ABSTRACT
Until relatively recently, “public expenditures” meant displays of private wealth which larger than usual numbers of ordinary (far from wealthy) people were allowed to witness: private money paying for pageants, processions and other outdoor entertainments accessible to anyone who wanted to turn up to watch.
During the 19th century and into the 20th, as governments enlarged their scope for action to deal with the challenges of population growth and urbanization, so they sought extra tax-raising power and, with it, power to decide on behalf of taxpayers what to do with the money collected. “Public expenditures” now meant any and all sorts of financial commitment entered into by tax-gathering public authorities. Some of the public services so provided did benefit “everyone” (national defence is the textbook case), while others catered for small minorities. To legitimize public expenditure serving minority interests—subsidized opera provision, for instance—economists developed a range of “non-use value” arguments explaining the hidden advantages that all taxpayers would enjoy whether or not they shared those minority interests.
This chapter looks at non-use value and indirect benefit concepts, suggesting once again that government decisions to fund high-cultural arts production through levies on taxpayers in general are inherently, unavoidably political.
