Artists Resale Royalties: a piece of pie…

The ARR scheme so far has cost taxpayers just over $2.2 million and as of December 2013 has delivered a total of 7,800 royalty payments, to 800 artists (or estates) with a median value of about $105 per payment. The scheme has, in three and a half years, only generated a total of less than $200,000 in management fees. It is unlikely that the scheme will be self-funding any time soon, if ever. And what has this costly public art project delivered? A make-work scheme for arts administrators, a restraint of trade and what is essentially an anti-progressive tax: the more you have, the more you receive. Below is a pie chart of resale royalty distributions by value. Note: the construction of the pie chart needed a few ‘extrapolations’ where information from previous years is used to categorise the latest data. These extrapolations might not be perfect.(see footnote below)

The pie chart makes it clear that royalties on resales of individual artworks for more than $10,000 each, account for 59% of all the money collected, yet these top rank payments – about 550 in total -  only account for just 7% of the total number of individual payments of the scheme. (BTW many thanks to Paul Fritjers for the tasty pie chart.)sales by price

On the other hand the bottom 44% (2,946) of individual payments have only accounted for just 9% of all the money collected. The median value of this bottom bracket of payments is about $55; the average individual transaction cost to CAL, alone, is $30.The only point of these thousands of very small, costly payments is to conceal the real, anti-progressive nature of ARR. Continue reading

Digital Discrimination: The Case of Airbnb

Michael Luca
Digital Discrimination: The Case of (pdf)

Online marketplaces often contain information not only about products, but also about the people selling the products. In an effort to facilitate trust, many platforms encourage sellers to provide personal profiles and even to post pictures of themselves. However, these features may also facilitate discrimination based on sellers’ race, gender, age, or other aspects of appearance. In this paper, we test for racial discrimination against landlords in the online rental marketplace Using a new data set combining pictures of all New York City landlords on Airbnb with their rental prices and information about quality of the rentals, we show that non-black hosts charge approximately 12% more than black hosts for the equivalent rental. These effects are robust when controlling for all information visible in the Airbnb marketplace. These findings highlight the prevalence of discrimination in online marketplaces, suggesting an important unintended consequence of a seemingly-routine mechanism for building trust.

One for Your Amazon Wish-List

French economist Thomas Piketty has been picking up a lot of attention in the rest of the English speaking world – well mainly the US – thanks to the publication of an English translation of his recent book Capital in the 21st Century. Never heard of him? Don’t fret about it – neither had I until I quite serendipitously came across this article in the Guardian a couple of days ago.

The subject of Piketty’s book is obvious from the title. More specifically, it deals with the growing inequality in wealth – and income – distribution which is becoming entrenched in the global economy. At 650+ pages it’s obviously going to be a substantial read when (or perhaps if) I finally get my grubbies on a copy but from what I’ve seen so far probably worth the effort. Continue reading

A postcard from 1968

I remember a long long time ago – in fact it was nearly fifty years ago I went with my family on a three week trip to Alice Springs and the Northern Territory. Dad didn’t spend much time with us as he was working while Mum, David and I tried to enjoy ourselves. Mum located a riding school and we went riding quite a few days. We went to the rock, where Mum, famous ever after in family culture, took one look at the climbing face of the rock and decided that if we stumbled and fell and lost hold of the single chain going up the rock, we might easily die. So we were forbidden from climbing the rock.

We were scandalised. In any event I still remember the trip quite well. Dad’s work meant nothing to me then but it was quite historic. It was work with two other academics – I think Colin Tatz and Sol Encel – on the likely consequences of giving aborigines equal pay.  The next year they got it of course, though it was never about their interests. They were not heard in the case and remained unrepresented. The white unions didn’t like competing against cut price labour.

In his part of the report focusing on economics, Dad concluded firstly that aborigines should be given equal pay, but also that demand for aboriginal labour would fall and so recommend support for aboriginal stockmen (I don’t know what kind, presumably the original documents can be located, but I don’t know where they’d be and I’ve not looked.) In the upshot Dad was (I expect) quite shocked to be attacked quite stridently as a racist. His saying that some aboriginal stockmen would lose their jobs was racist apparently.

Anyway, racist or not, he was right.

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All that was implicit was made explicit

Wendy Bacon Wendy_Bacon
Talk about clamping down on Pub Servants’ social media reminds me of how as journos we used to interview them before access to info stopped
10/04/2014 10:09 am

This tweet reminds me of something I’ve pondered for some time. The modern craze for making the implicit explicit. Its everywhere. Firms and other organisations didn’t have mission statements for most of time, and then began acquiring them starting around the 1980s(?).

Were firms hopelessly adrift before then? We introduced Freedom of Information legislation (about a decade behind the US) in the Fraser years. Has freedom of information improved. Well it’s hard to say – one’s formal rights to information have improved vastly – we had barely any before legislation like the Fraser Government’s legislation and its more recent replacement. And yet journos could ring up public servants and find out what was happening. There would have been strong (implicit) codes of conduct. Public servants wouldn’t be ‘outed’. They would likely have expressed personal views without having to explicitly go ‘on’ and ‘off’ the record as they talked.

Yet we are in a world where government is endlessly performed. And in this world the performer finds the velvet glove of formal transparency requirements the perfect accoutrement to the iron fist inside – the instinct for concealment. Today in most organisations any contact with the media will go through communications people who are trained not to answer questions. And who can blame the organisations? For on the other end of the phone acknowledge little common interest with those they interview beyond the commonplace narcissism which they may share with, or project onto their interviewee. The journalist on the other end is after something to entertain – a ‘story’ – not an explanation of what’s happening.  As Malcolm Turnbull puts it engagingly, they’re the hounds, he’s the fox, their job is to find and kill him and his job is to stay alive.

But the thing I always think of when I think of our mania for making things explicit is disability.  There are any number of ‘rights’ we’ve given the disabled. And we’ve done great things compared to what went before. We’ve made buildings, car parks, all manner of things more accessible to the disabled. We’ve passed laws to prevent discrimination against the disabled. But before all that, in a old world where there was no transparency,  the press engaged in a conspiracy of concealment – but one that was on behalf of the common good, of good government. Remarkably – it’s so far from our current circumstances I must say I can barely imagine it – in a world recognisably modern, in a world full of gutter journalism and dirty political tricks, no-one let on that Franklin Delano Roosevelt was a paraplegic. Continue reading

Artists Resale Royalties: on bullshit, part three

Australia’s Artists Resale Royalty (ARR ) scheme has so far cost taxpayers $2.2 million in direct support. And over many years the publicly funded lobbyists for this scheme, headed up by the National Association for the Visual Arts  Ltd, have additionally spent a lot of public money on lobbying for their scheme. ARR is a very political project. It is imposed by law on a lot of small ‘sole trader’ businesses; it imposes quasi-compulsory collective management on artists and also imposes a restraint of trade on an art market where profit margins are generally quite thin. ARR is not an ‘art project’.  

The fact that these publicly funded arts organisations have, for years, been free to use public money, intended for art projects, to conduct a very partisan political campaign really rankles.

The lobbyists for compulsory ARR are involved in a ‘last ditch’ lobbying campaign for their compulsory ARR scheme to “continue”.  As always there is a lot of fudge and misleading by omission to their advocacy. In particular they continue to claim that the majority of royalty payments, to date, have gone to indigenous artists: in this case to date is a very very large lump of fudge.

In the first years of the scheme’s operation, most of the royalty payments raised were on resales of indigenous art. However because resales of indigenous art make up only about 10-15% of total art resales by value, it is inevitable that in time more and more of the royalty payments will come from the resales of non-indigenous art. And it is also inevitable that the distribution of royalty payments by value must, eventually, map to the universal truth that when it comes to the resale of art: artworks by the top 20 artists most favoured by the market get most of the money and the next 80 or so of bestselling artists get most of the remainder.

The agency charged with administering the scheme, the Copyright Agency Limited (CAL), recently released some updated figures and information about the operations of the ARR. I also noted that this detailed information was not made available at the time of the ARR review process. The following analysis is based on the figures provided within that report.

Generally speaking, analysis of the top 21 payments confirms that this scheme is already starting to follow the usual market pattern: a handful of sales of a handful of top 20 artists  constitute most of the total value of art resales and therefore most of the total value of collected Art Resale Royalties.  This is despite the fact that the scheme apparently only currently affects about 10% of resales (according to CAL’s report). Obviously as the scheme starts to affect more and more of the majority of  art resales, the skewing of the distribution to a handful of artists such as Whitely, Nolan, Williams etc will inevitably become more pronounced. It would only take the scheme to collect another 10 to 20 high-end sales in the next year, for it to push the distribution to the handful of artists most favored by the market towards 30% or more.

The breakup of the top 21 resale royalty payments is :

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Operation 2770: TACSI’s Family by Family expands to Mt Druitt

Family by Family about which Troppodillians have heard before is spreading its wings. We’ve started in Mt Druitt where we’ve scoped the program which means investigating how it should be changed to optimise it to the local community. Here’s the Scoping Report which I think makes interesting reading.

Anyway we launched the scoping report with the Minister who’d commissioned us to establish the program – Pru Goward. And here’s my speech at the function. One thing that got my attention was the fact that, according to the scoping report, quite a few people from the area have tattoos of the postcode. And the supporters of Greater Western Sydney take signs of their postcodes to fixtures against Sydney Football Club – which is now more explicitly the team from the leafy suburbs.

Here also is the audio of a recent interview on this by Alex Sloan.

Notes for a Speech by Nicholas Gruen, Chairman of the Australian Centre for Social Innovation at the launch of the Family by Family Scoping Report for Mt Druitt, 12th March, 2014


Welcome to our modest function at Postcode 2770

Still, I’m reliably informed that from little things big things grow.

These are the words of Mystic (pronounced Mystique). She’s 21 now but was in out of home care since she was 3.

It happened so quickly. Once I turned 18, they sort of kicked me on my arse. They said ‘here’s $750, see you later, thank you’. And I’m just like ‘what the hell?’. A book and $750. That’s for being in care all your life.

Actually it makes you feel like an outsider. It makes you feel non existent on this earth. Like you are an alien. It does. It affects when you go to school too. You’re so used to being called ‘client’ and stuff that you start looking at yourself different to everyone else.

This example is not from NSW, but it’s not such an extreme example for those who know the system. And this is after what must be a decade, perhaps two of talking about “citizen centric services”!


Family by Family is different.

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The other Berlin Wall that came down: The collapse of communism and the spread of ideas

Book Translations as Idea Flows: The Effects of the Collapse of Communism on the Diffusion of Knowledge
by Ran Abramitzky, Isabelle Sin


We use book translations as a new measure of international idea flows and study the effects of Communism’s collapse in Eastern Europe on these flows. Using novel data on 800,000 translations and difference-in-differences approaches, we show that while translations between Communist languages decreased by two thirds with the collapse, Western-to-Communist translations increased by a factor of four and quickly converged to Western levels. Convergence was more pronounced in the fields of applied and social sciences, and was more complete in Satellite and Baltic than in Soviet countries. We discuss how these patterns help us understand how repressive institutions and preferences towards Western European ideas shaped the international diffusion of knowledge.

Bruce Chapman on Government as a risk Manager

Jan Libich recently interviewed Bruce Chapman, who was one of the main architects of the HECS scheme via which university places are financed in Australia, a system that is being copied all around the world now, making Bruce Australia’s most influential international economist by a mile. Bruce talks about this scheme and about the problem of how to manage risk more generally for governments. Follow the link and enjoy!