Technology, the sharing economy and the democratisation of art

LONDON. "Technology is transforming our relationship to assets and ownership" - Rachel Botsman recently said in an interview with Jasmine Gardner of the Evening Standard (June 27, 2013). The "sharing expert" was talking largely about consumer goods and real estate (Botsman and her family haven't owned a car in 14 years, they rent baby equipment and let the family home whenever they travel) but her message of "collaborative consumption" and the "peer-to-peer economy" as the mass democratisation of "everything" may well resonate (or should resonate) with the art community. 

For starters, P2P finance, which received government endorsement earlier this year with the Treasury's launch of a consultation process to determine the appropriate regulatory framework for these platforms, is increasingly being used as an alternative to conventional bank finance to acquire art (or so my sources tell me but no link yet). At the institutional level, museum trustees and curators are being encouraged to challenge the possibly outmoded preoccupation with ownership and explore new, more imaginative and productive ways to increase mobility of, and access to, cultural objects. Norman Palmer's 2006 paper on itinerant art in the European Community expertly sets out the various forms of legal relationships warranting serious consideration as alternatives to outright ownership or long-term loans of art and the virtues of multilateral vs. bilateral arrangements in order to foster cultural exchanges. The ongoing financial crisis, the mass digitisation of art and statutory restrictions on national museums to divest (i.e., relinquish ownership of) objects in their collections (cf. "sunset period" till 2019 under Holocaust (Return of Cultural Objects) Act 2009) make it all the more necessary to treat proposals for syndicated rotating entitlements, trusts of art, reciprocal exchanges, time-sharing and collective ownership schemes as real contenders in the pursuit of more fluid and accessible museum collections and even a greater distribution of art in the private market. These novel ways of structuring transactions are not straightforward methods for realising cultural and social objectives (think of the issues around insurance; longer, more difficult multiparty negotiations; increased administrative costs etc.) but they may be viable in certain cases and in the present climate, they cannot be automatically discarded.

I leave you with a more radical cry for the democratisation of art. Setting aside the countless practical problems associated with implementing the proposal, my main objection is to the author's one- dimensional view of access to art as physical access only when true access means physical as well as  intellectual access. Museums do much more than just display art: they interpret works and give them a context thus facilitating the public's intellectual access to works of art. As Professor Palmer puts it: "mobility [of art] is not a virtue itself."

Art & finance: the rise of "art loans" for the well-heeled clients of private banks

NEW YORK. Bloomberg recently reported that former hedge-fund manager Michael Steinhardt secured a "very cheap" loan from JPMorgan Chase Bank by pledging a number of the works in his fine art collection (estimated to be worth over $200 million) as collateral. While the use of art as collateral to obtain finance has been on the rise for some time now (Steinhardt joins the ranks of other managers such as Nelson Peltz and Steven A. Cohen), it is hardly indicative of a widespread trend in the banking sector towards lending against art. While it is true that art assets have flared quite way in the economic downtown and consecrated their place as an alternative form of investment, this is largely true of mostly "blue chip" works i.e., the Picassos, Pollocks, Warhols etc. that form part of the fine art collections of a handful of high-net-worth individuals. For the most part, investing in art is risky and expensive (transaction costs are too often overlooked) and my mantra remains that people should buy art because they love it, not in the expectation of hefty returns. Still, it's interesting to see that a growing number of banks are offering their "well-heeled" clients the possibility of structuring loans in this way. It makes perfect sense because the kind of art we're talking about in these cases really is "a stable form of collateral," as Suzanne Gyorgy of Citi Private Bank describes it. "When you look at our client base," Gyorgy goes on to say, "it's savvy business people that for the most part are using the liquidity from the art loan to invest back in their businesses."