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QOQQOON (cocoon) is a webzine for writing by artists. We also republish hard-to-find pdfs online. In our current issue (#6), we are thinking about how to be an artist? Submissions are welcome. Edited by Leigh Tennant and Steven Cottingham. Published on unceded, traditional, and ancestral Musqueam, Squamish, and Tsleil-Waututh territories (Vancouver, Canada) since 2018. ISSN 2563-4364.

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QOQQOON//To Live and Die at Sotheby’s

To Live and Die at Sotheby’s

Art Under Late Capitalism

Regardless of what is written in the public mandates of cultural institutions, art under capitalism tends to function as a bourgeois tool of wealth management for the international upper class. Through a series of institutions and mechanisms, artists and collectors can manipulate and exploit the contemporary art market to facilitate the laundering and accumulation of money. Under capitalism, the use-value of art is no longer tied to its social function as a means of communication or cultural expression, instead its use-value is derived from its sign-value which determines how effectively it can be used for wealth manipulation and as a key instrument in white-collar crime.

At a very basic level, the loose connection between a work of art’s material value and its monetary value can be exploited for all sorts of nefarious schemes. A generously appraised work of art can be donated to a local museum or other cultural institution for an equally generous taxable donation receipt or political favour. The IRS only audits a handful of the 100,000+ charitable donations made each year but routinely finds that one-third to half of the audited donations are overvalued by two to three times. Numerous prestigious museums like LACMA have been investigated over their role in these tax schemes, mainly whether or not museum officials knowingly accepted overvalued items.1

In 2007, a Jean-Michel Basquiat painting was discovered in a crate coming into JFK International Airport from London—the painting’s value was marked as $100 on the import form, but its real value is estimated to be around $8 million.2 The painting was later traced to former Brazilian banker Edemar Cid Ferreira who owned the Brazilian bank Banco Santos before its bankruptcy in 2005.3 Ferreira was accused by Brazilian authorities of numerous charges including bank fraud and money laundering. The Basquiat painting was part of Ferreira’s elaborate laundering program, in which his fortune was converted into a 12,000-piece art collection which he attempted to smuggle out of Brazil before it could be seized by Brazilian authorities.4

Expensive art can be used for more than a tax donation. The opaque nature of the contemporary art market means that highly valued art is the perfect vehicle for the illicit transfer and hiding of wealth. It is routine for a $100 million painting to sell at auction with providence listed as “sourced from a European collector”.5 A $100 million painting is the perfect avenue in which to hide wealth from regulators or to clean ill-gained profits. For example, numerous Malaysian officials involved in the 1Malaysia Development Berhad scandal were found to have had purchased art through shell companies to turn the embezzled funds into assets. These paintings were then used as collateral for loans of over $100 million.6 Jho Low, one of the primary architects of the 1MDB scandal was found to have purchased at least $210 million worth of art from Sotheby’s alone through his shell company.7 The 1MDB scandal was a large-scale embezzlement scheme where money was taken from a government-run development bank and deposited into the accounts of the Prime Minister and other government officials. The US Department of Justice estimated that at least $4.5 billion was embezzled in the entire operation.8

Another eyebrow-raising fact is that many of the world’s most famous art collectors are also active players in the financial markets. For example, hedge fund managers and investors like Steven Cohen, Dan Loeb, and Leon Black all have extensive art collections, with Coen’s being valued at nearly $1 billion.9,10 Cohen was was also recently fined $1.8 billion after pleading guilty to insider trading charges.11 Black stepped down as chairman from his firm in March 2021 after it was revealed he paid $158 million to Jeffrey Epstein for tax advice from 2012–2017.12 The overlap between art collectors and financial players suggests that both the art market can be manipulated to increase the value of an existing art collection, and that the art market itself functions as an alternative source of unregulated liquid currency.

Aiding in art as a liquid commodity are freeports. Freeports can be thought of as the art world’s equivalent to an infamous Swiss Bank Account; they are extremely secure, climate controlled warehouses often located in areas with very opaque registry laws.13 Using freeports, priceless works of art can be stored and traded without leaving the Freeport—effectively enabling the transfer of wealth without crossing national borders or tax territories.14 As nothing is imported or exported, the transactions remain hidden from any regulatory bodies. The culmination of these art market systems allows for money to change hands nearly anonymously with no work of art even needing to move or even really exist.

The work of art’s non-presence during these transactions is mirrored in the recent development of NFTs. When a NFT is sold, no physical work exchanges hands but instead a mark of ownership is placed on a digital ledger. Indeed, freedom from material constraints is a feature rather than a glitch of financial liquidity.

How to Respond

How should artists respond to these art-market conditions? If the measure of success for art is how useful it is as a tool of wealth generation and financial management, then how do we as artists create art that antagonizes these conditions? To this end I propose examining the character of Rick Masters (played by Willem Dafoe) in the William Friedkin’s film To Live and Die in L.A (1985). In the film, Rick Masters is an infamous money counterfeiter who daylights as a contemporary painter. The film shows Masters producing paintings but never selling them, instead choosing to burn them once finished. The counterfeit currency he prints supports his appearance as a successful artist.

Friedkin describes the film as an exploration of a counterfeit world: “[it] was about a counterfeit world: counterfeit emotions, counterfeit money, the counterfeit superstructure of the secret service; everyone in the film has a counterfeit motive. So it seems to me that the whole film was about counterfeit relations”.15 Rick Masters the “artist” is a counterfeit persona, the real artist is Rick Masters the counterfeiter and the real art is the counterfeit currency he produces.

Why counterfeit money? If art’s success under capitalism translates to its value within the market, then producing your own money does create a form of successful art. Additionally, producing counterfeit currency could be used to subsidize one’s lifestyle as a successful artist, circumventing the catch-22 situation where artists must produce autonomous cultural objects while also paying rent and buying materials. More importantly, producing and circulating counterfeit money would erode and destabilize the foundation of the capitalist financial system that defines successful art in the first place. Currently, some artists follow a similar strategy and produce art that is just meant to generate value (For the Love of God by Damien Hirst comes to mind). The difference with what I propose and these artists is that their art and participation in the art market does nothing to undermine the systems in which they participate. Producing counterfeit money and inserting it into circulation directly attacks and undermines the internal logic of capitalism necessary for it to function. Counterfeiting and the reproduction of forgeries also have a rich history in art before the absorption of art as a financial tool within capitalism. Only through the reintegration of counterfeiting and reproduction into art can art be detached from its sign-value and freed from its role in the global financial system.

Counterfeiting, Reproduction and Art

Counterfeiting and reproduction have played important roles in the development and role of art throughout history. Prior to capitalism and art’s transformation into a commodity item, art served a social or theological function. Think of statues produced by the ancient Romans and Greeks, illuminated manuscripts produced by monks in the Middle Ages, or the frescoes and portraits of the Renaissance. In fact, the Romans were apparently so inspired by Greek sculpture that they routinely copied Greek sculptures entirely.16 The result is that much of our knowledge of Greek sculpture comes from the copies the Romans produced of those sculptures.

During the Renaissance it was common for artists-in-training to produce copies of their master’s work—both as a training exercise and as a way to raise funds for the studio through their sale. Michelangelo’s initial rise to fame came from him producing a copy of a Roman statue, aging it artificially and passing it off as an antiquity.17 When the ruse was revealed, Michelangelo’s skill was noticed by patrons of the time and it helped propel his career.18

The notion of counterfeit as it exists today means producing duplicates of art that interfere with art’s status as a singular commodity. Art’s effectiveness as a tool of wealth management and generation is tied to its sign-value and its perceived exclusivity. Producing counterfeits and reproductions disrupts this sign-value equation. On a broader level, counterfeiting and reproduction interferes with the overall sign-value system contemporary capitalism is built upon. If art’s value was based on its use-value, the distinction between original and counterfeit would not matter.

Counterfeiting Under Late Capitalism

Jean Baudrillard describes counterfeiting as a phenomena distinct to the premodern period. This was a period in which images, signs and objects could gesture towards a distinguishable reality while remaining separate from it.19 Today, modern reproduction technologies allow for the creation of copies indistinguishable from their originals. The distinction becomes meaningless as the copy is absorbed into the information networks and web of signs that construct the modern era. Producing a counterfeit is impossible in some sense as, unlike in counterfeit money, the distinction between the original and the counterfeit depends primarily on context rather than content.

What does this mean for counterfeit money? Consider the “Supernotes” which regularly broke into the news cycle throughout the 90s and early 00s. These “counterfeit” banknotes were so accurate that only the most seasoned examiner with the most advanced equipment could detect them.20 Their reported origin was a North Korean counterfeiting operation and they were supposedly used to finance the North Korean weapons program.21

In 2006, German financial reporter Klaus Bender wrote a book about the inner workings of the elusive banknote printing industry. In the book, numerous industry insiders are cited doubting the North Korean origins of the Supernotes.22 The insiders claim the materials and production techniques are so accurate it would impossible for them to come from North Korea. The insiders suspect that the notes are manufactured within the United States as it is the only place where the appropriate production tools and materials could be found.23 In a 2007 article, Bender alleges that these Supernotes are manufactured by the US government—more specifically, a secret CIA facility north of Washington DC prints them for use in off the books operations.24 The difference between the copy and the original is fully meaningless.

–Robin Netherton, October 2021

Notes

  1. Jason Felch and Doug Smith, “Inflated Art Appraisals Cost U.S. Government Untold Millions,” Los Angeles Times 2 March, 2008.
  2. Patricia Cohen, “Valuable as Art, but Priceless as a Tool to Launder Money,” The New York Times 13 May 2013.
  3. Lawrence Van Gelder, “Missing Basquiat Painting Found,” The New York Times 15 February 2008.
  4. Cohen, “Valuable as Art, but Priceless as a Tool to Launder Money.”
  5. Graham Bowley and William K. Rashbaum, “Has the Art Market Become an Unwitting Partner in Crime?” The New York Times 19 February 19 2017.
  6. Bowley and Rashbaum, “Has the Art Market Become an Unwitting Partner in Crime?”
  7. Ibid.
  8. “Malaysia’s 1MDB State Fund Still $7.8 Billion in Debt – Government Report,” Reuters 6 November 2020)
  9. Katya Kazakina, “Steve Cohen Is Trading Art Like Stocks,” Bloomberg.com 3 November 2015.
  10. Michael Wolff, “Is Art a Criminal Enterprise?” USA Today 18 November 2013.
  11. Ibid.
  12. Dan Mangan, “Leon Black Quits Apollo Months Earlier than Expected Following Jeffrey Epstein Investment Scandal,” CNBC 22 March 2021.
  13. Talia Berniker, “Behind Closed Doors: A Look at Freeports,” Center for Art Law 2 November 2020.
  14. Berniker, “Behind Closed Doors: A Look at Freeports.”
  15. Counterfeit World: Making To Live and Die in L.A., Youtube (DVDXtras, 2021)
  16. Mark Cartwright, “Roman Sculpture,” World History Encyclopedia (28 September 2021).
  17. Mariana Zapata, “How a Forged Sculpture Boosted Michelangelo’s Early Career,” Atlas Obscura 14 December 2016.
  18. Zapata, “How a Forged Sculpture Boosted Michelangelo’s Early Career.”
  19. Jean Baudrillard and Sheila Faria Glaser, Simulacra and Simulation (Ann Arbor: The University of Michigan Press, 1995).
  20. Klaus W. Bender, “The Secret of America’s Counterfeit ‘Supernotes,’” trans. Armin Broeggelwirth, Watching America (8 January 2006).
  21. Ibid.
  22. Ibid.
  23. Ibid.
  24. Kevin G. Hall, “U.S. Counterfeiting Charges against N. Korea Based on Shaky Evidence,” McClatchy Washington Bureau 10 January 2008.

Image stills from To Live and Die in L.A., directed by William Friedkin (1985; Beverly Hills: MGM/UA Entertainment Co.), DVD.