And the Oscar Goes to… the Free Market! (Updated)*
On February 26, The Artist won five Academy Awards, including Best Picture, Best Director, and Best Actor for Jean Dujardin. (Snubbing Canine-Americans, the true star of the film, Uggie the Jack Russel Terrier, did not receive a single Oscar.) While this was a great night for silent films, it was also a surprising coup for the free market. Of the nine nominees for Best Picture, The Artist was the only movie that did not receive any tax credits or subsidies for filming. Could the French be re-discovering their inner Frederic Bastiat?
In the United States, 40 states have some form of tax incentives for film or TV production. Unsurprisingly, this industry favoritism has lead to less than stellar economic results. According to Joseph Henchman from the Tax Foundation, "these programs lose governments between 72 and 92 cents for every dollar spent on them, even after accounting for increased economic activity generated by film production." In addition, these tax credits are terrible job creators, since many production companies import most of their staff, while the vast majority of local hires are only temporary.
As Katherine Mangu-Ward noted on Monday, Kickstarter already generates more funding than the National Endowment for the Arts. Plus, Kickstarter may finance sequels to seminal video games like Psychonauts and Planescape: Torment. While the NEA does fund video games, their grants range from $10,000-$200,000 per project. By comparison, the developers behind Psychonauts, Double Fine Productions, have already earned almost $2.3 million for their next game. When the market provides everything from silent films to surreal adventure games, there's just no need for the NEA.
*Correction: Merde. Looks like the Bastiat revival will have to wait. As a few Hit-and-Runners pointed out, The Artist was subsidized by the French government. Désolé.
Reason and Reason.tv on film subsidies.
