The National Endowment for the Arts recently celebrated its 40th birthday. This is exactly 40 too many. Government funding for the arts has no convincing justification, and it generates unnecessary acrimony by permitting politically inflammatory uses of taxpayer funds.
The economic case for arts funding is weak because the private sector has ample incentive to produce art without subsidy. In contrast to pure knowledge, art is what economists call "excludable," meaning the producer can keep others from using his creation unless they pay for the privilege. A painter or sculptor, for example, can sell his work to a museum that charges admission and thus generates a return for the artist. This is in contrast to the creation of a new medicine, where absent patent protection the producer may have little ability to prevent copying by others.
A possible counter argument is that while art is normally excludable, it is still "non-rival," meaning many persons can consume it simultaneously. This is in contrast to, say, a hamburger, where if I consume it, you cannot. For example, many people can view the same painting simultaneously, and up to the capacity of the museum, each imposes little diminution in others' enjoyment of the painting. Thus if a particular piece of art is unique, the museum is, for this piece of work, a natural monopolist who might restrict supply -- i.e., set the admission price too high -- thereby inefficiently restricting the viewing of the art.
This perspective is reasonable in a few instances, but the vast majority of art is not unique like the Mona Lisa or the David. And so long as museums can price discriminate, they can extract most or all of the consumer surplus and will there produce the efficient amount of viewing. For example, museums can charge a high price initially to those desperate to see a new work and then a lower price later to less eager viewers.
Even if the natural monopoly issue arises for a few works of art, moreover, the political acrimony generated by the NEA is costly. From time to time the NEA funds artists whose work is offensive to a significant number of Americans (e.g., the Piss Christ, a picture of a crucifixion sitting in a glass of the artist's urine), and these taxpayers object to having their tax dollars spent in this way. The ensuing political battles leave everyone angry, all over a paltry few hundred million dollars that is tiny compared to private funding for the arts.