The institutions supported by Cultural Affairs disproportionately served affluent Manhattanites and tourists. While Manhattan — the city’s third largest borough — was home to nine Cultural Affairs-subsidized organizations, the other four boroughs had only five or six each. Perhaps more importantly, the institution that consistently received the most funding was the Metropolitan Museum of Art, among the city’s most popular visitor destinations and located on the Upper East Side, one of the richest neighborhoods in the world. In 1986, Cultural Affairs funding for the Met alone constituted nearly 20% of the entire departmental budget.[22] Meanwhile, visitors to the museum “skewed toward the higher income brackets,” according to a 1983 report, which found that around one third of museum-goers had household incomes of $50,000 or more.[23]

By focusing on the cultural institutions patronized by high-earning consumers, municipal arts funding abetted the city’s transition to a post-industrial economy based around finance and related services.[24] With the growth of these industries, the city’s new white-collar workers flocked to its museums, theaters, and art galleries. Their employers, meanwhile, came to see support for the arts as good corporate practice. With the city covering the basic running costs of its major cultural institutions, businesses were able to burnish their public image through the sponsorship of particular events and exhibits and through attendance at high-profile fundraisers. In an early example of the deepening bond between the city and corporate supporters of the arts, in 1976 the conglomerate Gulf + Western purchased 2 Columbus Circle — colloquially referred to as the “Lollipop Building” — as a gift for the Department of Cultural Affairs to use as its headquarters.[25]

By 1980, the Cultural Assistance Center — a non-profit group that worked closely with the Department of Cultural Affairs to promote arts and culture in New York — reported that corporate support was “the major growth sector for arts funding.” (The reliance of the city’s arts and cultural institutions on private giving would only intensify over the next few decades.) Corporations contributed to the arts out of “self-interest”: to “enhance community relations” and “improve corporations’ public standing.” At the same time, they did so because of a new awareness “of the role of the arts in attracting and keeping employees, in stimulating local economies, and enhancing the social and economic environment that enables business to prosper.”[26] This idea was shared by executives at tobacco giant Philip Morris — a company that invested heavily in the arts, perhaps in an effort to soften its reputation at a time when its product was under increasing scrutiny. According to George Weissman, the company’s vice-chairman, after considering moving its corporate headquarters to another location, Philip Morris decided to stay in New York because of “the excitement and creativity the arts spark and infuse, not only in our city life, but in our corporate life as well.”[27]

Against this background, the arts increasingly came to be viewed as a form of cultural capital — not only for businesses, but for the individual Wall Street executives, real estate moguls, and partners in corporate law firms expanding the ranks of the city’s nouveau-riche and fueling the spectacular growth of New York’s art market. New York magazine, in a cover story on the “frenzy” of art buying in the mid-1980s, attributed the trend to a “new breed of art collector, a modern-day Lucullus who has made a fortune in real estate, communications, or corporate takeovers.” In the 1987 film Wall Street, this “new breed” of buyer was represented by Bud Fox, a hungry junior broker who immediately purchases several contemporary paintings for his new Upper East Side apartment as soon as he cashes in on his first big commission. Buying art was a blaring sign of success in the new economy. As New York described it: “The young developer or arbitrageur who makes his first million hires a chauffeur and an art adviser and makes tracks for [the galleries of] Richard Feigen or William Acquavella or Leo Castelli.” And despite the occasional lapse in knowledge or taste, most of these new collectors actually knew quite a bit about art because of they had been “exposed to the arts through museums, television, and print” and spent time in New York’s burgeoning gallery scene.[28] The city’s effort to encourage the growth of New York’s cultured class appeared to be paying off.

It is impossible to measure the financial contribution of New York’s arts and culture industries to the city’s economic recovery. Yet the nature of their evolution helped shape the city that would emerge from the fiscal crisis. New York has long been a magnet for art and artists, but in the late-20th century the arts took on new purpose as city officials, along with and private benefactors and buyers, worked together to harness artistic expression in service of the neoliberal city. New York’s mostly poor and working class residents — and even many artists themselves, who increasingly found themselves priced out of a skyrocketing housing market — reaped limited rewards from the broader transformation of the urban economy that aided the city’s artistic revival. Indeed, they were never the intended beneficiaries.

Sarah Miller-Davenport is Senior Lecturer in United States history at the University of Sheffield and the Gardiner Foundation Fellow at the New York Historical Society. She is the author of Gateway State: Hawai'i and the Cultural Transformation of American Empire (Princeton University Press, 2019) and is currently working on a project on the reinvention of New York as a global city after the 1975 fiscal crisis.

[1] Michael Brenson, “The Case in Favor of a Controversial Sculpture,” The New York Times, May 19, 1985; Douglas McGill, “Art People,” The New York Times, February 22, 1985.

[2] Donald Thlacker, “Letters: The Leaning Sculpture of Federal Plaza” The New York Times, October 3, 1981; Eleanor Munro, “For an Art Truce in Foley Square, The New York Times, May 18, 1985.

[3] Kim Phillips-Fein, Fear City: New York's Fiscal Crisis and the Rise of Austerity Politics (New York: Metropolitan Books, 2017).

[4] Margot Hornblower, “New Yorkers, Artists Tilt Over ‘Arc,’” The Washington Post, March 7, 1985.

[5] Caroline Levine, “The Paradox of Public Art: Democratic Space, the Avant-Garde, and Richard Serra’s “Tilted Arc,” Philosophy & Geography, Vol. 5, No. 1 (2002), 51-68.

[6] Hornblower.

[7] While appropriations for the National Endowment for the Arts did not keep pace with inflation during the 1980s, its budget remained consistent most years, and increased from $154.6 million in 1980 to $171.3 million in 1990. Severe cuts to the NEA would not come until the 1996, when its budget was cut to $99.5 million from $162.3 million. See the NEA appropriations history here: https://www.arts.gov/open-government/national-endowment-arts-appropriations-history [last accessed 1/29/20]. Similarly, funding for the New York State Council on the Arts did not keep pace with inflation but nonetheless increased during the 1970s and 1980s, going from $20.1 million in 1971 to more than $50 million in 1989. See https://arts.ny.gov/history [last accessed 1/29/20]. Again, severe cuts came in the 1990s, when NYSCA’s budget went from $50.3 million for 1990-91 to $28.2 million for 1991-92. See Nancy Harrison, “Arts Groups Reel from Fiscal Woes,” The New York Times, October 20. 1991.

[8] Independent Budget Office of the City of New York, “Fiscal History: Agency Expenditures,” https://ibo.nyc.ny.us/fiscalhistory.html [last accessed 1/29/20].

[9] Kim Phillips-Fein, “The Legacy of the 1970s Fiscal Crisis,” The Nation, April 16, 2013.

[10] Estelle Sommeiller and Mark Price, “The New Gilded age: Income Inequality in the U.S. by State, Metropolitan Area, and County,” report by the Economic Policy Institute, July 19, 2018, https://www.epi.org/publication/the-new-gilded-age-income-inequality-in-the-u-s-by-state-metropolitan-area-and-county/#epi-toc-10 [last accessed 1/28/20].

[11] Judith Stein, Pivotal Decade: How the United States Traded Factories for Finance in the Seventies (New Haven, CT: Yale University Press, 2011); Jefferson Cowie, Capital Moves: RCA’s Seventy-Year Quest for Cheap Labor (Ithaca, NY: Cornell University Press, 1999).

[12] Michael Sterne, “Beame to Discuss Problems of City with Businessmen,” The New York Times, June 22, 1976.

[13] Shirley Benzer, “Downtown, It’s a Tenants’ Market,” The New York Times, August 11, 1974.

[14] Lizabeth Cohen, A Consumers’ Republic: The Politics of Mass Consumption in Postwar America (New York: Vintage Books, 2003).

[15] New York City Planning Department, Census Information and Data, https://www1.nyc.gov/site/planning/planning-level/nyc-population/historical-population.page [last accessed 1/29/19].

[16] Michael Sterne, “Despite Losses, City Officials Hope to Keep Corporations in New York,” The New York Times, April 10, 1977.

[17] Michael Sterne, “A Plan to Revitalize New York’s Economy is Offered by Beame,” December 21, 1976

[18] Office of Mayor Abraham Beame, press release on the creation of the Commission on Cultural Affairs, April 8, 1975, Martin Segal Papers, New York Public Library, Box 33.

[19] Report of the Mayor’s Committee on Cultural Policy, 1974, Martin Segal Papers, New York Public Library, Box 1.

[20] Report of the New York State Council on the Arts, 1960-1964, https://arts.ny.gov/sites/default/files/1960%20-%201964.pdf [last accessed 1/29/20]

[21] IBO of the City of NY, “Fiscal History: Agency Expenditures;” Public Advocate of the City of New York, “Out of Tune: A Survey on NYC Students’ Access to Arts Education,” June 2008, http://www.nyc.gov/html/records/pdf/govpub/moved/pubadvocate/ArtsEducationReport_web_.pdf [last accessed 1/29/20].

[22] “New York City Department of Cultural Affairs Report, 1985-1987,” New York City Municipal Library. Borough population data found here: https://data.cityofnewyork.us/City-Government/New-York-City-Population-by-Borough-1950-2040/xywu-7bv9 [last accessed 2/7/20].

[23] The Cultural Assistance Center and the Port Authority of New York and New Jersey, “The Arts as an Industry: Their Economic Importance to the New York-New Jersey Metropolitan Region,” May 1983, New York City Municipal Library.

[24] Saskia Sassen, The Global City: New York, London, Tokyo (Princeton, NJ: Princeton University Press, [1991] 2001).

[25] Grace Glueck, “Gulf & Western Gives New York a Culture Center,” The New York Times, December 9, 1976.

[26] Cultural Assistance Center, “Public and Private Support for the Arts in New York City, 1980, Martin Segal Papers, New York Public Library, Box 7.

[27] Amyas Ames, Concerned Citizens for the Arts of New York State, “The Effect of the Arts on Employment and the Economy of the State,” 1976, Martin Segal Papers, New York Public Library, Box 37.

[28] Dinitia Smith, “Art Fever,” New York, April 20, 1987.