Introducing 'The Grumpy Art Historian'

January 14 2013

Image of Introducing 'The Grumpy Art Historian'

Picture: Jezebel.com

Apparently I'm not the only one. Allow me to introduce a new and well written blog called 'The Grumpy Art Historian'. Recent pieces include a first-hand view of the decidedly curious 'Raphael and Studio' Pope Julius II in Frankfurt, and this interesting account of a visit to the prints and drawings room at the Louvre:

It was no problem getting an appointment, but I struggled a bit with the meaning of the 'red items' that could be seen only once.  Turns out it means that you can only request them once, ever - they keep a record of which drawings you've looked at, and on subsequent visits you can't request any 'red' items that you've seen before.  

Enough to make anyone grumpy, really.

There's also an interesting post on the merits or otherwise on the Government Indemnity system, whereby the state assumes all risk for art damage and loss so that museums in the UK don't have to pay for commercial insurance:

The Art Newspaper reports that the government provided free insurance for loans of works of art worth £8.6bn last year.  It is a shameful and stupid subsidy that incentivises perverse behaviour. 

This insurance isn't free.  There are costly claims for damage, and there is always the risk of a catastrophically high claim if something goes horribly wrong.  Governments shouldn't be in the business of providing services that they don't understand and can be more efficiently supplied by the private sector.  Insurance is a complex business, and a worst-case outcome (fire at the Leonardo show) could put a meaningful dent in state finances at a time when it's especially unaffordable.  I'm all in favour of government subsidising the arts, but this is an arbitrary subsidy that encourages institutions to borrow the costliest works because they never bear the full cost.

The dreadful story of the damaged Miro at the Tate is a salutary warning of the real harm that can be caused, which no amount of cash can put right.  It's not just specacular instances of damage that are of concern, but the ongoing stresses caused by packing and unpacking delicate works of art and moving them between different environments.  The state shouldn't be encouraging this by picking up a big part of the tab. 

 

The Art Newspaper estimates that commercial insurance would have cost about £15 per visitor to the Van Gogh exhibition at the Royal Academy (which I heard was too crowded for any of the 411,000 visitors to have seen much anyway).  The implication is that it's a Good Thing because it allowed the exhibition to go ahead with ticket prices at a reasonable level (less than half the cost if insurance were purchased commercially).  But why - especially in times of austerity - is the government providing a £15 a head subsidy to the well-heeled visitors to the RA?  And is this really the best way for the government to subsidise the arts at a time when the National Gallery cannot even afford to pay enough guards to cover all of its rooms?

The author of The Grumpy Art Historian knows all about risk - he (Michael Savage) is a trader at RBS. However, I think the Government Indemnity scheme is a great asset to the museum sector in the UK, and good value for taxpayers. As TAN reports:

We have also obtained data on indemnity payouts. In the 14 years up to 2010/11, there were 28 claims on behalf of lenders (an average of two a year), totalling £303,000 (an average of £10,800 each). These were all for conservation repairs, and not a single indemnified work was stolen. 

Last year, there were two claims, totalling £236,000. One was for a minor item, but the other was for damage to Miró’s Painting on White background for the Cell of a Recluse I, 1968, on loan to London’s Tate Modern.

 

All of which means that in 15 years, total claims on the Government Indemnity have been just over £.5m. It represents a signficant net saving to the government, for if museums had been forced to get private insurance, the bill to the taxpayer would have been in the tens if not hundreds of millions of pounds (since the governmnet funds museums to the tune of about 35%-45%).

Update - a reader from Spain writes:

The paintings loaned to the Prado, Thyssen and Reina Sofia Museums are covered by free insurance provided by the Spanish government called "Garantia de Estado" (State Guarantee) . Without this insurance would be impossible for public museums with very limited funds (even before the crisis) hold exhibitions, such as the Late Raphael or The Young Van Dyck, with works valued at exorbitant amounts. This expenditure, combined with the cost of transportation, would make it impractical exhibition with dozens of paintings from all over the world.

More on the Spanish system here.

Update II - another reader writes:

I’m not sure whether one should encourage too much open discussion of this surprisingly complicated question – but...

When you write “All of which means that in 15 years, total claims on the Government Indemnity have been just over £.5m. It represents a signficant net saving to the government, for if museums had been forced to get private insurance, the bill to the taxpayer would have been in the tens if not hundreds of millions of pounds (since the governmnet funds museums to the tune of about 35%-45%)”, there are several debatable points. Not all my answers point in the same direction, and I find myself both agreeing and disagreeing with the Grumpy Art Historian.

Firstly if one were to go down the private insurance route, it is rather unlikely in the present climate that the Government would in fact increase explicit funding, even to the 35–45% level. The fear is that, once out in the open, the value of the scheme would be retained by the Treasury and arguments such as the value of tourism etc. generated by the exhibition would be lost.

More insidiously you ignore what in the world of finance would be termed the “option value” inherent in insurance. I can chose not to insure my house, but it would be a category error to call that a saving of the amount of the commercial premium; and my wife might take a different view of the wisdom of my gamble. So far HMG has got lucky, but it is playing at the casino (best left to financial institutions): you simply don’t know when over the next 15 years, or 150 if necessary, the catastrophe will strike that will change the perceived value of the cover. There may be a saving in “self-insurance”, but it is only the profit element retained by insurers, a far smaller amount than the commercially appraised risk value. With or without profit, the hidden subsidy the Government has provided is an eye-catchingly large number to flaunt before ministers who (according to today’s Sunday Times) dare not even tell us they have been to the theatre, such is the perceived philistinism of the voter. And whatever you think of Gordon Brown’s numerous errors, taking the chips off gold bullion, even though the bet came up, was at least logically defensible.

A serious question for some of these high value exhibitions is whether the commercial insurance market would be able to provide sufficient cover for the very concentrated risk.

An even broader perspective: whether as tax payer or through my pension fund or other investments in insurance companies, I am probably footing this bill anyway. 

This gets a bit more complicated in an international perspective. If the National Gallery and the Louvre each self-insures their own Leonardo when they remain in the respective museum, how much of the premium notionally attached for insuring one on loan is covering a risk that wouldn’t have been covered before? In other words are we just talking about the extra risks from transportation? Of course the risk of loss goes up on a move, but if you sought commercial insurance for a Leonardo in situ only, you would still have to pay a vast amount to reserve the “line” of cover, however minute the risk. And of course if the Treasury started to think about the full implications of self-insuring the National Gallery’s permanent collection…

Which raises the crucial point: whoever pays, money is not an acceptable substitute for the loss or damage to a major artistic masterpiece. The price of commercial insurance cover merely focuses the mind on this – and the GAH is right to that extent. But actually curators are not better placed than civil servants to decide these questions: asking scholars to take round the begging bowl to the usual suspects just won’t work for these amounts. The numbers simply won’t permit a curator to trade off the insurance costs of a high-value loan against say the production costs of colour printing in the exhibition catalogue, and the market discipline the GAH seeks won’t work in practice. The result is that the major masterpieces would never be shown in the UK.

The reason for reducing the number of blockbuster exhibitions should be caution rather than Treasury politics. And if that is a spur to curators to follow Nick Penny’s lead in emphasising focused, scholarly exhibitions, so much the better. But the idea that we should never again be able to borrow a good Titian or Leonardo – for a serious exhibition that justified the risk – would be crushing.

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