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Eugine_Nier comments on Things you are supposed to like - Less Wrong
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Another crucial issue is that art nowadays is financed to a large degree by the government (either overtly or via its formally "non-governmental" organs such as large tax-exempt foundations, academic institutions, etc.). This creates the same perverse incentives as government-financed science: the work is optimized for the bureaucratic process that determines who gets funding and official recognition, not for any direct measure of quality.
Even the money that enters the system from private buyers doesn't change these incentives much, since these buyers want to buy high-status art, not low-status kitsch -- and people in charge of sorting these out are nowadays, for all practical purposes, government bureaucrats just as much as those in charge of renewing your driver's licence. (Which makes their attempts at a "rebellious" image only more farcical.)
Moldbug once wrote a hilarious (and yet highly insightful) article about how this system works in poetry.
I think the bureaucratic aspect is more important than the government aspect. After all most classical and renaissance art was also funded by governments.
Yes, that is certainly true. I didn't mean this as a general denunciation of government patronage, but as a comment specifically about the modern bureaucratic organization and financing of art. Clearly, the patronage of arts by, say, Renaissance popes or classical Greek rulers was a very different story.
Patronage by a patron works - indeed, there is no other satisfactory way of funding art. Patronage by a bureaucracy, by a committee, does not work so well.
The big problem is regulatory capture. Being an official artist becomes disconnected from any artistic talent.