Cultural economics has been dealing with the matter of culture especially since the 1950s. We can distinguish three developmental steps of cultural economics. The first step was applying economic theory to the arts. In the beginning, one of the main research questions was why government should support the arts. Cultural economics tends to help the cultural policy decision making and has been helping cultural policy development in western countries.
The reason why the economists use cultural economics instead of art economics is that cultural policy includes cultural heritage, contemporary art, and cultural industries, etc. However, in the beginning the main focus is arts, and cultural economics analyses the arts applying economic theory.
The second step was applying culture to economics. Since the 1980s, the definition of culture in cultural policy and cultural economics has been expanded. It includes the same definition of culture as in anthropology and sociology. At the same time, Unesco and the World Bank have become interested in culture for development. A. Sen argues that culture is not the last matter and not the last needs for people and developing countries. These trends influenced cultural economics, and economists started to be interested in applying culture to economic theories since the 1990s. They explored cultural value and cultural capital.
However, the definition of culture includes creativity as a core function in cultural economics. For example, D.Throsby gives the definition of culture as below,
1, that the activities concerned involve some form of creativity in their production,
2, that they are concerned with the generation and communication of symbolic meanings,
3, that their output embodies at least potentially, some form of intellectual property.
The definition of culture in cultural economics rather focuses on the creative function aspect of culture. It is ironic that anthropologists start to have doubts toward the concept of culture, and cultural policy and cultural economics start to expand the definition of culture including the anthropologist definition. They are interested in the role of culture for development and social inclusion.
The third step is to see economy as a cultural phenomenon. Economy is only one kind of exchange, the one using economic value. Economy is embedded in a larger sense of culture. More collaboration between anthropologists and economists will be required to develop this idea.