Of Prices and Values, Costs and Benefits

As recommended by Thought du Jour (which picks a different part to summarize): John Kay.

The economic value of the arts is in the commercial and cultural value of the performance, not the costs of cleaning the theatre. ... Good economics here, as so often, is a matter of giving precision to our common sense. Bad economics here, as so often, involves inventing bogus numbers to answer badly formulated questions. ...
But bad economics has been allowed to drive out good. ...  philistine businessmen assert that the private sector company that manufactures pills is a wealth creator, but the public sector doctor who prescribes them is not. Extolling the virtues of manufacturing, they value the popcorn sold in the interval, but not the performance of the play, arguing that the vendor of consumer goods creates resources, which the subsidised theatre uses up. ...
We need to put out of our minds this widely held notion that there is such a thing as “the economy”, a monster outside the door that needs to be fed and propitiated and whose values conflict with things – such as sports, tourism and the arts – that make our lives agreeable and worthwhile. Activities that are good in themselves are good for the economy, and activities that are bad in themselves are bad for the economy. The only intelligible meaning of “benefit to the economy” is the contribution – direct or indirect – the activity makes to the welfare of ordinary citizens.