More art is being produced and sold than ever before, at ever higher prices

I see a VAT of 25%. https://en.wikipedia.org/wiki/Taxation_in_Sweden

This doesn't change your overall conclusion that not a lot goes back to the artist.

In my opinion, the high art world depends heavily on the manufacturing of taste, brand, and scarcity for survival.

We have a $100,000 valuation for a painting that would never exist if we didn't get a bunch of people together who agreed, perhaps by mutual delusion, that the painting is worth $100,000, despite all the other artworks by other artists that are comparable that sit in other galleries for a meager $1-10K--if they'll ever even sell for that much.

This market only exists because both the artist and the gallery foster the illusions necessary. And the artists brand depends on getting into a high-tiered gallery just as the high-tiered gallery depends on attracting well-branded high-tiered artists.

So the market has decided a 50% split, and remember these splits are actually negotiated by the people involved since these are very high touch markets.

If the artist complains to much, there's always some other artist to groom. If the gallery complains to much, there's always another gallery for a "worthwhile" artist.

Now compare this to how developers pay 30% for a fixed price app in a store.

Given all the voodoo in the valuations, I could easily see why a gallery could negotiate for 50%.

If you're including the taxes the artist pays, shouldn't you include the taxes the gallery pays as well? Both are presumably taxed on net income after expenses. Thus it's not as if the gallery gets to run off with 50% of the revenue (which you called "earnings," but I think you meant revenue) and deposit it in the bank. In the US, a professional such as an artist would file a Schedule C to deduct business expenses from business income and pay only the remainder.

Re your later comment, why does the gallery calculate its percentage before VAT rather than after? It seems lopsided that the artist but not the gallery should be subject to a tax on funds that neither ever sees. The artist's business relationship is with the gallery, not with the buying patron, so it seems VAT should be charged on the amount the gallery pays to the artist. Maybe that's just how it is, and maybe it's an artifact of an imbalance of negotiating power between the gallery and artist. But it seems wrong.

Also, $5K to $10K per work is somewhat misleading. I depends a lot on the work, painting tends to be more expensive than photography for example and unique photographic works are generally more expensive than editioned work. A mid career photographic artist doing unique work can expect to start at $10K per work but it certainly goes up from there. A recognized artist with international representation is generally commanding much higher prices.

None of this takes into consideration other work, such as commissions, installations, advertising, books, etc. which can be very lucrative avenues of revenue.

Artists who have good representation in major areas are generally doing much better than $50K per year.

AFAIK the 50% is pretty standard but "mid-high level galleries" both sell a lot of work for more then 5-10K, and sell a lot of work outside the exhibitions.

I know a couple moderately successful painters and they are selling bigger pieces for well north of 10K and have a lot of collector interest, i.e. it's a conversation between the galleries and the artist about what gets reserved for a show and what might go to a collector as soon as it's dry.

That's not to say they're getting rich, but I think they're doing better than your example suggests.

[Edit] Also in case it's not obvious to folks w/o art-world experience, the gallery usually does a LOT for their 50%. Basically they take over the "business development" work -- all the schmoozing, the selling, the legitimizing. At least the good ones do. It's not just paying for the wine and hanging the art. Many even help arrange studio space and pay a stipend (against your share of future sales) if you need that to stay focused on the work.

One/set of Rolex which don't lose much value over time is perceived better than wad of cash slipped in envelope. Liquidity is quite good too.

If bribery somehow magically stopped worldwide overnight, quite a few watchmakers (definitely not only Swiss) would go bankrupt.

EDIT: User is visible again, thanks.

I don't dispute that very high end watches can be used for money laundering, but there are quite a bit more than a "few" collectors for watches, even in the $50k range. Blogs like Hodinkee have a large readership of collectors at this level, and relatively speaking a $50k watch is not uncommon among collectors at, say, a watch conference. $50k buys you access to the second tier (right above entry level) for brands such as Patek Philippe, A. Lange & Sohne, Vacheron Constantin or Audemars Piguet (and even smaller "independent" watch houses like F.P. Journe). If you go to the /r/watches subreddit, you can reliably see collectors posting watches well beyond this price, even if the day to day items are <$20k.

Based on my experience with watches and collectors, I'm (weakly) doubtful that your friend's perspective is indicative of the industry overall. Again to be clear, luxury items in general can be used for laundering, but I can't see any basis for calling "most of the business" an effort to frustrate money traceability. For one thing, off the top of my head, there is a clear awareness of disrepute among watch collectors, and savvy collectors (particularly those spending five figures on a watch) engage in due diligence and transparency for most of their purchases that would make laundering pretty difficult and inefficient. Obviously a complicit buyer and seller would have no reason to do this, which implies a bit of a sampling bias to what we can see. That said, these practices are widely and reliably enough used (even on, say, eBay, or among jewelers) that it's clear a very large volume of watches change hands "in the light", so to speak.

There's also a question of valuation. For most of the brands I mentioned above, purchasing them new results in a reliable 30% reduction in worth, though you can stymie that a bit by keeping the watch in excellent condition with its box and papers. The watches which retain their valuation the most are brands like Rolex. A Rolex Submariner can actually appreciate in value over time, even past inflation, because the brand is so recognizable. These would be a good target for money laundering because of their liquidity. On the other hand, brands that retain such value tend to be the most visible, which means they are the most imitated and faked. In 2018, I don't think I'd feel comfortable purchasing a Rolex unless it was new and directly from an authorized dealer. It's become extremely feasible to create fraudulent Rolexes that cannot be distinguished from a real Rolex by anyone, save for an extensive review at a Rolex inspection center.

Want to bribe a public official? Give his wife a $100k bracelet, and mention that it can be returned anywhere in the world for CASH (less a 10% “restocking fee” of course). Then you might mention how nice it would be to spend a weekend in Geneva - and coincidentally there is a branch of that jeweler just down the street from some very discreet Swiss bankers (back when they were discreet)...

Maybe they could attract more dollars to their projects by naming them after the main benefactor...

1. The path to becoming rich puts them in a social class that warps their view of what matters and leaves measuring themselves against arbitrary hierarchies of their own making.

2. The path to becoming rich in modern society is such that the kind of people who would commission RISC-V implementations or security audits of popular open source software or cheap medical interventions simply cannot succeed. It may require too much of a compromise of those beliefs to actually win.

Obviously it's not file systems or whatever, but he's definitely pushing the "definitions of art" for stuff he's interested in. Helps to have your own museum.

[0]: https://en.wikipedia.org/wiki/Museum_of_Old_and_New_Art

[1]: https://mona.net.au

People are doing this kind of stuff, just not always in a way that we nerds find interesting.

I would like to orbit durable messages around each of the inner rocky planets such that they form a "Burma Shave" style rhyme, similar to this:

  Life can take a nasty turn,
  If you try to pee
  In a transfer burn.
  Kodos toilets, for zero gee!

https://www.vox.com/2015/8/12/9140477/google-alphabet-larry-...

Casinos and jewelries as well, anything that might have a lot of non-tangible value and can be inflated without questions.

I am not too aware of markets outside of Brazil, but I'd assume sports teams and auctions are big too. I remember that in the last 15 years there were a lot of football team acquisitions by russians in europe.

Things like gold, bitcoin, stamp collections, art, expensive cars etc serve a similar function: the function of "saving", as opposed to "investing".

With "saving" I mean storing some excess purchasing power in something that doesn't have a counterparty and doesn't generate income, but also can't be duplicated easily so is likely to at least not loose a lot of value.

Of course, all these saving devices have different properties.

Gold and bitcoin are liquid, whereas art is extremely illiquid. Gold and bitcoins are egalitarian, in the sense that a poor man buying gold gets the same thing as a rich man buying gold. Art is elitist and susceptible to huge winner-takes-all effects. All are susceptible to stealing, but cryptocurrencies are susceptible to total failure because of their complexity (bugs, mathematical weakness, ...)

https://en.wikipedia.org/wiki/Levitated_Mass

The only thing that thing accomplishes is proving that a contractor had moved a rock from A to B, about as useful as figuring out how to get a certain number of zeroes in a hash.

2. You say it provides a strawman. But then you go on to basically confirm what the article says. And your defense is "that's just how it is"

To adapt a Father John Misty line: Maybe art is just an economy based on resource scarcity but I fail to see what that's got to do with you and me.

Edit: oh, and keep in mind that few pieces that later became coveted collector items already commanded a high price on the initial sale.

1) Move to NYC, get a job working for a near blue-chip artist. Look for one with the fewest assistants. Accept $20 an hour.

2) Go to art openings, sign your name in every gallery guest book and attend every after-party.

3) Have a studio, and get your friends, employer and his gallery contacts to visit

4) Start showing your work, or repeat steps 2 and 3 until someone shows your work.

5) The ball is now, rolling. To add some momentum do the following:

- Curate a summer show at a gallery somewhere

- Upgrade your studio to someplace people like to visit. (Dark wood floors, on the waterfront in Red Hook, Brooklyn perhaps) Throw good parties.

- Grow a lumberjack beard. Or, only shop at comme des garcons. Or thrift-store jeans and a white T, for all occasions.

6) Make friends with writers and critics. (Their needs are human, just like yours)

7) Get shown, written about, and finally get collected.

8) Now...this is the part where most artists discover how life as a successful artist is actually appalling. You'll need to socialize with and be popular among some very wealthy, but ultimately superficial people who treat you and your art as a certificate of their cultural sophistication.

9) If you have made it this far, and still want to continue, you probably have what is takes to be a successful modern artist whose work will appear at auction in a few years. Just keep in mind -- you'll receive none of those auction proceeds, and there's no promise you'll every go to auction again.

But for that to happen, you actually need to be talented and create amazing work, since it's a lot easier for a curator to push for you if you create something that's compelling.

If you look at the works in the elite galleries, the artists that are represented by them are much, much better than your everyday artists that you'd see at your local art fair.

So, the process is:

1. Create some awesome art.

2. Show it someplace - could be in a local fair or student exhibit or on the internet someplace.

3. Have some people talk about it by sending out press emails.

4. Get a major gallery to notice your work. The good galleries are always on the lookout for new, marketable talent, and if you have some buzz, that helps influence them.

5. Profit.

* 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

It's more like Pez dispensers and Beanie Babies and all that nonsense. Over-priced and over-hyped collectibles with no real-world (not even aesthetic) value.

While similar, those two concepts are distinct.