The Collecting of Art: The Intervention of Wealth and Secret Deals

by Joe Nalven

For the past month, I've wondered how long after talking with Vladimir Konečni about art would I again encounter a comment about bluff art or that art which is more about commerce than it is about the art.

To my surprise, a few days ago I read about one of those art question / exclamation marks — ?!

This time the bluff comes out of Art Basel - an installation that consisted of tires.  I suppose anything can be art and even this installation by Mike Nelson might be well-considered except that the buyer was an art collector. Who else could afford the price tag?



A Mike Nelson tire exhibit, M6, in England. The comment and photo by Rebecca Jay Nehomer notes: "After finding out the title of it being ‘M6′, it completely changed my perception of the piece. The M6 being the largest motorway in the UK, and therefore the busiest and where the most accidents would happen. From this I expect that this is almost a representation of the M6, a complete mess, really busy, and the destroyed tires being a representation of  the road accidents that happen." 

(Nb. I suspect the Art Basel installation was akin to this exhibit but finding no images on the web, this one should provide some of the meaning for a tire installation.)

Kelly Crow digs into the aspiration of many to become an art collector: 

Last year, Brazilian collector Pedro Barbosa spotted a tumbling spiral made with hundreds of rubber tires at the Swiss fair Art Basel. The next day, Mr. Barbosa told a collector friend, Luiz Augusto Teixeira de Freitas, that he intended to buy the tires, actually a $150,000 installation by British artist Mike Nelson.

Surprised, Mr. Augusto reminded Mr. Barbosa that the artwork wouldn’t fit inside Mr. Barbosa’s São Paulo home. “Doesn’t matter,” Mr. Barbosa said. “I bet I can lend it to some museum in America.” (For now, he is storing the work with a dealer in Italy).

That's right. The punch line is about American museums:  “I bet I can lend it to some museum in America.” 

Now, why would any museum engage in such an end run about looking for art in all the right places and not just at the behest of a billionaire?

Of course, one should not be surprised. The secret deal between art critic and connoisseur, Bernard Berenson, and art dealer, Joseph Duveen, was a side benefit to the boom in America's appreciation and collecting of Italian painting. This secret partnership has been the subject of several books and even a Simon Gray play, The Old Masters, performed at the Metropolitan Museum of Art (2011):

From 1907 and for three decades afterward, the refined, highly accomplished connoisseur Berenson profited by taking a percentage from Duveen’s sales for which his authoritative opinion was used to convince prospective buyers, a source of income that today would be looked on askance in the art world.
Yes, I like Italian Old Masters. I've even been to those museums in Florence and Venice.  Should I care that someone made a lot of money when the works he authenticated were sold in connection with his art dealer friend?

Am I being naive?  Does it make any difference to what is considered fine art and what is not? 

Perhaps that is the world of the Pedro Barbosas.  If something is going to be collected and have its value appreciated by sticking it in a museum, why shouldn't he (or she) be applauded?

I might not like Damien Hirst's objects or Serra's monumental pieces, but why not have money be the driver of what is art and what is overlooked?

Are there no ethics in museology? (Yes, there are. But here we are looking to the breaches and not the rules.)

Perhaps a bit cynical. So, we do need another example to enlarge this context.

Stanley Bulbach has a good collection of articles showing the questionable influence at work of art collectors on museum exhibits.  Here are two short excerpts (more at his webpage).

Both articles are from the New York Times.

1) Art, Money and Control: Elements of an Exhibition, David Barstow, New York Times, 12/06/1999, pp. A1&B16.

Professional dissension within the museum staff about the influence of the financial support on standard museum practices:

"The director of the Brooklyn Museum of Art gave the collector Charles Saatchi a central role in determining the artistic content of 'Sensation,' so much so that senior museum officials repeatedly expressed concerns that Mr. Saatchi had usurped control of the exhibition, internal museum documents show." . . .

"Mr. Saatchi, the British advertising magnate who owns the provocative paintings and sculptures in 'Sensation,' is the show's single largest financial backer, a fact museum officials disclosed in court papers after months of concealing Mr. Saatchi's financial support." . . .

"As costs soared, Mr. Lehman raised ticket prices and scaled back the additional security, visitor services and education programs planned for 'Sensation'."

2)  Armani Gift to the Guggenheim Revives Issue of Art and Commerce, Carol Vogel, New York Times, 12/15/1999, pp. E1&3.

Lack of transparency - another secret deal?

"The Solomon R. Guggenheim Museum announced last month that it would pay homage to the Italian designer Giorgio Armani next fall with a major retrospective of his work. The museum will turn its rotunda over to his ball gowns and pants suits and tuxedos, providing a breathtaking backdrop for an opening soiree and adding even more luster, if such a thing is possible, to the fashion designer's name." . . .

"What the museum did not acknowledge was that some eight months earlier, Mr. Armani had become a sizable benefactor to the Guggenheim. The size of his contribution has not been disclosed, but one participant in museum meetings at which it was discussed said it would eventually amount to $15 million, an initial $5 million with a pledge to donate $10 million more over the next three years." . . . .

"Asked about the gift, museum officials said it was part of a 'global partner sponsorship,' gifts that can go to Guggenheim projects anywhere in the world, and denied that was a quid pro quo for organizing the Armani show. The show is being sponsored by the fashion and celebrity magazine In Style, in which Armani is an advertiser."

Now, if I only had a billion dollars to throw around . . .  does anyone really care about museum ethics? 

The other side of the coin, of course, is that museums do need financial support, especially where there is insufficient foot traffic and where that foot traffic is going to football, baseball and basketball games, maybe staying at home and watching On Demand TV, going to amusement parks, or maybe surfing or hiking in mountains. Or maybe texting.

We are awash in things to do and a society suffering from too much wealth.  If we can't get the foot traffic into the museums, how else can the museums survive without the benefactor (church or otherwise) or the collector? 

There is another aspect to the problem of art valuation -- the legitimate and the aspirational. This other aspect is the image of the vampire IRS lurking in the wings for someone to pass and to determine who gets stuck with the bill. If the valuation is off, for any reason, the IRS does not care.

Remember the case of the Robert Rauschenberg work Canyon? The work was made in 1959; it was included in Rauschenberg's work at the Venice Biennale (1964); made stays at various museums and currently is on long term loan to the Metropolitan Museum of Art. 

Robert Rauschenberg, Canyon (1959)

The IRS valued Canyon at $65 million (after first stating it was worth $15 million.) The family that owns Canyon, the Sonnabend heirs and their appraisers, valued it at zero. 

Now, why is that?

The object includes a bald eagle and under U.S. law that protects bald eagles, Canyon cannot be sold. So, if an artwork cannot be sold, wouldn't its value be zero? Or must the family submit to government logic? 

[I]n 1981, . . . Fish and Wildlife agents became aware “of the peculiar situation involving a protected bird carcass that was affixed to a great American masterwork,” according to Lerner’s account. Agents notified the Sonnabend Gallery that restrictions written into the bald-eagle and migratory-bird acts applied to the artwork.

Sonnabend applied for and received a special permit under which she was permitted to retain possession of the bird carcass. . . .

After it first drew attention, U.S. officials stipulated that the whereabouts of Canyon must always be on record and that the work could never be sold, either within or outside the United States, as an export permit would never be granted. While Sonnabend was permitted to send the work abroad for museum exhibitions, she had to obtain a special export license to do so.

Perhaps we can look the other way when the 1% of the art world faces off against the government as the government seeks its due from those appreciated valuations. 

At the same time, this same government tolerates the killing of many golden and bald eagles when it is done in the name of wind power. 

Different contexts, to be sure.  But these comparisons do get us thinking. 

As we stand back and survey the collecting of art and how it gets waylaid from time to time by secret deals, winking valuations by public institutions and the collision with government oversight, we might summarize the artist's concern for entering into this world of art valuation.

The following summary draws on the examples above and could easily be expanded with other examples and other facets of this subject. 

1.  Private world of art collecting. Well, that's pretty much a Las Vegas enterprise and we might just note the rule of buyer beware.  That becomes an issue prmarily when misrepresentation and secret deals intrude.

2.  Public art institutions. The institutions do need support outside of government agencies, partly because tax-supported institutions often fare badly when rated against municipal, state and federal services. But also because we want the government to keep an arm's length from saying what kind of content goes into 'valid' art.  Socialist realism was self-limiting art and we don't need to repeat that style of glorification.  Private donors should be encouraged - but this gets mixed into the IRS write offs of charitable donations, which in turn, depends on museums and others validating the valuation of donated art and the quid pro quo of what the institution must do to accommodate the good will of the donor. 

3.  Government intrusion/oversight of art valuation.  This seems like it could be an easy topic with objective art appraisals. However, from the get go in filling out tax returns, the 'artist' must follow the categorization: hobbyist vs. professional.  One can easily be a hobbyist when one is alive, and then, depending on the course of art history, become a professional in the afterlife.  And then there are the bizarre juxtaposition of legal frameworks at work in the valuation of art objects, like with what happened with Canyon.  

Postscript:

I find my summary quite interesting, but I am amazed at how I got to this point

— extending my conversation with Vladimir Konečni about bluff art. That is often the case in having a dialogue with oneself. 

Post-postscript:
Two close readers of this art blog and friends, Gordon Moat and Sfonah Pelah, suggested that I include these article as complements to the approach taken by me above.

Here are excerpts from these articles that continue the discussion about what an investment in art is:

Suggested by Gordon Moat:

Outsized returns on fine art are impressionistic, at best
by Arthur Korteweg

Investors are eager to buy: Many so-called passion investments have been gaining in popularity, and a handful of funds, such as The Fine Art Fund Group, led by CEO Philip Hoffman, are making it easier for investors of all income levels to put their money into fine art.

 

In short, investors are embracing art-as-an-asset-class as if it were a newly discovered van Gogh. But is it?

Research we completed recently and presented in August 2013 at the European Finance Association conference shows investors would be wise to be wary. The returns of fine art have been significantly overestimated, and the risk, underestimated. Our research, based on the most complete auction database, BASI (Blouin Art Sales Index) shows the true annual return of art as an asset class over 1972 to 2010 was closer to 6.5%, instead of the 10% that the index shows. Moreover, holding an art fund in your portfolio does not increase the chances that the portfolio will outperform.

Suggested by Sfonah Pelah:

If The Internet Is Your Canvas, You Paint In Zeros And Ones
by Emily Siner 

That Benjamin Palmer dropped $3,500 at Phillips auction house in New York is not surprising. The 217-year-old company, headquartered on Park Avenue, regularly sells artwork for tens — and often hundreds — of thousands of dollars.

What is surprising, however, is that he took nothing home. He has nothing to put up on his wall or put on a pedestal in his living room. Physically, his acquisition lies among a hub of wires, and the likelihood is he will never touch it. But it lives virtually inside every computer, smartphone or tablet in the world. Palmer's purchase was ifnoyes.com, a Web page with colorful geometric patterns that respond to the movement or click of a mouse.

These articles are worth taking a close look at.