Well it took me 2 years to find the answer, but I did it! Two years ago I was looking for the economic law that technological advances will make it possible to produce goods more efficiently, but because the performing arts create works in much the same way they did 500 years ago, they don’t enjoy the benefits of this law.
An article on the New Music Box website on New Music Economics revealed what I had forgotten–it isBaumol’s cost-disease!
Matthew Guerrieri does a good job covering the topic in the New Music Box piece. Much better than my brief treatment two years ago which was more about bemoaning the failure of technology forcing my theatre to go old school with our ticketing and lighting. (Though my entry is arguably more entertaining.)
If you are thinking about not reading the article, give it a second consideration. As Guerrieri notes, the Baumol effect is “one of the main rationales behind government subsidization of the arts.” Opponents of government funding of the arts try to find exceptions to the rule. Becoming familiar with the arguments on both sides can be key to your arts advocacy efforts.