Marci Alboher of The New York Times has an article published 26 November 2008 about how artists can become and indeed are becoming entrepreneurs. To some extent, from an economics perspective, they have always been entrepreneurs, assuming they sell their work. However, I’d like to think that the point of the article is to transform the image of artists a little bit, from lazy, if not moribund, cellar dwellers and cafe smokers into bright, energetic, perhaps restless spirits.

This is good!

Let’s look at the main example from the article:

Claudine Hellmuth… said that when she graduated from the Corcoran College of Art in Washington in 1997, career options for artists were limited. “You could teach, or do outdoor festivals, maybe get into a gallery,” she said.

…she took an intensive summer course in Web programming and design at George Washington University and then returned home to Florida, where she found work as an online designer. All along, she continued to paint on the side, thinking that her day jobs would support her. A layoff in 2001 proved to be a turning point.

“I now had the skills to use the Internet to my advantage,” she said. “I am so thankful that I left the art world for a little while.” With a little Web savvy, she says, it is relatively easy for artists to reach a global marketplace for their work.

Claudine later parlayed these skills into her own online store, etsy.com, as well as licensing agreements and numerous other smaller commissions. This ought to be inspiring to anyone: to artists, because they might realize they have more opportunities than they know if they just get out there; to entrepreneurs, because it’s really demand in the market that has not been fully supplied, meaning there is profit to be made; and to everyone else, because it suggests choices and living standards are rising as people devote more income to that demand. Take this other example:

Alexander Niles, 14, a high school freshman in Miami with dreams of making it big as a musician, is young to be focused on making a living. But he has already become an entrepreneur.

It all began by accident, he said. He was late in handing in his choices for elective classes and landed in a course on business. For an assignment to write a business plan, he turned to his passion, guitars, and decided to create a business building custom guitars for other people, something he had already done for himself.

Wow! This is certainly an example of what to do as opposed to what not to do with education today. Art teachers, cut this article out and to the following things:

  1. Make your students read this article.
  2. Make your students develop a business plan.
  3. Teach your students about contracts — the art of negotiation, the nuance of legalese, and the structure of intellectual property licensing.

The final element is perhaps the most important. Since time immemorial, artists and their sympathizers have argued that they need legal protections such as moral rights because they are powerless to negotiate. This is nonsense. Understanding that they have entrepreneurial power, they have all the bargaining power that they need. In other words, someone who signs a contract with a magazine to draw their covers at a certain compensation for three years had a choice. Both parties benefit from the contract. If the covers suddenly become very valuable, then the artist’s value will rise too, and there’s no need to cry about the magazine unjustly getting enriched: they took a risk on the artist. It may even be true that the artist can break the contract by the doctrine of efficient breach and be just as happy.

There are manuals in every Barnes & Noble for artists to pursue just these educational ends, but it really ought to be your prerogative to teach them yourself. There aren’t more valuable lessons you could be teaching, so from an economics opportunity costs perspective, it’s a no-brainer. These skills enable artists to live and fight. Moreover, the legal jargon isn’t as tough to understand as it looks and intellectual property licensing is quite easy when you get the hang of it.

Yes, even artists can change the world. The economics of changing markets are clear. To repeat Claudine’s point:

With a little Web savvy, she says, it is relatively easy for artists to reach a global marketplace for their work.

The costs to the transmission of information have shot through the floor. They are still present: time has value as an implicit cost and we should not forget that the internet, laptops, and the like are hardly free (nothing, in fact, is technically free). But the point is, compared to the past, these costs are extremely low. As a result, we are able to transmit information over far greater spaces (read: far larger markets) than ever before. That means that the number of consumers who might have the taste to enjoy your art work increases, thereby raising the value of your work. With the availability of auctions and quick responses to pricing, economics suggests that artists will be better able to realize the full amount that people are willing to pay — a corollary to the doctrine of the price discriminating monopoly, or even the perfectly price discriminating monopoly, which is able to charge all the prices that people are willing to pay.

The monopolist, in this case, the artist, wins because she or he is maximizing their profit. The consumer wins because the monopolist has an incentive to produce the efficient quantity of output, which basically means all the output that the market can handle.

Ergo, everyone wins. Capitalism with free markets and property rights: the rising tide that lifts all boats.

(h/t Art Market Monitor for the NYT link)

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