(More) ideas that won’t work

Take 250 reasonably well-known artists and put their work together in a trust. Later the works will be sold. The payoff to each artist comes half from his paintings, half from the other paintings in the lot. The intermediary takes a mere twenty percent, plus it charges the artists half the costs of storage.

It is a retirement program for artists; supposedly it will minimize their risk and encourage creativity.

I can think of at least five reasons why it won’t work. To see just one, decompose the transaction. Half of your income stream remains tied up in your own art and thus risky, minus the twenty percent of course. With the other half of your pension you decide to invest in not-yet-totally-famous artists. Would anyone recommend such purchases on their own merits? Is that your idea of insurance?

Here is their web site. Here is the home page of the founder, Dan Galai; he has a prolific publication record in economics journals. For more information, see the May 29 issue of The Economist, p.75.


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