[photo by wallyg]
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Americans are passionately, stupefyingly, electrifyingly in love with the rags-to-riches story. It speaks of limitless opportunity, the nobility of the downtrodden and of the inextinguishable hope we harbor for a better tomorrow. We crave these ideas, devour them like ice cream or buttered beets. They represent the apogee of American idealism and are the sine qua non of America's implicit promise: all your hard work will be rewarded.
Born in 1883, Chester Dale was the son of a Manhattan department store salesman. A contumacious, red-headed boy, he could not be constrained. His father sent him to Peekskill Military Academy for some structure but Chester spent most of his time and all his allowance at the nearby horse track. At the age of fourteen he decided Peekskill wasn't for him and made his way to New York City where he got a job on Wall Street as a runner.
"He had a passion for art and the wealth to acquire it."
The stock market wasn't all that different from the race track and he soon worked his way into a job as a broker and, by the age of 35, into a large fortune as well. This was the Roaring 20's and fortunes were being made overnight. He was one of the first to recognize how valuable public utilities could be and soon became a tycoon. Timing, as they say, is everything and Chester had it in spades. He made his money before the Great Depression and had the good fortune to hang onto it when the economy faltered and then fell.
His wife Maud had a passion for art and had piqued his interest in the French Masters years earlier. He began collecting famous French works and then his tastes expanded; in addition to Eugene Delacroix and Jacques-Louis David, Chester bought works by Renoir, Van Gogh and Monet. The catalog of his collection reads like that of a well-funded museum. He acquired modern works from Picasso and Matisse. Salvador Dali painted his portrait as did Diego Rivera and Guy Pène du Bois. He had a passion for art and the wealth to acquire it.
While many former men-of-means were liquidating their estates, Chester Dale was filling his Manhattan apartment with bargain-basement masterpieces. Between 1926 and 1936 Chester bought over 500 paintings and 30 sculptures. When space ran out in his Plaza Hotel apartment, he started filling a five storey mansion at 20 East 79th Street in New York City. During the dark night of America's economic collapse the art world had a new benefactor and his name was Chester Dale.
Shrewd love
But Chester was not just an art enthusiast, he was a skilled investor. With the help of his wife, an artist and art critic, he learned how to recognize works of lasting value. The pieces he acquired throughout his life were worth much more at the time of his death than he had paid for them. So while his collection helped both to conserve prominent, historic works of art and to support the work of living artists, it also served to build his personal fortune.
How good an investment is art? It's a difficult question to answer with art tastes and trends considered fickle at best. To attempt to authoritatively track art as an investment seems a fool's errand. But for several years two NYU professors from the Stern School of Business have been trying to answer that very question with some confidence. Michael Moses and Jiangping Mei looked at repeated sales of the same works of art dating back to the late 19th Century. The result is the Mei Moses Fine Art Index.
"George Gershwin used to stare at one of Chester's prized Cezannes seeking inspiration."
The index now tracks the recorded sales of thousands of pieces of art and gives annualized returns for a number of art categories. In their latest report (July 2010), the Mei Moses All Art Index is up 13.4% since the end of 2009 with the Contemporary and Impressionist & Modernist Indices leading the way. The long term annualized returns for art are comparable to equities over the past fifty years with stocks narrowly beating out art 9.4% to 8.9%.
The major disadvantage to investing in art, as Mei and Moses point out in their 2002 paper Art as an Investment (.pdf), is the "heterogeneity of artworks and infrequency of trading." Unlike stocks, which trade continuously and behave as fungible commodities in the marketplace, each work of art is unique and can remain off the market for generations as it’s passed from heir to heir. Artwork tends to be cherished by its owners and treated as a part of the family. Chester Dale, who remained childless, at times referred to his paintings as "my children."
But its longevity and singularity is also the upside of owning art; you get to enjoy it. No one ever said, "Step into my study, I want to show you the 200 shares of Intel I just bought." A quality work of art however, can bring years of enjoyment to generations of family members and friends. It can be appreciated by houseguests and a source of endless conversation. George Gershwin used to stare at one of Chester's prized Cezannes seeking inspiration.
National Gallery of Art
Throughout his life Chester lent pieces to various galleries and museums but when he died in 1962 the bulk of it was given to the National Gallery of Art in Washington, D.C. I took my daughters to see the Chester Dale exhibit a few weeks ago and it is absolutely extraordinary. The scope of the collection alone is awe inspiring. I tried to imagine what his houses must have looked like with all those magnificent pieces decorating various rooms, glass curio cases filled with delicate Hummels in between I suppose.
The National Gallery categorizes works and displays similar periods together, the East Building displaying 20th Century artists and the West Building housing Renaissance through early 20th Century works. Because Chester's collection spans these periods it was split between the two buildings, but this year, and through next July, the entire collection is on display on the ground floor of the West Building.
While Chester welcomed many guests into his home-turned-art-museum, the works he preserved and loved could not be enjoyed by the vast majority of humanity. It’s likely he left his collection to the National Gallery because, as one of the most visited art galleries in the world, so many more people would be able to appreciate the art he had collected during his lifetime. These inspirational and masterfully crafted works were too valuable to be seen by only a few.
"Its virtue is that it makes us feel good."
There’s something to be said for the transformative power of fine art. It’s in the definition of the term itself: “art which serves no practical purpose.” Why then do we have it? We have all seen buildings, furniture, automobiles, and even appliances which could be considered works of art. But in each of these cases they also have some function beyond their aesthetic beauty.
Fine art on the other hand, has no purpose aside from being a work of beauty which pleases the senses. Its virtue is that it makes us feel good. And humans have craved it from the earliest days of our existence. Sure, some cave drawings were communicative in nature and were intended to convey information. The fact we find them beautiful today may only be a function of improved communication technology. But even in these earliest societies there are examples of art produced solely for the pleasure of its visual appeal.
How technology changes art
I’m not an art cognoscente but I know some works are considered “important” as well as being pleasant to view. Some of these challenge the social or political status quo, some usher in new artistic techniques and still others allow us to see inside a world we had never before imagined. They are not merely well crafted examples of the medium, but catalysts which transform the world in which we live.
The invention of photography eliminated the need to reproduce scenes manually, but we still use hand-drawn images for their aesthetic qualities. Sometimes the goal is not to capture an object or scene as it actually looks, but to capture the essence of what we see in it. These pieces move us, they provoke and inspire us, and they distill, from our base natures, nobility. As an aficionado I claim art is as valuable a tool in shaping the world as math or science.
Now, if we truly believe there are works of art which are valuable for humanity, that produce some social benefit beyond their utilitarian functionality and that have the ability to change our world, wouldn’t we want them to be as widely distributed as possible? While we can debate the value of our “advanced” society in terms of individual happiness and social harmony, there is no questioning the fact we are infinitely more knowledgeable and prosperous today than our ancient ancestors.
"The world has advanced on our ability to quickly transfer knowledge from one person to another."
The critical mechanism for humanity's exponential advancement has been the ability to transmit information from one person to another. From the development of written language, which allowed information to be transmitted between people who never personally saw each other, to the printing press, which enabled the mass production and distribution of these writings, the world has advanced on our ability to efficiently transfer knowledge.
The linked computer networks of today have lifted our ability to share ideas to unprecedented levels, providing an almost instantaneous transfer of thoughts from one person to everyone else. Perhaps in some future society technology will have advanced to the point our thoughts will be connected to the consciousness of everyone in our network and when one person learned a new language or skill, everyone would know it.
In the waning days of Chester's life a new generation was being born, a generation through which the world would enter a digital age of enlightenment. The art collection Chester Dale amassed contained many important works, but it was constrained by its physical nature to be viewed by a relatively small audience. With the ability to digitalize information the education and cultural experiences once available only to the rich would soon be available to everyone in the world.
We're all rich now
In the early days of the internet age people were still unsure of the value of such a connected system. What would it be used for? What types of applications were needed? Brewster Kahle graduated from MIT in 1982 with a degree in computer science and engineering. In 1989, Brewster developed the Internet’s first publishing system, Wide Area Information Server (WAIS), and unknowingly set in motion his destiny. In 1996 he began a lifelong project of immense scale and unimaginable ambition--to collect the world's accumulated knowledge in one enormous online database.
Brewster Kahle’s massive archival project, the Internet Archive, is a repository of information on the order of the ancient Library of Alexandria which was fabled to hold every published book of the time. In the 2nd Century B.C.E. this is impressive but comprehensible. But Brewster’s Internet Archive holds more than just books. It houses movies, television programs, radio shows and even archived internet sites from the web's earliest days. It’s a feat which boggles the mind and is only made possible by the digitalization of information.
Brewster has amassed over 2.5 million publically available texts which are free to download and view on your laptop or eReader. But because Brewster prefers to read physical books he has also devised an ingenious way of getting books into the hands of those without internet access or a local library. His bookmobile, a simple cargo van, travels around dispensing books like a traveling library but without a return date. The van has internet access, a printer and book binding equipment onboard. At a cost of about $0.01/page the bookmobile can print and bind a copy of any book in their archives. That means the accumulated knowledge of humankind is available for about $3 per book.
"During Chester’s lifetime you had to be a multi-millionaire to afford the majestic collection of art he had access to."
Now imagine a similar repository for great works of art and that a traveling van could print and frame an actual-size reproduction of an influential work of art you could hang on the wall in your house. A high quality giclee could provide a cost effective, high quality image produced on canvas or watercolor paper to replicate as closely as possible the original work. Imagine impoverished families living around some of the greatest works of art ever produced. Imagine members of these families inspired to pursue their artistic dreams, develop their own creative talents and to see their value to humanity as more than manual labor.
While their lives barely overlapped, and their paths never crossed, in many ways the dreams of both Chester Dale and Brewster Kahle were the same, to give the public access to the accumulated wisdom of humanity. One through collecting great works, the other through distributing them on a massive scale. During Chester’s lifetime you had to be a multi-millionaire to afford the majestic collection of art he had access to, but today we can all be as richly immersed in fine art through the digitalization, transmission and reproduction technologies Brewster helped develop.
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