Let them sell the Norman Rockwells

by on November 17, 2017 at 1:24 am in Current Affairs, Economics, Law, The Arts | Permalink

The Berkshire Museum, yes.  They were going to sell 40 paintings at Sotheby’s, including two very special Norman Rockwells, but at the last minute a court decision halted the sale, claiming (with only thin justification) that the sale would violate the museum’s trusts.  That is the setting of my latest Bloomberg column, here is one bit:

The sad truth is that the people running the Berkshire Museum just don’t care that much about American art any more, at least not from an institutional point of view. Given that reality, it’s actually better if they are not entrusted with important artworks.

The court’s decision now means it will be hard to pull off the sale with fully clear rights to the titles, although the court’s judgment will be re-examined in December. Both the uncertainty and the surrounding negative publicity will scare off buyers and may spoil the market for a long time to come.

There is much more at the link.  The argument against selling, of course, is that in a world of frequent sales all museums will find it hard to make credibly binding commitments to their donors, who often do not want their donated works recycled in the marketplace.  But the equilibrium of zero selling is one that will destroy a great deal of value in the art world.  Note that this problem will become increasingly relevant as the clock ticks and the number and inappropriateness of past museum commitments piles up.  If nothing else, sooner or later insolvency sets in.  Rust never sleeps.  And so on.

Should churches really own all that land in the downturns of major American cities?

1 Jeff L November 17, 2017 at 1:43 am

The real reason some powers oppose the sale:

Art is the original bitcoin, market participants benefit from restricting the supply as much as possible. The price run up also helps museums, their donors can claim larger tax deductions.

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2 Gertrude Higgins November 17, 2017 at 2:22 am

TC making much ado about nothing. This was a preliminary injunction with little precedential weight, not a decision on merits. The case could go either way in December. And the Museum is very well represented…

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3 Dzhaughn November 17, 2017 at 2:30 am

Yup, lawyers need work. Well, need money.

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4 Pensans November 17, 2017 at 2:59 am

The “downturns” churches own should be turned over to those who caused them.

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5 Sam the Sham November 17, 2017 at 6:44 am

That particular line sounds like someone is itching for Dissolution of the Monasteries II: Electric Boogaloo.

Should the universities really own all that land? We could sure pay down a lot of debt by putting state universities up for auction. Berkeley would make an excellent pick-n-pull! Prime location!

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6 dan1111 November 17, 2017 at 8:57 am

There are many huge, barely used churches sitting on prime real estate in cities, in America and Europe as well. It’s driven by the decline in church attendance.

You don’t have to be anti-church to think this is a problem. As a Christian, I think it’s terrible. What a waste of resources. Sell the building, use the money for charitable cause, and meet in a room somewhere. Or, open up the church building as a resource for the community (this actually does happen a fair bit).

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7 Sam the Sham November 17, 2017 at 9:19 am

Perhaps someone should offer the property owner a sufficient amount of money, and it will get sold. This is an econ blog, after all.

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8 dan1111 November 17, 2017 at 9:54 am

Yeah, yeah, point taken.

Ok, let me rephrase it: “I disagree with the value that owners of downtown churches place on their property”.

9 Sam the Sham November 17, 2017 at 10:02 am

Fair enough. And if you make the point that churches should be subject to the same laws as banks and absent landlords, I agree. Yards and sidewalks should be maintained, the exterior should be free of vulgar graffiti, etc, and owners fined if not done so. Regardless of church or bank, maintain the land if you do indeed value it.

Banks also seem to get away with this behavior, and I agree there’s a problem. I think universal code enforcement is the solution.

10 clockwork_prior November 17, 2017 at 10:43 am

If only someone would do this is Rome, or Italy more generally. Who needs all those frescos and paintings and stained glass when the latest mall is waiting to be built. Like this building, in city where prime space is extremely limited – https://en.wikipedia.org/wiki/Orvieto_Cathedral

11 jdgalt November 17, 2017 at 10:10 pm

The practical answer would appear to be to take away the property’s tax exemption once it’s no longer being used as a church. Then the owner has an incentive to either sell it or use it for something.

12 Art Deco November 17, 2017 at 11:45 am

There are many huge, barely used churches sitting on prime real estate in cities, in America and Europe as well. It’s driven by the decline in church attendance.

More (1) deficits of parking and (2) suburban development which (3) is a consequence of a number of factors, among them street crime which in turn (4) discourages people from attending downtown churches even when convenient.

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13 y81 November 17, 2017 at 3:53 pm

I only know New York City. Underused churches are often sold, sometimes to more vibrant congregations, sometimes to be torn down, sometimes to be repurposed. Problems can develop when the building is landmarked, which severely diminishes the ability of a prospective purchaser to repurpose it, but that problem can also exist with respect to buildings owned by for-profit owners (see Grand Central Station). In general, other than the landmark issue, there are no unduly onerous restrictions on a congregation’s ability to sell its building, and the courts don’t typically get involved, so I’m not sure what Tyler is talking about.

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14 clockwork_prior November 17, 2017 at 3:44 am

‘But the equilibrium of zero selling is one that will destroy a great deal of value in the art world.’

Because how does one measure the value of having art on public display for anyone to see compared to the profit to the museum of selling the work, the commissions of those involved with the auction process, and the price someone will pay to enjoy the possibility of removing a work of art from public view for their personal gain, including the possibility of later sale to capture market appreciation (a risky proposition, but one motive among many for buying a work of art).

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15 Sebastian H November 17, 2017 at 9:07 am

Typically if a museum is selling art, it is from a part of the collection NOT on regular public display. So your concerns about public display aren’t on point.

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16 clockwork_prior November 17, 2017 at 10:37 am

You are not wrong, except in this particular case as the museum is attempting to make as much money as possible from the Rockwells.

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17 dearieme November 17, 2017 at 4:30 am

Did Norman Rockwell produce anything besides hokey Americana schlock?

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18 chuck martel November 17, 2017 at 6:21 am
19 A Truth Seeker November 17, 2017 at 6:31 am

Why the lion has nothing but a little windon through which it can breath and see rhe world? Why is it confined like a criminal? Why doesn’t it have more space?

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20 Sam the Sham November 17, 2017 at 7:39 am

The lion ate a Brazilian, and yes it is on trial to determine if that was a crime.

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21 Edm November 17, 2017 at 7:53 am

Dinner is now a crime?

22 A Truth Seeker November 17, 2017 at 8:00 am

It couldn’t have eaten a Brazilian. There are no lions in Brazil, except in zoos, where they are well-fed and kept under close watch. Brazilians only venture in lion-bearing regions in Africa and elsewhere with the utmost caution and following a well-thought plan.

Actually, it was not lions, but jaguars that inspired the fjrst Brazilians. A famous Brazilian Indian chieftain, when it was called to his attention that he should not eat people because men do not eat men, replied: “I am not a man, I am a jaguar”.

23 Borjigid November 17, 2017 at 8:35 am

“Five circus lions in Brazil devoured a six-year-old boy after one snatched him from his father’s arm and pulled him into their cage.”

http://news.bbc.co.uk/2/hi/americas/708702.stm

24 JWatts November 17, 2017 at 8:37 am

“A famous Brazilian Indian chieftain, when it was called to his attention that he should not eat people because men do not eat men, replied: “I am not a man, I am a jaguar”.”

So Brazilians are cannibals.

25 A Truth Seeker November 17, 2017 at 9:31 am

“Five circus lions in Brazil devoured a six-year-old boy after one snatched him from his father’s arm and pulled him into their cage.”

I can assure you such accidents are exceedingly rare in Brazil. The owners of the circus fled to America, Americans harbor criminals. The guilty lions were shot by the proper authorities.

“So Brazilians are cannibals.”
No, some Brazilian tribes, during the colonization, used to eat European prisoners, but nowadays it is exceedingly rare. The native tribes are being integrated to Brazilian society and learning civilized living.

26 Borjigid November 17, 2017 at 10:11 am

I will not feel safe until President Temer takes some action. It might get his approval rating up over 3% too.

27 A Truth Seeker November 17, 2017 at 11:13 am

It is a non-existing crisis. People are not being eaten alive by lions on Brazilian streets. The situation is fully under complete control of the legitimate Brazilian authorities. It is not like America, where the Gestapo can round up and kill unarmed Blacks.

President Temer’s approval rate is recovering as the economy gets better and has, at certain points, cleared the 7% threshold. He got momentum and has launched a propaganda offensive. Evidently, President Temer is shaking the complacency of some powerful moneyed interests. His reforms are the boldest since the Perestroika, so some lack of popularity is to be expected (Gorbachev is not the hottest act in Russia either). President Temer may not be loved, but he is respect, his achievements in his long, accomplished carreer speak by themselves. He is a poet, a statesman, a gentleman, a scholar and an entrepreneur. He rose from the most crushing poverty, a strnager in a strange land, son of immigrants from the other side of the world, to beco e a millionaire, a Constitution framer, a president of the Congress, twice vice president and now a president and reformer who even opened the reunion of UN’s General Assembly.

28 Sam the Sham November 17, 2017 at 11:20 am

“It is a non-existing crisis. People are not being eaten alive by lions on Brazilian streets. The situation is fully under complete control of the legitimate Brazilian authorities”

You sound a bit like Baghdad Bob here, and I got a good chortle out of it!

29 A Truth Seeker November 17, 2017 at 11:27 am

It is totally different. Baghdad Bob denied an ongoing successful American-led invasion. Anyone who visits Brazil can verify that there are no men-eating lions at large walking the streets of Brazilian metropolises at all. It is a non-issue.

30 msgkings November 17, 2017 at 1:25 pm

So this is what Brazil has become, a place where lions devour six year olds and the president has an approval rating only 1/10 as large as Donald Trump. Sad!

31 A Truth Seeker November 17, 2017 at 2:07 pm

No, it is not. The lion accident happened almost two decades ago, three presidents ago. The situation is now under control. It was a foreign provokation, thr Circus’ owners were foreigners as their name (Vostok) shiws and they fled tothe United States, where criminals feel safe.
History will absolve Mr. Temer. His low popularity bears witness to the tough mission he received after prwvious mistakes commited mistakes and to his resolutenesd. Also, Brazil is a vibrant, roaring democracy, not a duopolical, oligarchy where half of the populace regards the other half is a sworn enemy.

32 msgkings November 17, 2017 at 2:30 pm

My mistake, since it happened a while ago. So this is what Brazil has always been. Thank you for the correction.

33 A Truth Seeker November 17, 2017 at 2:34 pm

No, it has not been such a thing! Such accidets are rare and, more often than not, foreign provokations. The situation is under control. Even bac then, the legitimate authorities shot the offending lion dead before they could eat the body. We rose the price of the aggression an prevented the aggressor from profiting from its evil deed.

34 msgkings November 17, 2017 at 2:49 pm

That is a lie. Brazil is known the world over for sacrificing their children to lions. This is why the Prophet Bandarra said Brazil would rise like a lion. The motto on the national flag translates as “Our lions will eat you”. One of the reasons Benjamin Harrison invaded Brazil in 1891 was to protect children from hungry Brazilian lions.

Why do you insist on lying so much, Thiago? Surely if you tell the truth about Brazil, we will realize its glory.

35 A Truth Seeker November 17, 2017 at 3:07 pm

You lie, boy!! Brazil’s flag’s motto means “Order and Progress” and was inspired by famous French philosopher Auguste Comte,?founder of Positivism. There are no human sacrifices in Brazil. The Prophet compard Brazil to a lion because lions represent strenght, majesty and courage and Brazil is predicted to rule with strenght.
Brazil has never been invaded since the War Against the Paraguayan Aggressor in the 1860s and repelling English meddling in the 1890s.

36 Sam the Sham November 17, 2017 at 3:22 pm

The motto on the national flag translates as “Our lions will eat you”.

I completely lost it at this one. Thanks, msgkings, my coworkers think I’ve finally cracked!

37 JWatts November 17, 2017 at 3:49 pm

“The motto on the national flag translates as “Our lions will eat you”.”

Are you sure about this? Maybe the proper translation is “I am not a man, I am a jaguar and I will eat you”.

38 A Truth Seeker November 17, 2017 at 4:32 pm

No, liars!! Lions are not a native species from Brazil, they are transported to and bred in Brazil for scientific study, entertainment or educational matters. And the bit about being a jaguar is not official policy of the Brazilian state. As I said, it was the reply of a native chieftain to his German prisoner. https://books.google.com.br/books?id=PmVXOM-n9d0C&pg=PT79&lpg=PT79&dq=hans:staden+jaguar&source=bl&ots=ZIZnt96r57&sig=KGe2jZNdr5EDjk9ZPMAM5pKEz6o&hl=pt-BR&sa=X&ved=0ahUKEwja-uXsxsbXAhUOOZAKHTrHBXIQ6AEIbjAM#v=onepage&q=hans%3Astaden%20jaguar&f=false

Prisoners were a ready, plentiful and delicious source of food for the savages.

39 So Much For Subtlety November 17, 2017 at 8:12 am

In the ocean of sh!t that is modern Art, hoket Americana schlock looks pretty good. I would take Rockwell over Lucian Freud any day of the week.

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40 Sam the Sham November 17, 2017 at 8:32 am

I’d recommend Tyler Cowen read “In Praise of Commercial Culture” by Tyler Cowen. It’s on my sidebar, and it sounds relevant.

I’ve seen better art as posters in college dorms, affixed with ticky tack, than I have in the modern art section of most museums.

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41 dearieme November 17, 2017 at 11:25 am

Americans do like their schlock.

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42 dearieme November 17, 2017 at 10:50 am

THAT WAS BOGUS DEARIEME who still can’t write British English.

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43 A Truth Seeker November 17, 2017 at 6:29 am

So that is what America has become: a place where rhe public is looted and deprived from seeing works of art by the acfion of greedy museum executives.

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44 rayward November 17, 2017 at 6:46 am

Cowen continues today with the rugged individualism theme. Here’s what David Brooks thinks of it: https://www.nytimes.com/2017/11/16/opinion/elites-taxes-republicans-congress.html Here’s what a $500,000,000 sales price for a single work of art means: https://www.nytimes.com/2017/11/16/opinion/davinci-salvator-muni-auction.html

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45 Axa November 17, 2017 at 7:01 am

Some liquidity is good….why not put a restriction that the work can only be sold to other museums where it will be on public display too?

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46 bill November 17, 2017 at 7:13 am

Watch “Art of the Steal”.
They could have and should have just sold a few pieces from the basement and kept the museum where it was.

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47 Bill November 17, 2017 at 7:45 am

Perhaps the donor understands that the product he donates does not have the market value he claims for tax purposes, and the museum takes it, knowing that as well.

So, if there were a sale, it would be all too clear that it was not tastes that changed, but rather that the market would reveal the true price.

There are three parties to the exchange: the donor, the recipient, and the tax collector. One of them gets screwed. Can you guess which one.

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48 Bill November 17, 2017 at 7:49 am

In other words, can you make the argument the other way: ‘But the equilibrium of zero selling is one that will destroy a great deal of value in the art world.’ Maybe selling would destroy a great deal of value in the art world.

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49 The Anti-Gnostic November 17, 2017 at 8:36 am

Should churches really own all that land in the downturns of major American cities?

Well that’s an interesting trial balloon. How about this one: should the current landowners of Newark NJ own all that land a bridge away from Manhattan?

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50 Art Deco November 17, 2017 at 11:37 am

The bridge is in Fort Lee, NJ, in the next county.

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51 The Anti-Gnostic November 17, 2017 at 11:53 am

Thanks Art. I’m taking copious notes.

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52 JWatts November 17, 2017 at 8:42 am

It seems like a perfect opportunity for Congress to step in and make national legislation whereby this type of gift / deal has a set period of legal binding. Perhaps 20 years? After 20 years, the original requirements are no longer enforceable.

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53 Bill November 17, 2017 at 9:25 am

Why? The donor should be able to restrict disposition; the museum is free to accept or reject the donation with the restriction. I don’t see the market failure here. Other than the tax/valuation issue, which this proposal does not address.

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54 JWatts November 17, 2017 at 3:52 pm

“Why? The donor should be able to restrict disposition; the museum is free to accept or reject the donation with the restriction.”

A donor can’t enforce it once their dead. Do we want these matters tying up the court? And frankly, no matter what the promise of the current museum, 20 years down the road, it’s going to be different people who won’t feel obligated to fulfill a promise made by people long since gone.

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55 Axa November 17, 2017 at 6:27 pm

Promise?

I thought it was a contract.

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56 JWatts November 17, 2017 at 8:45 am

“Should churches really own all that land in the downturns of major American cities?”

I would assume that you meant downtown. But this seems to be an unrelated item. The churches aren’t forced to keep the land. If the church want to sell the land they can. If they want to keep the land, they also can.

If you are arguing for the removal of Private Property rights from charitable organizations, you should make the argument explicit.

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57 Benny Lava November 17, 2017 at 9:05 am

Maybe it wasn’t a typo? Is that a Straussian reading?

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58 CM November 17, 2017 at 9:22 am

There may be a better equilibrium in which Churches could continue performing their missions while owning less downtown real estate but that tax and regulatory issues prevent churches from moving towards this equilibrium. For example, Church owned land is alienable but churches have less incentive to sell because their holdings are exempt from property taxes and some states impose restrictive conditions on the sale of property owned by religious non-profits (sales of church property in NYS, for example, requires approval of the AG).

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59 y81 November 17, 2017 at 4:01 pm

I’ve done a bunch of church sales in my lifetime. (I am a real estate lawyer.) AG approval is pretty much of a rubber stamp. Also, it doesn’t always apply, and it may apply to nonreligious corporations which are non-profit.

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60 dan1111 November 17, 2017 at 9:56 am

@JWatts, you are overthinking this. It’s just another example of property being held and not used optimally because of the influence of donors.

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61 Art Deco November 17, 2017 at 11:38 am

the influence of donors.

???

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62 peri November 17, 2017 at 10:13 am

Maybe the donors’ grandkids can buy the paintings back.

I don’t care about where art lives but this reminded me of the Boy Scouts of America. I expect most of the folks who donated land to BSA over the years, pictured kids enjoying their properties in perpetuity. I expect they also thought there was a conservation component to their gift.

They should have gotten that in writing.

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63 JWatts November 17, 2017 at 3:56 pm

Have the Boy Scouts of America been selling off donated land?

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64 peri November 17, 2017 at 6:02 pm

Yes. Where I live, camps that boys have gone to for generations, which made for a link between fathers and sons, and you might think, would be good for continuity.

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65 dearieme November 17, 2017 at 10:46 am

My old teacher of English would have blanched at “inappropriateness”. He’d have pointed to the very presence of that noun as evidence that the sentence needed rewriting. He’d have demanded to know how “inappropriateness” can pile up. He would have disparaged the cliche about the clock. He would have commented acerbically on insomniac rust. He would have enquired, with mock concern, whether the author was himself getting enough sleep, and whether he had dashed off his column in five minutes or in ten.

He would probably have commended George Orwell’s advice on writing English.

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66 August Hurtel November 17, 2017 at 11:22 am

I do not see anything about this case that might mitigate my old professor’s ire, should she not be resting in peace by now, at the thought of museum staff selling off items that they have tired of. I was informed, in no uncertain terms, that if I were to do anything remotely like what you suggest, I would (and should) go to prison.

Museums don’t generally have ownership of the art. They are responsible for maintenance and display to the public.

There is a risk- if you upset the existing practices, you may end up with less art in museums- especially museums open to the public.

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67 Viking November 17, 2017 at 1:19 pm

To what extent can old dead white guys control what happens with their wealth in the future?

That is the key question. My alma mater was founded based on a trust where the mission was to educate white students. In the 60s, that trust was broken, and the university decided to change with the times. In any society based on blind justice, one would expect the same to happen to black only scholarships.

What promises can anybody credibly make about the future? Especially whan the payers are scheduled to be future tax payers.

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68 A Truth Seeker November 17, 2017 at 5:24 pm

“My alma mater was founded based on a trust where the mission was to educate white students.”

Such is life in America.

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69 chuck martel November 17, 2017 at 4:37 pm

“Should churches really own all that land in the downturns of major American cities?”

Why not? That’s where people go to listen to lunch-time pipe organ recitals.

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70 jdgalt November 17, 2017 at 10:13 pm

Sounds like a good idea for re-use. Turn the church into a Pizza & Pipes.

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71 AnthonyB November 18, 2017 at 8:59 am

A 2015 gift to the Art Institute of Chicago (44 works, approx. $400 million) came with restrictions: keep the collection together for 25 years, then on public display (as a collection or not) for another 25 years. Given the advanced age of the donors, these conditions be in force long after their demise.

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