
Merit goods are goods produced under non-market conditions by the state
for political reasons. They are intrinsically desirable, uplifting or socially
valuable. Cultural celebrations are seen as merit goods because that
should be promoted and supported by the government, in order to improve
the welfare of society as a whole. They are beneficial to the public, which
in this case is the population or inhabitants and also the target group.
Insufficient demand might exist to enable private provision. Some events
are rather expensive and have a low demand and therefore they require
subsidies, without questioning whether or not the private sector could do
just as good the job.
Take a festival you recently visited, are planning to visit, or if you are not all a
festival-go-er take a well-known festival. Can you point out (using additional
festival information if needed) if the festival was/will be organised by the private,
the public or the not-for-profit sector. Is this kind of organisation the most
efficient one taking into account two arguments from the article, book, and
lectures.
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