Social utility debate
But not every collector is as municipally minded. Consider the story of Van Gogh’s painting Portrait of Dr Gachet, which was purchased in 1990 by Ryoei Saito, a wealthy Japanese industrialist, for USD$82.5 million. Since then, the painting has never been seen in public again. Mr Saito caused considerable controversy in the art world when he said that he wanted to be buried with the painting but, although he died in 1996, there is no evidence that his wishes were granted. Its whereabouts, however, remain unknown and it was conspicuously absent from a major Van Gogh retrospective, focused on the collection of Dr Gachet, at the New York Metropolitan Museum of Art in 1999.
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The willingness to share possessions with society varies widely from one country to another. In general, respondents from the Middle East and India are most likely to agree that there is a duty to share valuable possessions for the good of society, while respondents from the U.S., Japan, Hong Kong and U.K. are least likely to hold this view (see chart 25). This may reflect a strong culture of philanthropy in these regions, or again it may be bound up with status and a desire to demonstrate wealth and good taste.
Withdrawing valuable and important works of art from circulation certainly impoverishes cultural life. But it also could have a detrimental effect on the broader economy.
Compare buying an Old Master with providing seed capital to a young start-up company or investing in equities: When a wealthy individual acquires an Old Master, the money spent re-enters the economy, but there is no certainty about where that money will end up. It may be used to invest productively in the economy, or it may be used to buy another painting. By contrast, investing directly in a start-up will have a much more powerful economic impact if it goes on to be successful, while investing in equities can help larger companies to grow, invest and make a bigger contribution to economic development.
“Investing in art can be highly positive on a broader social level if the collector is willing to act as a custodian to the item and share it as a cultural treasure with a much wider audience. There is a school of thought however, that argues that investors can create greater social benefits if they invest directly in productive businesses or new ventures,” says Dr Davies. “Many will feel that this rings true in the current environment, prompting both a relevant and emotive debate.”