“It is the great multiplication of the productions of all the different arts, in consequence of the division of labour, which occasions, in a well-governed society, that universal opulence which extends itself to the lowest ranks of the people.”

— Adam Smith

Dear Reader,

Talking with Dominic Frisby about the Edinburgh Fringe Festival got me thinking about the various festivals and events the city of Baltimore puts on.

Take Artscape, the largest arts festival of its kind on the East Coast. Every July, our local politicians try to help people forget about the heat, the humidity, the corruption, the rampant crime and poverty by sponsoring tents and artists and food trucks and a series of free concerts.

We’re not just talking garage bands, either. Charm City has hosted the likes of Aretha Franklin, Ray Charles and, er, The Mighty, Mighty Bosstones.

In all, Baltimore’s budget allocates $18.1 million of taxpayer money to these feel-good publicity stunts. The acts given the stage are chosen by the Baltimore Office of Promotion & The Arts, a “non-profit” arm of the city’s government.

In essence, then, the government is deciding which artists to sponsor. And since the concerts are free, there’s no way to measure whether that money is being well spent.

Sure, the city earns plenty of tax revenue and sponsorship cash… but who’s to say whether The Mighty, Mighty Bosstones were the best choice for a headliner the year they played? How many people specifically came to hear “Knock on Wood” live… and how many showed up just to find out why all the roads were closed?

What’s more, going back to Friday’s conversation about Elon Musk and capital allocation, does it make sense to spend $18.1 million on music in a city with more than 300 murders every year? Aretha Franklin may be the Queen of Soul, but singing about “Respect” isn’t a talisman against violence.

Of course, I’m not saying there shouldn’t be concerts… even free ones. Instead, I’m saying that the government should just cut everyone’s taxes by $18.1 million and let the free market run Artscape.

The Edinburgh Fringe Festival is proof that it can work.

As Dominic explains, the Festival started as a high-brow showcase, featuring “famous ballets and orchestras, all this elitist highbrow stuff” — all chosen and sponsored by a city commission.

Less hoity-toity groups asked to be included, but were denied. So “they came and did their shows anyway.”

Some of the acts were successful. Some were not. Those who succeeded kept it up. Anyone who failed either tried again with something new next year, or just stopped coming.

It’s how the Festival has run since 1947, without a dollar of government support. Artists come because they think it’s in their best interests… not because they expect a handout.

Fans keep coming, too. According to Dominic, in 2019 the Fringe Festival sold more tickets than the Olympic games, which tend to be the best-attended (and government-sponsored) events on Earth.

I could go on, but I think Dominic puts it best: “talking about it isn’t as good as the film.” So be sure to check out Adam Smith: Father of the Fringe for free on YouTube.

Now imagine if more things worked that way — letting the market alone determine spending decisions, just as Smith championed, instead of centralized allocation.

It would mean the end of massive government spending… and an end to the massive inflation we’re seeing today.

Follow your bliss,

Addison Wiggin
Founder, The Financial Reserve

P.S. Researching this story led us to the Baltimore Office of Promotion & The Arts. There we learned its communications director is none other than Barbara Hauck — your former Reserve liaison.

Small world.