Should the Detroit Museum sell off some of its art?

Virginia Postrel says yes:

…great artworks shouldn’t be held hostage by a relatively unpopular museum in a declining region. The cause of art would be better served if they were sold to institutions in growing cities where museum attendance is more substantial and the visual arts are more appreciated than they’ve ever been in Detroit. Art lovers should stop equating the public good with the status quo.

On the fiscal front, Detroit has a much stronger claim on its museum’s assets than the typical U.S. city government. During the 1920s, when the local economy was booming and the museum was still building its collection, the DIA relied on annual appropriations from the city not just to fund operations, as many museums do, but also to buy art. That marked “a significant departure from the norm for major American art museums,” observed art historian Jeffrey Abt in his detailed 2001 history “A Museum on the Verge.” City dollars paid for the core of the museum’s collection, including the Van Gogh, Bruegel, Matisse and Bellini.

We easily can imagine that more people would see those artworks if they were located in Los Angeles or other larger and growing cities.  Nonetheless I believe such a sale would set off alarm bells for conservatives, related to Arnold Kling’s “civilization vs. barbarism” axis.  Detroit would be sending a signal that it will never even try to go back to what it was, much as if a university spent down most of its endowment and relied on borrowing.  Still, perhaps that is where we are at with Detroit.

Another issue is that deaccessioning makes all donors feel less confidence in the stewards of their gifts.  If I see Detroit selling off its artworks, should a collector donate his Haitian paintings to the Figge Museum, in Davenport, Iowa?  What if the farmland bubble bursts?  Might they sell those paintings to Miami or maybe western North Dakota?  How many donors know that Detroit has this special history of municipally funded art?  But again, letting Detroit and the Detroit Museum rot also won’t do much for donor confidence at the national level; it is a precarious institution in any case and perhaps the purchaser will take better care of the pictures and also market them more effectively (otherwise why buy them?).

In any case, I expect previous norms against deaccessioning to weaken with the onset of The Great Reset.


"Deaccessioning": NOT a pretty verb . . .

--and not more pretty as a noun.

For society, the question is not so much public or private, but how far "removed" from the roadways we all travel?

In this sense, perhaps Detroit is not so far "from the road" as it may seem, for what it is actually attempting to hold and represent.

Given the direction Detroit has been going: It seems prudent to re-locate irreplaceable art before barbarians sack the place and destroy everything.

This may be the most idiotic comment I have ever read on this site. I truly hope you were making a feeble attempt at humor.

This may be the most idiotic comment I have ever read on this site. I truly hope you were making a feeble attempt at humor.

Given that arson has become the leading outdoor sport in Detroit, this isn't a foolish or unwarranted fear.

Perhaps a visit to Detroit by the humorists here so they could learn something about the place would be in order. You could even stop in to the DIA to see some great art!

Instead of selling off art to LA museums to please the entitled Detroit should just export all its homeless and unemployed to LA. I'm sure everyone would be better off.

All this might just be bluffing in order to move forward negotiations. The real threat if they did send the artwork to another city is a loss of trust among both donors and taxpayers, who recently passed a millage to fund the DIA.

The taxpayers are long gone. That is why the city is in trouble.

"When the news broke that if Detroit goes into bankruptcy the city might cover some of its $15 billion debt by selling Detroit Institute of Arts treasures, the reaction was predictable and the language harsh."

This quote from the article was confusing. If Detroit indeed goes into legal bankruptcy, where comes this choice from?

A debtor declaring bankruptcy has a choice whether or not to liquidate a certain asset? Why? Don't the creditors have a right to get paid by raising whatever they can from all assets? Or is a city somehow prevailed?

In trying to clean up the sentence, I introduced an error. I actually meant to address the possibility of sale during the current round of negotiations. But if the city does go into bankruptcy there's a legal dispute about whether it could be forced to sell art or just pressured very strongly.


Why the legal dispute? Is this a special kind of asset or is the Museum so structured that the city's bankruptcy insulates museum assets?

It was a tri-county millage.

New equilibrium = conditional gifting. Or retention of title with issuance of durable but revokable (at will or for cause of changed circumstances) license to possess and display with duty to maintain and secure. There are many art works currently on display in the best museums around the world that are owned privately and could be repossessed upon news of an event such as this one.

Of course, the fundamental question remains: What are the implications for tax deductions!

Why is the measure of the use of art the number of feet walking past it?

Using that reasoning, we ought to send all the great art to Shanghai, Karachi, and Mumbai.

Karachi? You are a tease.

Hey, don't knock it, 21 million now. Detroit's under a million now!

Yeah, but how many of them are art lovers?

So how did Detroit Inst Art come to own many of these pieces? By buying off of bankrupt Europeans after the First and Second World Wars. They are not anymore inherently 'Detroit' than they were 'Lyon', 'Rotterdam' or 'Vienna'.

As Tyler has mentioned elsewhere, many cities, states and countries are not bankrupt because they have plenty of assets to sell off in order to generate cash. The DIA collection is just one of these assets

By donation mostly.

The primary asset governments have is roads and bridges which are the right of ways that are the lifeblood of the modern economy.

Just think of the market price of the right of ways that the government holds if put on the free market. You could charge a tariff for all passenger travel, even walking, for telephone calls, for water and sewer, for electricity, for natural gas, for Internet, for telephone by wire, and for all physical goods.

How about 10% of your income as a fair market price for you to move about the world in pursuit of that income in either the physical or virtual world?? Is $5000 of $50K annual income too large a price for the ability to earn that instead of being confined to your small patch of land? Land carved out of Locke's common by killing or running off the Indians so the common wasn't needed by anyone to be consistent with Locke's limitation on carving out private land.

Pretty sure I'm already being charged well in excess of 10%, and only a tiny portion of that is actually going toward roads.

According to Wikipedia, Detroit is considering selling its 50% stake in the Detroit-Windsor Tunnel.


What if the farmland bubble bursts? Might they sell those paintings to Miami or maybe western North Dakota?

Is there a way to legally structure a painting donation as a loan with the condition that the painting reverts to the original donor (or his estate) on any attempt to deaccession it?

That might become the donor's tool of choice.

It is the standard practice. Boilerplate. All States have laws that make it easy to do. 47 States have replaced the previous uniform law with UPMIFA since 2006, Michigan in 2009.

One of the things that people forget about detroit is that it still has great institutions (DIA, nearby universities, Orchestra, hospitals, etc).

Given the fact most private gifts of art carry covenants that prevent the sales of the gifts in most cases, requiring the art to be returned to the donor or transferred to alternative institutions meeting the objectives of the bequest, that means the only artwork that can be sold is that bought by the government workers.

And as we all know, government workers are both incompetent and corrupt, so the only artwork owned by the Detroit museum must be slock work created by the grandchildren of the government workers in daycare or traded for supplies at the Detroit mental hospital.

While donor covenants can be broken, they usually require a decade of lawsuits being resolved in probate court.

I find it odd that Tyler is not aware of this already. This is well trodden territory. The sale of museum assets is known as deaccessioning and controversies over such sales date to at least 1775. The history creates a common law requirement that sale of museum assets must be devoted to maintaining the museum. Thus only taxpayer funded assets can be sold for purposes other than the museum.

Note Michigan adopted UPMIFA - Uniform Prudent Management of Institutional Funds Act in 2009 to replace the 1972 Prudent Management of Institutional Funds Act that previously applied in Michigan. UPMIFA specifically includes government agencies which operate for the listed charitable purposes, which includes "education" which a museum is for.

UPMIFA was drafted and recommended in 2006 in the wake of the 2000 crash of the NASDAQ, and then the subsequent poor Bush economy which hurt so many charitable institutions. (Tax cuts make charitable giving much more costly for the rich - when tax rates were 90% on income and two-thirds on estates, Howard Hughes could give away two-thirds of his wealth for free, and he gave it all to the public to avoid paying taxes - that's what HHMI means.).

And the origins are in our founding law which was English law, and thus UPMIFA derives from the English Statute of Charitable Uses, enacted in 1601.

The DIA doesn't own the artwork. It is the property of the city of Detroit. The UPMIFA govern non-profits, not municipalities. The donors and their heirs can sue, but that's it.

the city actually bought most of its valuable pieces, so the question of donor strings is irrelevant for much of the collection.

As someone who responds deeply to the civilization-barbarism distinction, I think a bankrupt Detroit that can't provide even the most basic civil services to its geographic area is a SIGNIFICANTLY more serious step toward barbarism than selling off a few, or even all, paintings. Selling off paintings doesn't even register to me as a step toward barbarism.

Perhaps Detroit should start a business that rents out their collection. That way they can get bigger attendance and the money and not have to sell them off.

They do some loan programs, but it's not clear to me whether they get paid for it. If they aren't, they should certainly try it.

The problem with selling off assets like this is that it can instigate a death spiral--make an already tough place less appealing. There are few institutions and cultural anchors left in the city that are helping to keep it afloat, so every single one is significant. The debt built up slowly and it is time to pay. But there are some signs that the city is starting to turn around, and decimating this collection will be nothing but discouraging to the people who have or are thinking about taking a chance on Detroit. Midtown, the museum's location, is one of the few bright spots in the city. With things like a new Whole Foods just opened and some yuppies now moving in to the area, it could be a spark for bordering neighborhoods to gentrify as well, but not if it is neglected.

And just because more people might see some of this art in LA or New York, huge cities that already have so many cultural attractions, that doesn't mean that Detroit shouldn't be the home for these collections. There are other ways to expose more than Detroiters to the art--in fact DIA does do a lot of loans--but this museum and its supporters and donors are overwhelmingly local. Why give that up for a one-time, drop in the bucket, payoff?

Instigate a death spiral? How quaint. I guess you haven't noticed but Detroit has been in a death spiral since approximately 1967. I'm afraid that there are no known examples of a city recovering from the particular problem that Detroit has.

A death spiral since 1967? Wow almost half a century and there are still 3,700,000 people in the metroplex.

Particular problem? Ha, there are many problems, but even a small Pittsburgh-like resurgence would be positive and I think achievable given the point they're at now.

There are many great works of art throughout the world that Detroit doesn't already possess that would no doubt enhance the DIA. Whenever Detroit decides not to acquire one of those works, are they instigating a death spiral? Put another way, if the DIA didn't already possess the specific pieces in question, if one wanted to invest in the revitalization of the city, would the best use of dollars be to buy those specific pieces from whomever did possess them?

No, it is a signaling issue. If Detroit begins to sell off the DIA collections it is signaling that it is not committed to the city's cultural institutions or revitalization generally. It is not a question of, on the margins, would acquiring N pieces of art for $X yield Z units of revitalization. It is more binary.

If city leaders signal that they are rational, is that "discouraging to the people who have or are thinking about taking a chance on Detroit" because those people don't want to live in a city where leaders act rationally?

Certainly it is better to "live in a city where leaders act rationally." People may just have a different interpretation of what acting rationally is than you do.

"Art lovers should stop equating the public good with the status quo."

I didn't read the rest of the Postrel's commentary, but this sentence in isolation is an interesting one. Consider the top N pieces in the DIA's collection and suppose they are worth $X. If those pieces were not already in the DIA, would it make sense for Detroit to spend $X to acquire them, i.e, to give up $X in cash so that area residents would have easy access to those N pieces in the future? Now, consider the question that the city currently faces: should the DIA keep those N pieces instead of selling them for $X, i.e., should the city give up $X in cash so that area residents can have easy access to those N pieces in the future? The two questions are equivalent, neglecting transactions costs (that it might cost more than $X to acquire the N pieces if one didn't already possess them and/or that selling the N pieces might yield less than $X). So, if the city wouldn't spend $X to buy these pieces if they didn't already have them, then why would they forgo $X by not selling them?

Regarding the signalling issues that TC raises, we can also ask the complementary question: what signals are, or are not, being sent by cities, including Detroit, that are not spending money to acquire works of art that they don't currently possess? Those are the same signals, or lack of signals, that would be sent by not forgoing proceeds from sales of art that they do possess.

The should sell naming rights for the pictures.

From the Detroit Free Press, re: the DIA is "an unpopular museum in a declining area" - "There are 12.8 million people in the LA Metropolitan Statistical Area, according to the 2010 U.S. Census, compared to Detroit’s 3.7 million. Crunch those numbers, and it’s clear that a much larger percentage of the Detroit metro area cares about art — 13% of metro Detroit's population visited the DIA last year, compared to just 9% in Los Angeles."

Voters in the surrounding suburbs voted in 2012 for pretty significant bonds to keep the museum open. It's important symbolically for Detroit for the museum to stay intact, but it's also attended and loved by the entire region.

Good point. This really is a silly article by Postrel.

That article takes a figure for Getty Museum attendance used in my article to illustrate the potential audience for a given work and extrapolates it to indicate art museum attendance in Los Angeles more generally. But the Getty is the second-largest museum in Los Angeles--LACMA has more visitors--and there are a bunch of others (including the Getty Villa). So you'd have to more than double the figure.

It sounds like you think the best approach is to simply maximize the number of people--regardless of who they are or where they live--that can view the art. If so, why wouldn't we just put all the world's art in New York, Hong Kong and Paris, say? If Detroiters want to see the stuff, they can get on a plane and go check it out.

My article was inspired by the prevailing attitude among the museum establishment, mostly outside Detroit. It takes the view that it's an offense against ethics and high culture for a museum ever to sell an art work for any purpose other than the acquisition or maintenance of more art--even directly related programs like arts education or guards' salaries to keep galleries open. That view essentially says that if your city happens to have grown recently, rather than a long time ago, you're never going to have a shot at the best older works.

I am not saying that Detroit doesn't "deserve" to have a first-class art museum, assuming it can support one and would rather have art and cut back elsewhere. I am not saying that museums should only be in places with large population. I am disputing the common argument that Detroit has a special moral claim to the art--that it "belongs in Detroit"--just because the DIA happened to buy it first.

Since other people were making moral arguments I was supplying a counterargument on their terms. If you want to take financial considerations off the table and say where the art "should" go, Detroit's case isn't that strong.

Does Detroit really have the luxury of choice? A bankrupt debtor pretty much loses every asset he has. Whether he loves that asset or its symbolism seem academic points.

Good point, but there are certain things they should consider when making Detroit scrape for the last cent, like to what extent selling off certain assets would harm growth prospects. The more that tax revenue increases, the more money lenders could be repaid later on.

No, no, no!

Chapter 9 protects ALL city assets from being disposed of and preserves the city's control over its finances. It gives them broad power to renegotiate debt and obligations. A federal bankruptcy judge CANNOT make the city sell anything and CANNOT tell the city how to spend its revenues. The judge is only permitted to approve the adjustment plan and ensure that all creditors are treated equitably.

Thanks Willits! Now I see! Municipalities are indeed treated differently under law for bankruptcy.

I didn't know that.

No problema amigo.

Believe me, I would sleep better at night if creditors could take the art work. I've had a very hard time keeping my retail customers from fleeing muni bonds that make up a good bit of their portfolios, so I'm a bit touchy about it. The media fed a wave of hysteria. Sorry for biting your head off. :)

With these sort of cushy protections, I don't know how someone ever buys Muni bonds! :)

Essentially, I could go bankrupt, drive down taxes, raise salaries and maintain fancy expensive properties while the creditors can go talk a walk?!!

Someone crunch the numbers for me: is .09*12.8 more or less than .13*3.7?

On deaccessioning more generally, here's a good dissertation applying econ and org theory:

How much of this is just racism?

Did you hear of any discussion of selling public assets--art museums, libraries, park spaces--when Jefferson County Alabama, Stockton and San Bernandino, California, went bankrupt?

Or, is it just that Detroit has all the good assets?

Aaaaaaaaaaaaand you're a dipshit. Congratulations on not engaging in the slightest bit of real argument, but reaching directly for that tired, dog-eared trope of the retarded leftist: the mindless application of the accusation of racism. Bravo.

Are you from San Bernadino or Stockton?

No, probably Jefferson Parish Alabama.

Just ask the hard question:

Why do other cities which faced bankruptcy not have their public assets being put up for sale.

There's a real question in there. You totally ignored it and did some name calling. Bravo.

No, there is no real question in there. It was 100% race baiting.

The subject was Detroit, and somehow we ended up in California.

Skip to paragraph two of Bill's first comment, take a deep breath, and read it.

Willi, I am going to quote some of the comments in this blog and ask you if any were racist:

1. dbp: "before barbarians sack the place and destroy everything."

2. Timegistus: "Given that arson has become the leading outdoor sport in Detroit, this isn’t a foolish or unwarranted fear."

3. Mike: "I guess you haven’t noticed but Detroit has been in a death spiral since approximately 1967. I’m afraid that there are no known examples of a city recovering from the particular problem that Detroit has."

4. Willitts: "Detroit has bigger problems than this with spending and revenue. If they are down to the art work, then maybe they should be fearing riots and looting. If you don’t see angry mobs with torches, then declare bankruptcy and get your finances under control."

Yes, they are racist against Visigoths.

Did any of those towns have art museums with collections of comparable value to the DIA's? If their collections were worth less than DIA's, then not discussing the purchase of additional works to raise the collections' values to those of DIA's was equivalent to discussing the sale of DIA's works to the point where DIA's collection's value is comparable to those towns' collections.

Yes, you did hear about selling public assets in those other bankruptcies. But as I wrote earlier, Chapter 9 protects cities from having to liquidate assets.

Yes, Detroit has more and better art than Jefferson County, Stockton, and San Bernardino.

Jefferson County is predominantly Black.

There ya go--you found the question in there.

And, the answer is that Chapter 9 would prevent the sale of the assets, which by the way, again raises the question of why the DIA should sell.

I said below that they shouldn't sell but rather should lease. On the other hand there are many good reasons not to go into Chapter 9. Legal fees can be enormous, and credit might be hard to come by for years.

I tell individuals that they have to overcome their attachment to things when their lives or livelihood are imperiled. Cities need to be prepared to do the same. Even though they don't have to sell, I don't see any reason to take it off the table. Constraints limit the number of feasible solutions to problems. Acceptability is a purely human caused barrier to problem solving.

The latter. Old cities have more interesting assets. That's a big point of the piece. It's not "racist" to suggest that Atlanta might get a shot at some Old Masters.

Use the population of Detroit metro, rather than the city proper, and you will get a different picture. Also, check into the recent purchases of downtown property/real estate and the urgency with which Section 8 vouchers have been issued to scuttle folks downtown to the rougher suburbs. You will see that there is an effort to revive the city that may finally have some legs. I doubt these forces will let the DIA be liquidated.

Has the author been to the DIA recently? I was there a few weeks ago at 8pm on a weeknight and the DIA was packed. Not only were their patrons in almost every wing, but there was a concert going on in the Rivera room. To say that DIA's art is not being appreciated by the local population that pays for it with their tax money boarders on ridiculous.

They don't need to sell it. They can close their museum temporarily and out the art out on the road for lease. They can bring it home and reopen when they are solvent.

"Selling the family jewels" is a contentious point with individuals, countries and cities. The correct answer is that you sell them if you can no longer afford to keep them. You can't eat them.

Detroit has bigger problems than this with spending and revenue. If they are down to the art work, then maybe they should be fearing riots and looting. If you don't see angry mobs with torches, then declare bankruptcy and get your finances under control. Chapter 9 is preferable to a fire sale.

Man, people really don't understand Detroit. Detroit (city) /= Detriot (region)! Since 1950, the *city* has gone from 1.8M to 700K people. But in the same time, the *region* has gone from 3.7M to 5.2M. (Peak population for the region was 5.3 in 2000). The *city* is facing bankruptcy. The *region* and the *state* are not (actually, the state of Michigan is relatively healthy financially -- especially compared to nearby Illinois, for example -- having made the prescient decision to move state employees from pensions to 401K's in the 90s).

Next, the DIA is *owned* by the city, but it is not currently *funded* by the city (as others have noted, operating funds are now provided by a regional tax). The Detroit Zoo, BTW, has the same kind of deal -- it is owned by the city but operated by a non-profit (with funds from donations and the same type of regional millage). The city itself may be too small and poor to support such institutions (though the city population -- as reduced as it is -- is still about 60% greater than Atlanta). But the metro region is certainly neither too small nor too poor (and, let's face it, art museums around the country are often much more patronized and supported by wealthier suburbanites than lower-income city residents).

What will happen to the art (and the tigers at the zoo)? Most likely option -- nothing. Second most likely option -- the institutions and their collections are bought from the city with some combination of donations and maybe a state-level bond issue. The city gets a cash infusion, and the institutions are freed from the city's financial problems. But the chances of the collections actually going on the auction block look pretty remote.

Also, you can only sell your museum once.

When people do something like this, sell the family silver, it can make sense to provide some cash towards a transition to a new, poorer lifestyle. You sell the house, buy a van and head to North Dakota to find work.

So is the money from the sale of the artwork going to a fund to find other places for the people in Detroit to live? Or is it going to fund municipal salaries for a year, after which they have to come up with something else? Jan also makes a point that this is likely to end in a smaller but healthier version of Detroit, if we look at the trajectory of other rust belt cities such as Pittsburgh (both Detroit and Pittsburgh are in good locations, its just the Pittsburgh of 1920 and the Detroit of 1960 that was unsustainable), and the museum will be an asset to the newer, smaller city.

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