what are you selling?

May 30, 2018 8:03 AM

Arcis is a new art storage facility in Harlem that offers its clients a Foreign Trade Zone. But are they selling the art world a luxury tax haven, or just banking on confusion? - Atossa Araxia Abrahamian. Why A Lot Of Very Expensive Art Is Disappearing Into Storage

Inside the Uber-High-Tech Art Warehouse That Doubles as New York’s First-Ever Freeport

Picasso Finds Possible Digs in Harlem $2.5 Billion Art Port

The Informal Economy And The Global Art Market

A free port is a storage facility that exists formally outside of the territorial jurisdiction of any country. The Geneva Freeport, the first of its kind, was originally created in 1888 to store grain and other agricultural products in transit. The essential aspect of the free port, according to New York Times reporter David Segal, is the “temporary exemption of taxes and duties for an unlimited period of time”.2 While one cannot store grain for an unlimited period, more valuable commodities such as art and wine (to say nothing of gold bars) could be stored much longer. In the era of offshore expansion in the late 20th century, tax loopholes and secrecy domains acquired a much greater significance in the global economy and, for art, the free port became the physical equivalent of the Swiss Bank account. Invisible to tax authorities, foreign governments and even the insurers of the art works themselves, art could be stored there with complete anonymity and sold without any taxes being paid.

The Role of Freeports in the Global Art Market

The Bouvier Affair, previously. Swiss freeport king Yves Bouvier sells art storage company Natural Le Coultre, Swiss Authorities Investigate Charges That ‘Freeport King’ Yves Bouvier Owes More Than $100 Million in Back Taxes, What Geneva’s Art King Lost in Battle With Russian Billionaire, faces fresh charges in Switzerland.

posted by the man of twists and turns (18 comments total)

This seems like background for a heist.

I would be...more than fine with that, actually.
posted by schadenfrau at 8:14 AM on May 30, 2018 [5 favorites]

You know, I'm getting the feeling that I...don't like capitalism that much. That it's inimical to actually being in the physical world rather than just moving money around, even.
posted by Frowner at 8:20 AM on May 30, 2018 [16 favorites]

I was on a background tour of the Warhol a few years ago and the curator talked about the fact that they can't bid on Andy's work much these days because the art market has gotten way too expensive for museums to afford. They're having trouble affording the insurance on their existing collection too because of the huge rise in value.
posted by octothorpe at 8:27 AM on May 30, 2018 [3 favorites]

That it's inimical to actually being in the physical world rather than just moving money around, even.

I think that’s exactly it. Every value, emotion, characteristic, and experience has to be monitored and tracked so it can be reduced to the dullest sort of mathematical comparison and someone can pretend to have made a buck off it. Everything is an investment and nothing is ever really experienced or enjoyed.

The future is a financial algorithm stamping on s human face forever, basically.
posted by GenjiandProust at 9:26 AM on May 30, 2018 [14 favorites]

Zarobell's writing is VERY pertinent to my interests. Thank you o mantot
posted by infini at 10:08 AM on May 30, 2018

This seems like background for a heist.

If these people are just buying art as a speculative commodity, never even going to look at it and just transferring ownership around like gold bars in a depositary...

Would they even notice?

Actually, even better plot: over some long amount of time, swap some—but not all—of the art out with counterfeits. Just enough so that you'd never be able to know, for sure, the true provenance of anything stored there. Since the speculative value is based on the premise of scarcity, it is wholly dependent on provenance, because that "authenticity" drives the scarcity of art as a rival good. You would crash the speculative value of all the art there, back down to the art-as-art value rather than art-as-investment-vehicle value.
posted by Kadin2048 at 10:37 AM on May 30, 2018 [4 favorites]

This seems like background for a heist.

I imagine that in a few cases, a heist (the super-exploitation of another's labor, and/or the earth's resources) facilitated the art purchase...
posted by nikoniko at 11:01 AM on May 30, 2018 [1 favorite]

That it's inimical to actually being in the physical world rather than just moving money around, even.

I think that’s exactly it. Every value, emotion, characteristic, and experience has to be monitored and tracked so it can be reduced to the dullest sort of mathematical comparison and someone can pretend to have made a buck off it. Everything is an investment and nothing is ever really experienced or enjoyed.

The future is a financial algorithm stamping on s human face forever, basically.

It's much worse due to the concentration of wealth. If it wasn't all in the hands of few there would be plenty of practical investments that can be made by the ordinary people who actually know how to do things in the real world - open new restaurants, build or upgrade factories, develop new technologies and such.

But that is not what we are seeing lately. Instead we are getting speculation in pursuit of high returns. Gambling really. So for the super wealthy a return that you would get from building a solid quality business that could last 100 years just isn't worth getting up out of bed for. The return you can get for buying up limited supply desirable items in a world of increasing super wealth? Now that's worth getting out of bed for. The rich know that now and even more in the future the real money will be made off their fellow rich and their need to own restricted supply items to give them their gambling juice. You just gotta be careful not to be the last buyer. Particularly if the rich ever get fairly taxed again.
posted by srboisvert at 11:22 AM on May 30, 2018 [4 favorites]

this reminds me of the enormous stone coins of the Yap people. They are exchanged, bought, and sold regularly (now mainly for ceremonial occasions) but typically not moved. One is even on the bottom of the ocean, but the record of ownership is maintained.
posted by vogon_poet at 11:50 AM on May 30, 2018 [5 favorites]

Zarobell's writing is VERY pertinent to my interests.


He's got a book out.
posted by the man of twists and turns at 12:08 PM on May 30, 2018 [1 favorite]

Don't just launder money, hide great art at the same time. It's an evil twofer.
posted by adept256 at 12:15 PM on May 30, 2018 [3 favorites]

The return you can get for buying up limited supply desirable items in a world of increasing super wealth? Now that's worth getting out of bed for.

Sometimes yes, sometimes no. Art goes through fashions and cycles, it requires steep carrying costs, it is highly illiquid, it can prove to be phony, its sale is subject to capital gains, and it has interested gatekeepers and taste-makers. All markets fluctuate. For the global super-rich, high end art is a store of value, much like gold bullion, fine wine, and London real estate, just a fraction of a diversified portfolio. It goes up, great, if goes down, well, the bump in Apple stock made up for the loss, and you can always right it off.
posted by BWA at 12:23 PM on May 30, 2018 [1 favorite]

You would crash the speculative value of all the art there, back down to the art-as-art value rather than art-as-investment-vehicle value.

“Artfinger” will be Idris Elba’s first Bond movie.
posted by Etrigan at 1:10 PM on May 30, 2018 [2 favorites]

Gilded age bullshit.
posted by qxntpqbbbqxl at 1:40 PM on May 30, 2018

this reminds me of the enormous stone coins of the Yap people. [...] One is even on the bottom of the ocean, but the record of ownership is maintained.

Rockchain.
sorry.
posted by jdherg at 3:25 PM on May 30, 2018 [8 favorites]

The future is a financial algorithm stamping on s human face forever, basically.

Of course Mefite @cstross wrote about this already: Saturn's Children.
posted by billsaysthis at 4:40 PM on May 30, 2018

over some long amount of time, swap some—but not all—of the art out with counterfeits. Just enough so that you'd never be able to know, for sure, the true provenance of anything stored there.

There's no way to prove that some savvy owners haven't already done something this. You could sell the same artwork more than once because who's going to critically examine a work in storage, and how would the "owners" find out that they'd been sold the same piece?
posted by Joe in Australia at 12:14 AM on May 31, 2018

And how much looted Ur and Timbuktu are in there?
posted by infini at 2:02 AM on May 31, 2018 [2 favorites]