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Regular societies produce art. Culture-oriented societies produce fine art. And everyone can tell the difference between the two, even without an extensive education. An interesting side-effect is that the happier the artists in such a society, the more inspired are their works, which is not true for artists in regular societies.
- 50% of excess Happiness added each turn to the amount of Culture that may be spent on Social Policies.
This level 1 Policy can be very helpful, or just helpful, depending on the amount of Happiness in your empire, and on the exact moment of the game. A 5-point increase in Culture could really make a difference in the Classical Era, but not so much in the Industrial. And in most games, this is more or less what the benefit of this Policy amounts to, at least until you adopt an Ideology and get these powerful Happiness-boosting Tenets which allow you to maintain 40+ Happiness in the empire.
So, you should judge well wether you need this Policy, or you can adopt the other level 1 Policy in the tree (Cultural Centers) first, which will bring you a more long-term benefit. In short, if your Happiness is less than 10, go for the other one. You will eventually get this one later, since it is required to progress further down the tree.
The Fine Arts, as opposed to folk arts and applied arts, are those pursuits that create aesthetic objects or experiences that can be shared with others. The term "fine art" came into vogue in 17th century Europe; the five "greater fine arts" consisted of painting, sculpture, architecture, music and poetry, with the "minor" arts including drama and dance. Intense debates rage on whether film, photography, calligraphy, fashion, comics and even videogames are "art," whether fine or not.