Why are Artists Poor?

Borrowing the title of Hans Abbing’s important sociological interrogation of contemporary art practice from 2007, let us consider a case in point. A young unknown artist relocated 30-odd kilometres north of his hometown to a capital city, to live in the house of an art dealer. The pair made a business arrangement whereby the dealer would broker sales and commissions for the artist, who in turn would work using a studio in the dealer’s house and also tutor students-cum-assistants. This arrangement delivered the artist’s only source of income for four years: 1631 to 1635. The artist in question was Rembrandt van Rijn and the dealer Hendrick van Uylenburgh of Amsterdam.

Surviving records show that Uylenburgh was the business manager, in charge of providing the finance through sales of original paintings, copies of them and other works; developing a market for engraved prints; and securing commissions from an increasing number of wealthy merchant patrons in the Netherlands. Rembrandt was responsible for artistic production, and his engagement with Uylenburgh was exclusive: he worked for no other dealer, mostly executing portrait commissions, of which he completed around 100. There is no evidence of Rembrandt producing work outside Uylenburgh’s so-called ‘academy’ or of selling his works to patrons/collectors other than through Uylenburgh. In other words, Rembrandt was effectively Uylenburgh’s employee and was evidently very well paid.

Having a single patron was not the norm during the Dutch Golden Age and the innovative Rembrandt/Uylenburgh business relationship was initially criticised by their respective peers. But as the business became increasingly successful, soon establishing itself as the leader of a burgeoning art market in the Netherlands, other artists were admitted into the Uylenburgh stable (or established similar relationships with other dealers). After four mutually beneficial years with Uylenburgh, Rembrandt used his new-found wealth to strike out on his own, buying a house and developing an autonomous practice.

‘For the first time we are talking about a recognisable business in modern terms’, said Ian Dejardin, director of London’s Dulwich Picture Gallery, which in 2006 mounted the exhibition ‘Rembrandt & Co: Dealing in Masterpieces’. The Dutch Golden Age laid down foundations for our modern art business framework, but did not create an artist/dealer model that is recognisable in today’s global art business world. Nowadays only designers of products and packages tend to be employees of design consultancies, working to meet the needs of commissioning business clients. Fine artists are not normally employed by art dealers, but exceptions can be found. Poland offers a recent an example.

Abbey House (AH) was established in 2010. It is a private limited liability company based and registered in Warsaw. Three other commercial companies own the majority of its shares. AH’s key services are to conduct public auctions of Polish contemporary artists’ work, to advise businesses on investing in contemporary art and to manage such investments. The supply side of AH’s business is provided by a stable of Polish-based artists employed by the company to produce works for sale at its public auctions or through private treaty deals which it brokers.

Artists are employed according to the following ‘business model’: ‘AH works closely with a group of up to 30 established and prospective Polish artists by signing a five-year contract with them exclusively. As part of the agreement, Abbey House for the first five years guarantees the artist a monthly stipend to create a certain number of images, one of which is sold by the Company. In the same contract artist agrees to provide to the Company over the next 15 years one image a month at the so-called preferential price.’ This loose translation of AH’s Polish website conveys the essence of its artists’ employment. During the first five years artists receive a monthly salary from AH in return for which they produce ‘a certain number of images’; works will be owned by AH (not consigned to it for sale on behalf of the artists) and artists may only produce works for AH. After five years the employment and salary terminate but artists must continue to produce one work each month for the next 15 years; works will be owned by AH (not consigned to it) but artists may now also work for themselves or others. In effect a 20-year contract operates: artists produce a ‘certain number’ of works monthly for five years and receive a salary, but work only for AH; then produce 180 works over 15 years (12 per annum) without remuneration.

Is this a good deal for the artists? This question recently prompted Jo Caird, a London-based freelance arts journalist who writes for the Guardian and other titles to visit some of AH’s artists in Warsaw to find answers (‘Polish art now: workable model for British art and business?’ Guardian Professional, 3 June 2013). Her initial view was sceptical: ‘But here’s the catch. Aside from their fixed salaries and occasional bonuses triggered when a certain number of works are sold, the artists see nothing from these sales. All proceeds go to Abbey House, which is also free to do what it likes with any works that go unsold. The other kicker? These contracts are exclusive and last five years.’

Although Caird’s report of her visit does not say she read AH’s artists’ employment contract, she does offer valuable secondary evidence of how it is working. She spoke to Anna Szprynger, a 30-year-old painter who signed with AH at the outset of its operations, who ‘acknowledges that being tied to one company exclusively for such a long period has its downsides, but as far as she’s concerned, the advantages of such an agreement far outweigh the disadvantages. The monthly salary of 5,000 Polish Zloty (just over £1,000) easily covers the rent on her bright live-work studio space just north of Warsaw city centre, bills, groceries and the odd evening out. Given that the average salary in Poland is around 3,500 Zloty, Szprynger considers herself comfortably off’. Another of AH’s inaugural young artists, Jakub Slomkowski, ‘approached the deal with caution, but felt that it could offer him the chance to take his practice up a gear, not just in terms of his painting but also the performance art and musical strands of his work’. He does not see his employment with AH as a ‘bad deal’: AH is ‘working hard on his behalf: he is saved the hassle of publicising his work, while his name becomes known; in two years, when the contract has elapsed, he will reap the rewards’. Slomkowski confirmed that employment contracts with AH do not allow artists to sell their works to buyers directly for the first five years. Caird interviewed other AH artists, all of whom were pragmatic and positive about their deal. Is this a good deal for AH? Jakub Kokoszka, AH’s Chairman, told Caird that the company’s business focus was offering art as investment to ‘the sort of super wealthy individuals who, up until now, were more likely to spend their cash on designer handbags and fast cars than on paintings’. Łukasz Gorczyca, director of the prominent Warsaw-based Raster Gallery, criticised AH for ‘being more concerned with business than with art and of exploiting its artists’, and considered AH’s sale prices as ‘absurd’ and ‘nothing to do with the real market situation, either in Poland or internationally’. It is clearly too early to judge whether AH’s business model will work in practice, with two more years to run on its initial contracts of employment.

This revisiting of the relationship of artist as employee and dealer as employer appears to be unique. It is certainly not a customary model in today’s Polish art business environment or elsewhere in Central and Eastern Europe or Russia: artists and gallery dealers did not rush into each others’ arms following the collapse of Communism and the development of market economies. On the contrary, many artists in such countries were and still are reluctant to sign up with any galleries as their dealers (exclusively or otherwise), preferring to sell directly themselves or consign to auction houses for primary sales. In these ways such artists seek to guard against what they see as the real risk of dealers influencing the content and form of work in order to be more marketable, and to avoid paying up to 50% commission fees to dealers (auction houses in such countries charge sellers consignment fees of less than 10% of the hammer price). Accordingly, many contemporary art gallery dealers do not develop a primary market for a stable of artists by taking works from them on consignment, but operate only in the re-sale/secondary market with stock bought at auction, from other dealers or collectors, or directly from artists. A customary artist/gallery business deal is hard to find in such countries, and certainly not one of employment.

Developing economies in India and South-East Asia have experienced a correlative and significant growth in their art markets. The newfound wealth of individuals and businesses in such territories has stimulated investment in contemporary art, the re-sales of which have achieved profitable returns. These new contemporary art economies have yet to establish customary trading practices or norms for artists and art market professionals – including artist/gallery business deals. Similarly, a customary artist/gallery business model has yet to emerge in other developing contemporary art markets such as China, Latin America and parts of Africa.

Australia has experienced an upsurge in the market for contemporary art made by its indigenous peoples, often called Aboriginal Art. Collaborations between indigenous and non-indigenous Australians have resulted in the production and marketing of a range of contemporary works, including especially paintings on canvas and cloth depicting designs and images that would traditionally have been painted on leaves, or carved in wood and rock and sand. Such works are sold in cities such as Sydney by dealers and at auction, and fetch significant prices. City dealers visit the artists in the outback, where most live communally in relative poverty and generally poor conditions. Materials are regularly supplied by dealers, who pay relatively small fees to artists compared with the much higher re-sale prices paid for their works by collectors in the cities. Such artist/gallery deals are effectively employer/employee relationships. Likened by many critics of the practice to slave labour, the prevalence of such deals was a key reason why the Parliament of Australia introduced the Resale Royalty Right for Visual Artists Act in 2009. Non-indigenous contemporary artists in Australia also benefited from the Resale Act; their relationship with gallery dealers tends to follow the customary model established in Western Europe and North America.

A customary artist/gallery model has been established and is recognisable in Western Europe and North America. It is a deal to which most artists aspire. In past decades artist/gallery deals were based only on trust, not on a well-negotiated and defined contract, whereas in recent times artist/gallery contracts are increasingly recorded in writing. This is partly because younger and emerging artists and gallery dealers have a far more professional and business-like attitude than earlier generations; partly because of the globalised nature of art business, and the strong influence of Continental European legal practices (usually requiring business contracts to be written); and because gallery dealers need to secure the artists’ services on an exclusive basis – gallery dealers are artists’ agents and do not operate as their employers.

A balance has been struck by artists and galleries to arrive at a mutually beneficial customary model in Western Europe and North America. Typical contracts require galleries actively to promote their artists through exhibitions, broker primary sales of new works and commissions, and share the proceeds of sales (often, though not necessarily, equally). Artists may appoint one or more dealers to represent them – exclusively or non-exclusively – in one country or continent or worldwide; dealers rarely represent a single artist (except perhaps at the start of their dealing career) and usually act for a ‘stable’ of artists. Operating at their best, such deals allow artists to retain artistic autonomy to create work they believe in and dealers to nurture the careers of artists they believe in: both earn reputational and financial rewards.

Over 50 years ago, from a public seminar on The Creative Act at the Convention of the American Federation of Arts, Houston, Texas, April 1957, Marcel Duchamp said: ‘Millions of artists create; only a few thousands are discussed or accepted by the spectator, and many less again are consecrated by posterity.’ His comment rings true today. Only a few thousands of galleries deal in contemporary art, enjoying market dominance over the millions of artists who create. Dealers can pick and choose which artists they will champion. Relatively few artists are chosen.

In today’s highly developed world market economy, goods are manufactured in response to consumers’ needs. Artists live in a different economy (which Abbing demonstrates is exceptional), chiefly operating from a starting point of total freedom and autonomy: works are produced, then a market is sought. A tiny percentage of artists achieve artistic and/or financial success during their lives. Most artists are unable to monetise their works alone and need external support to do so. Support can come from a variety of sources nowadays: a minority of individuals and businesses finance unknown artists because they believe in them and expect nothing in return; governments and foundations can likewise be altruistic, though many expect something in return; agents and gallery dealers expect to be paid for services rendered to artists or to make profits on re-sale margins. Employers of artists not only own the products of their employees’ artistic skill and labour but also own intellectual property rights in their work.

Artists want to be free of obligations to produce, not to be the piper whose tune is called by the payer. But there is usually a price to pay for autonomy and self-determination. Rembrandt ended his lucrative arrangement with Uylenburgh in 1635 to go it alone. His business affairs were held together reasonably well for the next seven years by his wife until her death in 1642. Without his business-minded wife or Uylenburgh, Rembrandt’s business fortunes declined: he sold all his assets to avoid bankruptcy, became an employee of his art-dealer son, died in penury in 1669 and was buried in an unmarked grave.

Why are artists poor? It is a question of both the necessity and the price of autonomy and artistic freedom. Caird ends her report by saying ‘The Abbey House artists I met are glad of this opportunity – perhaps their British peers might be too?’ But there is unlikely to be a queue of British artists wanting to sign up to this new employment model.

© Henry Lydiate 2013 

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This article is from the Artlaw Archive of Henry Lydiate's columns published in Art Monthly since 1976, and may contain out of date material. The article is for information only, and not for the purpose of providing legal advice. Readers should consult a solicitor for legal advice on specific matters. Artists can get free online legal information from Artquest.