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Creative Arts and Entrepreneurship
I am sure many of us who collect art and love art feel that it a shame that so many artists die poor. Why is that? Well maybe it's because as our Carleton University Dean of Engineering and Design, Dr. Sammy Mahmoud, says: "Your don't get in this life what you deserve, you get what you negotiate."
As someone who teaches creative people (many of them architects), I know first hand how reticent they are about blowing their own horn, self-promotion, hard edged negotiating, confrontation, deception, feints, and all the other negotiating tactics that one encounters in life. But I am also DELIGHTED that so many of them are now deciding to come across with me to the School of Business and study entrepreneurship.
When it first started happening, it was a bit of a mystery but in the last few years it has explained itself. These young people don't: a) want to wait until they are old before they can enjoy some financial success, b) want their death to be an upward career move (i.e., their work is more appreciated and appreciates more after their deaths), c) want to always be at a disadvantage in terms of negotiating with their clients and customers.
Artists, painters, writers, novelists, poets, architects, actors, musicians, composers-they are all on their own. They (generally) don't have a union, they don't have pension plans, they don't get 'benefits', they don't get paid every two weeks by an employer, they don't get paid holidays. But they do get taken advantage of by agents, brokers, clients, customers, resellers, publishers, producers, employers …
I have argued that the value in a stock like Disney is largely a result of their creative output-their IP (Intellectual Property). I have tried to measure the value of creativity in my essay on Treescapes.
To cut to the chase, it's clear that unless creative people learn to stick up for themselves they are likely to die poor like Vincent Van Gogh.
I was struck recently by this brief article that appeared in BusinessWeek (October 11, 2004), which I show below. I thought the idea was brilliant. Each artist (250 of them) contributes 20 works to a NYC Artists Pension Trust, mostly from early on in their careers. When they retire, they receive payment from the fund-half from the sale of their own works and half from the sale of everyone else's works in the trust.
This is similar to the resolution of an issue I was involved with at a law firm some years ago. Their partnership was tearing itself apart over the issue of partner compensation. Every partner was being rewarded equally, which clearly wasn't fair to the big billers in the firm, some of whom were billing at that time $750,000 a year (in their real estate department). But some partners were only billing $250,000 (they were in the much smaller, family law practice). Yet every partner was taking home the same pay.
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The family law practioners reasoned that the firm needed to provide a complete service to their clients, some of whom were getting divorced. Their argument was that clients came to the firm because it had a full service offering and so each partner should be treated equally because they all shared equally in creating a full service offering. Nonsense cried the real estate division. If you don't change the system, we'll walk.
Well, the solution we created was precisely the same as that used in the creation of the artist's trust as reported by BusinessWeek. Half of a partner's earnings went into the pot for all to share; the other half, they kept.
It's the art of taxation-a famous Frenchman once said that the 'art of taxation is the ability to pluck the maximum number of quills from the goose with the minimum amount of hissing.' When a partner is taxed at more than 50%, this destroys their incentive to work and, in fact, it had hurt the firm's results in the previous two years before they finally changed their partners' compensation system.
Partners who had been big billers were taking two and three months off a year (in Ottawa's awful winters, of course). This changed after the system was reformed.
But the point I am trying to make is that Universities and Colleges that teach creative arts need to teach entrepreneurship too and, in fact, many of them are starting to recognize this.
I am not sure how something like this would work for, say, architects. It would obviously work for composers, musicians, painters and maybe poets, novelists and writers too. Architecture presents a greater problem. I have been pondering how the profession can cope with ever increasing demands on it with ever shrinking margins and how it can take advantage of the Internet or even something like the NYC Artists Pension Trust. I will ponder some more. Suggestions are welcome.
Copyright, Dr. Bruce M. Firestone. Ottawa, Canada. October 2004.
http://www.dramatispersonae.org/DesignEconomicsFrontPage.htm