The Economics Of Art And The Art Of Economics

Here in Detroit, there is debate and concern over the possibility that the city’s bankruptcy might obligate it to sell off masterpieces in the local art museum. Is solving a temporary financial problem really worth the cultural impoverishment of the city?

Yes. From Marginal Revolution:

Consider “The Wedding Dance,” a 16th-century work by the Flemish painter Pieter Bruegel the Elder. Detroit museum visitors have enjoyed this painting since 1930. How much would it cost to preserve that privilege for future generations?

A tidy sum, as it turns out. According to Christie’s, this canvas alone could fetch up to $200 million. Once interest rates return to normal levels — say, 6 percent — the forgone interest on that amount would be approximately $12 million a year.

If we assume that the museum would be open 2,000 hours a year, and ignore the cost of gallery space and other indirect expenses, the cost of keeping the painting on display would be more than $6,000 an hour. Assuming that an average of five people would view it per hour, all year long, it would still cost more than $1,200 an hour to provide the experience for each visitor.

So the question of “should Detroit keep this painting?” reduces to “does the average visitor to the art museum derive $1200 in value from seeing this particular painting?” which is very close to “would you pay $1200 for a ticket to an art museum that only had this painting in it?”

(other people may be more cultured than I am, but I find when I’m in an art museum I spend about ten seconds looking at each painting before moving on to the next one. So for me, at least, the cost is $120 per second of viewing time)

In If It’s Worth Doing, It’s Worth Doing With Made Up Statistics, I endorse trying to think quantitatively – not because we are always very good at quantifying things, but because sometimes just the attempt to quantify things makes the right answer so drop-dead obvious that whatever errors you make won’t change things one way or the other.

In the comments on MR people object that maybe some of the numbers in the calculation are a bit off, and that’s probably true. But just by trying the first numbers we think of, we realize we’re three orders of magnitude away from the spot where this would be a hard problem. And our numbers aren’t that off.

And this is why I continue to identify as consequentialist even though consequentialism is very hard and we can never do it exactly right. You don’t need a complete theory of ballistics in order to avoid shooting yourself in the foot.

Since I’m already being all soulless and analytical, let me just come out and say it – sell every piece of art in Detroit, but hire skilled forgers to make exact copies of them for a couple of hundred dollars each. You’ll have made billions of dollars, and the Detroit Art Museum will look exactly the same to anyone who’s not examining it through an electron microscope.

Sure, it’ll make it a little harder to signal snooty cultural superiority. But if you’re living in Detroit and trying to signal snooty cultural superiority, man, I don’t know what to tell you.