Using taxpayers' money to subsidise the arts is a modern aberration. Unlike in continental Europe, the development of the arts in the UK was, until recently, overwhelmingly a private matter with only occasional royal patronage and government intervention.
Then, during the Second World War, our government got involved in concerts to boost morale, and Lord Keynes instigated the Arts Council in 1946. Since then, expenditure on the arts has grown, in real terms, seven times faster than all other uses of taxpayers' money.
The people who consume the arts have higher social status, more education and fatter wallets than Mr or Mrs Average. Furthermore, because the supply of top artists, like that of top footballers, is limited, many subsidies simply bid up the wages of the best artists without adding to supply or reducing prices.
Consequently, we can accurately describe the subsidy of the arts as a transfer of money from the poor to the rich.
Demand for the arts increases with wealth and education. Given that we are much richer and supposedly better educated than 60 plus years ago, then the case for the poor paying for this rich person's pastime gets weaker by the year.
So, what has happened? Why have subsidies increased while demand has been rising?
We have created two powerful, well-connected pressure groups who favour such subsidies. The first consists of the well-educated well-off who have infinitely more political clout than the poor and inarticulate. They are more likely to join a political party, they can argue better, and their ranks produce most of our politicians. The second group consists of the class of bureaucrats in government, the quangos and the producer organisations who are astonishingly close and friendly, not to mention well-paid and well-pensioned.
Are goods produced by artists 'public' goods? No, as people can be denied access. Are they 'merit' goods needed by people? No, as arguments to do with education, tourism, posterity and so on turn out to be weak at best on close examination. If only Gladstone and Peel had been right when they claimed that contemplating beautiful art would reduce crime.
The arts can, and did, flourish in the private sector, and will do so again when the Arts Council is closed down.
It is hard to think of a branch of the arts that did not prosper prior to state involvement. British theatre from the end of the 16th century springs to mind, as do the public concerts of the 17th century. We had a market in music which brought Handel and Haydn to us in the 18th century.
There was princely patronage, but it is often hard to disentangle it from private patronage - as with the Medici in Florence. And does anyone want to maintain that centralised patronage in 16th/17th century France produced better or more durable art than in decentralised Italy?
It really is simple: the demand for art grows with income and income has, overall, grown hugely over the past 500 years. Patronage declined for, say, 250 years and was replaced by specific commissions and dealers.
It is this market in art which produced our rich cultural heritage, and just as we produced great art without state subsidy so we produced great architecture and beautiful public places before town planning. To my mind, the Arts Council is as criminally responsible for the degradation of our heritage as are the planners in the town halls.
The claim that the market cannot produce art flies in the face of history. It is utterly implausible. And the idea that a wealthier society needs more subsidy is just plain bonkers.
But it gets worse. Subsidies change what gets produced, and for the worse. Subsidised works crowd out the unsubsidised as artists no longer need to worry about customers. They can charge less and, if attendances are low, so what?
Subsidised supply for an unsubsidised demand is a recipe for poor performance. All three of our major political parties have abandoned an industrial policy of 'picking winners' as they inevitably ended up picking losers. Why should we think that such a policy can work for the arts when it fails everywhere else? So my conclusions are:
- subsidising the arts is not good, not even neutral, rather it is plain bad in terms of artistic outcome;
- art flourishes without subsidy, indeed the lack of subsidy liberates the artist from today's little Stalins;
- subsidy of the arts has a regressive effect on income distribution;
- as subsidies decline so donors will step up to the plate - indeed subsidies deter donations;
- tax breaks for donations to the arts are far superior to subsidies;
- and the Arts Council and all other such bodies must be closed down - the whole subsidy establishment should be made redundant in one fell swoop.
In the Institute of Economic Affairs paper
Should the Taxpayer Support the Arts?  the distinguished economist David Sawers quotes the famous art critic Clive Bell as follows: "The one good thing that society can do for the artist is to leave him alone".
I could not agree more.
John Blundell is director general and Ralph Harris fellow of the Institute of Economic Affairs. He was once placed second in the Turn-Up Prize at Chelsea College of Arts...
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