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Can someone explain what the downside is? I'd much rather the rich spend their money on art than activities with huge negative externalities like flying around

Can someone explain what the downside is? I'd much rather the rich spend their money on art than activities with huge negative externalities like flying around in private jets, buying land or employing servants.

igorkraw 9y ago
The negative externalities here are (nonexhaustive) * tax evasion (kindly fuck of with "it's legal so it's avoidance", it's evasion even if it's legal. Spirit of the law) * money laundering for $CRIME_YOU_DESPISE/$DICTATOR_YOU_DESPISE * shutting down/perverting the market for those that actually care about art (not me, but they
- mozumder 9y ago
  It doesn't really shut down the market for those that actually care about art. The billionaire buyers will exist in a separate world from the everyday artists that are selling their works for $500. Completely independent markets.
  - theoh 9y ago
    It's wrong to assume that "everyday artists" and people who actually care about art are insulated from this. Some worthwhile artists get promoted into this high-prices world of prestige, and their production/careers get distorted. For better or worse, the humble $500 "everyday artists" you seem to be affirming are, for the most part, not intellectually or culturally relevant. But this isn't about affordability, it's about the valid art culture (the mainstream) being corrupt and overheated. Good artists get swept up in it.
- roenxi 9y ago
  > * tax evasion (kindly fuck of with "it's legal so it's avoidance", it's evasion even if it's legal. Spirit of the law) At its heart, modern tax law separates people into classes and then allocating the burden of maintaining society unequally between those classes. The spirit of the law that you are defending here is that people should shoulder unequal responsibilities to their society. Although that isn't controversial, it also doesn't automatically have a moral high ground; it could be a better outcome if everyone contributed equally. It just happens that everyone contributing equally flat-out won't work, because most people can't contribute enough. The spirit of the law is unfair. That is an unfortunate reality of taxes - in a sense they can't reduce the total unfairness in the world, only shift it to people who can better deal with the burden. That people should ignore the detail of the law and voluntarily subject themselves to an unfair burden is not clear-cut. The clear cut part of this is that the law should be clear, pass through the usual channels and be enforced with due process - ie, as written or as commonly interpreted by the courts. If you want to call it tax evasion, someone is going to have to change the law so it is actual tax evasion. Until then, it is legal so it is avoidance.
  - hedvig 9y ago
    All of those usual channels and law-making are easily influenced by wealth and power. By avoiding taxes they have committed a crime against the state and the people and should be punished.
- CryptoPunk 9y ago
  Tax avoidance is not a negative externality, since it does not impose a cost on any party. Money laundering is also not an externality, though in some circumstances it could facilitate activity that generates negative externalities, like extortion, racketeering, etc. I also don't see how more demand for art could destroy the market. The supply is flexible and can grow to meet the extra demand.
  - igorkraw 9y ago
    >Tax avoidance is not a negative externality, since it does not impose a cost on any party. If you don't pay the taxes you are supposed to pay, you use public goods without paying for them. This is stealing from society. Unless you live on a float in international waters without using GPS or satellites >Money laundering is also not an externality, though in some circumstances it could facilitate activity that generates negative externalities, like extortion, racketeering, etc. By this logic lead in the drinking water is not a negative externality, because it only in some circumstances generates negative externalities like reduced IQ, death etc >I also don't see how more demand for art could destroy the market. The supply is flexible and can grow to meet the extra demand. There isn't demand for art. There is demand for a vehicle for money laundering/tax evasion
    - CryptoPunk 9y ago
      >>If you don't pay the taxes you are supposed to pay, you use public goods without paying for them. This is stealing from society. Of course, but it's not always the case that tax avoidance leads to someone paying less taxes than the cost of the public goods they consume. Also, as an aside, technically, consuming 'public goods' (defined in technical terms as non-rivalrous and non-excludable) does not generate negative externalities. What you're referring to is common and private goods, which are rivalrous, meaning one person's consumption reduces the amount available for others to consume. >>By this logic lead in the drinking water is not a negative externality, because it only in some circumstances generates negative externalities like reduced IQ, death etc Polluting public waters with lead is always a negative externality because the damage done to the water itself is a negative externality. The water can be seen as property of society, and damage to it as property damage. The increased risk posed to humans is also guaranteed, whether or not that risk materializes. With money laundering, with some sources of revenue, there is no risk imposed on society at large. It depends on what activity produced the money that is laundered. >>There isn't demand for art. There is demand for a vehicle for money laundering/tax evasion And that demand for a private store of wealth for tax evasion and money laundering translates to demand for art pieces. I'm arguing that this additional demand doesn't ruin the market for other art buyers, since economic theory would suggest that in the long run the supply expands to prevent increased scarcity and higher prices.
tzahola 9y ago
I’d rather have them spend their money on advancing mankind, rather than on the intellectual masturbation (and/o money laundering) that is modern art.
emodendroket 9y ago
> In her follow-up Dark Side of the Boom: The Excesses of the Art Market in the Twenty-First Century, Adam, a longtime editor at the Art Newspaper and contributor to the Financial Times, considers the negative effects this influx of money has had on the art itself. As contemporary art is increasingly viewed as an asset class—alongside equities, bonds, and real estate—Adam sees artworks often used as a vehicle to hide or launder money, and artists encouraged to churn out works in market-approved styles, bringing about a decline in quality.
- ianai 9y ago
  I remember many artists complaining that what they like to make I vastly different than what sells. I’m pretty sure it’s been that way for a long time.
  - emodendroket 9y ago
    Fine art is a bit of a different world, I'd think, than mass market art is.
yoz-y 9y ago
What's wrong with employing servants (as long as they are paid correctly and treated like humans)?
- walshemj 9y ago
  Maybe because you might have had grandparents "in service" - certainly made me feel uneasy when I considered working in Malysia a few years back.
francisofascii 9y ago
Completely agree. This is way better than the rich gobbling up finite natural resources. Art is virtually infinite since you can always create more. And it allows more people to actually be artists.
biztos 9y ago
What's negative about employing servants?

igorkraw 9y ago

The negative externalities here are (nonexhaustive) * tax evasion (kindly fuck of with "it's legal so it's avoidance", it's evasion even if it's legal. Spirit of the law) * money laundering for $CRIME_YOU_DESPISE/$DICTATOR_YOU_DESPISE * shutting down/perverting the market for those that actually care about art (not me, but they

mozumder 9y ago
It doesn't really shut down the market for those that actually care about art. The billionaire buyers will exist in a separate world from the everyday artists that are selling their works for $500. Completely independent markets.
- theoh 9y ago
  It's wrong to assume that "everyday artists" and people who actually care about art are insulated from this. Some worthwhile artists get promoted into this high-prices world of prestige, and their production/careers get distorted. For better or worse, the humble $500 "everyday artists" you seem to be affirming are, for the most part, not intellectually or culturally relevant. But this isn't about affordability, it's about the valid art culture (the mainstream) being corrupt and overheated. Good artists get swept up in it.
roenxi 9y ago
> * tax evasion (kindly fuck of with "it's legal so it's avoidance", it's evasion even if it's legal. Spirit of the law) At its heart, modern tax law separates people into classes and then allocating the burden of maintaining society unequally between those classes. The spirit of the law that you are defending here is that people should shoulder unequal responsibilities to their society. Although that isn't controversial, it also doesn't automatically have a moral high ground; it could be a better outcome if everyone contributed equally. It just happens that everyone contributing equally flat-out won't work, because most people can't contribute enough. The spirit of the law is unfair. That is an unfortunate reality of taxes - in a sense they can't reduce the total unfairness in the world, only shift it to people who can better deal with the burden. That people should ignore the detail of the law and voluntarily subject themselves to an unfair burden is not clear-cut. The clear cut part of this is that the law should be clear, pass through the usual channels and be enforced with due process - ie, as written or as commonly interpreted by the courts. If you want to call it tax evasion, someone is going to have to change the law so it is actual tax evasion. Until then, it is legal so it is avoidance.
- hedvig 9y ago
  All of those usual channels and law-making are easily influenced by wealth and power. By avoiding taxes they have committed a crime against the state and the people and should be punished.
CryptoPunk 9y ago
Tax avoidance is not a negative externality, since it does not impose a cost on any party. Money laundering is also not an externality, though in some circumstances it could facilitate activity that generates negative externalities, like extortion, racketeering, etc. I also don't see how more demand for art could destroy the market. The supply is flexible and can grow to meet the extra demand.
- igorkraw 9y ago
  >Tax avoidance is not a negative externality, since it does not impose a cost on any party. If you don't pay the taxes you are supposed to pay, you use public goods without paying for them. This is stealing from society. Unless you live on a float in international waters without using GPS or satellites >Money laundering is also not an externality, though in some circumstances it could facilitate activity that generates negative externalities, like extortion, racketeering, etc. By this logic lead in the drinking water is not a negative externality, because it only in some circumstances generates negative externalities like reduced IQ, death etc >I also don't see how more demand for art could destroy the market. The supply is flexible and can grow to meet the extra demand. There isn't demand for art. There is demand for a vehicle for money laundering/tax evasion
  - CryptoPunk 9y ago
    >>If you don't pay the taxes you are supposed to pay, you use public goods without paying for them. This is stealing from society. Of course, but it's not always the case that tax avoidance leads to someone paying less taxes than the cost of the public goods they consume. Also, as an aside, technically, consuming 'public goods' (defined in technical terms as non-rivalrous and non-excludable) does not generate negative externalities. What you're referring to is common and private goods, which are rivalrous, meaning one person's consumption reduces the amount available for others to consume. >>By this logic lead in the drinking water is not a negative externality, because it only in some circumstances generates negative externalities like reduced IQ, death etc Polluting public waters with lead is always a negative externality because the damage done to the water itself is a negative externality. The water can be seen as property of society, and damage to it as property damage. The increased risk posed to humans is also guaranteed, whether or not that risk materializes. With money laundering, with some sources of revenue, there is no risk imposed on society at large. It depends on what activity produced the money that is laundered. >>There isn't demand for art. There is demand for a vehicle for money laundering/tax evasion And that demand for a private store of wealth for tax evasion and money laundering translates to demand for art pieces. I'm arguing that this additional demand doesn't ruin the market for other art buyers, since economic theory would suggest that in the long run the supply expands to prevent increased scarcity and higher prices.

tzahola 9y ago

I’d rather have them spend their money on advancing mankind, rather than on the intellectual masturbation (and/o money laundering) that is modern art.

emodendroket 9y ago

> In her follow-up Dark Side of the Boom: The Excesses of the Art Market in the Twenty-First Century, Adam, a longtime editor at the Art Newspaper and contributor to the Financial Times, considers the negative effects this influx of money has had on the art itself. As contemporary art is increasingly viewed as an asset class—alongside equities, bonds, and real estate—Adam sees artworks often used as a vehicle to hide or launder money, and artists encouraged to churn out works in market-approved styles, bringing about a decline in quality.

ianai 9y ago
I remember many artists complaining that what they like to make I vastly different than what sells. I’m pretty sure it’s been that way for a long time.
- emodendroket 9y ago
  Fine art is a bit of a different world, I'd think, than mass market art is.

yoz-y 9y ago

What's wrong with employing servants (as long as they are paid correctly and treated like humans)?

walshemj 9y ago
Maybe because you might have had grandparents "in service" - certainly made me feel uneasy when I considered working in Malysia a few years back.

francisofascii 9y ago

Completely agree. This is way better than the rich gobbling up finite natural resources. Art is virtually infinite since you can always create more. And it allows more people to actually be artists.

biztos 9y ago

What's negative about employing servants?