>From the Guardian Newspaper, London
http://www.newsunlimited.co.uk/The_Paper/Daily/Story/0,3604,28381,00.htm l
Smith's task force for a spot of creative accounting
As in ancient Rome, cultural rebirth is funded by beggaring the empire
By James Heartfield Monday March 8, 1999
In every city, from Birmingham to Glasgow, the old industrial centres, canals and railways are being renovated to make way for cafés, bars and galleries. This is the creative economy celebrated by Chris Smith's Creative Industries Task Force.
The task force's Mapping Document argues that 'unlike many other industry sectors, creative industries continue to benefit from high growth rates and expanding global markets'.
Near Old Street, London, is the studio of artist Patrick Hughes; the gallery which represents him, Angela Flowers, has just had its best year, with a turnover of £2.7 million. Its success is part of the £2.5 billion sales of the art and antiques market that the task force celebrates and Hughes's cottage industry part of the 71 per cent increase in artists and designers. This is great for our culture, but the task force's argument that the creative industries are the solution for the British economy is less plausible. Fuelling the market for the fine arts are profits that in other times would be re-invested in production. Shareholders demand higher rates of return from their shares, and are spending more of their money on themselves. Luxury goods are buoyant. Sports car sales have risen 248 per cent in five years and the luxury housing market by 124 per cent.
Behind the boom are historically low rates of investment in business. In absolute terms, investment appears to have recovered since the low-point of 1992. But compared to GDP, private investment has only risen from 10 per cent to 12 per cent in 1997, way below the 15 per cent of 1989. According to the Bank of England 'the rate of return on capital is at near record levels and hence we would expect business investment growth to be higher' but instead 'the higher share of profits absorbed by dividends [means] the more likely firms are to face restraints on investment spending'. As less is invested, more is available for luxury goods.
The culture secretary boasts that employment in creative industries has rocketed while the increase in the overall figures of the economically active population is 'negligible'. But this is not just a coincidence: the growth in luxury goods markets is a consequence of reduced rates of investment in business. Like ancient Rome, Britain's cultural renaissance is funded by beggaring the empire.
Much of the research into the profits and employment in the creative industries cited by the task force was started at the Arts Council, drawn up as ammunition against cuts.
It was understandable to say that 'no, the arts are not just a drain on the public purse, but a positive contribution'. The most cited examples, like the billion pound turnover of the music industry, though, had nothing to do with the fine arts. When Polygram Records outsourced the packaging of its compact discs to M&S packaging in Blackburn, 180 workers were employed to pack a quarter of a million CDs every day. Shifts last 12 hours and packers earn £692 a month. Attention is on the artists but profits depend on sweated labour.
The more the Government promotes the special role of the creative industries, the more vague the definition of what a creative industry is. At the start of last year Chris Smith had them earning more than £50 billion. By the end of the year the estimate, for the same period, was 'approaching £60 billion'.
The number employed in creative industries is estimated at one million, or 1.4 million, upon the discovery of 'creative workers' in other industries. With growth rates of £10 billion turnover and 400,000 employed in the twinkling of an eye, the success begins to look more like creative accounting.
• James Heartfield is the author of Need and Desire in the Post-Material Economy, published by Sheffield Hallam University Press.
-- Jim heartfield