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Why people collect art (aeon.co)
66 points by pepys on Feb 11, 2018 | hide | past | web | favorite | 37 comments



I think a lot of the same can be said about 'art' in general, be that 'art' in a traditional sense, or be that music, books, films, etc... Some people just seem to have a predilection towards 'art' more than others.

I spend a lot of time finding new and interesting records. I get massive amounts of enjoyment from finding and listening to smaller bands and music that just never makes it to the mainstream. I have friends who have no interest in music other than the radio in the background. I have friends who listen to a lot of music, but only what is in the charts. I can suggest 'this amazing band' to a friend, but the chance of them listening, much less enjoying it is pretty remote.

Similarly, I bought a lot of 'art' when I was younger. I bought it because I loved it, I got pleasure from it, enjoyed seeing it hanging, enjoyed talking to people about it. Many of my friends who decorated houses hung 'art' without any reason - it was just there, or filled a space, seemed like appropriate colour for the place, like paint on a wall. Or often then didn't hang art at all - instead they put up photos they've taken, or mirrors.

I guess what I'm saying; I think it's really just another example (fairly literally, in this case) of 'different strokes for different folks'. I buy art, you buy racing bikes. We're all different. And isn't the world so much of a better place for it?!


After topping out on prestige, land, wealth and power. What else is left? But to amass a treasure horde of the rarest artefacts and masterpieces the world has ever known.

Longform profiles of superstar dealers such as Larry Gagosian or David Zwirner provide more insight into the psychology of those who catch the art collecting "bug". And how it can morph into irrational idee fixe territory. Such as Getty's obsession with the Roman Emperor Hadrian.

The Art-World Insider Who Went Too Far

https://www.newyorker.com/magazine/2016/02/08/the-bouvier-af...

And of course, you don't need to be a millionaire to start building your own collection. Just a keen eye, good taste, and love for making deals ;)

How To Start Collecting Art In Your 20s

https://www.artsy.net/article/artsy-editorial-start-collecti...

The latest innovation and natural evolution of digital art collecting is potentially the blockchain and distributed ledgers.

The Blockchain Art Market Is Here

https://www.artnome.com/news/2017/12/22/the-blockchain-art-m...


"How to collect art in your 20's" -> get a loan

Was hoping for creative ways to identify rare pieces for cheap.


Definitely read that Artnome piece if you're interested in Blockchain art - I'll share this with him as well.


Expensive art?

1. Money laundering

2. Hedge against inflation

3. Many idiots become rich. Total boring and uninteresting people. They think having a (minor) sketch from Renoir on their wall makes them interesting or special (it doesn't).

Source? Personal observation.


I always wondered if the art galleries in my high tax country were used for money laundering.

It seems pretty obvious: Individual A buys a piece of art for, lets says $10,000. A couple of years goes by, and the individual puts it up for sale at an art gallery. Individual B's company buys the painting for $100,000 - Voila, $90,000 laundered completely legally as private sale of art isn't taxed.

All that is required is a small group of friends with companies they control. Why the art gallery - to make it seem more legit that they are facilitating the sale.


First, I think you're thinking of tax evasion, not money laundering. If company B's money is illicit, it doesn't become less illicit because it's used to buy art.

Second, it's not quite as simple as that. Company B will have to convince their auditors that this painting is indeed worth $100,000, and Mr. A might also be asked to explain how it is that a company that might otherwise owe him roughly $90,000 suddenly became so interested in this particular, and very recently much increased in value, piece of art.

Bottom line, this strategy depends on not getting audited, and there are much simpler strategies that work perfectly well under such circumstances.


> If company B's money is illicit, it doesn't become less illicit because it's used to buy art.

Individual A now has clean money - they successfully speculated in the art market - even if company B's money was dirty.


Also, you can easily roll up a 1 Million dollar painting in China, bring it on an airplane, fly it to Switzerland. Try bringing 1MM in cash out and in...


In the US, individual A would owe taxes on a $90,000 capital gain. Certainly, private sales aren't subject to any mandatory, automatic reporting; but the tax is still due. This could actually be useful for money laundering -- this $90k gain is clean money, if reported correctly; so maybe buy the art with a mix of dirty and clean money, then claim only the clean money as cost basis.


certainly seems plausible to me. do you think there's a reason they do this with art more than cars, homes, watches, jewelry? portability?


Because cars, homes, watches and jewerly don't jump in price as highly as art pieces do. You can't buy some shitty car and sell it for 1 million a few years later. As for selling antique cars and Ferraris and such, those are already expensive to begin with and the margins are low.

But you can artificially inflate some BS artist's work.


These things generally aren't unique, and so it's relatively easy to establish a market price, and flag it if something suddenly sells for a lot more than that.


I have a small art collection of small pieces of art by local artists. I generally get them at open studio events or local art fairs. I don't have a lot of wall space.

The ones not on the wall I rotate displaying on a little stand that sits beside the door when I leave.

I enjoy them and they seem to lift my mood.


+1 for this, my art collecting is basically the same, mostly prints and paintings from local artists in the sub-$500 range. I enjoy them like most other entertainment: as a portal into another reality. And if they become worth something to someone else in the future and I decide I don't want them? Bonus.


If you're interested in this, I highly recommend the book The $12 Million Stuffed Shark: The Curious Economics Of Contemporary Art. As the promo blurb says, it's a Freakonomics-style look the art world, covering artists, deals, collectors, and auction houses. A ton of insight into how all the psychology of it fits together.

https://www.amazon.com/Million-Stuffed-Shark-Economics-Conte...


Ha, I was just going to post this as well. I can't recommend this book enough, it's really an eye opening discussion of how value is created in the contemporary art market.

If you wonder why some artwork that seemingly required little skill is worth millions or why someone would pay for an all white painting, this is the book for you.


A recent scandal in France taught us that art collection is also a great way to hide bribes. If you want to receive say one million from a Saudi gentleman, just put one of your 100 k painting for sale and one anonymous buyer will discover a taste in that artist and buy it for 1.1M. then brag about your flair.


You can do that with anything. A recent famous case in my country involved a shady real estate mogul who bought a $40 million piece of real estate and then turned around and sold it to a russian oligarch for $100 million. Was it a bribe? Who can say?


Why don't you just say Donald Trump?

Two reasons why it wasn't bribery: First, it wasn't just bought and then sold - the property was bought, renovated by Trump, and then sold 4 years later. Secondly, the Russian that bought it subdivided the lot and is set to make a few tens of millions off of selling each subdivision: https://www.bizjournals.com/southflorida/news/2017/10/06/rus...


I feel like US Presidents shouldn’t be allowed to participate in any large scale commercial enterprise while in office. Whether it’s innocent or not is largely besides the point, the potential for conflict of interest is huge and there’s no way to ensure their financial incentives align with those of the American people. Furthermore, there is a long tradition that previous Presidents have placed their assets into a blind trust, a tradition that Trump clearly disregards. Sure, you could argue it’s not a bribe, but it’s very shady.


This sale happened 10 years ago so this didn't happen in office.

Was Russia planting the seed in 2008 to have a puppers in the white house? Yeah, I don't think so.


I don’t see why it matters when it took place. I’m curious, don’t you think he may have an incentive to benefit his russian business partners, both for past and future deals they may make, at the expense of the American people? Why wouldn’t he choose to benefit his russian business partners, at your expense, if he has an opportunity to do so? The incentive is clearly there.


Because bribery usually happens when people are in power. I've never heard of preemptive bribes, where hopefully the bribee will run for office 10 years later.

You know what, this just isn't worth it. You calling them "business partners" shows me what I need to know. No reasonable person would call the counter party in a transaction a "business partner". You realize that Trump has done thousands of deals with people of all sorts of nationalities right? Do you expect them to all get favored treatment, or just Russians? Is that how good business people operate? "We did a transaction once, therefore I will favor you and give you free consideration for no other reason"


> Is that how good business people operate? "We did a transaction once, therefore I will favor you and give you free consideration for no other reason"

Suppose a person works in real estate their entire life, and then runs for political office but still maintains their real estate business. Is it not reasonable to assume, absent evidence to the contrary, that they have incentives to benefit the real estate industry and in particular their own business, over that of others? Why would they stop acting in a way that maximizes their own personal profit?

Would we not assume the same for really any professional background? If Mark Zuckerburg runs for President and wins, would we not assume that he would favor policies that benefit Facebook to the detriment of their competitors, simply because he has a strong financial incentive to do so? Indeed, would you be comfortable with a President Zuckerberg who remained in complete control of Facebook while in office?

Why then is it weird to be concerned that Trump has not distanced himself from his business interests? Trump has done thousands of deals, but those deals only benefited him and his counter parties. Those deals were not done for the benefit of the American public at large. That's fine for Trump the private citizen, but not Trump the President. I reasonably expect that all dealings that a President has while in office are exclusively on behalf of and for the benefit of the American people. If he were a banker, or wall street financier of any other type, wouldn't the same conflict of interest exist? Do you really not think this is a cause for concern?

The default assumption should be that a person is prone to corruption. That is the safe assumption for anyone granted power, and is the assumption of the founding fathers who wrote the Constitution. We should not give the benefit of the doubt to any leader. That is far too dangerous and runs contrary to the spirit of Democracy. If you want to believe a leader is a saint above reproach that is the realm of Authoritarianism, not Democracy.


What does this have to do with a real estate sale 10 years ago?


> Why don't you just say Donald Trump?

Oh, I didn't mean him. I mean, surely if this is so routine, it must happen a lot, right?

> the property was bought, renovated by Trump, and then sold 4 years later

Except the buyer immediately tore down most of the renovations.

> Secondly, the Russian that bought it subdivided the lot and is set to make a few tens of millions

That's funny, the link you provided says he hasn't yet turned a profit. Where did you get the number you specifically cited?

Here's an article explaining in detail exactly why this was so shady:

https://www.seattletimes.com/nation-world/why-did-a-russian-...


> Oh, I didn't mean him. I mean, surely if this is so routine, it must happen a lot, right?

It's pretty routine for 'real estate moguls' to do real estate deals.

> Except the buyer immediately tore down most of the renovations.

So if this was a bribe, why did Trump even bother renovating? Why not just let it sit for 4 years?

> That's funny, the link you provided says he hasn't yet turned a profit. Where did you get the number you specifically cited?

From the article I linked. He hasn't turned profit because he is still sitting on 1/3rd of the subdivisions - the estimated profit was based on previous sales prices and current market conditions.

This is only shady because people, like you, hate Trump and basically think that he is guilty of everything he is accused of.


> So if this was a bribe, why did Trump even bother renovating? Why not just let it sit for 4 years?

Could be because the asset was not conceived as a bribe vehicle at first. Actually it is pretty dumb to use real estate goods for that as their values can be more objectively evaluated than paintings.


Happens in Australia too $4.55MM to $12MM in a year... dodgy!

https://www.macrobusiness.com.au/2018/01/another-money-laund...


But here the x2.5 ramping up in price looks shady. For a painting its value is so subjective that this kind of things happens routinely.


In some cases art can be classed as business equipment, and sold without any capital gains tax.

https://www.rossmartin.co.uk/private-client-a-estate-plannin...


See also this Planet Money episode that came out this week https://www.npr.org/sections/money/2018/02/09/584555705/epis...


Back when online auctions were a new thing I got me a 1932 second printing (traditionally the first printing was cheap paper and pasted on walls while later runs were for subscription clubs and whatnot) French advertising poster for something stupid like $79 off yahoo auctions.

Sometimes a deal is just too good to pass up.


A lot of them do as a form of stock/investment. But I think there is a prestig factor in there somewhere


To avoid taxes ?


From the article: "Another popular explanation for collecting – financial gain – cannot explain why collectors go to such lengths."




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