wheeling and dealing
Post #553 • June 7, 2005, 8:47 AM • 28 Comments
A controversial Rand Research in the Arts study, commissioned by the Wallace Foundation and published earlier this year, touched off the latest onset of anxiety. According to the study, "Gifts of the Muse: Reframing the Debate About the Benefits of the Arts," the oft-touted social and economic and social fruits of the arts (more jobs, bigger tax revenues, higher test scores for arts-enriched children) may not be so solidly provable after all. Previous research on the subject, says the study's authors, lacks "empirical rigor as well as a comprehensive theoretical explanation for the claimed benefits." Better to focus on the "intrinsic," ostensibly personal value of the arts (aesthetic pleasure, captivation, enchantment), the Rand report proposes. From there, the study's somewhat fuzzy argument continues, the arts foster a continuum of "instrumental" assets, from empathy and cognitive growth to the creation of social bonds and the expression of communal meanings. The Rand authors go on to recommend early and sustained exposure to arts experiences as the best means to ensure the flow from intrinsic (personal) to instrumental (social) benefits.
Barry Hessenius, executive director of Alonzo King's Lines Ballet and former director of the California Arts Council, proved to be the most provocative member of the panel. "We've made great cases," he said. "What we lack is political muscle." Hessenius challenged his colleagues to work for arts-friendly candidates. You could almost feel the air go out of the room. For beleaguered administrators who are busy struggling to pay their vendors and put bodies in seats, the idea of leafleting for the right kind of city council member or mayor sounded too daunting to contemplate, especially at 9 o'clock in the morning. Hessenius had one more unsettling thought. "We're overbuilt in the arts," he said. "We haven't done what we need to downsize and streamline" and deal with the "oversupply" of arts organizations.
Mark Spiegler for the Art Newspaper, via Todd: The art trade is the last major unregulated market.
Speaking of museums, the selection of artists for mid-career retrospectives functions as one of more heavily traded-upon pieces of market information. Short of sudden leap in auction prices, there is almost nothing that will turbo-charge an artists market faster than a retrospective at major institutions such as the Tate, MoMA, or Whitney. Yet such shows are rarely announced immediately after they have been decided upon. And during the period between when the show is green-lighted and its official announcement, the people best positioned to act upon it are major collectors. ... By the time the retrospective is officially announced, little primary-market work is available, so the second-tier collectors end up either buying the artist at auction or paying the newly raised prices justified by the retrospective.
What to do? Ah, let's go ask the dealers...
Among dealers, there's widespread disagreement about what should happen next. "There's a lot more money in this business than there used to be, and yet we're less regulated than used car dealers", says one major American dealer who is taking part in ArtBasel in June. "And if we don't start cleaning up the business, we might end being forced to do it from outside. Frankly, I'm surprised [New York State Attorney General] Eliot Spitzer stopped after those tax evasion casesmaybe he didn't realise how much money is involved here." But another top American dealer, likewise coming to Basel, says, "If you make the business transparent it would collapse overnight. I have to have the option to lie to collectors about what's available or quote them prices 10 times what other people paid. Entire careers are built upon fabrications, like about which shows sold out and at what prices".
From Learning to Look Gift Horses in the Mouth, by Robin Pogrebin and Carol Vogel for the NYT:
The Metropolitan Opera relied on a $4 million pledge from Mr. [Alberto W.] Vilar [a benefactor recently arrested on fraud charges] to underwrite two of its most extravagant productions, Prokofiev's "War and Peace" and Beethoven's "Fidelio." When Mr. Vilar's money failed to come through, the Met created, in September 2002, a bad debt reserve to cover it.
Mr. Vilar's experience with the Met offers an important lesson for institutions everywhere, arts executives say: Wait until you have the cash before you spend it. Under 1995 accounting rules, Ms. Scovell said, pledges have been counted as income, so institutions must be careful not to spend ahead of cash flow.
Pledges count as income? Can I spend them at the grocery store?
I don't support regulating the art market - I'd rather that people form contracts with each other, then put my feet up, pop open a root beer, and enjoy the show while jilted collectors sue the bejeezus out of fork-tongued gallerists. But it seems axiomatic that more money would flow towards a market that behaved honestly if not predictably, something better said by Ian Charles Stewart to the Art Newspaper:
"For anything to truly be called 'investment grade', you need to be able to track its prices over times, both at auction and in private sales", he says. "A registry of all sales, auditable by the buyers and sellers, to show the price history of a piece would help a lot. The passage of art-market information now is so inconsistent that it's like tech stocks from 1994 to 1999the market is flush with cash, but it's the insiders making the most money and the newbies often tend to learn hard lessons."
If newbies buy art they love and it loses value, at least they have art they love, and if they buy art for financial reasons, we don't really need their input in the market. (I, along with Jerry Saltz although not to the same degree, think that a dot-bomb style market blowout would have a tonic effect on the art world, which would search its soul for about twelve weeks before the nouveau riche threw themselves back into it with amnesiac gusto.) I don't worry about it, I just don't understand why the people involved in this wouldn't want assurance that their investments weren't based on lies about the artists' accomplishments, for example. I guess there's too much money to be made in the short term. Anyway, markets adjust to better reflect real value over time, and the same could happen to the art world.
But the museums are a different matter. Regarding the retrospective-induced price inflation described above, boards influence museum programming, and consist of collectors who potentially stand to gain from this unsavory phenomenon. Meanwhile, the same museums are trying to make their cases to the public on the basis of research that needs correction by the Rand Institute, operate on tax laws that, at least in part, don't apply to the real world, and feel resistant to commonsensical politicking and market analysis (as when Hessenius deprived the room of air). My uneducated but horse-sense analysis indicates that if too many factors line up the wrong way, some institutions could find themselves in a perfect storm in which public and private support melt at the same time.