Tuesday, April 26, 2011





What do all those cities have in common?

The sad answer is that their orchestras have either declared bankruptcy, are in the process of declaring bankruptcy, or are on the verge of declaring bankruptcy.  And we could probably add Detroit to the list, even though their players recently ended a strike by accepting a pay cut, as well as Indianapolis, which is widely believed to be heading in the same direction.

The situation in Philadelphia stands out from the trend, however, as it's one of the storied "Big Five" of American orchestras - its collapse is to classical music what the collapse of the Intiman Theatre is to American theatre.  (Although actually, it's arguable - given the number of civic orchestras in financial danger - that the nation's orchestras are under more financial pressure than the nation's theatres.)

Of course a flashpoint in this ongoing situation remains the question of wages.  I remember two years ago when I wondered at the fairness of the BSO's union pay (entry level, around $128 K, much like that at the Philadelphia), given that the best local artists in other fields could command less than half that salary, I was ridiculed from all sides.  One hyperventilating classical music fan was so offended he actually began a blog to "oppose" me (I think he long since shut that down - one of two short-lived blogs, by the way, that have been devoted entirely to attacking me; another validation - if Harvard's attacks weren't enough - of the power of the ideas expressed in the Hub Review).  At the same time, local Globe second stringer Matthew Guerrieri lectured me, in several heated exchanges, that BSO salaries were actually a result of free-market competition.

Uh-huh.  I was never quite sure how union salaries were supposed to be the result of free market competition (don't they represent the antidote to free-market competition?) - but whaddya want when it comes to economic argument from Matthew Guerrieri, he's a composer! At any rate, over time what has become the sticking point in most of these bankruptcies, including Philadelphia's, is the fact that salaries and benefits at the orchestras do not, actually, result from free-market competition but rather represent a compromise between union demands and the willingness of the symphonies' Boards (that is, the local business communities) to support them.  That's how orchestra salaries are set, all you libertarian classical fans.  Not through the free market (as ticket revenue rarely covers more than two-thirds of costs), but through Board largesse.  In Philadelphia, for example, ticket sales this year brought in $33 million, but the orchestra's costs were $46 million.  Even after a round of emergency fund-raising, the deficit still amounted to $5 million.  And yes, the Philadelphia has an endowment of $140 million, but given an annual deficit rate of $5 million (and nobody thinks the deficit is going to go down),  if the orchestra began to tap that fund, it would be gone in little more than a generation (and at the actual deficit rate of $13 million a year, it will be gone in little more than a decade).

And you know, Board largesse runs strongest when workers' wages are falling against revenues (and thus the wallets of the rich are fatter than usual), so it's hard not to intuit that every time a player in an orchestra like the BSO gets a raise, that increase parallels a pay cut to the respective city's working class, at least in relative terms.  I'm not saying there's causation there (before you write in), but still - that see-saw is the none-too-pretty economic picture of civic orchestras (and for that matter of any arts organization that can't meet its payroll through ticket sales).  You could try to argue, as Matthew Guerrieri did, that there's still a kind of limited competition at work within, say, the oligopoly of the Boards of the "Big Five" - New York, Chicago, Boston, Cleveland - and oops, I guess not Philadelphia anymore, but maybe L.A. now.  But the point is, even if you want to call that cooperative understanding a "market," it still looks like the bottom just fell out from under it.

Of course there's a strong case to be made that union wages aren't the only thing killing off America's orchestras.  Or even the main thing.  I wouldn't argue that they are.  I'm sure mismanagement, rising real estate costs, etc., have all played a role in the debacle in Philadelphia and elsewhere (and maybe even the leading role).  And it's worth remembering that the Philadelphia isn't really "dead;" it's just in a state of legal limbo in which all its contracts - especially its contracts with its unions - are open for re-negotiation by management.

But here's the rub.  Since the orchestras survive on Board donations, they have to convince America's ruling class that their union wages aren't what is undermining their solvency.  Only America's ruling class doesn't really want to hear that, do they.  And does the working class (for whom unions are now largely a thing of the past) want to hear it either?  Somehow I doubt it.

See this is were things get - how to put it? - culturally sticky.  Because actually, the only people who might be sympathetic to the argument of the orchestra unions are America's artistic classes (people like Matthew Guerrieri!), but for better or worse, they're on the losing side of a libertarian cultural meme that began to build steam with the fall of the Berlin Wall and is now pretty much dominant in our discourse, even among the "educated."  Thus supporters of symphony musicians try to play the game both ways - by simultaneously guilting the Boards into coughing up more cash ("The whole problem is your management incompetence!") while pretending these salaries are the result of the free market.   Although I think many of these types do honestly believe that "value" aligns with remuneration in some vague but deeply true way.  So if you're the very, very best violinist in the whole wide world, in their minds you're bound to make a very good living.

Only it doesn't work that way anymore, largely  because the forces of digitization, the Internet, and globalization are all undoing the foundations of what we used to think of as "value" - which was never really intrinsic to labor or talent, anyhow; it's always only been purely a function of replacement costs.  Somehow the educated retain a touching faith, however, in the idea that value isn't tied to those costs, or to things like geographic location and market barriers.  Seemingly hypnotized by a series of naive economic gurus, they seem to believe that value can still exist in a virtual world in which all boundaries have been erased and everything at last is "free" - in short, an "economy" in which everything is replaceable, and yet somehow everything still retains its value.

Of course what happens instead in such a world is that value aligns more and more with political power (or its factotum, celebrity power).  That's why Arianna Huntington could get so rich off the efforts of people she didn't pay at all; and that's why young people are so desperate to get into the Ivy League - not for the education (please!) but rather for entrĂ©e into a class that has the political power to look after its own well-being.  The rest of the nation, of course, isn't so lucky.  Indeed, the great social problem of the millennium is probably not racism, but instead the way that globalization and digitization have undermined the foundations of economic value.  That is what has rendered unions powerless, and what has left the working class in a seemingly permanent economic slide.

But I digress.  The point is that orchestra unions may have thought they were protected from this trend - after all, you can't import a BSO concert from China, can you - but in the end, the trend is catching up with them anyway, if indirectly.  For to a non-unionized populace, especially one equipped with a theory supplied by the chattering class, the perks of a specialty union - whether in the arts or in government - look undeserved and unjustifiable.

This is the atmosphere in which the BSO will be going into its next round of contract negotiations (the current contract expires in August).  Of course the BSO hasn't declared bankruptcy, and I doubt it's in any serious monetary straits.  Still, I also don't get the impression that James Levine's tenure has really done it all that much financial good.  He was very expensive, of course ($1.6 million, last I heard), and he tended to demand extra money for special projects; and while I think audiences stabilized after his controversial first season, he got more lip service than money-love from the Hub.  The ongoing search for his replacement basically represents another question mark hovering over the negotiations - although it's probable that whoever is chosen will be both healthier and cheaper than Levine.  Indeed, it's hard to imagine a more uncertain financial environment for these negotiations.  It's almost enough to make you wish all this was determined by the free market.

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