Droit de Suite

A model of an artist's lifetime earnings is incomplete if it ignores complementary investments by early investors in the artist's works: the curators and collectors who buy early works and who work to make sure that it gets in front of the right people in the cultural elite. Unless you're born into an art family, you're just not likely to have the connections necessary for success.

And so I'm pretty sceptical about Droit de Suite - policies that seek to redistribute portions of realized capital appreciation in artworks back to the originating artist. At the margin, they reduce incentives for gallery owners, curators, and collectors to make complementary investments in new artists. What are the distributional effects?

• A windfall gain in the current period to established artists at the expense of those who made complementary investments in their success;
• A transfer to those artists who become successful from those who never do;
• For a successful artist, a transfer of income from when he's young and poor to when he's old and established.

None of these seem particularly desirable. The first has efficiency consequences as well as distributional effects. The latter two turn art into more of a winner-take-all market. Think of a work from a new artist as a lotto ticket that might or might not pay off if an investor makes a pile of ancillary investments. The value of that lotto ticket is lower if the winning tickets are taxed. So the initial price a new artist's works can attract is lower than it otherwise would be. So all new artists earn less on their early works while those who eventually become successful are paid back with interest. But that's when they're already well off and can supplement their income by doodling on folks' napkins at restaurants.

Note further that none of this requires that investors are only in it for the money; they're just less able to afford to keep making those investments where the returns are taxed. It wouldn't be surprising if the insult given by the implicit devaluation of their role were as motivating as the reduction in forward-looking returns. But budget constraints do bind too.

@CherylBernstein points to a newly introduced American bill that would implement Droit de Suite in the U.S.

The Equity for Visual Artists Act of 2011, would set aside 7% of the price for works resold for more than $10,000 at major auction houses, such as Christie’s and Sotheby’s, with half the proceeds going to the artists and half to non-profit art museums.

If the portion going to non-profit art museums goes into a common pool rather than to the museum that first exhibited the artist's work, or to the museum of the artist's choosing, recipient museums have free-rider problems in making investments in emerging artists. What do I mean? Consider two non-profit museums. The first makes large investments in figuring out which new artists in the community are worth promoting and works hard to help them become successful; the second spends the same amount of money hosting travelling exhibitions from other galleries. The first museum buys a lot of the emerging artists' work and hopes to use earnings from the small proportion that really pan out to help future emerging artists; the second just banks revenues from travelling exhibitions to fund later hosting of travelling exhibitions. The proposed policy takes money from the first museum and gives it to the second, reducing museums' incentives to invest in new artists.

The legislation, as it stands, would only apply to the resale of works at public auction houses “with more than $25 million in sales in the prior year”. Auction houses that operate only online would be excluded, as would private galleries.

Prediction: more sales shift to online and private galleries from public auction houses. I have no sense of how costly that is in terms of sale revenue foregone, but if most auctions are coordination games, and everyone's making the flip, it's probably not that bad. The big auction houses will be lobbying hard against the legislation and might find it worthwhile to flip to online-only auctions.

Update: Consider now the case in which curators and collectors really have no effect on an artist's success. In that case, the policy still results in reductions in the amount those folks are willing to pay for a new risky artwork and so still effects transfers from those artists who never become successful to those who do and from artists when they're young and poor to when they're old and successful. But there's less efficiency consequence as the ancillary investments by others are of less value.

Fun conferences I've not attended

I'd thought @adzebill was trolling us when he started livetweeting this conference. You can see how I was confused by tweets like:

Knives out already: speaker upbraided for not "addressing the sociology of the paua". #NZFoodHist

and

The Symons Touchstone Score for Biscuit/Cake Iconism peaks in the 1920s. #NZFoodHist

But here are some of the conference papers:

Aaliyeh Naqvi-Sherazee – “Food, identity and place-making: Indian settlers in 1920s New Zealand”

Donna Brien – “‘An Affaire de Stomach’: Australian and New Zealand 1920s Food Writing”

Duncan Galletly – “Iconism in cakes and biscuits”

Helen Leach – “Home Science and the arrival of the ‘modern kitchen’ in 1920s New Zealand”

Janet Lymburn & Diane Langman – “Driving Change: Imaginative Thinkers”

Janet Mitchell – “Mélanie S. Primmer, B.A. and the Up-to-date-Housewife”

Jeanette Fry – “The influence of generic cookbooks and pamphlets over the past 90 years and the role of advertising in reducing the cost of daily living; Or, how mustard saves you money on every meal.”

John Webster – "Trying to find Miss Fidler"

Nancy Pollock – “Chinese contributions to New Zealand gastronomy”

Nicola Saker – “By their menus ye shall know them: Or, if you are what you eat, what you eat is who you are”

Tui Flower – “First-hand experience of kitchens”

It all sounds ridiculous fun; I envy @adzebill's attendance.

Meanwhile, @BruceSchneier points to a U Minnesota conference on Cephalopods and Art:

Why do we make images, where do they come from and what is their primary function? Human image production and image distribution systems have made rapid growth to the level of unimaginable saturation in urban contemporary life through design, architecture, city planning, Internet, fine arts, and other media. The Origin of Image Making: Behavioral Ecology of Cephalopods and Art brings together scientific, humanistic and artistic attempts to investigate these ever critical existential questions by examining the cognitive and interpretive systems of the adoptive coloration of cuttlefish as a model to code and to re-map visual information such as paintings, photographs and video.

This conference’s primary goal is to create a discussion platform among scholars, experts, and students from different academic and non-academic fields. During the two-day conference, we will focus on cuttlefish research including neuroscience, comparative psychology, animal behaviorology, and art as conceptual, practical and/or tangible foundations to understanding our own visual communication system.

I wonder if male cuttlefish better able to make artistic displays in their patterning enjoy more reproductive opportunities. Does the Art Instinct extend to cuttlefish?

Recent Acquisitions

We have made the following acquisitions over the last few months.

This one in response to the ongoing economic turmoil:

This one consequent to the geological unpleasantness:

The latter sat at CoCA for a few weeks after the February earthquake before we were able to collect it; we'd bought it a couple weeks before the quake. It would have been helpful.