Posts Tagged ‘Economics’

The Idea That Has Every Artist Kicking Themselves

Saturday, January 15th, 2011

We all should have seen this coming, and many artists probably thought of it.

Death + Taxes writes,

What does Google’s CEO Eric Schmidt, Twitter’s creator Jack Dorsey and Rupert Murdoch’s wife have in common? They have all become financial backers for the most nonexclusive online art gallery in the world.

Founded by 24-year-old Cleveland Carter, a computer science major at Princeton, Art.sy will attempt to connect art galleries all over the world to provide not just a database but a database personalized to your taste. The website is attempting to do for fine art what Pandora did for music.

While all artists cannot also be computer science innovators who know how to get venture capital funding, they can certainly do what they can to understand more about how technology and innovation can attract funding on whatever scale they are working in.

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The Clash of Morals and Money in the Arts

Friday, July 2nd, 2010
Boycott BP
Image by Rusty Boxcars via Flickr

(I really got a good snicker coming up with this alternative blog post title, so I just had to share it: Oil-Based Art Protests. Har har har.)

Moving on…

A recent article came out in the Telegraph about artists protesting a Tate Britain event due to the Tate’s involvement with BP,

…oil and art came together in a clumsily choreographed pageant of comic absurdity this week at Tate Britain’s Summer Party. A group of spittle-flecked wing-nut demonstrators poured oil down the gallery’s steps as a “protest” against BP’s financial support of the gallery. A hi-vis mop-up army immediately replicated the Louisiana shore in Pimlico, but cleared up to better effect. The party continued.

While it’s easy to see the appeal for staging such a protest and equally easy to see the appeal of making fun of the protesters, author Stephen Bayley brings up a panoply of scenarios in which artists have (more or less happily, or at least ignorantly) been funded by arguably despicable people, companies, and governments,

That anyone should express outrage at BP’s involvement with the Tate is evidence of cringe-making naivety, not to say burping, thigh-slapping and howling ignorance. Artists have always gone where the money is. You either have the Holy See or you have BP. Art and ethics do not have a straightforward relationship, they have a grubbily convoluted one: the great art of the Renaissance was paid for by usury, vice and corruption. Pope Alexander VI was the father of Cesare Borgia, a poisoner, sadist, sexual deviant, intriguer and mercenary syphilitic. The Borgias created the culture in which Bramante and Michelangelo flourished.

Great art has always been involved with great fortunes: it was only a temporary distortion of history, a hangover from the Romantic idea that artists need be poor and tormented, that insisted art must be uncontaminated by trade. Patronage may well be a non-negotiable part of artistic activity. For a while, this principle was blurred when the interventionist economist J M Keynes helped found the Arts Council after the Second World War. Keynes simply made the state a patron. Do the oily protesters advocate refusal of the Arts Council’s “government” money supporting the Tate because the same government money funded an illegal war in Iraq and a tragic war in Afghanistan? Of course they don’t.

That artists always go (must go?) where the money is, is often lamented as the “sad reality” of being an artist…because art is supposed to transcend the meanness of money-making to achieve the sublime goal of inspiring and enlightening. Art and artists seem to be stuck because not only are they encouraged not to think of their art as products, but the act of displaying and disseminating art is not a mere business transaction, but something sacred. It is because art is treated this way that higher standards have ostensibly been set (even if subconsciously) for its funding sources. But Bayley provides more examples of what could be considered the inevitable clash of morals in the arts.

Any inflated posturing about the relationship of art to ethics and to money is bound to end in an embarrassing collision of principles. Teeth-rotting sugar, mother’s ruin booze and blood diamonds have funded great galleries around the world. Profits from the slaves’ torment of the Middle Passage made Liverpool and Bristol great cities of art. The Guggenheims became philanthropists only after polluting Philadelphia and running some mining interests that would, perhaps, today be criminal. Never mind if commissioning Frank Lloyd Wright was an after-the-event expiation of corporate sins, New York’s Guggenheim Museum is a benefit to us all.

Throughout the Twenties, The Dearborn Independent, a newspaper owned by Henry Ford, frequently published articles about the menace of “The International Jew”. Ford sponsored the vicious, spurious and anti-semitic Protocols of the Elders of Zion. The same Ford also mobilised poor Americans with his Model-T, paid his workers with fabulous generosity and commissioned the Communist Mexican painter Diego Rivera to create epic murals about the proletariat’s struggles in the Detroit Institute of Arts.

Right now, London’s Frieze Art Fair is one of the most successful art fairs in the world. It’s the creation of Matthew Slotover, whose parents, full declaration, are friends of mine. And Jewish. Slotover, more sensible than the howling pack who emptied their sump of resentment over the Tate, is quite comfortable that the Frieze Art Fair is sponsored by Deutsche Bank which, in 1999 agreed to contribute to a fund of several billion pounds for Holocaust survivors who could still remember that it financed IG Farben, producer of Zyklon-B, the murderous gas used in Auschwitz.

Another Frieze sponsor is BMW, whose owners made their fortune from producing the batteries that powered U-boats and the V2 missile that pounded London. BMW is also sponsoring our bomb-site Olympics. We move on.

These examples abound. Artists, it seems, cannot be too picky about their customers. But why should this really be a dilemma? Do we boycott the local hardware store because a serial murderer paid for the rope and plastic sheets he used to kill his latest victim? I know that is a horribly crude analogy, but I’m trying to illustrate that the stain of the profit can perhaps be removed, cleansed so to speak, when it is cycled through an artist’s hands, transformed into something else…then again, maybe not.

What is the solution? How can artists reconcile these moral and fiscal dilemmas? Just as many artists find no hypocrisy in monetarily supporting and praising the art of a child rapist, perhaps they can similarly continue to take money from gulf-destroying corporations without feeling any moral incongruity?

I suppose one argument is that the artist is never beholden to take funding from BP, Ford, BMW, or any government in particular – but it does seem the list of despicable offenders that have enough cash to pay for art are greater in number than the squeaky-clean philanthropists and good samaritans.

Bayley concludes,

These are not so much conflicts as inevitabilities. And they arise not from any disingenuousness of clients nor from any cynical opportunism by patrons, rather from the confused nature of our understanding of “art” in the contemporary world. An art that requires to be institutionalised and displayed in expensive galleries is inevitably going to cost someone a lot of money.

And if it is BP’s money rather than ours, then that’s to our common good…And while I am not the person to exonerate a dirty and dangerous energy company, who has the methodology to calculate whether an oil spill causes more damage to civilisation than mendacious and greedy bankers? Perhaps the misery caused by the wicked speculations of Lehman Brothers was, in the long run, more injurious to human dignity and well-being than a dirty-and-dangerous oil platform. Lehman Brothers supported the Lincoln Center, the American Ballet School and Kathleen, wife of the notorious CEO Richard Fuld, was vice-chair of the Museum of Modern Art.

In the long run we are all dead, declared Keynes. In the meantime, let’s do what we can with what we have got. Frieze Art Fair is a very good thing, even if Deutsche Bank funded the Gestapo. Tate Britain is a very good thing, which is made even better by oil money, although we do all wish BP were a little more fastidious about its day job. Only a peevish hypocrite would deny these things.

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Making a Profit in Music: The Mick Jagger Meme and More

Friday, May 28th, 2010
Mick Jagger - The Rolling Stones live at San S...
Image via Wikipedia

I saw this quote from Mick Jagger at least 5 times in different blogs in my Google Reader,

…people only made money out of records for a very, very small time. When The Rolling Stones started out, we didn’t make any money out of records because record companies wouldn’t pay you! They didn’t pay anyone!

Then, there was a small period from 1970 to 1997, where people did get paid, and they got paid very handsomely and everyone made money. But now that period has gone.

So if you look at the history of recorded music from 1900 to now, there was a 25 year period where artists did very well, but the rest of the time they didn’t.

I think people are fascinated about what Jagger has to say since he is one of the most wildly successful and no doubt wealthy recording musicians of all time with career longevity most artists envy. Plus, he’s rich, right? Is he saying it was just good timing? (Nah, I’m certain some of that musical genius and epic charisma had something to do with it.) However, despite Tyler Cowen’s friendly rib that Jagger is no economist, the phenomenon Jagger is talking about is no less true and is explained further by Daniel Wolf of Renewable Music,

That date [Jagger is referring to] in the late 90′s coincides rather precisely with the mass introduction of cheap digital recording equipment and media as well as the widespread use of portable digital players.  The old model of radio advertising paying royalties for recorded music which was licensed cheaply for broadcast with the idea that randomly-heard broadcasts of songs were advertisements for the purchase of albums — which allowed the listener to select particular songs on their own — pretty much collapsed at that point in time.  The technological innovations leading to ever-cheaper and ever-more accurate recording and storage capacity were inevitable but the whole thing gets ugly when one considers that the firms selling the new recording technologies were, in many cases, also publishers of the music that was inevitably going to be recorded.

The “gets ugly” Wolf is referring to is the loss of revenue to individual artists. (Check out this scary graphic re: distribution of profits in the music world via NewsObserver TechJunkie.) This is admittedly a problem for most artists aiming to have a recording and performing career. Wolf further notes, and correctly in my opinion,

Although recordings and webcasts may have some advertising function, in the end, the grand experiment [of commodifying music] may leave us back where we started, with live performance the most important — and in many cases, only — opportunity for a musician to earn money.

While I will only mention the can of worms that is the issue of Baumol’s cost disease in live performance, I think Wolf is correct in that performance is likely to be the most lucrative way to make money. It is undeniable that the business model for artists is subject to rapid change, in particular when technology is introduced and dramatically alters the landscape artists have to work with.

However, I find it curious that despite the fact that individual artists are likely to have low(er?) chances of making it big financially in music, introduction of technology has helped achieve what has long been considered one of the most troubling aspects of becoming and artist and disseminating work: access to distribution channels. Never before in history have so many people been able to access A) ways to make and distribute their own music cheaply B) ways to hear music of all kinds cheaply. This is an undoubted improvement, as far as egalitarian ideals of access to the arts are concerned.

So, are we dealing with trade-offs (sacrifices) between access and profitability? Are there other business models that could evolve to put even more control of revenues into individual artist’s hands? Is what is “wrong” with the music industry the big labels in charge promoting watered down music, or the poor tastes (and thus, demands) of mass consumer culture?

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The Artist as Entrepreneur

Thursday, April 8th, 2010
Salvador Dalí 1939
Image via Wikipedia

I do not know why I did not think to post this earlier, but due to popular demand and some of the great commentary my recent post received on Brazen Careerist, I’m posting one of my graduate essays on the topic of The Artist as Entrepreneur. This is something I have tried to impart to my students as a private voice teacher and something that inspires me both as an artist and an economist. There are ample examples of commercially successful artists throughout history. Learn from them.

While I know it’s bad form to quote oneself, I only do so to entice you into reading all 20 pages of The Artist as Entrepreneur,

As an artist studying economics, I’m often met with exclamations of incredulity when someone learns of my academic pursuits.  Comments usually have to do with the misconception that artists are not of the mind to bother themselves with matters of economics and money – they must be too busy creating, inventing, and dreaming…While many artists I know also think this way, I aim to show that to be a successful artist, in addition to holding a certain level of artistic competence, an artist must develop the business and finance skills that lead to successful careers for artists and non-artists alike.  The ability to market oneself, take advantage of economies of scale, utilize commercial dissemination of one’s work, and career skill set diversification are critically important to long-term fiscal viability.  As any entrepreneur will tell you, taking risks can increase career reward, and artists are often known for taking risks creatively and in their careers.  However, there is a difference between risks that can lead to growth, and risky professional behavior that does not lead anywhere.

The story of Salvador Dalí is one of many examples of artists throughout history achieving commercial success during their lifetimes…Because Dalí welcomed the popular demand for his style of work in the market and promoted it to gain profit, he was eventually ostracized from a community of surrealist artists he associated with who felt he was straying from their cause. Artist Mark Vallen quotes the following passage from Philadelphia Museum’s Dalí exhibit catalogue,

“[Art critic Andre] Breton had long thought Dalí’s art had become too commercialized and that Dalí’s growing fame threatened the unity and agenda of the Surrealists. His growing disgust with Dalí’s financial success as an artist led him to dub Salvador Dalí with the anagrammatic nickname ‘Avida Dollars,’ describing what he perceived as Dalí’s greed for money and fame.” (Vallen, 2005)

Other [commercially successful] artists include: Rubens, Tiziano, Rembrandt, Lenbach, Stuck, Picasso, and Beuys.  Composers and musicians include Mozart, Beethoven, Verdi, Wagner, Domingo, Pavarotti, Carreras, and Callas.  Authors and playwrights include Shakespeare, Goethe, Dickens, Hauptmann, Brecht, Thomas Mann, and Jane Austen.  All of these artists became wealthy due to commercial success during their lives (Frey, 2000 and Cantor, 2006).

There is no panacea that will solve the many difficulties of pursuing a career as a creative artist.  Though author Miguel de Cervantes is well known for his work Don Quixote, he struggled to find commercial success during his lifetime and was poor for most of his career.  However, his quote from Don Quixote, “It is the part of a wise man to keep himself to-day for to-morrow, and not to venture all his eggs in one basket” is apropos when thinking about one’s career or investments.  The approach to diversify and mitigate risk that has served great commercially successful artists and private sector entrepreneurs can serve today’s artists as well.

In the discipline of finance, it is common for investment professionals to speak of portfolio diversification, which is a method of allocating one’s investments among a variety of styles and vehicles based on an individual’s risk profile or tolerance in order to choose investments that match an individual’s willingness to bear a certain amount of risk.  “The principle of diversification tells us that spreading an investment across many assets will eliminate some, but not all, of the risk” (Jordan and Miller, 2009)

In the paper I elaborate on all these ideas and more! There are pictures too! There might be typos (I’ve already caught one, can you?)! Mainly, I hope what I’ve written can serve as inspiration for artists and fodder for debate on this important topic.

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Economic Evidence of Atlanta’s Hip-Hop Dominance

Saturday, March 27th, 2010

I get very excited when I see things like economic analysis of the hip-hop and rap industry.

From the article, “Urban Economics: Atlanta, the Rap and R&B Capital of the World,”

A preliminary analysis of our 2007 MySpace dataset shows the MSAs whose Hip Hop and Rap bands have captured the most fans on myspace.com. Atlanta’s urban artists and groups have the third-most fans in the country – 6.4 million – behind only Los Angeles and New York. This is roughly 7.5% of the 83.7 million fans of the two MySpace genres, which, incidentally, are the most popular genres on MySpace.

Atlanta is an elite producer of one of America’s most widely consumed cultural products: radio-friendly rap and R&B. Atlanta is indeed a skilled city. But it is doubtful that the proportion of four-year college graduates is much of an indicator of the songwriting, arranging, and performance skills that some of Atlanta’s most successful entrepreneurs practice at world-class levels.

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A Defense of Manual Labor and The Arts

Thursday, March 25th, 2010
woodwork couple
Image by strollers via Flickr

It is no surprise that in this crippling economy more and more people are learning skills in self-sufficiency by planting their own gardens, knitting and sewing their own clothing, and learning to be more handy around the house.

Being able to create with one’s hands is something of a lost art in a luxury society like the United States, where most goods and services can be found at relatively cheap prices, such that few of us have ever had a need to know how to change a faucet out or install a deadbolt, or repair a moth-eaten sweater.

I came across a lovely piece by UK journalist Libby Brooks entitled “The dignity of labour” where she makes a compelling case for a revival of artisan skills such as woodworking or crafting,

In the knowledge economy that values above-the-neck abilities above all others, an increasing lack of manual competence renders us passive and dependent. It also significantly alters our relationship with the material world. So that chair, once woodworm stippled, now sanded smooth and varnished, no longer holds the narrative of our own efforts and nascent skill, but the mediated story of a stranger’s capability.

And, while manufacturing may have moved east, there is still a demand for manual competence in east London. Last year, the Crafts Council published an audit highlighting the desperate skills shortage in this country, while Country Living magazine launched a campaign to preserve traditional craftsmanship. Jobs in manual trades such as carpentry and masonry are proving hardest to fill during a recession when millions are facing unemployment.

Despite this, “vocational” training remains the Cinderella stream of education, with the implicit assumption that it narrows and restricts students’ potential. Which is ironic at a time when the open-skies opportunity of the much-lauded university degree offers little more than a free pass to the dole queue. The value we give to particular kinds of learning will only become more pertinent as the recession continues.

In a knowledge economy, it can feel embarrassingly retro to talk about the dignity of labour. But Richard Sennett talks compellingly about the value of lasting work to workers, and the way that the economic downturn is forcing a reassessment of the quality of life offered by cog-in-the-wheel office life, where employees see neither daylight, their families, nor the end product of their labours.

And this is an ethic that challenges directly the disposability of the consumer age. An item can be made, mended and re-fettled again. The ability to think critically about material goods, to comprehend their structure and durability, offers a certain freedom from the imprecations of the advertisers, who would rather we concerned ourselves with the cultural associations of an object, rather than its inherent quality or capacity to serve a purpose.

I think of my own father, a true Renaissance man. He came to this country as a professional dancer, only to work as a truck engine repair man, and eventually owned his own interior finishing business. One day he was in our front yard surrounded by a number of large half-circles of wood. I asked him what on earth he was doing.

“I’m building a water fountain for a client,” he replied.

Surprised, I responded, “I didn’t know you knew how to make water fountains!”

“I will when I am done.”

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Music Pricing and The Free Market

Wednesday, March 24th, 2010
Compact Disc
Image via Wikipedia

Oops, the free market did it again. That is, made goods cheaper due to competition and innovation. Why we think this model only works in the music industry but not in others is beyond my comprehension, but hey, apparently it should make you think twice before downloading full albums on iTunes.

From Billboard,

The Universal Music Group could rewrite U.S. music pricing when it tests a new frontline pricing structure, which is designed to get single CDs in stores at $10, or below.

Beginning in the second quarter and continuing through most of the year, the company’s Velocity program will test lower CD prices. Single CDs will have the suggested list prices of $10, $9, $8, $7 and $6.

For those of you who like to watch “Big Business” squirm, check out competitor reactions,

On March 16, executives at the other majors were nervous about the UMG move, calling around to accounts for information on the move. Privately, some appeared annoyed by the move. “Why does Universal feel the need to get below $10?” a senior distribution executive at a competing major asked.

I’d ask him, “When was the last time anyone bought a physical CD other than because it wasn’t available for immediate download for less?”

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Arts and Econ Links of Interest

Tuesday, March 23rd, 2010
Graph of CO 2  (green), reconstructed temperat...
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Arts and Econ Links of Interest

Thursday, March 11th, 2010

To illustrate just how big this unresolved debt threat has become, Lanchester (along with others) estimated that the total cost of the financial system bailout in the United States is bigger, in inflation-adjusted terms, than the combined cost of the Louisiana Purchase (in 1803, by President Thomas Jefferson), the New Deal (the 1930s), the Marshall Plan (1948-52), the Korean War (1950-53), the Vietnam War (1961-75), the savings and loan crisis (the 1980s), the invasion of Iraq (2003) and the entire NASA program, including the moon landings.

In a Nutshell

Wednesday, March 10th, 2010

Sometimes I just don’t get the time to blog about all the things I would like to. So I’m going to start doing what all the cool kids in the blogosphere do, just post the links and let you guys do the hard work.

…2005 was a peak of its own in the three-year trend coming out of the steep post-internet boom recession of 2002. If the art market can consolidate above the 2005 level at is trough, the hypothesis that the art market has entered a new, global phase that offers much greater expansion in terms of both volume and price has some value.

  • High profile fair use fight over art. Images of the Korean war memorial depicted on a US stamp vs. the actual sculptures of the Korean war memorial.
  • Even higher profile arts smackdown: China out-arts France. What could it be? Could it be…mmmm, Satan? Or just the associated evils of capitalism?
  • And an interesting twist on the price elasticity of demand argument for luxury goods – turns out that art as mere luxury good may not be as accurate as art as alternative investment or store of long-term value.

“While outright global demand was weaker for luxury collectibles and consumables, there has also been a shift in luxury purchasing habits, as many HNWIs looked to secure their wealth in assets with long-term tangible value,” says the report. “This has worked strongly in favour of the art market, with art now recognized as a viable alternative investment asset.

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