Speech presented by Francesco Augusto Razetto, the President of Eleutheria Foundation at the Symposium organized by Aspen Institute.
22. 5. 2013
There are two fundamental reasons for investing in art, and these differ in principle as well as logic. The first is based on the principle of the INVESTMENT itself, while the other is based on the principle of COLLECTING.
The purchase of works of art, aside from the need to satisfy one's natural aesthetical sensation and the need to own, may without doubt also be an investment. In the XVI. and XVII. centuries, Flemish paintings were used as a currency and rich noble families of that time invested heavily in these commodities.
Of course, a lot has changed since then. However, it remains a fact that, since renowned financial consultants today recommend that their clients diversify their investments (i.e. to invest in, among others, works of art), what we see here is a generally accepted and logical approach.
It is evident that all investments are associated with risks, and this also holds for investments in art. Equipped with our own taste and preferably also with sufficient knowledge and education, we can approach this extraordinary world – with the help of specialists/professionals, gallerists and specialized magazines. Unfortunately, the market with works of art in Central Europe is different from the one in the United States or in the rest of Europe, and has its own specific dynamics.
After the fall of communism, which represented almost 50 years of dictatorship, these countries lack an established system of world-renowned art specialists, simply because of the lack of a free market here and art was not considered a marketable item during communism – it was subservient to the regime and basically was part of its propaganda. In the last 20 years, a number of entrepreneurs created their own art galleries; however, they were met with two types of distrust right from the start: distrust from the market, since there was no history of trading art, and distrust from individual artists, who grew up in this culture and did not understand why they should commit themselves to some middleman. A number of artists rejected this opportunity and preferred to do marketing on their own, through their own expositions or the internet.
Simultaneously, what we see in these countries is an interesting evolution in art because of its independency from the market and freedom of expression, contrasting to the previous longstanding political dictatorship.
One task of specialists in this area is to invest their own energy not only into teaching "good tastes" and preferences of their clients, but also to try to eliminate the prejudices and misconceptions of artists, who often think that they themselves are always their best promoters.
It is also important to keep in mind the possibility of supporting external cooperation with colleagues – gallerists who operate on both continents, through participation on international exhibits, without the risk of direct competition on such a grand scale; this should rather be considered an opportunity for personal growth.
I mentioned at the beginning that there exist two reasons for investing in art: INVESTMENT and COLLECTING. The first is rather direct, while the other is more complex and indirect. Patronage was always an important factor in art; ranging from the Italian princes during the Renaissance to the pope, a large amount of antique artists relies on the generosity of individuals. Collecting today manifests itself via foundations, thanks to the direct support of individuals or more frequently associations and companies, which promote restoration works or special events. The return and benefit to their own image is definitely larger than any advertising investment, and the resulting amount of propagation is significant, in some cases even permanent.
Foundations (Czech, Slovak as well as Hungarian) are definitely an important topic here. Contrary to the system in the U.S., these do not provide any sort of tax relief for companies who wish to invest part of their assets into collecting. This fact is a significant restriction for the involvement of large global foundation groups, which are based on the generosity of individuals. However, there is no doubt that a large opportunity is present here for those who wish to invest in art indirectly. Only sport can provide a comparable opportunity for advertisement and social image creation as art, although by different means and in a different area.
The relation to government institutes (such as museums, universities, ministries) differs from case to case, or perhaps one could say is based on personal relations and sympathies, however what we see in this area is a lack of a strategy for cooperation. Despite the mutual goals and interests, government cultural institutions are somewhat "stuck" or inflexible in some area, and their communication delays often inhibit mutual cooperation. One may go so far as to say that there is a certain uncertainty or a lack of "courage" for development of new projects – while it would be desirable if exactly these institutions, due to their independency from the market, were the first promoters of large projects whose realization depends on cooperation between the state and the private sector.
It is necessary to add that speaking about art also carries with itself a certain emotional undertone, which sees a gallerist not only as a trader and investor. We collectors know well the rush which follows the purchase of a work of art, and the disappointment after an auction during which we could not obtain an item we wanted. The primary goal of us, the protagonists – institutes, foundations, collectors, gallerists – is to keep this magical drive associated with art alive, in exchange for the unrepeatable feelings of absolute happiness, which can perhaps only be compared to love in our lives.