Actually, humans have done quite well for themselves when given the liberty to look after their own lives. We use laptops, digital cameras, advanced healthcare, and enjoy much of our consumption due to the ability of humans to freely contract with other humans and to trade as they deem fit. To the extent that they are disallowed from doing so, then, they suffer from unnatural interventions. And artist moral rights, like unions, are a relatively new innovation in the world, for they require a conception of property rights that is far from natural.

In the case of unions, companies are prevented from firing whole groups of workers who traditionally simply worked at the pleasure of the employer. Due to some perceptions of unfairness, government interfered with the natural relations of humans, chaining the entrepreneur and the shareholder to the whims of the union. Artists have always held the ability to negotiate sales of their works based on certain conditions and many enterprising ones have retained various rights upon sale of a work. However, artists realize that if they put conditions restricting the alienability or future sales of their works, that purchasers would be all too happy to purchase other art works with no such conditions. In order to avoid this, artists have blatantly engaged in rent-seeking: obtaining legislation that prevents purchasers from acquiring full ownership of works despite a lack of retention of rights by the artist in the contract or sale.

In the European Union, home to the most advanced and disturbing artist moral rights, one such right is the artist’s right to receive royalties from each subsequent sale of the work. Last week The Economist highlighted this right:

For the past two years 4% of the price of a work by a living artist sold through an auction house or by a dealer has been payable to the artist. Sales of less than €1,000 (£796) are exempt, and the tax is capped for anything worth €500,000 or more. Throughout the European Union the tax is payable on sales of works by living artists or those who have died within 70 years; in Britain it is only works by living artists that qualify. The EU allowed Britain this exemption until 2012. Mr Hirst and his colleagues would like to make sure it is not extended.

Consequences? Yes, please! Among them, we would expect that since the rate of return on investment is lower for certain of these investments, that in certain price ranges, investors will simply not invest in art works and instead invest in other areas. May I have another? Yes, please! Artworks within a certain price range (about €1,000 – €500,000) will be more likely to be sold in the United States and Asia than would otherwise be the case. ( This is probably not a serious consequence, since it would not be terribly substantial and other art work can always fill the void, but it is certainly an unintended consequence. ) The list goes on, but for some reason the European elites can never seem to stop punishing their people enough. As The Economist also mentions:

A study sponsored by the Antiques Trade Gazette showed that, in the 18 months to August 2007, 10% of the 1,104 artists benefiting from ARR in Britain (around half of whom are British) got 80% of the pot; the bottom 30% received less than £100 each. The royalty has also proved cumbersome and costly to collect.

In the United States, it has been estimated that regulations cost more lives than they save when they cost about $8.4 million to implement. The reason why is because the money that goes toward implementing the regulation would be better off in the hands of the people who paid that money in taxes to increase their own welfare or that of others by charity. In this case, considering the results of moral rights legislation in Britain, it’s hard to see how the benefit would outweigh the cost of millions of pounds going to enforce it — especially when artists could take care of this themselves in their own contracting. The need for this artificial intervention is, at best, lacking.

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