Brief Review


Pricing the Priceless, by William D. Grampp, New York: Basic Books, 288 pages, $19.95.

William D. Grampp's book on art, artists, and economics will probably offend virtually everyone. Artists, museum curators, and collectors will find his analysis disrespectful and obnoxious. He treats the art market like the markets for autos, perfume, and dishwasher soap. Economists, while more sympathetic, will be troubled by the occasional lapses in economic theory, which may simply be due to careless writing.

Critics of the attempt to clamp down on the National Endowment for the Arts' funding of controversial exhibits should read this book. Grampp convincingly demolishes the main arguments for subsidizing the arts. But he does not address the reasons why artists themselves should oppose government involvement. Whatever the merits of a given project, political considerations inevitably play a role in funding decisions involving public money. So long as the government has to allocate funds among competing projects, there will be complaints that such decisions endanger artistic freedom.

Grampp argues that art is subsidized because artists, museum officials, executives of performing arts institutions, and government officials concerned with the arts lobby successfully for taxpayer support. Polls indicate that taxpayers do not favor subsidizing the arts, but they remain blissfully unaware of how politicians are spending their money. Subsidies for painters are identical in this respect to subsidies for tobacco farmers.

As Grampp reveals, patrons of the arts and especially of museums are mainly prosperous and highly educated, often with professional interests in painting. Teachers are over-represented. The concentration of theater in New York is at least partly explained by the concentration of the advertising and broadcast industries in that city. In other words, subsidies for painters, performers, and producers support the pleasures and professions of the upper middle classes.

Subsidies are often justified by arguments that the arts produce better citizens, create a more congenial environment, and provide benefits that extend beyond those who experience art directly. Grampp notes that there is no evidence, or any logical reason to believe, that visiting a gallery will make an individual a better citizen, provide benefits to those who do not frequent museums, or improve the social environment.

Subsidies do permit museums to be major buyers of art, which helps artists both directly and indirectly. (Having works exhibited in a prestigious gallery or bought by an influential collector enhances the value of an artist's other pieces.) Despite a strong role in the art market, museums, as nonprofit institutions, often fail to take good care of their collections (their capital) and typically warehouse more of their art than they exhibit.

On the basis of what museum officials say and do, Grampp deduces that they are indifferent to increasing attendance, improving revenue from admissions, or minimizing costs. They are usually motivated to please their peers in the museum world; to increase their unrestricted funds from gifts, donations, and subsidies; and to acquire more oils, lithographs, and watercolors, even though they cannot display all they possess. Although many museums never exhibit much of the work they own, they still oppose selling any of it.

Information about products, services, and conditions is valuable in any market, including the art trade. Intelligence about the painter, changes in the work, restoration, and previous owners is precious. With a few lively illustrations, Grampp shows that the value of a work depends crucially on its attribution. If pictures were valued simply by what is on the canvas, an excellent reproduction would be as valuable as the original.

It may come as a surprise to some, but artists are dedicated to enlarging their earnings, as this book demonstrates with a number of well-chosen examples. Painters depict those subjects which will sell best. Moreover, artists are not above attempting to monopolize the market. Guilds have often sought to restrict entry in order to preserve or enhance the prices of established artists' oils. The best-known example was the French Academy's refusal to show the work of the Impressionists. Like most cartels, this attempt to exclude newcomers failed.

This book is often fascinating. Unfortunately, it is occasionally marred by infelicitous writing, careless economics, and references that will be obscure to noneconomists. While the book is replete with relevant anecdotes, hard empirical data are largely drawn from other studies. Nevertheless, one hopes that Pricing the Priceless will prove so irritating that it will be widely read.