I want to begin with an obvious point. Great plays, or even good-ish ones, cannot be legislated into existence. They can sometimes be legislated out of existence, but that's another matter. I mention this because sometimes in Britain we fall into the trap of believing that there is some kind of ideal social structure in which art is bound to thrive. We look back to the days of Pericles's Athens or Florence during the Cinquacento, and say, 'Ah yes, well, it's all very simple. These were societies where the arts were honoured, artists were treated as respectable citizens and not as self-indulgent layabouts; and look at the results! The Oresteia, the Mona Lisa".

In Britain, the Arts Council often justifies its existence by suggesting that it is the modern democratic equivalent of the great feudal patrons of the past. I do not quite know to what period in British history they are harking back with such nostalgia, but perhaps it would be the early eighteenth century, when noblemen of various titles and descriptions flocked to the studios of Sir Godfrey Kneller to have their portraits painted and those of their wives, daughters and dogs, though not always in that order. It was certainly an age of patronage on a grand scale. Even today, our regional art galleries suffer from a glut of Knellers, their walls positively bulging with bucolic barons, while the mansion which Sir Godfrey built from the ill-gotten gains of portraiture, Kneller Hall, has become a centre for brass bands of military disposition. Some artists, with better patrons than they deserve, could benefit from more neglect. The Arts Council would never refer back to the bad old days when the Puritan fathers of the City of London kicked the actors out of the city gates in mid-winter, and forced them to settle among the stews and bawdy houses of Southwark on the unfashionable South Bank, where they had to cobble together from old logs a new ramshackle playhouse-the Globe-and hastily improvise new plots from history books-King Lear.

I do not want to simplify. Of course, Shakespeare had help from his aristocratic patrons, who hated the Puritans even more than he did, and from the estimated 15% of the population of London who came to see his plays. In Sir Godfrey Kneller's time, there were better artists than he, who died in poverty and neglect. My point is simply this-that the relationship between an artist and his or her society is a complicated matter, with unpredictable effects arising from unknown causes. Very often the cultural climate matters more than the social system, and the climate, if we can analyse it at all, is composed of a multitude of individual likes and dislikes; personal choices, which collectively provides the atmosphere within which the artist lives and breathes and works.

Nor does a hothouse climate, warm, moist, and sympathetic, necessarily benefit the arts. Sometimes a cooler temperature produces better results, where a certain wariness exists between the artist and the public-where audiences are not easily impressed and the artist must work hard to gain any kind of recognition. But I'm not putting forward any romantic notion that the artist has to be an outsider, that social antagonisms, storm and stress are good for the soul. I'm simply warning about false connections and the belief that good societies produce great art, and bad societies don't, and that the key to creativity lies in the disposition of grants.

In Britain, during the 1960s, we thought that we had devised a very good system for supporting the artist. Of course, there was never enough money available but the system, as systems go, seemed to work well enough. Politicians had generally grown accustomed to the thought that the theatre needed public subsidies, which were given from two main sources, from the state through the Arts Council of Great Britain, and from the local authorities, representing the towns or regions. Not all theatres required subsidies in the sense that they would go bankrupt without them. We had a commercial sector-and not all theatres required subsidies to the same degree. But it was generally agreed that too great a dependence on the box office vulgarised the theatre: it led to tatty girlie revues which were then touring around the old music halls, or to over-opulent musicals and society dramas with high ticket prices which only the rich could afford to pay.

Subsidy was not given to the theatre primarily for economic reasons- but to raise the standards and to spread the benefits of the arts to those people who had previously been unable to afford tickets to the theatre, ('raise' and 'spread', two key words in Arts Council documents). But it was feared that too great a dependence on subsidy would place artists in the hands of their new political benefactors who might try to tell them what to write, what plays to perform and which to avoid, a kind of censorship by bribery, typical, as we were then told, of Eastern bloc countries. This was long before Mrs. Thatcher. A Labour government was in power. And so, in a British way, we built checks and balances into the system. The government would give a block of money to the Arts Council, whose members were not selected for their political affiliations. They were sometimes artists, but not often, for it was thought that they couldn't be trusted to administer public funds impartially. By benefactors, governments usually meant lawyers and members of the Lords. This was known as the 'arm's length principle', and the Arts Council in turn would give grants to those theatres thought worthy of subsidy without telling the artistic directors how the money should be spent.

The theatres themselves were 'non-profit-distributing' companies, which meant that their grants could not be used to speculate in the commercial theatre for private profit. Thus, on all sides, artistic freedom was to be respected, while public money was not to be abused. And it is this system which survives today, within the subsidised sector of British theatre, although much battered and discredited. But it is not so discredited that Mrs. Thatcher's government, which doesn't like giving away public money if it can be avoided, has tried to get rid of it. On the contrary, the Arts Council has been given a 17% increase in its grant, spread over three years.

I do not wish to dwell on parochial British politics. I do not even want to spend too much time on trying to explain why the system has become discredited. We actually have fewer professional theatres in Britain than we did in the days before subsidies, though many more multi-purpose arts and leisure centres; and the unemployment rate among actors is far higher. But I do not think that too much should be read into these statistics. In the 1920s, when the theatre had no subsidies but was specially taxed instead, and censored through the Lord Chamberlain's Examiner of Plays, and generally abused, we had more than a thousand theatres in Britain. Now we have less than three hundred, with only a third of them subsidised: but I do not conclude from these figures that the best way to have a thriving theatre is to tax it and censor it.

I want instead to concentrate on those historically surprising years in the mid-1960s, when politicians of all persuasions suddenly decided, after centuries of thinking otherwise, that the theatre was not so wicked after all, that it could be quite good and socially beneficial if it were not forced to debase its tastes by pandering to the box office, and that public money should be given to it on the understanding that it could do what it liked with these grants, more or less, provided that it did not make profits with them. Theatre censorship was abolished, and if we wanted to destroy the capitalist system the theatre was the best place for us.

What caused this sudden enlightenment? What models inspired us? I think there were two. One model undoubtedly was that of the great state and civic repertory theatres on the continent of Europe, of which those in Germany were prime examples. Our theatrical traditions had grown up in quite a different way. We had very little state patronage: Shakespeare, Sheridan, Oscar Wilde and Bernard Shaw were all commercial dramatists. Our system was based primarily on commercial touring companies which stemmed from three or four metropolitan centres, such as London and Manchester, where successful productions could play for months, even years, on end. For the lucky impresario or star actor the rewards were great-but so were the risks, which is one reason why, a century ago, the critic Matthew Arnold, who had just seen and admired the Com├ędie Francaise, called on British theatre to emulate the examples from France and Germany. Arnold believed that the public mind could be cultivated by coming into contact with the great minds of all ages and societies; and he pointed out that Shakespeare was more often performed in German theatre than British ones, hoping to shame us with patriotism.

He called for large theatres with large permanent companies to perform repertoires of great classic plays, and eighty years later, in the 1960s, his call was answered. We tore down the large Edwardian and Victorian theatres and built medium sized repertory theatres in their place. While it is true to say that artistic directors were not told what plays to perform in these theatres, it was very clear to most directors what was expected of them, to provide a repertoire of great plays, with the occasional modern one thrown in. The theatres were to provide civic libraries of drama, with seasons composed of perhaps a Moliere, an Ibsen, Chekhov, Brecht, Ayckbourn, Shaw and Shakespeare.

This kind of programming makes heavy demands on a company, for if you simply think of the different acting styles which are appropriate for this handful of playwrights, you will realise that what is being asked from the casts is not just a Protean technique, but the capacity to switch from one kind of theatrical philosophy to another, and to another and another, all within the space of a season. And it also makes heavy demands on an audience. We assume too easily that great plays can transcend the gulfs of social, geographical and temporal difference. It is in fact very difficult to understand Shakespeare, which is not to suggest that we shouldn't produce his plays or see them, but that we should recognise the magnitude of the task. There have been too many attempts to make Shakespeare in Britain a little easier, a bit more accessible, and relevant to our times. They nearly always do Shakespeare injustice.

But, above all, it makes heavy demands on the creative artist, who has to struggle to make his or her voice heard against the murmurings of ancestor worship. It's hard enough to launch a new play, without the embarrassment of knowing that, in a classic repertoire season, Hamlet was playing last night and Mother Courage will be on at the weekend. It isn't just the problem of unfair comparisons, or of directors who simply don't want to take the risks of producing new plays at all, and do so only in a spirit of condescension: it is rather that the whole cultural atmosphere surrounding classic repertoire theatres becomes ponderous and self- important, so that a possibly interesting idea has to be instantly elevated into a major statement if it is to survive.

I am referring to the British experience and, in truth, only a small part of it, for it was quickly realised in the late 1960s and early 70s that very few of the new civic repertory theatres were capable of handling repertoires on the scale of the French and German civic theatres. They never had the financial resources. Our traditions lay elsewhere- and quickly the repertory theatres in Britain slipped back into that mixture of social worthiness and commercial caution which they had been created to avoid, leaving only the national theatres, the Royal Shakespeare Company and the National Theatre, trying, and often not trying very hard, to live up to an ideal which everybody else had abandoned as a lost cause.

That was the first model-and the second was not of a theatre company, but of the Artist. I like to think', wrote Lord Redcliffe-Maud in one of the interminable papers on how to organise the arts better', not of the artist as a special kind of person, but of every person as a special kind of artist'. I find that very revealing. Nobody talks like that of any other profession, even in Britain. Nobody says that every person is a special kind of doctor or maintenance engineer. It suggests that anybody can be creative if they let themselves go enough. Artistry becomes muddled up with self-expression and the development of the personality; and the idea that artists have skills to learn, and jobs to do, and functions to perform, seems rather philistine.

On one level, of course, it must seem rather degrading to the artist if their work is something which anyone can do if he or she tries hard enough. The trouble is that here is someone who is writing about how to organise the arts who has only the haziest notion as to what the artist can really do, if anything. Artistry is just some kind of subliminal impulse which will fade away if you look at it too closely or ask it to do anything practical. Is this why artists have to be kept free, or at least at arm's length? Is this why they can't be expected to manage their own affairs?

I really do not see why artists have to be more or less free than anybody else, except perhaps in this respect, that their work often draws them into considering the moral, social and political choices that underpin our lives. These choices exist, nobody denies that they do, and nobody, East or West, denies that it is wise and prudent for them to be examined from time to time, to see what they are like; and traditionally, the artist in European and European-based societies has been the one to undertake this function. From a serious examination of these choices, many consequences may flow.

It may be the general nervousness about what artists may say when they look at the choices on which our societies are based that tempts benefactors like Lord Redcliffe-Maud into some kind of pre-emptive strike, to suggest that artists are only expressing their personal opinions which anybody can do with enough time and self- indulgence. I may be doing him an injustice, yet I am increasingly drawn into the belief that the systems we devise for helping the artist are in reality doing no such thing, that they deliberately mystify and confuse and make elaborate that which is simple, and stifle with false notions of culture the impulses towards change and evolution, so that the artist is forced into isolation by the menacing arms that reach out in an embrace.

There is always an underlying tension between the artist and the city; and states which pretend to be too generous to the artist, either in money terms or in the sense of letting them do or say what they like, often haven't realised how disruptive the arts can be. Artists who let themselves too easily be embraced by the societies around them need to watch to see what aspects of their work they are sacrificing for popularity and security. What is needed at a social level is not indulgence but a mutual respect, tinged with wariness. Artists always have to define the standards by which they are to be appreciated. Cities which impose standards upon them eventually destroy what they are trying to foster. This is the problem of systems. They fossilise the life that they are trying to preserve.