Middlemen

In both art and science, the products of (small groups of) individuals are disseminated to the world by other companies. In the world of art, these companies are the galleries representing artists. In the world of science, they are the publishers and their journals.
In both these situations there is a clear distinction between those who produce the goods and those who distribute them to a wider audience. The presence of such middlemen is common in many industries, but an uncommon aspect found in both art and science is that the financial benefits to the intermediary are far greater than those of the producer. Scientific publishing is now a multi-billion euro industry and the largest of the art galleries have turnovers in the range of tens of millions of euros.
The curious similarities between the two fields are the result of imperfect information on the consumer side, combined with some leftovers from an older world where the financial risks were differently distributed and legally arranged. 

For both scientific publishing and art galleries the most valuable asset is the firm's reputation.
For example, the price of an artwork is linked quite directly to the standing of the gallery it is shown in. Similarly, a scientific discovery is generally considered more impactful if it's published in a journal of significance. It's therefore imperative for both galleries and scientific journals to become, and remain, reputable. It's also easy to see that for both fields there is simultaneously no inherent and necessary connection between the quality of the work and the social standing of the middleman. The intermediary does not change any intrinsic property of the final product. That the perceived quality of the intermediary is nevertheless seen as a useful indication of the quality of the good is due to a characteristic that economists call imperfect information.
In both art and science, there is no information about the quality of a good that is both reliable and readily available. The causes of this imperfect information are different in each field, but over the course of the last century they have led to a similar outcome where the intermediaries have a disproportionate influence on both the kind of goods that get produced as well as which consumers have access to it.

Any consumer needs information about a good in order to make a decision about what is worth spending their money on. They can either have full access to all necessary information, which is called perfect information, or limited access to one or more characteristics of the good, which is called imperfect information.
In both art and science, information about the quality of a good is difficult to ascertain for a large number of interested buyers. Quality in the arts is next to impossible to quantify and subject to changing cultural perceptions. And while scientific merit can be checked in principle, this requires an impossibly large amount of time, money and other resources, so in reality it is unfeasible for any one party to make an objective judgement based on their own experimental knowledge about the quality of all articles published in all journals.
Hence, for both art and science, there is a lot of effort that goes into convincing a potential customer of the value of the good that is being sold. As the goods themselves don't provide accurate clues to their genuine value, this is done through less direct means that convey a perception of longevity. Such (signs of) longevity can ostensibly only be reached by consistently providing quality goods.

Galleries and artists today try to provide credible signals of value by demonstrating a long-term commitment to each other. Until the early 20th century, this meant that dealers were directly buying (nearly) all of an artists output, thereby putting their money where their mouth is. If nothing else, this would at least demonstrate to a potential client that the dealer has a strong belief in the artist. And the dealer is only able to aquire those works today if they have made sound financial decisions in the past. These days the commitment is less strong, expressed by 'representation' of the artist by the gallery. The financial capabilities of the gallery are generally demonstrated through large, and mostly empty, spaces in expensive buildings in desirable locations, as well as participation in ludicrously priced art fairs.
I've written elsewhere on this blog how this shift is likely partially caused by changes in anti-trust legislation in the Western world in the first half of the 20^th century, so I won't delve any further into this subject here.

The publishing of scientific works likewise underwent significant changes in the last two centuries.
A scientist is usually employed by a university or some other institution, and when they've made a discovery, they write up what they've done to try and make it known to others what they have discovered. It is of course difficult to reach a broad audience, even in the age of the internet, so this is one thing a publisher can help you with. A publisher possesses ways to reach an audience that any single scientist doesn't have. A publisher also has access to infrastructure. Although these days more and more of scientific publishing is done digitally, physical printing and distribution of materials has historically been a venture with large upfront costs, combined with specialised knowledge and equipment. These upfront costs carry significant financial risks, which can only be borne by a large company that is able to spread such risk over multiple ventures. 

It's also a well known fact that most scientific literature has a very small readership. Current estimates on the audience size of the average journal article range from single to triple digit numbers.
Yet at the same time, there is a great number of scientific articles that are published every day. With such fragmented readership, there is little possibility for scientific texts to gain widespread attention in the same way a newspaper article or a viral video might. Therefore, to a broad audience it is virtually unknown what the value is of any given article relative to all the other articles that are available.
As already stated, some of this uncertainty is remedied through the reputation of the journal the article is published in. This reputation is mostly based on the reception of the works that were published by the journal in the past, as well as the academic standing of its current editor(s). There have been attempts at quantifying this reputation by metrics like a journal's impact factor, which essentially measures how often articles from a journal have been cited by other scientists. But as Goodheart's law states, any measure that becomes a target seizes to be a good measure, so such undertakings merely repackage the problem instead of solving it. 

Both industries thus have a small customer base and these customers ought to be sceptical of the goods they provide and the high prices they ask for them.
So how do these middlemen leverage their position to create profits for themselves?
In the arts it is a simple question of gallerists charging very high commissions for their work, so that a handful of sales can provide an adequate amount of turnover, especially when their risk is spread over a number of artists.
In scientific publishing, exorbitant profit margins only arrived around the turn of the millennium, and to see why this is the case requires a short history lesson on copyright law, and in particular how such laws were implemented in the United States of America.

The foundation of today's copyright legislation was laid at the Berne Convention in 1886. This type of copyright is based on an idea of author's rights, where the creator of intellectual property is also automatically the owner of intangible rights relating to that work. These reproduction rights could then be licensed to a third party, such as a publisher. This can happen in different ways, but it must be noted that a perpetual exclusive license to reproduce the work is an option, even when the author retains the copyright in such a case.

This is in contrast with the common law idea of copyright, which is much more focussed on the economic right to publish and distribute. The United States, which legal system is based on common law, was thus late in incorporating the principles of the Berne Convention. In the early 20th century, copyright for individuals did not exist, but a publisher could register the publication of a work at the copyright office to obtain its copyrights.
It's a bit of an oversimplification, but it wasn't until the Copyright Act of 1976 that the intellectual property laws of the United States became more closely aligned with those of most other countries.

This change has quite directly lead scientific publishers to mandate their authors to sign over their copyrights to the publisher, instead of licensing their papers. At best this can be seen as a good-natured attempt to retain the best publishing standards possible, but it's much more likely that this decision was aimed at retaining control over the substantial captial the publishers had ammassed up until that time.
For example, in the 1966 edition of the Handbook for Authors of Papers in the Journals of the American Chemical Society, the section on 'Liability and Copying Rights' is only half a page long and simply states 'The Society owns the copyright for any paper it publishes'. This was true under the federal copyright laws of the USA at the time, which required registration at the copyright office.
Interestingly, the section on 'Liability and Copying Rights' of the 1978 edition of the Handbook for Authors of Papers in the Journals of the American Chemical Society was nearly twice as long as the previous edition. It now contained the following phrase: 'Under the terms of the Federal copyright law, effective January 1, 1978, scientific publishers who wish to obtain copyright ownership of papers in their journals are required specifically to obtain such ownership from the author of each paper. Since it is necessary for the widest possible dissemination of scientific knowledge that the society own the copyright, authors are required to transfer copyright ownership before publication of their manuscript.'

This last sentence is simply not true. A perpetual, even exclusive and non-restricted, license to publish poses no practical objections. However, such a license would still leave the ultimate ownership in the hands of the author, so that the publisher could not license the work out to third parties. Transfer of copyright ownership thus is an issue of control of the work beyond the any direct publishing efforts in their own journals.

However, it might have been vital for publishing companies to protect those interests. In the 1970's, publishing was still a complex and costly business, with large upfront costs and little or no guarantee that anybody would be interested in the final product. The publishing industry had a high risk of failure and the small number of scientific publishers that have survived, only survived because they originally published books that turned out to be of particular significance and relevance to other scientists. Unlike most of their publications, these tomes had several reprints and made a healthy profit, which could offset the cost of the many failures.
It is, however, impossible to predict which publications become a hit, and if the publisher didn't own the copyright, such a reprint would have most likely have to be renegotiated with the author. This author by then has of course seen how well their book is selling and so they'll likely want a bigger cut for themselves, or could even let the reprint be done by a different publisher altogether. This is therefore debilitatingly risky to a publisher during that time, and so the transfer of copyright ownership may have been a reasonable request in the 1970's. 

This all changes towards the 2000's and the advent of widespread internet access. Through more than a century of publishing and consolidation in the industry, a handful of scientific publishers are in possession of enormous archives and because of their insistence on copyright ownernship, they have full control over them. Through digitisation these materials are now also easily searchable and through the internet they can be distributed at negligible cost to the publishers. In other words, the publishers' material capital is now more valuable than ever, while their operating costs have fallen dramatically.
As a result their profits have risen to extraordinary heights. To illustrate this fact, two of the top ten highest paid CEO's in the Netherlands are scientific publishers. 

In summary, the presence of middlemen is necessary in both art and science to create credible signals about the quality of goods. And in both these markets, the middlemen have understood the necessity of their presence and found ways to leverage that power into great profits by essentially exploiting the weak negotiating position of their suppliers and in some cases those of their clients.
Such predatory practices are much lamented in both industries, yet I'm unaware of any proposed solution that could remedy the problem. Many of such initiatives are focused on the (financial) inequality of the artist/scientist and gallery/publisher, but I believe a solution can only be found in making information about the quality of goods readily available to end users.

As a final remark, it must be noted that book publishing in the arts is a market that functions remarkably well, considering the difficulties that exist in scientific publishing and the sale of artworks. In art publishing, there is a healthy market of buyers and sellers, while risks and profits are usually shared in reasonable terms between the artists and the publishers.
The reason for this is simply that an art book can quite literally be judged by its cover. When selecting which art book to buy, an interested buyer usually can find the books that appeal to them by considering the design of their covers. Art books also retain their value rather well, so that even if a mistake is made, a buyer can still resell the book at only a minimal loss. Therefore information on the quality of a good is widely available, while the cost of misinformation is marginal.
This is the exact opposite of scientific publishing and the market for artworks, where credible information is hard-won and the costs of getting it wrong can be extremely high.

Public Funding for Arts Initiatives

For as long as I can remember, the artist-run-intitiative and other not-for-profit art organisations have constituted a significant part of the arts landscape.
Often organised in the shape of foundations, they are not usually self-reliant and instead funded by government grants and other public funds. 

Their existence is however a fairly recent development, coming only into being during the late 1950's to 1970's. New York's PS1 was founded only in 1971, for example.
Before these now important exhibition venues there were only private galleries, like 291 and Art of this Century, or else there were museums housing collections that were wholly owned and organised by either governments or wealthy individuals.
There existed some smaller initiatives that had a more independent spirit, like the Arts Club of Chicago or the various Kunstvereins in Germany, but they were funded by private patronage of either collectors or artists.

One can thus say that it's a only a recent development that private initiatives for the display of art are financially supported by the state. This development followed the introduction of redefined ideas about significance of cultural relations after the second world war. They are therefore most likely influenced by initiatives such as the United Nations and the European Economic Community, which was founded after the 1957 Treaty of Rome.
During that same period, ideas about the welfare state also became a bigger part of the political agenda of many Western countries.

The current landscape of funding for the arts can't be separated from these developments and I believe it's no coincidence that the independent exhibition venue came about only after the political and economic climate had shifted in the aforementioned direction.
The state funding for such cultural endeavours is intrinsically linked to notions of national identity, as well as the political idea that the state ought to provide for those who can't provide for themselves.
At the same time, state funding was seen as highly suspect after the second world war. After all, both Nazi Germany and the Soviet Union saw considerable state intervention in their business ventures.

These conjectures I'm making here are nothing new. They are ingrained in current practice, where various subsidy programmes in the Netherlands (and presumably elsewhere) refer for their legitimacy to possible exceptions under EU regulations, as the subsidies they receive could otherwise be considered illegal government aid for businesses. These exceptions are listed in Commission Regulation (EU) No 651/2014 under paragraph 72, which states that ' In the culture and heritage conservation sector, a number of measures taken by Member States may not constitute aid because they do not fulfil all the criteria of Article 107(1) of the Treaty, for example because the activity is not economic [...] and case practice has shown that such aid has limited effects on trade.' It furthermore states that it 'recognises the importance of promoting culture for the Union and its Member States and provides that the Union should take cultural aspects into account'.
It thus can be said that the legal basis for the public funding of such art initiatives lies in the (in)direct benefits for the state, or any other issuing body, combined with the limited economic activity involved.
It is the combination of these two factors that make public funding for art organisations possible. Or as it's worded in the Commission Regulation concerning exemptions to the government aid: 'In general, activities which, although they may present a cultural aspect, have a predominantly commercial character [...] should not be covered.'

With this rationale it's easy to see how direct funding by the state is possible for individuals, especially since it's partially inspired by the long history of art patronage of individual artists.
In the Netherlands, such individual funding started with the SBBK or 'Social Support for Visual Artists', which was introduced in 1949. It thus supports artists who, due to the nature of their work, are not able to sustain themselves, and a special kind of social welfare has been designed for them. This type of social security recognises the cultural importance of their knowledge and that without financial support this knowledge might be lost. This would presumably be to the detriment of all and thus a government is allowed to directly support such an individual.

It is however more difficult to understand how an exhibition space fulfils both criteria of being beneficial to the national culture, while also being limited in its economic possibilities.
The benefits for the state may be there, as an exhibition venue is a way to bring the cultural production into circulation without direct state intervention, but the activities of a large exhibition venue are not economically neutral. Anything that employs multiple people likely brings enough economic influence to fall firmly within the rules for government aid.

That's why in the Netherlands today, the non-commercial nature of the cultural activity is usually safeguarded by a stipulation that organisations applying for multi-year funding have to be registered as a stichting.
Under Dutch law a stichting is similar to a foundation, whereby an abstract goal can be considered an independently acting legal entity. And while a stichting is legally allowed to make a profit, this may not be its only goal, and any profits ought to benefit the goal of the stichting, instead of any natural person who is involved in the stichting.
In theory the founders and directors of a stichting are thus nothing but meat puppets that are the physical beings who are able to act outside of the legal fiction upon which the structure of the stichting is based.
It is then easy to see that the legal justification for the state support of arts organisations is that it's the abstract goal of the stichting that is supported, and attaining that goal is in turn beneficial to the state. The goal itself is financially helpless almost by definition, so this also satisfies the legal requirement for limited economic impact.

But of course, this is not how this principle is commonly applied in practice within the arts.
In many ways, a score of the stichtingen that operate in the Dutch art world today could be considered almost as fronts for the benefit of individuals.
It is of vital importance to the legitimacy of the system that there is no connection between the (goal of the) stichting and the personal interests of the individuals that are employed by it. In a strict reading this is however rarely the case.
In most instances these art organisations are founded by one person, or a small group of people, and their mission is based on their own ambitions. These ambitions are usually related only indirectly to any kind of common good, and the main drive for founding the quote-unquote organisation is a private desire to participate in, or contribute to, the arts as a whole. In most cases, this kind of entrepreneurship requires a substantial amount of capital investment and such a project naturally contains a degree of financial risk. Many art graduates, especially those just starting out, are unable, or unwilling, to bear these kind of financial burdens.
Therefore, they register their initiative as a stichting, have some cookie-cutter statutes drawn up, and all of a sudden they are eligible for state funding for their pet project. In such a case, the stichting is nothing but a vehicle through which funds can be acquired so that their private financial risks, or losses, can be passed on to society.

This behaviour doesn't arise from malevolence, but rather out of ignorance. Applicants to government funding often don't question why a government would hand out that money. They simply see it has a gift, a reward for their good artistic work. That's why every funding round there are a number of shocked responses from applicants who believe that they are making worthwhile artistic contributions, yet found that their application was denied. They erroneously believe they are judged on their artistic merit, rather than their adherence to the goals of the issuing body, which may vary over time.
This is not necessarily their fault. Most governments don't present their subsidy programs as benefitting themselves over the artists. They are still often presented with an air of patronage, where funds are ostensibly provided to create an amount of freedom for the arts.

Therefore the applicants often approach the grant with the idea that they themselves are the beneficiaries and that the received funds are a gift, rather than a resource that they're allowed to use on the implied condition that it also (indirectly) benefits the governing body that provides it.
Many organisations thus approach the very founding of their organisation as a way for the founder(s)/directors(s) to provide themselves with a reliable and moderate to high income, something they likely are unable to attain without such a vehicle. 

This leaves an incredibly murky situation, where both sides of the application process are often unhappy with the results of the system. Yet since they are unaware of its fundamentals, they blame various unrelated factors and not uncommonly fall back into distrust of the other.

It is however easy to see that a disconnect between the intended legal use of a stichting and the inadvertent misuse of such a system is at the root of a lot of the problems associated with funding for arts organisations.
This is especially true for the kind of grants that span multiple years, with budgets that can easily grow above € 500.000 per year. As I stated before, the essential aspect of a stichting is that, from a legal point of view, it is the abstract goal that is acting, and that the humans involved in it are fully interchangeable.
We all know that this isn't true for arts organisations. The specific humans involved in an organisation are crucial for its outcome and (lack of) success. This isn't only true for young art organisations, where those who founded the organisations are also those who are in charge of it.
Very often it is still the case when organisations have been around for a longer time. Often the original founders have left at some point in their history, and thus in theory all that remains of the stichting is its stated purpose. The only thing that is then needed are a number of people who are willing and able to pursue this purpose. At least that's the theory.
In practice you often see that directors of such organisations, once they have found their seat, don't leave it for anything. Art organisations are commonly in precarious situations with a large amount of turnover in their staff. Yet if an organisation survives at all, then it's almost a standard scenario that their director is present for ten, twenty, thirty years. This is even sometimes seen as a sign of a stable organisational structure.
Yet if you would have an organisation in any other field where the executive positions are constant over time, while the rest of the staff is continuously changing, then that would clearly be a company that is wholly based around the direct interests of the individuals in upper management. This is of course in direct opposition to the nature of a stichting, where there is no theoretical room for such personal interests.

This minor legal travesty is so ingrained and unremarkable in the normal proceedings, that it has disrupted the very basis of the arts system without anyone really noticing. 

I myself see only two easy solutions out of this conundrum.
The first is that (local) governments acquire a number of venues where exhibitions can be held and that those governments also provide the technical staff and other utilities. Then every number of years there is a tender for a director who can house a program in one of those venues. Such a system is already at times in place for theaters and music venues.
Although it is thus similar in practice to the current situation, it does nearly completely negate initiatives that, for whatever reason, don't fit within this structure. So although it could be a reasonable way to maintain the status-quo with greater security, with such a system it will be difficult to anticipate on the ever changing needs of the cultural and political landscape.
The second solution is that applications to structural funds ought to require an exit strategy for any executive positions in such an organisation, including how the abstract goal that is the basis of the stichting will be safeguarded in the future. I don't think it's a good idea to prescribe a maximum term for any positions, but a clear description of how the interests of the of stichting are kept seperately from the personal interests of any of the people involved would be a welcome addition. If you take that reasoning a bit further, it should be easy for any stichting to describe how the organisation could function without any of its current upper management, or conversely, why these specific people serve the organisation better than any other people could.
In fact, a toned-down version of this solution is already in place, under recommendation four of principle three of the Dutch 2019 Cultural Governance Code, which states that: 'Managers and supervisors let the interest of the organisation prevail over their own interests and refrain from personal favouritism towards themselves or their peers.' But although in theory this also covers greyer areas than blatantly illegal conflicts of interest, in practice there is quite a lot of leeway in how these principles are interpreted and applied. Additionally, there are only limited possibilities for accurate supervision of these principles outside of the organsiations themselves, as the principles are guidelines for self-regulation and not enforcable laws. Therefore a more strictly defined requirement might provide a more effective instrument for enacting change.

Of course there is always a third option, which is that those working in the cultural field educate themselves on the ramifications of their choices, but such wishful thinking unfortunately can't be considered a realistic scenario.

A Change is Gonna Come

A few months ago I read the news that the Dutch Mondriaan Fund was working on a Fair Practice Code for galleries. Starting July this year, any commercial gallery that wishes to apply for funding at the Mondriaan Fund has to implement this code in order to be eligible. The code was made in consideration with the Dutch National Gallery Association and one of the stipulations in the code is that a gallery has to have written contracts with their artists.
As writing a contract can be difficult, the Mondriaan Fund further states on their information page that various model contracts can be found on website of the NGA.

A few months ago I looked on that website and I found only one model contract. This was an 'Artist-Gallery Consignment Agreement' that was about as useful as a piece of toilet paper. I was thus preparing this post as a step-by-step consideration as to why it was a document that nobody should ever use, when I checked the NGA's website again today and found the agreement wasn't there anymore.
So then I checked the most recent backup of their website on archive.org, which dates from December 2021. On this archived page there is no mention of any model contract. I can thus only surmise that somewhere in 2022 somebody at the NGA hastily wrote and uploaded a 'model contract' to their website to appease the Mondriaan Fund in their preparation for the upcoming regulation change. Now that this change has been implemented it seems like there are other people who were critical of the proposed model agreement and I can only assume that the previous agreement was therefore taken down to be rewritten.

If that's the case I'm curious to see the results and I am hopeful that I can finally give some praise at one of these attempts of the art world to get its act together from a legal point of view.

Update 5-9-2023:
It has indeed been the case that a new model agreement was uploaded to the website of the NGA. This time it was called a 'Cooperation Agreement'. It's a workable document, broadly speaking, that mainly codifies the current common practices in the artist-gallery relationship.
It nevertheless fails to (re)consider particular points in these common practices that are or may be problematic. For example, there are some assumptions about what it means to be a 'primary gallery', which as it stands is about as legally useful as saying you'll be 'best friends forever'. A definition of this term with a legal basis would thus have been welcome.
For the rest the agreement has some inconsistencies, and inconsistencies can lead to legal disputes. Under article 2, for example, the duties of the gallery are outlined in what is roughly in accordance with a principal-agent agreement, like would be the case in an independent insurance agent and a insurance firm. Article 3 then goes into detail into how 'Unless agreed otherwise, the Artist’s work which is provided to the Gallery will always be on consignment in the Gallery'. Which is an odd thing to specify in relation to article 2, because an agent doesn't really have anything under consignment. A consignment agreement is always about specific works, while agent - principal agreements generally pertain to all activities of the agent relating to the principal in a certain geographical area. Which works 'are provided to the gallery' is thus more a question of physical storage and possession, not a different legal structure that wouldn't be covered by the agent-principal relationship.
Under article 5.1 it is also stated that 'The sales price will be the same for sales inside or outside the Gallery', which is fine enough. However, it is then stated in article 5.3 that 'The Gallery may allow any discount of up to 15% without the Artist’s permission.'. Which is something I would be interested in to see how it would play out in court, especially with the use of the words 'discount' and 'permission', as well as it being 'shared equally between the Gallery and the Artist'. That in this agreement the gallery, who as the agent is legally speaking working for the artist, unilaterally decides who can and can't deviate from the agreed upon sales prices is odd to me. For the same reason it is iffy that the gallery doesn't need to provide client information to the artist under article 6. As the gallery is a representative for the principal, legally the artist is providing the gallery with said client information, not the other way around.

All in all this new document reflects current practices fairly accurately and is therefore better than the absolute garbage they had before. Yet it still fails to comprehensively reflect on the legal nature of the relationship between the artist and the gallery , the different kind of risks artists and galleries bear, and the difference in the power relationship between the parties, which may shift over time or per subject.

Understanding Your Own Position

This week concludes the lenghty saga of the dismissal of Ranti Tjan as the facility director of the KABK, an art academy in the Hague.
At the heart of this story lay a conflict between Tjan and his supervisors that was presented by news outlets such as NRC, de Volkskrant and Metropolis M as Tjan being punished for his opinion that the executive board of the overarching Hogeschool der Kunsten Den Haag ought to consist of more than one person.
This seems like a solid standpoint and it understandably gave Tjan a great deal of support from the media and the public, but this viewpoint is in fact a gross misunderstanding of the situation.
So let me explain briefly why Tjan's position makes it impossible for him to perform his duties as facility director and why he was rightly relieved from his position.

For this we first need to understand a bit about the school's recent history.
From 2014 to 2021 Marieke Schoenmakers fulfilled the directorship role at the KABK. During this time the facility directors of the KABK and the Royal Conservatory were also the only two members of the executive board for both institutions. This in effect meant that they were supervising themselves, as the principal task of a facility director is the daily managment of an organisation, while the executive board is tasked with monitoring the facility director and managing larger institutional concerns. This is nevertheless a common situation with a few advantages, but also brings with it considerable risks of mismanangement. Indeed, there were many abuses under the tenure of Schoenmakers that can partially be attributed to the fact that she supervising herself during that time.

So towards the end of 2021, the supervisory board of the Hogeschool der Kunsten set out to rectify this situation, by appointing a new facility director of the KABK and installing a seperate person to function as the executive board. They expressed their intentions and described their proposed governance structure in the following document published in december 2021: https://www.hogeschoolderkunsten.nl/storage/documents/Bestuursmodel-HdK-herijkt-DEF.pdf
It is worth noting that an executive board with a maximum of three members is mentioned as a distinct possibility and it is also noted that 'an executive board usually consists of two or three members'. The supervisory board is therefore not fundamentally dismissing the possibility of an executive board consisting of more than one person.

A few months later Ranti Tjan was appointed facility director at the KABK and a short while after that Huug de Deugd was appointed as the sole member of the executive board.
Quickly after that Tjan expressed his dissatisfaction with the organisational structure, even though it could and should have been known to him that this structure was explicitly chosen to increase the accountability of the facility director. In various media Tjan is described as saying that he wished to expand the executive board from one person to three people, as an executive board with a single member is in conflict with the 'diverse and inclusive direction of the KABK'. What all of these media left out is the simple fact that what Tjan actually suggested, and kept on suggesting even during the court case, is not a general expansion of the executive board, but a specific composition of the executive board, where he and the director of the conservatory would be the other two board members next to de Deugd. This of course essentially brings back all power into the hands of Tjan and the other facility director, inherently returning to the previous and unwanted situation whereby the facility directors can freely make decisions that go unchecked for a long time.

At best this can be seen as a fundamental misunderstanding on Tjan's part about his own job description that was, or should have been, known to him from before his appointment. At worst this can be interpreted as a blatant attempt at gaining more autonomous power by employing political pressure on his supervisors.
Simply put, by proposing his own inclusion in the executive board, Tjan wished to re-instate an unwanted situation that the supervisory board explicitly sought to correct with the current structure. That Tjan has claimed he 'hasn't been presented with an argument why a three headed executive board would be impossible', is thus nothing but an obvious indication of his own lack of understanding of his role within that structure. If a facility director is unclear about what aspects of the organisation he has decision power over and, rather than informing himself, he seeks to gain political traction through the media, then he is indisputably unfit for such a position.
It is therefore no wonder that a court has held the same view and ordered the dismissal of Tjan, despite the misguided public outcry at the situation.

Kows and Cats

CATPC and Renzo Martens will be the Dutch entry for the Venice Biennale of 2024. In light of this announcement I'm reminded of something their gallerist Alexander Koch wrote in the book 'CATPC' from 2017: 'it is becoming clear how different the social, economic and contentual dimensions of these sculptures appear when looked at from different points of view. Our gallery KOW is one of those locations where social and economic inequality can be critically reflected on from a position of privilege.'
He goes on to say that: 'any such attempt to reorganise the art world's ideological parameters, symbolic capitals, material resources, and social privileges so that they actually reduce inequality rather than increase it will inevitably involve pitfalls. This particular model has a number of economic aspects, one of which is that 50 percent of the profits from the sale of the CATPC's sculptures flow to Lusanga, while the other 50 percent remain, as is usual, with the gallery in Berlin. This is not about creating an exception to the rule, but rather a different constellation of actors and relationships.'

The particular phrasing of 'as is usual', reminds me of another text from about sixty years earlier. Marcel Broodthaers speaks about his gallerist on the invitation to his first-ever exhibition, saying: 'if I sell something, he'll take 30%. These are, it seems, normal conditions.' We can sense Broodthaers' indignation at the workings of the gallery system and by explicating that this high commission is business as usual, he reassures us, and perhaps himself, that he isn't being exploited.

If sixty years ago the mention of a thirty percent commission was still something that could rattle an audience, Alexander Koch assures us today that a fifty percent commission on all sales is a non-negotiable proposition. For all its focus on social issues and reduction of inequality, Koch and friends don't seem to wish to question the accumulation of wealth, and power, in the gallery system that has quietly occurred over the last decades and which has done nothing but deepen the links between art and capital.
Simply proclaiming such self-serving business choices as inescapable truths is about as far from facilitating any 'attempt to reorganise the art world's ideological parameters' as one could get.

Write the fine print.

This was going to be a post about the complications that may arise from the creation of a foundation, or stichting in Dutch, by artists or art organisations.
However, upon reading the legal text, it quickly became clear that the law actually provides quite a lot of freedom in how the statutes of such a stichting should be formalised.

Yet in my experience, art organisations quite often get in trouble down the line as the organisation changes in ways that were mandated by their own statutes. This happens even if they could theoretically have written almost anything they wanted in the statutes.
So instead of a cautionary tale about the intricacies of law, it will be a plea to please consider your statutes carefully and make sure they provide guidance and protection for the artistic and non-artistic integrity of your organisation as well as a continual focus on its core values. Because right now, a lot of you are simple copy-pasting some vague and generalised words that are considered good governance or common practice and in just as many cases those principles don't apply to what you do.

Age Old Mysteries

Over time I have seen some publications that ask themselves the question why artists generally have low incomes, including 'Why Are Artists Poor?', the PhD-thesis of Hans Abbing, who's probably the most famous Dutch theorist on the economics of art. That 300 page document has a reasonable understanding of economics, but almost zero understanding of contemporary art and thus unsurprisingly doesn't come to any satisfying conclusion.

Yet it shouldn't be a big mystery why artists are poor and knowledge of art or the art market isn't necessary to understand it either.
An artist's practice is an R&D heavy, thus capital intensive, business, that commonly produces a limited output to a market that is limited by definition because the goods it produces will always defy the common appearances of whatever other goods are sold at that time. *

That by itself should be enough reason why most artists aren't turning huge profits and then we haven't even talked about the lack of reliable information about the quality of goods or the vast supply surplus or any of the other ways the market fails.

But please continue to wonder why artists are poor and I will continue to wonder why people with negligible knowledge of the field they work in can obtain professorships. 

* Even in his thesis Abbing notes that painters and sculptors pre-19th century had generally decent incomes.
That's because those businesses produced a single style, had an output that was similar to the craftsmanship still present in many other markets and its products where relatively clearly defined, so that a functional market of informed buyers could arise.
The explanation he gives for the change, a strong need for authenticity in art since the 1850's, however is such a dull and ill-informed cliche that I don't even know what to say about it.

Postscript on October 19, 2025:
The same principle is illustrated when Davis Baird describes the early history of Baird Associates in 'from Classical to Modern Chemistry: the Instrumental Revolution'. Baird Associates is a maker of scientific instrumentation and it 'went into business '[t]o bridge the gap between the conception of new methods of physical measurement and their practical applications'. They proposed to accomplish this goal by developing 'simple, rugged, accurate, generally usuable instruments to make the measurements under consideration', and then to find a market for these instruments making only a 'limited number' of them. Once a market had been established they intented to hand the manufacture of the instruments over to some other firm. BA did not intend to become a manfacturer of instruments.
Financially, this approach was a disaster, for sales of the initial prototype instruments had to carry the entire financial burned of research and development.'

It's Fairly Compensated

In recent years there has been a strong push for 'fairer compensation' of artists, meaning that they should be receiving more money, particularly when they are invited to work on projects. Given that many artists already get a sizeable chunk of their income through government subsidies, from an economic point of view 'fairer compensation' would probably mean less pay for artists, not more. 

 

This is a simple, factual observation that can't really be argued against. If it seems wrong to you, then there is probably a misguided sense at play about how or why people receive remuneration. The thinking is likely that the amount of money one receives is somehow related to the quality of the service or goods one produces and the fact that it has been produced by them. Taken this way it would indeed be reasonable to claim that artists are underpaid, as a good deal of them are highly educated people with high standards who perform a great amount of work to do the things they do. 

However one's pay is not based on the quality of the good in and of itself, nor on the work that it took to produce it, but rather on how much somebody else values that work and is ultimately willing to pay for those goods. This depends far more on the buyer's perception of the good and is no way directly related to its factual qualities. In such a mechanism substitute goods also play an very important role. 

 

There is a common example where for a museum exhibition the technical staff is paid more than the artists on display. It's easy to see why this is the case if we forget who is more 'important' in this scenario, but instead think of it in terms of who is more easily substituted. If the museum wants to attract the competent technical people it needs to create museum-quality exhibitions, it will have to compete with other possible employers of those tradespeople, of which there are many. For a carpenter a museum is simply one of many possible employers. The museum thus has to pay at least a wage that those employees would be able to earn elsewhere if they want to attract them to working for the museum.

And the same is true for the artists. In order to attract the artists, the museum has to pay the artists the kind of wage they would be able to get elsewhere for the same work. As there usually are little, if any, other opportunities for the artists, there is no need for the museum to pay them anything at all and consequently that thus rarely happens. If however an artist insists on being paid for their work, then the museum probably has a large number of artists it could choose from who would be willing to mount the show for less.

This is but a simple explanation for one of the most common examples of unreasonable or unequal pay for artists, but such basic economic principles apply throughout.

The pay of artists is low because the supply of artists and artworks is far greater than any realistic demand at the present time. There simply aren't enough interested consumers for the 10.000 or so artists that are currently working in the Netherlands. In fact, the total volume of art bought by private citizens in the Netherlands in 2011 had a value of 141,6 million euro's. On a population of 16,69 million in 2011, the average amount spent on art by a private citizen in the Netherlands was € 8,47.

By comparision, the average person in 2012 spent € 28 at pet stores, € 43 on flowers, € 44 at perfume shops and € 49 at the juwelers. As these four categories are equally 'useless' luxuries, it is thus easy to see that there is plenty theoretical room for the demand for art to grow.

 

The problem therefore lies on the demand side, with underconsumption, or perhaps overproduction, being the main culprit of low wages for artists. However, the solution that is often brought up is that artists should simply be paid more. As the market isn't going to do this on its own, the largest Dutch government fund has actually offered more subsidies to pay artists directly when working on a project. It should go without saying that solving a problem caused by overproduction by putting funds towards stimulating production is not a particularly efficient approach.

Instead if one truly wishes for artists to make more money, which is what 'fairer compensation' ultimately means, then it would be a far better idea to find ways to create greater demand for art.

Skater Owned and Artist-Run

Amongst skateboarders the term 'skater owned' has historically been important in defining the serious brands that are worth associating with. In order to stay 'core' it was considered valuable and important for skateboard related clothing brands, board manufacturers and even specialised skateshops, to be owned or operated by people who skateboard themselves.

 

The name skater-owned, and the associated claims of authenticity, bears some relationship to the term 'artist-run', which is most commonly found in the artist-run gallery or artist-run space. This adjective likewise purports whatever it's associated with to be trustworthy and legitimate, because it's supposedly born out of love instead of commercial interests.

When I decided to start my own gallery in 2019, I think this association was unconsciously on my mind. Not that I necessarily thought that other galleries were only in it for the money, so to speak, but I did notice that there was a deep chasm between those who make art and those who exhibit and sell it. I guess it seemed odd to me that between skateboarding and art, which both posses a large degree of freedom and room for individual approaches, the art market didn't seem to care about creating those close links between the professional practitioners and their customers.

 

What I didn't realise until very recently is that there is a marked difference between the customers of these two things. The principal customers of a skateboard brand are people who skateboard. As it is natural for a consumer to feel connected to the things one buys, it makes sense for these brands to advertise how similar their owners are to their customers. 

However, things are very different in art. The customers of galleries are not artists, but art collectors. Most art collectors have made their money outside art, and to them art is thus something to be passively enjoyed, not actively worked upon. In this sense, the buyers of art thus more readily identify themselves with the gallerist instead of the artist.

While the term 'skater-owned' is thus an affirmation of the values of those who consume skateboarding, 'artist-run' is much more like a refutation of the common values in the art market.

The Road to Hell is Paved With Good Intentions

Recently I came across the Belgian organisation Juist is Juist, which translates to Right is Right or Just is Just. They were founded in June of 2020 and their aim, in their own words, is to provide 'a knowledge platform with toolbox that gives you the tools needed to enter into a partnership on an equal basis. Juist is Juist takes into account that fair practices can differ depending on the context – without calling into question the basic legal and solidarity principles.'

They do so by providing guidelines and a 'toolbox' consisting of such things as model contracts and calculation modules.

In principle I applaud these initiatives, as there is much unclarity and misinformation about art and its relationship to economic and legal matters.

Unfortunately, some of the model agreements Juist is Juist distributes at the present time are a perfect example of these kind of misinformed attempts to better the world.

One of their model agreements is a sales agreement and it can be found here.

Article 1 of this agreement states the following:

 

'The Artist transfers to the Buyer ownership of the artwork described below'

 

It is thus clear that this agreement is for a transfer of ownership of the work. There is zero ambiguity about that fact. The concept of ownership is central to civil law and is considered the most far reaching right one can have on a good, most principally providing the owner of a good the right to exclude others from accessing that good.

Most of the contract stipulates other aspects that make such a transfer of ownership possible, such as a general description of the work(s), sale price, date and method of delivery and so on.

 

However, at some point in this contract they attempt to restrict the rights of the new owner. 

Article 5.1 and 5.2 read:

5.1. The Buyer will take good care of the artwork. He will handle and maintain the artwork in accordance with the intention of the Artist and with due regard for the creator’s intellectual rights. 

5.2. The Buyer undertakes to inform the Artist immediately of any theft of or damage to the artwork. In such a case, the Buyer will take the necessary (remedial) measures in consultation with the Artist. 

 

Presumably their intentions lay in making sure that a new owner of a work would take good care of that work, which regrettably sometimes doesn't happen.

However, having a say in what another person can or cannot do with a certain good is precisely one of the things ownership entails. With these articles they thus in effect attempt to create a contract wherein the artist retains ownership of the work, while the buyer obtains a simple right of use. These stipulations are in clear contradiction with the previous assertion that the contract entails a transfer of ownership.

Any contradiction in an agreement is sure to bring a whole range of difficulties and uncertainties if it is ever tried in a court of law, so this agreement will likely do more harm than good for an artist that wishes to retain some degree of control over their work after it leaves their studio.

There are some laws in some countries that assert an artist's moral rights, as opposed to the intellectual rights cited in this contract, but the effective application of this kind of legislation has had varying outcomes in court so they can't be said to provide any securities in advance.

 

If an artist wishes to retain a greater deal of control over their work they can always choose to not transfer the ownership of a work, but instead lease the work for an (indeterminate) amount of time. This will however likely not be something that many collectors will be interested in, as this makes it impossible for the work to serve as an investment for the holder of the work.

Alternatively, an artist can include a detailed technical specification in the sales agreement and assert that the work can only be displayed under the artists' name if those technical specifications are strictly adhered to. That any repair or significant change to the work without prior notification will give the artist or their (named) representatives the right to publicly renounce their authorship of the work. If the buyer disregards the artists' wishes then such a renouncement will greatly limit the economic value of the work in the future. Such a clause will thus serve the same effect without attempting to infringe on the right of ownership of the buyer.

There is one other stipulation in the model agreement provided by Juist is Juist that deviates from the general stipulations under Belgian law and this stipulation contains very unclear wording. At the end of the contract there is the following article:

 

'In the event of resale of the artwork, the Buyer grants a preemptive right to the Artist. The Buyer can thus only sell the artwork to a third party under the condition precedent of the Artist not exercising this preemptive right. This pre-emptive right will be exercised as follows: if the Buyer has concluded a sale under the aforementioned condition precedent or has received a binding offer from a prospective buyer, he will inform the Artist of this by registered letter. The Artist then has a period of 15 calendar days to exercise his preemptive right and to notify the Buyer of this by registered letter.'

 

The translation from the Dutch is terrible, but the specific pre-emptive right they refer to here is a right of first refusal given to the artist when the new owner wishes to resell the work. 

From what I can gather this is an attempt to limit the possibility of 'flipping' the work. However, from what I understand of Belgian law, this right of first refusal is only offered if the owner has already agreed to sell a good to another party. In that case, the artist is offered to buy the work for the same price and conditions that the other party has agreed to. Thus the sale is guaranteed in either case and I therefore don't see how this stipulation offers anything to the artist besides the assurance that they can buy back their own work at an inflated price. As the artist has no say in the price or conditions of that sale, I have difficulty in understanding how such a clause could benefit them.

Far from protecting the artist, these uncommon stipulations thus bring risk and uncertainty for an artist if they ever found themselves in the already costly and demanding situation of having to fight their case in court.

 

Some of the other information Juist is Juist offers also isn't as exhaustive as they seem to presume. There are for example a number of agreements that attempt to shield the artist from any copyright infringement. That is all fair enough and to be expected, but simultaneously there are no guidelines for how an artist should act when another party holds a copyright over some part of their work.  For example, there is no information on what an artist should do if they hired a photographer to document one of their performances or if they commissioned someone to write a text that will become part of their painting. 

In either case, finding that their well-intended legal information was also likely to do some harm at the moments where the artists would need it most, I emailed the organisation with my findings and recommended that they let their information be double-checked by people with the relevant legal expertise. 

After a month or so I received a reply that their legal expert took a look at it and that she did find some things that were 'questionable' and that they would revise the contract. About a year has passed since and nothing has changed about this contract on their website.

Maria Eichhorn Aktiengesellschaft

For her presentation at the Documenta11 in 2002, Maria Eichhorn founded a German Aktiengesellschaft (AG) named Maria Eichhorn Aktiengesellschaft.

In 2007, the Van Abbemuseum purchased the resulting work, likewise titled Maria Eichhorn Aktiengesellschaft, and subsequently published a book containing all the relevant documents concerning its creation in the same year.

In Eichhorn's own words: 'My contribution to Documenta11 is a public limited company to be formed for an indefinite period. Within the structure of the company, its functions are to be adapted and its attributes rewritten, that is to say, the form and content are to be developed and established in ways that differ from those usually practised in companies. The assets assigned to the company when it is founded are to remain unchanged. The assets are not to become part of the macro-economic circulation of money and accumulation of capital or be used to create added value. All of the shares will be transferred to the company itself. The company will therefore be the owner of its own shares - all of its shares. The money assigned to the company in the form of contributions at the time of its formation continues to belong to the company. However, the company no longer belongs to the shareholders because they have transferred their shares to the company. The company belongs to itself, as it were. That is to say, it ultimately belongs to no one. Therefore, the company's assets, its money - no longer have any relation to the shareholders or to anyone else. The concept of property disappears in this case.'

While some of these premises are correct, most of the deductions derived from them are somewhat misguided.

An Aktiengesellschaft is a legal entity that creates a limited financial liability for the owners of said AG. The founders have to buy shares of the company at its formation and this initial capital is then used as the company's collateral. The formation of an AG requires a minimum contribution of € 50.000. This sum of € 50.000 is presumably chosen to be quite a large amount of money for most individuals, yet a somewhat insubstantial amount for the kind of sizeable business the limited liability is aimed at.

Additionally, any AG is considered a commercial business under the German Handelsgesetzbuch, which states in book one, part one, section one, that 'a commercial business is any commercial enterprise unless, by reason of its nature or size, the enterprise does not require a commercially organised business operation.' 

Here we encounter Eichhorn's first possible misconception. It could very well be argued that the nature of the Maria Eichhorn Aktiongesellschaft doesn't require a commercially organised business operation. In fact, 'the assets assigned to the company when it is founded are to remain unchanged' is somewhat of an antithesis to business operation in general. If this is taken literally, then the Maria Eichhorn Aktiongesellschaft isn't a commercial business at all, and therefore couldn't become an AG either. 

However, the watchful legal eye of Eichhorn's collaborator Tilman Bezzenberger stated that the goal of the company is 'to manage and preserve the company's own assets'. Which is a perfectly valid and oft-used purpose of an AG, which are not uncommonly companies that produce nothing of their own and simply exist to direct the flow of capital. That this flow could remain static as a result of the companies' efforts is an improbable, but perfectly possible, outcome. This formulation thereby provides a legal basis for Maria Eichhorn Aktiengesellschaft's existence.

The next step that Eichhorn stipulates is that 'all of the shares will be transferred to the company itself.' According to her, the result of this is that the company will be the owner of itself. 

Ownership is a principal part of law, but one that is not always well understood. Ownership under German law is defined in section 903 of the civil code as: 'The owner of a thing may, to the extent that a statute or third-party rights do not conflict with this, deal with the thing at his discretion and exclude others from every influence.'

In this sense ownership of an AG's shares is not to be taken as a direct ownership of the company as a whole in the same sense that one can own a piece of furniture. While only the shareholders have a right to vote during the general assembly and are ultimately the recipients of the companies' financial gains and losses, the lack of ability 'to deal with the thing at his discretion and exclude others from every influence' certainly steers away from a philosophically naive idea of ownership.

Ownership of an AG, in the full sense of the world, is thus at best shared between the shareholders and the managing board, which sole member in this case is Maria Eichhorn herself. As is stated in the AG's entry to the commercial register: 'She [Maria Eichhorn] represents the company solely even if additional members of the managing board are appointed in the future. She may conduct legal transactions on behalf of the company'. Although Maria Eichhorn, as a person, might not 'own' the shares that represent the assets present in the company, she has free reign to direct the company as she wishes, which I would say lies closer to the idea of ownership as it was outlined before. No one but the managing board has agency over the assets present in the company. The shareholders' influence can only ever be indirect, which reflects their limited personal financial liability for the company.

Furthermore, it must be noted that the possibility of a company being owned by no one has obvious and far-reaching consequences for the proper working of a legal system. Therefore most countries, Germany included, have laws that regulate a company owning shares of itself. As Tilman Bezzenger once again points out in the second supplement to the contract between Eichhorn and the Van Abbemuseum: 'Under German law, a company may not continue to hold a substantial portion of its own shares indefinitely. Rather, Paragraph 71c(2) of the Law on Public Limited Companies provides as follows: "Where the shares which a company has lawfully acquired ... and continues to hold account for over ten percent of the company's subscribed capital, the proportion of shares in excess of this percentage must be sold within three years of the shares' acquisition".'

The solution Bezzenger concocted is that every three years Maria Eichhorn Aktiengesellschaft transfers its shares, free of charge, back to Maria Eichhorn, before she in turn transfers these shares back again to the company. This recurring moment where Eichhorn temporarily becomes the only shareholder of the company also provides the opportunity to work around another law that bars a company from voting its own shares in shareholders' meetings. It is only at these shareholders' meetings that the members of the supervisory board can be elected and such elections must be held at least every five years. These brief, but recurring, moments where Eichhorn is the factual shareholder of the company thus provide an opportunity to arrange these necessities.

While legally sound and effective in yielding the maximum amount of time that an AG could possibly be its own shareholder, the fact that this construction requires active and recurrent intervention by people who are legally allowed to make decisions concerning the company is a severe dent in the idea that Maria Eichhorn Aktiengesellschaft 'ultimately belongs to no one'.

The conclusion that Eichhorn finally arrives at, that 'the company's assets no longer have any relation to the shareholders or to anyone else' is thus plainly false. Nor can it be said that 'the concept of property disappears in this case'. 

The company's assets comprise of nothing but € 50.000. And as is stated multiple times in various documents regarding the registration of the company: 'This paid amount of Euro 50,000.00 is definitively at the free disposal of the managing board.' As the only member of the managing board, the full amount of € 50.000 has thus always been available to Maria Eichhorn. It doesn't matter who is or isn't a stakeholder in the company for this to remain the truth.

In all of practical reality, the € 50.000 has thus always been the property of Maria Eichhorn and despite what many people think, law follows reality, not the other way around. It doesn't matter what you call something, it matters how one acts. Simply saying that something 'doesn't belong to anyone' doesn't make it so and despite her best efforts, Eichhorn hasn't overcome such a legal impossibility. 

 

Out of all the 40-odd legal documents that are reproduced in the book Maria Eichhorn Aktiengesellschaft, I found that the most telling document was the only one that was considered an 'illustration'. This document was the original loan agreement between the organiser of the Documenta11, documenta und Museum Fridericianum Veranstaltungs-GmbH, and Maria Eichhorn.

The legal team working on behalf of the documenta understood the ramifications of Eichhorn's project quite well and took a very level-headed approach to it. The organisers of the documenta agreed to provide Eichhorn with the sum of € 50.000 required for the foundation of the AG, but only as a loan with a limited duration. The loan, issued on March 12, 2002, had to be repaid in full by December 31, 2007, or whenever one of two things would occur. The first is if the work would be sold and the second is if the AG would be liquidated and dissolved. 

The people who drafted these conditions understood full well that despite Eichhorn's assertions to the contrary, at no point would there be a situation where she doesn't have full control over that € 50.000. Legally speaking there is nothing to stop her from simply taking the money and running, except in a situation where the money was provided as a loan that had to be repaid.

More interestingly, in the document that details the agreement between Eichhorn and the Van Abbemuseum there is only an implicit assumption that the Maria Eichhorn Aktiengesellschaft will continue to operate in a similar manner in the indefinite future. A stipulation does exists that says 'the Artist will work towards ensuring the continued operation of the public limited company until the end of 2012', but please note that this does not entail any real obligation on Eichhorn's part.

Further it is stated that: 'In the ninth year of the public limited company's existence, that is to say in March 2021, new rules on the organisational and legal maintenance of Maria Eichhorn Aktiengesellschaft shall be agreed between the Van Abbemuseum and the Artist'. Presumably this means that every few years the agreement is extended, without significant changes, for another few years. That is, until it isn't and the € 50.000 somehow has to be placed back into the 'macro-economic circulation of money' it was supposedly removed from.

While such stipulations are completely understandable from a practical point of view, they hardly adhere to the idealism that seems to be the raison d'être of the work. 

 

Far from finding a 'form and content [...] that differ from those usually practised in companies', Maria Eichhorn's project fits snugly in the current existing framework of legal and financial practices. Ultimately, her construction doesn't factually do what it's supposed to do and it is only the concepts that her work relies upon which disappear in that case.

What the Non-Fungible Token

At the time of writing, non-fungible tokens, or NFT's, are digital ledgers that are sometimes sold for large lumps of money when they are related to 'art', or rather digital image files. This has created some speculation in the media about NFT's as the future of the digital art market. 

Given that the world of NFT's involve technology, legal issues and money, there is naturally a lot of interest from an art public. Just as predictably, much of that interest is founded on poor understanding of the relevant concepts.

For example, it's sometimes claimed that an NFT makes the buyer the 'owner' of an image. This isn't true as a buyer doesn't gain any rights pertaining a file by obtaining an NFT. 

Another common misinterpretation is that an NFT is akin to possession of an autographed copy, in other words, a non-unique item that is nevertheless verified as something unique by a (digital) autograph. This also isn't true, as the NFT doesn't contain any data related to the art/file in itself, but merely a pointer to where the file in question can be found. The NFT isn't a copy of a work, it is instead nothing but the autograph and furthermore, that autograph is only the autograph of the person who issued the NFT, which doesn't necessarily need to be the original creator.

In fact, the closest analogy in the traditional art world to an NFT is not a certificate of ownership as is sometimes claimed, but rather a certificate of authenticity. Like an NFT, at its core a certificate of authenticity is nothing but a pinky swear by somebody that something is 'authentic'.

Imagine that I've made a sculpture and instead of selling you this sculpture, or even a cast or a photograph of this sculpture, I sell to you nothing but a piece of paper stating that this sculpture is an genuine work made by me and that it can presently be found in my studio. That piece of paper is what an NFT is. 

A buyer of this piece of paper doesn't own the work, they don't own any rights to the work, they don't even own anything pertaining to the work that by and of itself can guarantee its authenticity. All they own is my claim that I've made this work and my assurance that it exists at the present time in some location, with no guarantee about its existence in the future.

 

Now, while such a certificate may be largely pointless, it isn't inherently worthless, so that a market for them makes sense to some degree. Imagine for example if I owned a certificate of authenticity of a Van Gogh painting signed by Van Gogh himself, yet I don't own the painting, have access to the painting or even know what it looks like. That certificate would still be worth something by virtue of its historical value and general demand for Van Gogh related items. This is true even if the original purpose of the certificate has vanished, with the actual painting belonging to a museum collection for example, where the authenticity of the work has already been established by other means such as chemical analysis of the painting and a detailed provenance record.

So while these NFT's may themselves hold some value as certificates, the prices they are fetching now rely on faulty assumptions of value based on an utility they don't posses.

The Sales Exhibition: Contradictio in Terminis

A principal, perhaps the principal, task of a gallery is exhibition making. It is, or at least it traditionally has been, the primary way of a gallery to make known what they have on offer to the public.

It thus strikes me as odd that some of the core aims while making exhibitions, at least in contemporary art practice, are in ways diametrically opposed to the core business that allows a gallery to exist, which is making sales.

 

In my view an artwork is something that has been manipulated in some kind of unusual way. In order to effectively communicate the what, why and how of these manipulations, the work is exhibited in such a manner that a careful observer is able to notice what is important or special about the work on their own accord.

Even if one doesn't share these particular views about the importance of the manipulation of material, it can still be asserted with near-absolute certainty that an exhibition which doesn't rely on any external explanation is more effective than one that needs some other commentator to convey its most important features.

 

Any sales activity will act as an intervention at that core characteristic of exhibiting. A sales pitch is essentially designed to be either an introduction to an audience who knows nothing about a product, or a descriptive expansion of a product that an audience has already expressed interest in. 

This kind of introduction or expansion of knowledge about the work necessarily imposes on the idea that the works in an exhibition are capable to convey the required information themselves.

Although passive information associated with the work, such as press releases and even titles to some extent, are often considered an integral part of any given exhibition, there is an argument to be made that these are primarily part of the sales tactics surrounding the work.

For an example of these two different ways of approaching the communication of a work to the audience, I want to bring up an exhibition I housed at my gallery in 2020. 

The exhibition was fairly sparse, with only two works being presented in the space. One of these works was a necklace made from bright red silk and its material description simply read 'custom made necklace'. With this description and its implied tight fit around the buyers neck, there was some implication of the violence that connect it to the other work. It nevertheless requires a fair amount of imagination and reasoning power to visualise this thin red 'cut' across the neck of a wearer and thereby realising the full impact of the work.

So while I had some interest in the work during the exhibition, I ultimately wasn't able to find any buyers for the work. I partly attribute this to my own stance towards sales, whereby I tend to only provide additional information about the work when I'm explicitly asked to do so.

The exhibition has since ended and the work is now offered by another party. They are two former gallerists that presently divide their time between the conservation of a number of private collections and activating those collections through various projects. To help fund their program, they also offer a number of editions from artists they collaborate with.

Their approach to selling this particular work is very different from mine. They don't have a physical space, so the work is only presented on their website and other online channels. In stark contrast to the lean presentation at the gallery, there the work is accompanied by 521 words of explanation and background information about its origins. Although I haven't recently been in direct contact with them, I suspect they will be much more successful selling the work than I was. 

In essence I was offering what seemed to be a simple red necklace for twenty-five times the price one would be able to acquire it at any jeweller, while they are offering the story and thought process that led the artists to make that work.

I'm not making any claims about the supremacy of either of these approaches, I'm simply stating that they are opposite in their way of reaching out to the spectator.

There is even a more telling example of these inherent contradictions at work in an edition from a different artist offered by the same organisation. This time the 14 photographs of the work are accompanied by a 213 word explanation, which ends with the following sentence: 'Like Ha'nish's original illustrations the works appear unmediated, with no accompanying explanation or attempt to contextualise them'. 

That sentence shows the difference between exhibiting a work and selling that work. In exhibiting the work, it can be shown 'unmediated, with no accompanying explanation or attempt to contextualise them', while in selling the work, one can only offer an explanation or attempt to contextualise the work, by explaining that the work is to be shown without explanation and contextualise the background by which this lack of contextualisation is justified.

While the contradictions between artistic practice and the economic functioning of a gallery is most clear in exhibition making, many other core characteristics of contemporary galleries are rooted in their economic function.

First there are the names these galleries take. Most of the financially successful galleries carry the name(s) of their founder(s). Given the individualistic nature of most of the artworks they offer, it seems odd that the gallery would also present itself from a very individualistic viewpoint. This tendency of galleries to name themselves after their founders is thus often seen as a wish to equate their own doing with the perceived prestige of artists. 

There is however a simpler economic signalling function to be found in this personification of what could be a large, anonymous organisation. By identifying an individual with the gallery, a gallery named after its founder gives the impression of a personal guarantee. There is an implicit loss of reputation at stake if the gallery offers works that somehow aren't worth their price. In a very opaque market, one can only afford to run this perceived risk if one is convinced the goods they offer live up to customers' expectations. Conversely, non-profit organisations don't have to project these kinds of guarantees, so their names are more conceptually oriented: Croxhapox, Onomatopee, TENT, and so on. 

It thus can be said that naming a gallery after oneself is an effective, yet effortless and therefore meaningless, method of projecting economic value to potential customers.

Something similar could be said of the idea of artists being represented by galleries. I have my problems with the way this practice is taken for granted in today's world, yet I also have to admit that it is a very public and efficient way for both a gallery and an artist to show their trust in each other as well as their long-term commitment to each other. That factual reality is often very different from this outward display doesn't take away from the strong signal it generates, especially considering the extreme cost of being really committed to each other for a number of years before the same signal could be sent to the outside world.

A further important signalling function is the physical space a gallery inhabits. The more successful galleries often boast of their large spaces and the famous architects that designed them. While a well-lit clean space is conducive to the perception and thus the sale of artworks, this can also be achieved with nothing more than a bit of plasterboard and some fluorescent lighting. 

The large and often empty spaces of galleries thus primarily show the ability to afford such large, cumbersome spaces in a world where real estate is forever increasing in price. The primary function of these spaces thus isn't to facilitate exhibitions, as one might be inclined to believe, but rather to act like the impressive offices of financial institutions. They show the gallery's intention to stick around for a long time and demonstrate the ability to do so, strongly implying that the customers money is safe with them.

In short, the most important task of a gallery that wants to stay in business is not to make exhibitions, but to gain the trust of its customers. A gallery can do this by providing as much information as it can about the functioning of the gallery and the artists and artworks it offers.

This is in stark contrast to exhibition making, which is almost always improved by appealing to an inquisitive yet sceptical audience. In an exhibition the relationship of trust is reversed and it falls upon the artist to create the conditions for the audience to be able to reach insights on their own accord and trust that they are willing to do so.

The Influence of Anti-Trust Legislation on the Rise of the White Cube

Brian O'Doherty's series of essays on the concept of the white cube are now considered seminal texts on the subject, most famously for coining the term. At the very beginning of these texts O'Doherty writes: 'An image comes to mind of a white, ideal space that, more than any single picture, may be the archetypal image of twentieth century art; it clarifies itself through a process of historical inevitability usually attached to the art it contains.'

His analysis frames the white cube largely as a result of historical movements, most of them related to philosophical ideas about art, and describes its influence on the viewers ability to perceive the work that is shown within it. While he does touch upon the economic reality of art being sold at a gallery in his description, ultimately his focus lies on the presentation of paintings and changes in how works are framed, together with their 'pictorial expansion'; 'Abstract Expressionist paintings followed the route of lateral expansion, dropped the frame, and gradually began to conceive the edge as a structural unit through which the painting entered into a dialogue with the wall beyond it. At this point the dealer and curator enter from the wings. How they - in collaboration with the artists - , presented these works, contributed , in the late forties and fifties, to the definition of the new painting'.

While his insights are not unseemly, if perhaps a bit dated at times, there is a far simpler possible explanation for the rise of the empty white exhibition space. One that furthermore has no direct relationship to any artistic vogue or interpretation.

In an earlier post, I already outlined how, and why, art dealers moved from buying and reselling individual paintings to an agent-like representation of artists in a more formal gallery structure. One of the largest economical differences for the dealer is a shift in his financial risk from one of acquisition of paintings to one of overhead in storing and presenting them. 

For a dealer who buys artwork directly from artists with the intention of selling them on to others, it's advantageous to have as much of that work on hand to show to potentially interested clients. We can thus his imagine his gallery to look like a stockroom, with many works hanging close together on racks and others being stacked close by, so that the dealer is quickly able to show these works to anybody who might be interested. After all, the dealer already paid for these works and has already incurred the largest cost for all of them. The greatest risk for this kind of dealer is thus that there are works that remain unseen to the public and therefore can't be sold, as a public has to know something exists before it's able to buy it.

 

Compare this to the art dealer who doesn't directly buy the works from the artist, but acts as a broker, or representative, receiving a commission on the sale price of a painting if and when it is sold.

For this dealer it's beneficial to have as few works on hand as possible, as there are costs involved in storing works as long as they haven't been sold. These works also aren't part of the dealers assets, making any painting that isn't sold contribute a net loss to his balance sheet. This is different for a dealer who bought and owns the works that don't sell, as they could rise in value in the future, be used as leverage in negotiations, or brought up as collateral for loans. As such, they posses some value to him even if they aren't sold.

So if the dealer-representative only wishes to have a few works in his custody, then it's also important that he sells these works as quickly as possible, as he will only receive a commission on the sale if he helped to make that sale. This means that whatever works the dealer wishes to sell should get the largest amount of attention from the buying public. A crowded amalgam of many different styles and artists of course isn't beneficial to focus the public's attention, so the dealer decides to do something different. He presents only the works of one artist at a time and in such a manner that each painting is shown somewhat isolated from the others in a neutral space, giving the public the best possibility to notice the particular qualities of the works and imagine them in the setting in which they wish to keep the work themselves. Over time this naturally leads to a refinement of the exemplary empty hangings we have come to know and love (to hate) today.

Editions Published by Medium to Large Museums

To continue the thread of my earlier observations about the (non-)functioning of the art market in the Netherlands, I don't think it would be unconscionable to say that within the Netherlands there has traditionally been a large public support structure providing a direct income for artists and art-related professions, while little is done to stimulate a healthy climate of interested art buyers.

As far as I'm aware, the only direct public stimulation for buyers is something named kunstkoop, which is organised by the Mondriaan Fonds, the countries' largest public fund for art. Kunstkoop is a programme offered by about 125 galleries which allows buyers to request an interest-free loan with a minimum of €250 and a maximum of €7.500 to acquire artworks produced after 1945 from living artists. While this arrangement is widely used and undoubtedly provides some buyers with an extra push to make a purchasing decision, I can't imagine that it has far-reaching effects on the demographic composition of the art-buying public. 

The loan provided by kunstkoop has to be paid back within 36 months. This means that for the maximum credit of €7.500, a buyer will end up with a monthly instalment of €208,31. I think that it can safely be assumed that anybody who can afford to have over €200 of their expendable income be tied up in one purchase for three years also is likely have €7.500 available in liquid assets. The factual contribution of kunstkoop to the budgets made available by individuals for the purchase of art must thus be negligible.

In addition, the current set up of the programme relies heavily on the support from the private banking sector. Its existence is therefore dependent on a banks' perception of the gains it might receive from providing such a service. Former supplier ABN AMRO had pulled out unexpectedly last year, only to be replaced in the nick of time by Spanish bank Santander, who are obviously and blatantly using their support of the programme for marketing purposes, as to increase their fractional market share in the Netherlands. Santander's long-term commitment on the project thus remains to be seen, which strikes me as an unwanted quality for a public programme that ought to provide some financial security.

The more general effectiveness of such a strictly financial measure is also debatable in a country where the Tesla Model 3 was the best sold car of 2019. The base price of this vehicle is €49.980. A collector with a keen sense and a bit of patience could easily build a collection worthy of a small museum for that base price of €50.000. It could therefore hardly be argued that a lack of money is the principal hurdle that is holding back the Dutch art market. 

Although I don't believe financial issues in the Netherlands lie at the root of the problem, it is just as unreasonable to claim that any new buyer is immediately willing to spend large amounts of money on a new hobby simply because they would strictly be able to do so. 

Even for the citizens of a wealthy country it is unlikely that the first artwork one acquires would cost multiple thousand euros. A price range of €0 - 2.000 for a first artwork seems more reasonable and likely. The artworks in this price category tend to be either by young or relatively unknown artists, or works in edition.

As buying artworks from young artists is already set aside for a somewhat specialised audience, it is unlikely that the first artwork acquired by any aspiring collector is from the hand of a completely unknown artist.

However, inexpensive editions are a gateway drug for many art buyers. They have somewhat of a bad reputation to the experienced collector, but since the 1800's there has been a steady stream of public interest in editions from a much larger group of potential buyers for whom owning multiple original works from established artists is simply out of reach.

 

A great number of (notable) museums in the surrounding Belgium, United Kingdom, France and Germany regularly offer up editions from the artists they exhibit or collect. Some of these are offset printed reproductions, where the only value comes from the artist's signature, but there are just as many that are tailor made for the occasion and are available for a fraction of the cost of any other work from the artist.

However, museums in the Netherlands don't offer these kind of perks.

The reason for this absence is presumably that large museums in the Netherlands can rely on a substantial amount of public funding. In the neighbouring countries, the editions often are a way for the museum to generate some welcome additional income, as there are less public funds available for museums or these funds are distributed through a more competitive model.

Some evidence for this hypothesis can be found in the fact that many of the smaller Dutch institutions like Onomatopee, SEA foundation, Club Solo, 1646 and Hotel Maria Kapel, amongst others, do publish and sell such editions, even if the larger museums do not. Again this is in contrast with most other countries in Europe, where museums of all sizes have a edition programme, which is not uncommonly presented as an integral part of their overall programming.

The motivation for the smaller Dutch institutions to publish editions is likely related to the possibility of financial support this can provide to them and the artists they exhibit. However, in my experience the value of these editions for a potential audience is rarely considered and in all frankness, the varying quality of the editions on offer in these places do little to facilitate a new buyer in the market. 

For a small edition of little prestige to have any artistic appeal to a larger audience, it requires an artist who has a strong visual language that lets itself be easily reduced to some kind of iconography in various media. See for example the incredible merchandise possibilities that Robert Indiana's LOVE emblem has had, even if the artist himself has seen very little of the revenue it generated. As this particular kind of iconographic clarity is rare in peripheral artists, it's unlikely that such editions created by them, although well intended, are perceived as valuable or worthwhile to a public that isn't already invested in the work of the artist in question. 

So let us instead consider for a moment the position within the greater structure of an art market that editions take which are offered by medium to large museums from more well known artists. One of the principal qualities that such editions contribute to the market as a whole is that they make the possibility of acquiring an artwork tangible for a significant potion of the audience.

A museum naturally has a much wider appeal than any gallery might be able to attain. The museums in the Netherlands were visited 33 million times in 2019. There aren't any exact, or even estimated, figures for galleries, but it's unlikely they reach even a tenth of this number.

As much of the art-loving public exclusively visits museums, there is likely an extremely large mental gap in these audiences between the idea of owning an artwork themselves and the enjoyment they get from viewing the works in a museum setting. By keeping the environment of the museum strictly separate from commercial concerns, the idea is reinforced that artworks can be found in many places in the world, but never in your own home. 

What allows this kind of public to become acquainted with the idea of art ownership is thus precisely a museum offering a smaller, more attainable, version of what they just saw in the exhibition. Any person interested in such a work also engages in the a kind of art collecting that is related to motivations of personal tastes over investment value or other economic concerns. This is a positive aspect, as any market benefits from a diversified group of buyers and buyers making decisions based on their own value systems are more likely to promote such a diverse market.

If someone can thus get comfortable with the idea of collecting in a low-risk environment they are already familiar with, it stands to reason that this way of entry may remove more barriers than providing a simple financial incentive could ever accomplish.

Update 23-11-2023:

It has been announced last week that Santander pulled out of the KunstKoop programme, after completly halting all their activities relating to consumer finacing through retail channels in the Netherlands. If only somebody could have seen this coming.