
How Contemporary Art Became a Fiat Currency for the World’s Richest - pseudolus
https://www.bloomberg.com/news/articles/2019-05-16/boom-review-michael-shnayerson-chronicles-contemporary-art-rise
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qzw
You know, I would much rather see the super wealthy spend mroe millions on art
than buying yet another super-yacht or Gulfstream. Art probably has a much
smaller carbon footprint than most other forms of conspicuous consumption.

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nutjob2
Don't forget, it also supports artists. I wonder if artists could sell art
with a contract stipulating a royalty whenever it changed hands.

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m_fayer
It warps and stifles artists and the art world. An artist knows that only
maybe 5% of artists manage to survive financially off their work, and maybe 1%
become wealthy. Knowing that there is that lottery ticket, and that the odds
can be boosted by catering to the whims of the ultra-rich and engaging in
their cynical high-end social politics, that's hard to resist for many who are
otherwise looking at being forced out of a beloved career or living in
poverty. Many take the bait without realizing they're doing so, or somehow
attempt to split the difference. Either way, it eventually causes some very
fundamental psychic distress, and both artist and output suffer.

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osullivj
Is that so different from the world of startups?

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lmm
Startup employees largely have better working conditions (even those who let
themselves get conned into unpaid overtime) and softer landings. I remember a
retrospective on a photo-sharing startup did the rounds a couple of years ago:
it was a failure as a business but the developers were well-paid and able to
walk into fresh software jobs at a good salary.

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osullivj
It was founders, not employees, I had in mind. It's a massive longshot,
survivor bias clouds our thinking, and you need connections.

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jpm_sd
I think the original article title, "How Contemporary Art Became a Fiat
Currency for the World’s Richest" is actually quite informative

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biztos
Agreed. There is a _lot_ more to "the selling of contemporary art" than this
article touches on, and that's not even what it's really about.

Even with a single Koons piece getting $91M in the secondary market[0][1], the
vast majority of _actual sales_ of contemporary art have nothing to do with
hedge funds or the Singapore free port. In the art world it's a mistake to
only follow the money.

I'm in Berlin right now and some of the most interesting works are not in the
super high end galleries but in the smaller ones that sell work in a wide
range of prices and actually have to make a lot of sales to stay afloat. For
instance my personal favorite Berlin gallery[2] often has works available for
under 1000 EUR, and sometimes for more than 60000 EUR for people your
grandkids will still find in the History of German Art. That's not atypical.

That said, this article was pretty interesting if very short.

[0]: [https://www.bloomberg.com/news/articles/2019-05-16/steel-
rab...](https://www.bloomberg.com/news/articles/2019-05-16/steel-rabbit-by-
koons-sells-for-record-91-million-at-auction)

[1]: I recently heard Koons described as the "Donald Trump of the Art World,"
which (fair or not) makes this particular sale a bit ironic.

[2]: [https://www.galerie-berlin.de](https://www.galerie-berlin.de)

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TheOtherHobbes
"Contemporary Art" is more or less circularly defined as big-ticket
artworks/projects being sold to incredibly rich collectors, corporate
decorators, and headline galleries by predatory dealers.

There's plenty of other art happening, but it's of no real interest to the big
dogs - who are far more concerned with ROI than anything else, and consider
artistic merit a means to an end rather than an end in itself.

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barry-cotter
The kind of self licking ice cream market you describe where it’s a con and
everyone’s in on the con are not stable. For an example of the collapse of one
see the market for stamps and stamp collections. People used to buy stamps as
investments and criminals used to treat them as reasonable currency
substitutes, like bearer bonds except for much higher than face value. Now the
market is flooded with the collections of the deceased and the price has
collapsed so much people buy stamps so they can use interesting stamps to mail
their wedding invitations.

Markets are robust to having very large portions of their demand being
transactional, people who are in it to make a profit. But gallerists, curators
and agents are overwhelmingly art lovers themselves. No doubt there are plenty
of people who are in art to make money but there are many, many more who love
art or who are buying art to gain social status (not mutually exclusive
motives) than grifters. At the top of any field you’re going to find
remarkably few pure grifters. It’s a lot easier to work 60 or 80 hours a week
if you like or love your work. Lots of people love art and some of them even
make a living at it.

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nutjob2
How exactly is this by fiat? The author doesn't seem to understand what the
word means.

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SubiculumCode
The article does not make it clear how this is a _fiat_ currency, or how this
is more properly called a currency rather than just property. Anyone know more
and would like to clarify?

Shameles Plug: My sister is a great artist, I'm sure she'd like her work to
become someone's fiat currency.
[http://www.briannaleefineart.com](http://www.briannaleefineart.com)

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dagaci
Currency is is reasonable here since its understandable that art can be used
as an be a means of exchange for fiat or in barter, if they are regularly
accepted and exchanged in this way.

Technically Fiat is a thing declared and enforced by the state. Art is not
that, so agreed the title is an abuse of language and actually non-sense.

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SubiculumCode
When people say, bartered otter furs for a donkey, were the furs a currency?
Was the donkey a currency? It seems a bit of a stretch. But in any case, it
was the word 'fiat' which, to me, was the biggest violation.

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lawn
No, bartering with it doesn't make it a currency.

However what money is (the abstract concept) and what a currency is (the
actual thing you use) is subjective. Art could be used as money and a
currency, just as well as sea shells or cigarettes can.

The key is it being used as a medium of exchange, not as something you get for
its own gain. So trading art, for the sole purpose to trade it for something
else, is using it as a currency.

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village-idiot
Money also requires fungibility, which art certainly is not. Typically money
is also supposed to be a unit of account, which both requires fungibility and
universality, something art doesn’t have. Nobody values their house in
paintings, that’s ridiculous, instead the house and the art gallery are
measured in the local currency.

I think realistically modern art is more of an investment vehicle than a
currency.

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dagaci
But remember that Fungibility is relative because digitally the movement of
USD is traceable. And all physical USD are marketed with serial numbers. Money
laundering is a huge part of the financial system where $100 will be sold for
$50 for the purpose of obtaining "clean" money, or where vast amounts of
artificial work is expended for the purpose of funnelling cash into the
mainstream. Thus $100 is not always worth $100.

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village-idiot
That’s a fair point, but even still there is a massive gap between the
fungibility of USD and art. Assuming all your money is clean, there’s
literally no difference between any two given dollars. High value art on the
other hand is at most produced in limited editions, and a lot of the super
high value stuff is literally unique.

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cafard
<philistine-mode>

Some years ago, when Jeff Koons was mixed up in a copyright issue--he made, or
directed the making--of a sculpture that looked a lot like a photo--the NY
Times ran an obituary of the inventor of the "jackalope", a stuffed jackrabbit
with antlers
([https://en.wikipedia.org/wiki/Jackalope](https://en.wikipedia.org/wiki/Jackalope)).
One saw them at roadside establishments out west, and perhaps still does. It
occurred to me that if Mr. Herrick had chanced to grow up nearer New York
City, he might have been a rich artist rather than a moderately prosperous
entrepreneur.

</philistine-mode>

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mimixco
This has been going on forever. I think it explains why a Jeff Koonz just sold
for ~$91M. It's not that the sculpture is worth that much, per se, it's more
of a store of value.

Famous artist Gerhard Richter said that modern art prices have nothing to do
with the art's value.

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osrec
Can't remember where I read it, but a great article suggested that expensive
art was often used to launder money.

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baud147258
Here in France, art is mostly tax-free, so it's used as a mean of tax
avoidance by the rich

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village-idiot
A lot of money is also laundered via contemporary art, because it’s an
unregulated market with extremely hard to price assets.

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magwa101
It's all tax avoidance money laundering.

