Jon Chait is government funding of the arts through mechanisms like the NEA, arguing that it’s “not a clear cut case of market failure requiring government intervention, and the complications involved with either censoring or failing to censor offensive exhibits are hard to square.”
I don’t know which way this cuts, but it’s worth pointing out that for all the sporadic hubub over the NEA, by far the biggest federal subsidy to the arts comes in the form of the federal income tax deduction for charitable contributions:
This costs a ton of money, a lot of charitable donations go directly to the arts (museums, ballets, opera, etc.) and another large chunk goes to universities that, in turn, spend money on the arts. The huge advantage of subsidizing the arts this way is it lets you hide the ball. You never hear people getting mad over the fact that tax-exempt contributions are going to fund controversial or offensive art. It’s a pretty good model, and yet nobody ever talks about it, in part because it works precisely through the mechanism of people not talking about it.