Category: The Arts

Markets in everything the law of one price?

As an investment, cash is considered a conservative bet. Tonight in Melbourne, a confident buyer took a punt that sometimes, in certain company, cash is worth more as art than money in the bank.

As the opening lot of the Deutscher and Hackett auction, a single wad of $20,000 cash – an artwork called Currency – was sold for $17,500. When the 22 per cent buyer’s premium is added, the total cost comes to $21,350.

The work – by Sydney artist Denis Beaubois, and brought to life with a $20,000 grant from the Australia Council – was divided into two lots of 100 uncirculated $100 banknotes.

Deutscher and Hackett had given it an estimate of $15,000-$25,000, with both extremes sending competing messages about the inflationary value of the work. The notes can still be used as legal tender, according to the artist.

You will note that the winning bidder was not a Swiss bank.  Here is more and for the pointer I thank Zac Gross.

The Benefits of Fiscal Illusion

David Wessel does a good job explaining how the Gang of Six plan is both a tax cut and a tax increase:

The Gang of Six, a bipartisan group of senators, threw its deficit-reduction package into the arena Tuesday and it is variously described as increasing tax revenues by $1 trillion over 10 years and also decreasing them by $1.5 trillion over 10 years. Huh?

Measured against current law, the Gang of Six plan is a tax cut. The law currently says that the Bush tax cuts expire at the end of 2012 for everyone and that the pesky Alternative Minimum Tax will reach deeper into the middle class (because it doesn’t automatically adjust its thresholds for inflation).

The Gang of Six, among other things, would eliminate the Alternative Minimum Tax—that alone would cost the Treasury about $1.7 trillion versus current law. Altogether, the various tax changes in the Gang of Six plan would reduce tax revenues by $1.5 trillion.

But no one expects current law to prevail. Congress every year, for instance, puts a patch on the Alternative Minimum Tax so it won’t hit more families. And both the White House and many Republicans want to extend the Bush tax cuts for taxpayers with incomes under $250,000 a year. (The argument is over expending them for taxpayers with higher incomes.)

So budget wonks have developed “alternative” or “realistic” baselines. The Bowles-Simpson fiscal commission used such a baseline, borrowing one developed by the Obama White House. Among other things, that yardstick assumes the AMT is patched year after year, and assumes the tax cuts for the under $250,000 crowd are extended. Against that baseline, the Gang of Six raises about $1 trillion revenue over 10 years, roughly the same sum that the Bowles-Simpson plan did. That’s how it’s also a tax increase.

Thus, if the Republican base reads it as a tax cut and the Democrat base reads it as a tax increase, we just might get a deal.

Ella and Louis offer relevant advice.

The Art of Bribery

Interesting piece on bribery in China. The following four scenarios all have counterparts elsewhere but, as relayed by the author, in China the elegance of the art and the elegance of the bribe are all brought together with true appreciation.

The First Scenario:

The corrupted official can sell a fake painting at any rigged gallery. After coordinating with the official, the briber will go to the designated gallery and buy it at the agreed price plus the commission of the gallery owner. All of the three parties know that the painting is fake, but eventually they are all benefited. This fake painting can be reused and it can go through another bribery circulation of other “elegant” buyers and sellers.

The Second Scenario:

The briber puts a real and expensive painting at the gallery. The gallery marks down the price as if it were a fake painting. The official buys it as if he has the greatest bargain on earth. Sooner or later, the official can resell it at the right place, at the right time, and at the right price.

The Third Scenario:

The briber visits the official and gives him/her a real or fake painting as a present. Three days later, a seemingly unrelated person knocks the door of the official and buys that particular painting at an unreasonably high price. This buyer is actually a trusted subordinate of the briber, and, by doing so, the whole process does not involve the gallery whose owner will certainly ask for a commission.

The Fourth Scenario:

There are rigged auction houses all over China and they become the most suitable places for elegant corruption. The briber, first of all, gets a fake painting either from a gallery or a fake painting factory. Then, s/he provides relevant document proof of scholars and experts to take care of the problem of authenticity. These scholars and experts are paid to confirm the authenticity of this fake painting. They falsify every historical detail, evidence of painting style and scientific verification of the materials used. The forged painting is then given to the official as a gift and is auctioned at a very high price. Eventually, there is always someone coming from nowhere who wins the bid. Again, the bidder is a trusted person of the briber. These auction houses get hush money before the whole corruption process is completed.

Hat tip: Daniel Lippman.

Markets in everything

Intentionally flawed goods:

Artist Jeremy Hutchison commissioned a series of intentionally incorrect products from factories around the world.

“I asked them to make me one of their products, but to make it with an error,” Hutchison explains. “I specified that this error should render the object dysfunctional. And rather than my choosing the error, I wanted the factory worker who made it to choose what error to make. Whatever this worker chose to do, I would accept and pay for.”

Hutchison received a comb without tines…

My favorite things Hungary

The Austro-Hungarian empire does not count per se, so I will use the Hungarian language for demarcation.  As you might expect, there is lots:

1. Author: Peter Nadas, A Book of Memories, is a classic novel of ideas which is under-read in the United States.  Nadas has a new book coming out this fall.  Imre Kertesz doesn’t do much for me.

2. Movies: Bela Tarr, Satantango.  It’s over seven hours long, but don’t be put off.  It has some of the best shots of grazing cows and angry peasants committed to reel, and I wanted it to be longer.  It’s mesmerizing in a way that makes it one of the film classics of the new century.  I find Werckmeister Harmonies too corny but it has some fine scenes.  Less traditionally thought of as Hungarian is the great Emeric Pressburger, who collaborated with Michael Powell on numerous fine films.  Alexander Korda did The Thief of Baghdad.

3. Actor, Peter Lorre is the obvious choice, plus Bela Lugosi made the best Frankenstein ever, forget about Dracula.

4. Conductor: You have George Szell, Antal Dorati, Georg Solti, and Eugene Ormandy.  Szell was so often perfect, Dorati cut some of the best sounding records of all time, Solti’s whiplash style was either offputting or splendid, and Ormandy was deeper than he was given credit for.   Ivan Fischer is a more recent contender, for instance his Mahler’s 4th reflects a scrupulous concern with rehearsals.  Péter Eötvös is an excellent conductor of contemporary music.

5. Pianist: Gyorgy Cziffra and Ervin Nyiregyhazi are two memorable eccentrics.  Solti and Szell were underrated as pianists and Zoltan Kocsis is very good.  Don’t forget Franz Liszt, even though no recording has survived.

6. Scientist: There is Szilard, Teller, and von Neumann and many many others but can they come close to this top tier?  The options for Hungarian mathematicians defy belief.  Hungarian inventors were critical to the “great non-stagnation” of 1870-1940, including for the all-important electrical transformer; few if any of those names have survived much into general Western history which I suppose says something.

7. Artist: Victor Vasarely is the obvious choice, but I don’t like him so much.  This area seems oddly weak.  Am I forgetting something?  Mihaly Munkacsy anyone?

8. Economist: Janos Kornai comes to mind, and Melchior Palyi remains underrated.  I believe Milton Friedman’s parents were from Hungary.

The bottom line: You can’t gush enough about music and math and physics and science and invention.  The achievements from a small country are staggering and unprecedented.  Yet literature and painting are relatively weak.  Hungarian composers will get a post of their own, but there is a strong line-up of Liszt, Bartok, and Ligeti.  What else am I forgetting?  I can’t think of major films set in Hungary and I don’t count the Hollywoodesque The Shop Around the Corner even though nominally it is Budapest.

*Outsider Art*

This is a poem by Kay Ryan:

Most of it’s too dreary

or too cherry red.

If it’s a chair, it’s

covered with things

the savior said

or should have said —

dense admonishments

in nail polish

too small to be read.

If it’s a picture,

the frame is either

burnt matches glued together

or a regular frame painted over

to extend the picture. There never

seems to be a surface equal

to the needs of these people.

Their purpose wraps

around the backs of things

and under arms;

they gouge and hatch

and glue on charms

till likable materials —

apple crates and canning funnels —

lose their rural ease. We are not

pleased the way we thought

we would be pleased.

That poem is cited in the new and enjoyable book by David Orr, Beautiful & Pointless {A  Guide to Modern Poetry}.

*The Anatomy of Influence: Literature as a Way of Life*

That’s the new Harold Bloom book, which has all the strengths and weakness of Harold Bloom books (I am a fan).  Excerpt:

Picasso is reputed to have said he did not care who influenced him but he did not want to influence himself.

Bloom’s books are very good for motivating rereads of classics, in this case Walter Pater, Paul Valery, Shakespeare, Hart Crane, Walt Whitman, Leopardi, and Montaigne’s essay “On Experience,” among others.  Here is a weaker passage:

I recall first reading the poem when I was thirteen, thrilling to Satan and falling in love with Eve.  In those years I fell regularly in love with fictive heroines and encountered Eve after a year of infatuation with Thomas Hardy’s heroines, particularly Eustacia Vye…and Marty South… I all but wept when Marty South cut off her long, beautiful hair, while I joined Milton and Satan in their lust for Eve’s wanton tresses.

Still, he is one of the greatest readers ever, this is probably his last major book, he truly believes in his project, and the point about prompting rereads makes this — whatever its flaws — better than almost anything else you can pick up.

“When and where do great feats of architecture come about?”

The post is interesting throughout, but these are the two best paragraphs:

Transparency
You only need to impress someone when there is asymmetric information, where that someone does not know how great you are. Shah Jahan needed to build big because the targets of his attention did not know the GDP of his dominion and his tax/GDP ratio. In this age of Forbes league tables, Mukesh Ambani does not need to build a fabulous structure for you to know he’s the richest guy in India. A merely functional house suffices; a great feat of architecture is not undertaken.
Accountability The incremental expense of going from a merely functional structure to a great feat of architecture is generally hard to justify. Hence, one might expect to see more interesting architecture from autocratic places+periods, where decision makers wield discretionary power with weak checks and balances. As an example, I think that Britain had the greatest empire, but the architecture of the European continent is superior: this may have to do with the early flowering of democracy in the UK.

For the pointer I thank Yogesh.  Three older posts of relevance are here and here and most of all here.

My favorite things South Africa

Torr writes to me:

Please will you consider doing a “favorite things South Africa” on Marginal Revolution. I’m also curious: have you ever visited South Africa?

I have yet to go, but here is what I admire so far:

1. Visual artist (you can’t quite call him a painter): William Kentridge.  He is one of the contemporary artists who is both a realist and has a lot of the emotional power of the classics.  His extraordinary body of work spans film, drawings, prints, and mixed media.  Here are some images.

2. Home design: I am an admirer of the Ndebele, some photos of their colorful homes are here.  They are better represented in picture books than on the web.

3. Movies: I don’t know many.  I enjoyed The Gods Must be Crazy, even though some might find it slightly offensive.  Nonetheless I hand the prize to District 9 for its interesting take on ethnic politics, its deconstruction and mock of Afrikaaner settler myths, and its commentary on how South Africans view Zimbabwean immigrants to their country.

4. Movie, set in: Zulu, 1964 with Michael Caine.

5. Novels: My favorite Coetzee is Disgrace, though I like most of them very much, including the early Life and Times of Michael K and Waiting for the Barbarians and the later semi-autobiographical works.  Nadine Gordimer I find unreadable, call the fault mine.  Same with Alan Paton.  A dark horse pick is TrionfAgaat sits in my pile, waiting for the trip of the right length.

6. Music: Where to start?  Malanthini, for one.  As for mbqanga collections, The Indestructible Beat of Soweto series is consistently excellent.  Singing in an Open Space, Zulu Rhythm and Harmony 1962-1982 is a favorite.  Random gospel and jazz collections often repay the purchase price and in general random CD purchases in these areas bring high expected returns.

7. Economists: Ludwig Lachmann was an early teacher of mine and I owe him my interest in post Keynesianism and also financial fragility hypotheses.  G.F Thirlby remains underrated.  W.H. Hutt was one of the most perceptive critics of Keynes and his insights still are not absorbed into the Keynesian mainstream.  His book on the economics of the colour bar remains a liberal classic.  Who am I forgetting?

The bottom line: There’s a lot here.  Here are previous MR posts about South Africa.

The quality of fiction vs. the quality of non-fiction

Marcos Jazzan, a loyal MR reader, requests:

The quality of fiction seems to be decreasing relative to the quality of non-fiction, or am I just biased against active fiction writers vs. dead ones?

I agree with this assessment, and I see a few mechanisms at work:

1. A lot of good non-fiction is based on current affairs, which are always changing, or progress in science or social science, or biographies of previous uncovered subjects.  Fiction doesn't have a comparable source of new material, at least not since the modernist revolutions.

2. The internet makes it easier for people to be interested in a "culture of facts."  It doesn't help long narratives in the same manner.

3. For a given level of IQ, people are more likely to agree on what is a good non-fiction book than what is a good fiction book.  Internet reviews therefore make non-fiction purchases more reliable to a greater degree than they do for fiction.

4. Arguably literary fiction peaked in the 1920s, with Proust, Kafka, Joyce, Mann, and other important writers.  Could it be that fiction took a bruising from the rise of radio and film at that time?  Even if we compare the 1960s to today, fiction seemed to be more culturally central then.

What mechanisms am I missing?

Markets in everything the future of kung fu?

Today, however, temple officials seem more interested in building the Shaolin brand than in restoring its soul. Over the past decade Shi Yongxin, the 45-year-old abbot, has built an international business empire–including touring kung fu troupes, film and TV projects, an online store selling Shaolin-brand tea and soap–and franchised Shaolin temples abroad, including one planned in Australia that will be attached to a golf resort. Furthermore, many of the men manning the temple's numerous cash registers–men with shaved heads and wearing monks' robes–admit they're not monks but employees paid to look the part.

Over tea in his office at the temple, Yongxin calmly makes the case that all of these efforts further Buddhism.

As for some of the traditional styles, perhaps Baumol's cost disease is operating:

"There are no high kicks or acrobatics," he says. Such moves create vulnerable openings. "Shaolin kung fu is designed for combat, not to entertain audiences. It is hard to convince boys to spend many years learning something that won't make them wealthy or famous." He seems drained by the thought. "I worry that is how the traditional styles will be lost."

Here is much more, and for the pointer I thank The Browser.