The National Lottery has prompted an unprecedented expansion of a cultural sector that already employs almost twice as many people as the motor industry. Sara Selwood reports.

The notion of culture as commodity goes against the grain of much postwar thinking in Britain. Until the late 1970s and the advent of the new academic disciplines of media studies, cultural studies and the like, culture was protected by two principles: it was what the Arts Council and the other arts funding bodies said it was; and it was subsidised because it could not, or should not, have to compete in the marketplace.

All that is now changing - nowhere more conspicuously than in Labour's shift from a Department of National Heritage to a Department for Culture, Media and Sport and in its promotion of the "cultural economy".

Few would maintain that Matthew Arnold's understanding of culture as "the best that has been said or thought in the world" has much currency now. Over the past century, the notion of an elite culture bound by an established hierarchy of taste has come under various attacks.

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It is argued that the state should support more democratic forms of culture, relevant to people's ways of life, and that culture should be regarded as a positive economic force. But old habits die hard. As often as not, seemingly incompatible perceptions of culture exist side by side. The government's pre-election cultural strategy, Create the future, is a good example. It opens with a citation from John Ruskin about the transforming power of the arts, and describes culture as helping "to define who we are as a nation"; it is "vital to our intellectual development"; and "enriches the quality of our lives". But it also promotes the cultural industries. Indeed, the prime minister has hailed Britain as the "design workshop of the world", and claims that it is leading the new creative revolution.

Labour's understanding of the "creative economy" and its promotion of culture as a commodity draws on two diverse inheritances from the early 1980s: one, the ideology of enterprise society; the other, the theories of the philosopher Adorno about the cultural industries that were manifest in the Greater London Council's cultural policies.

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In the early years of the Thatcher government, the Arts Council found that it was not only having to justify arts funding, but that it had to promote the arts as a major employer and economic catalyst. The titles of some of its publications - Making Arts Money Work Harder and Better Business in the Arts - say it all. The council's difficulty lay in the fact that it was the guardian of a narrow range of activities that appealed to minority audiences, and made little impact on the wider consumption of cultural commodities and services. While the council acknowledged that it should encourage access, broaden audiences and improve the visitor experience, it remained the case that most people's cultural needs and aspirations were supplied by the market. Furthermore, the massive growth of cultural and media studies had shifted the parameters of which cultural activities could be considered worthy of critical attention. Nearly 20 years on, the Arts Council is still struggling with these issues as the battle over Royal Opera House seat prices, the financial crisis in our theatres and the advent of the stabilisation scheme to support ailing arts organisations suggest.

The GLC first referred to the "cultural industries" when it set out to develop a broadly based and effective cultural policy. In doing so, it turned its attention to a series of social practices whose primary purpose was the transmission of newspapers, periodicals, book and music publishing,commercial sports organisations and so on. It recognised these activities as functioning in a wholly different way to the conventionally subsidised arts in that they actively contribute to the economy and create employment.

By the late 1980s both the left and right had come to accept that the "arts industry" was grounded in economic and social realities. The Policy Studies Institute's 1988 report on The Economic Importance of Arts in Britain gave this notion considerable weight. It presented the arts as a major contributor to the economy, as stimulating tourism and contributing to urban renewal, as a major export earner, and responsible for mass employment.

Given the degree of political interest in culture as a commodity, it is surprising that we know so little about it. There is no standard definition as to what the cultural industries comprise and no precise record of how many people they employ, the size of their combined turnover or details of the relationship between their commercial and subsidised operations. Indeed, attempts to measure these aspects of the cultural industries are often dismissed as biased or methodologically flawed.

So, what do we know? It is now widely accepted that the cultural sector is an important player in the labour market. The Arts Council estimates that 684,000 people work in the arts and cultural industries. A recent PSI study, which examined the workings of the subsidised sector, put it at just over 500,000 people - some 2 per cent of the total UK labour force. It employs more people than retail banking, and nearly twice as many as the motor industry. The Design Council estimates that design activities employ a further 300,000. The cultural sector is vital to the UK's tourist trade. The British Tourist Authority has found that the country's cultural assets are an important factor in overseas visitors' decision to come. Seventy per cent of visitors come for historic properties and 60 per cent for museums. Once they get here they account for nearly 40 per cent of all visits to historic properties, and 20 per cent of all visits to museums and galleries.

If the postwar years witnessed a burgeoning of publicly funded arts organisations, the National Lottery has prompted an unprecedented expansion of the cultural infrastructure. By February 1997, nearly Pounds 1 billion had been committed to capital projects for the arts, museums and galleries, and parts of the built heritage alone. Since lottery funding requires various levels of partnership funding - a minimum of around 40p to the pound - the total amount committed to capital projects at the time was more like Pounds 1.4 billion.

PSI found that in 1993/94, the financial year before the advent of lottery funding, the combined turnover of the supported arts and the built heritage sector was in the region of Pounds 1.7 billion. Just over half that came from government funding specifically earmarked for the arts and the built heritage. This was equivalent to the Department of Transport's spending on London Transport that year, about 2 per cent of government spending on health and about 4 per cent of its expenditure on defence.

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But relatively few of the population consume subsidised culture. According to the Arts Council's figures, in 1995/96 less than a quarter of the British adult population claimed to go to any kind of play, or any art galleries or exhibitions. Seven per cent went to some form of ballet, 12 per cent to classical music, 6 per cent to opera and less than 5 per cent to contemporary dance. The people who attend such events and benefit from the subsidies tend to be ABs or C1s, and are more highly educated and have higher annual household incomes than nonattenders.

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Predictably, levels of take-up are very different in other areas of cultural consumption. Over half the population goes to the cinema, nearly a quarter to pop or rock concerts and two-thirds read for pleasure. The number of book titles being published is rising at a steady rate. In 1995 it stood at over 100,000. Between 1985 and 1996 the number of cinema screens in the country more than doubled in number to 2,200. And, in 1996 the value of UK retail record sales was Pounds 1 billion.

Rock music is worth some Pounds 2.5 billion to the country a year. The Design Council estimates that design is worth Pounds 12 billion a year. Curiously, commercial interests appear to be stimulating the consumption of high culture.

Television, radio and film are creating new markets for contemporary writers and classic authors.

Classic FM reaches twice as many of the population as Radio 3. Cable and satellite broadcasting may well reverse the fall in arts coverage on terrestrial TV - not least because it appeals to the ABs and C1s so beloved by advertisers and subscription operators. These shifts in cultural consumption have stark implications for the subsidised cultural sector that has to make up for diminishing revenue funding by extending its audiences and generating even more of its income. Funded organisations are already market-led to some extent. They have to put on what people want. The London theatre was dominated by musicals during the first half of the 1990s. The Natural History Museum depends on its spectacular dinosaur exhibitions. It was only a matter of time before the Victoria and Albert Museum and Marks and Spencer launched a line of heritage undies, the National Trust expanded into interior decoration, the Tate and Pret a Manger collaborated on the Cezannewich and the British Museum opened a shop at Heathrow.

Although in 1993/94, a third of subsidised museums and arts organisations had a combined deficit of Pounds 100 million, it was also the case that the funded cultural sector was generating as much as half its income from commercial activities - ticket sales, touring, merchandising, retailing and catering. The lottery will hardly stop museums and galleries charging or do much to promote universal access, since the long-term financial sustainability of many of the capital projects it is funding depends on paid admissions.

These days, acknowledging the extent to which culture has become commodified almost inevitably leads to a discussion about "dumbing down". It is said to undermine our expectations of cultural activities and subvert the quality of experience they provide. In many respects, the discussion parallels the "breadth versus depth" debate that perennially accompanies the introduction of new academic subjects, such as media and cultural studies.

But changes to the cultural landscape are inevitable. One could cite shifts away from music hall and cinema towards television and video. The decline of classical music is another example, marked by falling attendances at concerts, the decreasing value of subsidies, the collapse of its share in the recorded music market and rise of new musics. Since the subsidised sector is being driven to generate increasingly more income and the government is set to promote the commercial cultural industries one might ask what the point of subsidy is any more - keeping the cultural sector financially buoyant, or preserving an outmoded heritage of cultural forms?

Sara Selwood is head of the cultural programme at the Policy Studies Institute. This article draws on Culture as Commodity? The Economics of the Arts and the Built Heritage in the UK by Bernard Casey, Rachael Dunlop and Sara Selwood and the quarterly statistical publication Cultural Trends.

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