Tuesday, September 29, 2015

Deaccessioning & "Private Choice"?

The art world is notoriously (and controversially) posh and awash in money. Over the summer, several commentators opined on whether or not those remarkably high prices and levels of investment reflect a bubble about to burst. But one player in the art world isn't about money, at least in theory.

The social and institutional norms of the art world prohibit museums from selling or "deaccessioning" works of art, except in order to purchase more works of art. The deaccessioning policy of the Association of Art Museum Directors (AAMD) is representative. Essentially, the argument is that museums hold artworks in the "public trust" and therefore cannot treat them like commodities by selling them, except in order to purchase more and better art.

Of course, as Donn Zaretsky of The Art Law Blog has observed over and over again, deaccessioning norms are both harmful and incoherent. They are harmful because they prohibit museums from selling artworks, even if the alternative is bankruptcy. For example, the Corcoran recently sacrificed its independence, which it almost certainly could have preserved by selling a few artworks. Moreover, they prohibit the sale of artwork, irrespective of consequences. For example, the art world establishment angrily objected to the City of Detroit selling artworks in the Detroit Institute of Art, even if doing so would enable the city to make pensioners whole. Even if you believe that holding artworks in the "public trust" is public good, it's hard to see why it should trump other public goods.

But the most curious aspect of deaccessioning norms is their incoherence. As Zaretsky has memorably and humorously observed, artworks are apparently held in the "public trust" unless they are not. It makes no sense to insist that artworks cannot be sold for one purpose, but can be sold for another. As Zaretsky observes:

Look, there are two coherent positions on this whole issue.

One is the one O'Toole sketches out here: works of art should not be converted into cash. They are records of human creativity that are held in the public trust. To sell them is an ugly deed.

That's a coherent position. It needs, in my view, to reckon with the kinds of counterargument that Michael O'Hare, for example, makes against it here. But it's not an irrational stance to take.

The other coherent position is O'Hare's: yes, these are enormously valuable things, and generally worth holding onto, but sometimes, depending on the circumstances, the benefits of selling one may exceed the costs. You may not agree with it, you may make a different value judgment, but it's clearly not an irrational view.

But what's not a coherent position is the one the AAMD (and the rest of art world establishment) takes -- that works of art are records of human creativity held in the public trust and cannot be converted for cash, except when the museum wants to use the proceeds for one particular purpose (out of the hundreds of possible purposes), in which event they somehow cease to be held in the public trust and suddenly can be converted into cash without controversy.

Or, put even more simply (and to sum up thousands and thousands of words I've written on this issue at the blog): they're either held in the public trust or they're not.

And, as I've also argued repeatedly, the museums themselves, by their own actions (routinely selling off works from their collections), tell us the answer is they're not.

Interestingly, while Zaretsky is memorably (and unfailingly humorously!) critical of the value and coherence of deaccessioning norms, he refrains from opining as to their motivation. In my experience, when people get very upset about a practice, but cannot provide a coherent explanation of why they are upset, there is usually something unspoken or unrecognized motivating their objections.

As any economist knows, incentives matter. So what are the incentives for deaccessioning norms? The art market depends on scarcity. For most works of authorship, scarcity is ensured by copyright. But the art world is unusual in that the scarcity of artworks is ensured by the fact that they are unique or artificially limited objects. In other words, the value of artworks is maintained by the fact that there is a limited number of works on the market. At least in part because a vast number of artworks are in the collection of museums, which are largely prevented from selling those works by deaccessioning norms.

How do museums obtain those works? Often by donation, typically from the very people who buy and sell those works for profit. The people who donate works to museums have a vested interest in ensuring that donated works stay out of the market, in order to ensure scarcity. In other words, participants in the art market want to ensure that they can capture any capital gains, rather than museums. Which tracks nicely with deaccessioning norms. Museums cannot sell artworks in order to capture capital gains, unless they immediately plow that money back into the art market.

In other words, I suspect that public choice theory may provide a useful model for explaining why art world insiders defend deaccessioning norms so forcefully and uniformly. Or rather, given that art museums are typically private, charitable institutions, we ought to call this a form of "private choice" theory? Or maybe even something worth analyzing under antitrust principles?

Brian L. Frye

http://lawprofessors.typepad.com/nonprofit/2015/09/deaccessioning-private-choice.html

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Comments

What if the theory is that art museums' missions are fundamentally *to continue to be art museums* and thus to continue to make works of art available to the public, researchers, etc.? This might explain why they ought not to sell works of art to produce some other public good, but can sell works of art in order to get more works of art...

Posted by: Paul Gowder | Sep 29, 2015 7:24:02 PM

hmm... tried to post this comment a min ago, but it didn't go through... what if the theory is that art museums are supposed to be driven by a central mission of making art available (to researchers, the public, etc.)? This perhaps explains why they ought not to sell art to pursue other ends, but can sell art in pursuit of that overall higher-level end (including buying more art... but perhaps also some of these other uses, like retaining their independence, in the right situation)?

Posted by: Paul Gowder | Sep 29, 2015 7:26:02 PM

Paul, thanks for your comment & sorry for the slow posting. The comments on this blog are moderated & have to be approved manually. In any case, you make a good point, but the problem is that the AAMD deaccessioning policy actually prohibits art museums from selling works - even one! - in order "to continue to be art museums." For example, many art museums encountered financial difficulties during the recent recession, when they found revenues suddenly inadequate to meet their fixed costs of operation. The AAMD deaccessioning policy holds that those museums cannot sell even one work from their collections in order to cover those operation costs. Of course, the issue in Detroit was somewhat different, given that the proposal was to sell artwork for a non-art-related social good. In other words, I think your theory would be a signal improvement on the AAMD policy, which is one reason I am suspicious of the unspoken (& perhaps unconscious?) motivations for the AAMB policy.

Posted by: Brian L. Frye | Sep 30, 2015 1:37:17 PM

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