Book Review: Risk and Uncertainty in the Art World

co-posted with ARCAblog

Detail of Mark Wagner's Currency College of the Mona Lisa
Source: DesignBoom

Risk and Uncertainty in the Art World (ISBN: 9781472902924) is a notable attempt at compiling into cohesive curricula research by scholars such as Marina Bianchi, Tom Christopherson, Neil De Marchi, Elroy Dimson, Tom Flynn, Daiva Jurevičieně, Arjo Klamer, Roman Kräussl, Javier Lumbreras, Fleur Maijs, Benjamin Mandel, Clare McAndrew, Jianping Mei, Michael Moses, Laurent Noel, Anders Peterson, Rachel Pownall, Olivia Ralevski, Steve Satchell, Jaketrina Savičenko, Aylin Seçkin, Kyle Sommer, Christophe Spaenjers, Nandini Srivastava, Hans Van Miegroet, Thorstein Veblen, Olav Velthuis, and Luca Zan.

Published by Bloomsbury, it is edited by Anne Dempster (Sotheby's Institute of Art). Contributors include Tom Christopherson (Sotheby's Europe), Anders Petterson (ArtTactic), Olav Velthuis (University of Amsterdam), Hans J. Van Miegroet and Neil DeMarchi (Duke University), Marina Bianchi (University of Cassino), Rachel Pownall (University of Tilburg/University of Maastricht), Elroy Dimson (London Business School), Steve Satchell and Nandini Srivastava (Cambridge University), Christophe Spaenjers (HEC Paris), Laurent Noel (Audencia Nantes School of Management), and Arjo Klamer (Erasmus University).

The book takes a multidisciplinary approach, through alternative investments, art history, behavioral economics, cross-cultural studies, due diligence, macro- and microeconomics, Modern Portfolio Theory, emerging markets, provenance research and many other topics. It is highly recommended to anyone with an interest in the international art market.

Petterson’s discussion of how the Internet has changed the art market was robust. His description of the art market ecosystem and how it is adapting in light of online galleries, artist portals, social media, blogs, online auction/art fairs, online inventory management, price databases, indices, investors, art funds and wealth management, showed that there is both a new audience and desire for transparency. In creating a more educated consumer, both traditional and upcoming entities have nothing to lose and everything to gain. Petterson’s article is a treatise against all those that desire not to adapt to provenance standards in the market.

Flynn’s discussion of the role of government and private corporations in art commissioning showed that more needs to be done in regards to authentication of art in the public space. What was striking about the article was that it showed a dissonance between corporate views on art and the industry, itself. A clear conclusion was that, in desiring to imagine itself as an ‘exception’ to business, the art world has only done itself more harm. As both a lecturer with the Association for Research into Crimes against Art and also in hosting a blog titled ArtKnows, Flynn, continues to be frontier of these discussions.

Satchell and Srivastava’s derivations about wealth and utility, adding upon Pownall’s essay, showed that there is still much more to connect between mathematical models, financial markets, and the art world. Integration of Veblen’s Theory of the Leisure Class, the price and wealth effects of Marshallian demand, attempts at indexation – whether through the Financial Times All Shares (FTAS) and the London All Art price index or the Mei-Moses index – the Miller-Modigliani capital structure theorem, and the aesthetic dividend, make the reader wonder if the time is here for further data integration with the Standard & Poor’s and Thomson Reuters of the financial world.

The most disappointing was Christopherson’s essay that showed some dissonance against “testosterone-fuelled bond traders” (Risk and Uncertainty 65). The main discussion on legal title, authenticity, issues of attribution comparisons, condition, and valuation was vague. In discussing the Foreign Corrupt Practices Act, Artists Resale Rights, and Bribery Act, Christopherson described a desire to return to an imaginary past. The ultimate lesson learned appeared that he merely seems unsatisfied with changing business models in the art market.

The book leaves much to build upon; taking the theory to reality is clearly the next step forward.

Should museums stop using technical defenses to prevent restitution of looted art? The debate rages...

Nicholas O’Donnell’s article on Ronald Lauder’s Editorial on Stolen Art and Museums Fails the Common Sense Test

By Pierre Ciric*

In his article titled “Lauder Editorial on Stolen Art and Museums Fails the Glass House Test,”[1] Nicholas O’Donnell attempts to respond to Ronald S. Lauder’s editorial published in the Wall Street Journal on June 30, 2014, titled “Time to Evict Nazi-Looted Art From Museums.”[2]

O’Donnell attempts to find legal shortcomings in Lauder’s editorial, which simply expresses the need for art museums to act responsibly by returning Nazi-looted artwork instead of raising technical defenses and mere pretexts to deny the rights of the claimants.

Fred Jones, Jr. Museum of Art

In his article, O’Donnell refers to the ongoing case brought by Léone Meyer against the University of Oklahoma, among other defendants, to obtain the restitution of “La bergère rentrant des moutons” (Camille Pissarro, 1886), currently on permanent display at the Fred Jones Jr. Museum of Art in Norman, Oklahoma.

Although O’Donnell—counsel to David Findlay, Jr. Gallery, a defendant no longer involved in the case—recognizes that the recent court decision is limited to whether the Oklahoma defendants could be sued in New York, he repeatedly brings up a 1953 Swiss court decision involving Camille Pissarro’s La Bergère as grounds for why Léone Meyer’s claim should fail, and why Mr. Lauder’s argument is baseless.

O’Donnell’s argument fails the common sense test. First, no one disputes that the Nazis stole La Bergère from Léone Meyer’s family.

"La Bergère rentrant des moutons," Camille Pissarro

Second, the 1953 Swiss court decision was not decided based on a late claim, as O’Donnell argues, but was decided against Léone Meyer’s father because he could not prove the “bad faith” of the art dealer who acquired La Bergère after it crossed the Swiss border from France.

Third, prior Swiss decisions involving looted art have long been held as doubtful or baseless in several U.S. jurisdictions. Even the Swiss government itself recognized in 1998 that the deck was stacked against claimants who wanted to file art restitution claims in Switzerland after World War II. New York courts have found/determined that “Swiss law places significant hurdles to the recovery of stolen art, and almost ‘insurmountable’ obstacles to the recovery of artwork stolen by the Nazis from Jews and others during World War II and the years preceding it." See for instance, Bakalar v. Vavra.[3]

Finally, O’Donnell misses the point of Mr. Lauder’s editorial. As French government officials have recently stated in a public forum dedicated to France’s efforts to track and restitute looted art, the time for “clean museums” has come. Hiding behind technicalities and procedural loopholes to delay basic justice, i.e. restitution of looted property, is not morally appropriate, even less so when public institutions are involved.

Ronald Lauder is right. It is time for museums to do the responsible thing. It is time for museums to “clean” their collections of any tainted artwork by returning Nazi-looted artwork.

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* Pierre Ciric is a New York attorney, the founder of the Ciric Law Firm, PLLC, and a board member of both the French–American Bar Association and the New York Law School Alumni Association.  He currently represents Léone Meyer against the Board of Regents of the University of Oklahoma in her quest to obtain the restitution of “La bergère rentrant des moutons” (Camille Pissarro, 1886), currently on permanent display at the Fred Jones Jr. Museum of Art in Norman, Oklahoma.

[1] Available at: http://www.artlawreport.com/2014/06/30/lauder-editorial-on-stolen-art-and-museums-fails-the-glass-house-test/.

[2] Available at: http://online.wsj.com/articles/ronald-lauder-time-to-evict-nazi-looted-art-from-museums-1404076759

[3] Bakalar v. Vavra, 619 F.3d 136, 140 (2d Cir. 2010); see also In re Holocaust Victim Assets Litigation, 105 F. Supp. 2d 139, 159 (E.D.N.Y. 2000)