To celebrate a wonderful year of production on all of the shows in our network, we asked our staff to choose their favorite episode of the year.

Lyric Bowditch, Production Associate
“Why Do Doctors Have to Play Defense?” Freakonomics, M.D.
After the Supreme Court overturned Roe v. Wade, my feeds were flooded with content about it. This episode cut through the noise by offering a really important (and distinctly Freakonomical) perspective on the issue that I hadn’t considered or encountered anywhere else. It was also the first time I heard of “defensive medicine” — so interesting!

Neal Carruth, Executive Vice President and General Manager
“Has Globalization Failed?” Freakonomics Radio
Freakonomics Radio does not shy away from posing big, provocative questions. This episode starts with a question that might, at first blush, seem kind of boring or too abstract to be interesting. But through a charming conversation with a supremely knowledgeable guest, the law professor Anthea Roberts, you acquire the tools to answer for yourself the question of whether globalization has failed. This episode also does a good job of engaging with the back catalog of Freakonomics Radio since the show has covered this general topic in the past.

Jeremy Johnston, Audio Engineer
“Names,” Off Leash
Since my dog doesn’t seem to recognize his own name half the time, I was excited to learn something from this episode of Off Leash. It ended up being a really great insight into how dogs respond to their nicknames, differentiate vowel sounds, and identify their owners’ voices in crowded places. This is such a happy episode full of animal lovers talking about how they arrived at a name for their furry friends, and also takes us on a fun tour of Isabella Rossellini’s farm.

Julie Kanfer, Senior Producer
“Why Is Everyone Moving to Dallas?” Freakonomics Radio
I really enjoyed this two-part series and learned a lot about a place I’ve never been (Dallas) and a thing I didn’t know (that everyone is moving there). I found myself thinking about this episode/series a lot throughout the year, random bits of it popping into my brain when I least expected them to. It also really evoked a sense of place and of the people in that place; I felt like I was along for the ride (in that Uber in the pouring rain).

Ryan Kelley, Associate Producer
“What Is Sportswashing (and Does It Work)?” Freakonomics Radio
Why you liked that episode: We don’t normally focus on current events on Freakonomics Radio (we like to give the economists time to play with the data and come up with something smart), but the new, Saudi-backed professional golf league was just too intriguing not to cover. When Phil Mickelson, Qatar, and Barbra Streisand all come up in the same conversation, it must be good.

Alina Kulman, Production Associate
“Can the Big Bad Wolf Save Your Life?” Freakonomics Radio
I loved how interdisciplinary this episode was — it’s about wildlife conservation, politics, literature, and also (of course) economics. It also has some pretty staggering statistics, like the fact that deer collisions cost about $10 billion in damages annually.

Zack Lapinski, Senior Producer
“Why Did You Marry That Person?” Freakonomics Radio
This episode has everything: sexual anthropology, Victorian era politics, divorce, Shakespeare, the dating app Raya, aristocratic romance, Bridgerton, and — of course — an economist.

Morgan Levey, Senior Producer
“A Rockstar Chemist and Her Cancer-Attacking ‘Lawn Mower’,” People I (Mostly) Admire
Maybe it’s a little gauche to list your own show / an episode you produced, but I loved this episode with Carolyn Bertozzi. Rarely does someone so brilliant also have the ability to explain Nobel-prize winning science so clearly. She’s also cool as hell, and I’d really like to be friends with her.

Rebecca Lee Douglas, Senior Producer
“J***s C****t, Angela, Why Are You Such a F***ing Potty-Mouth?” No Stupid Questions
I saw that Morgan listed an episode of PIMA, so now I feel empowered to share an episode of NSQ. This show was so much fun. It was packed with interesting research, personal anecdotes, and lots and lots of jokes — basically, the ingredients for an incredible episode of NSQ. We received more listener emails/voice memos to this show than any other episode we’ve produced.

Katherine Moncure, Associate Producer
“Are N.F.T.s All Scams?” Freakonomics Radio
I loved that entire series (“What Can Blockchain Do For You?”) because it took a very complicated and opaque part of our economy — a part that’s highly polarized — and in classic Freakonomics fashion, broke it down into something that was actually understandable. N.F.T.s are especially mind boggling to me, but less so now. I would have to say though, my favorite part was not any of the clear, informative explanations, but rather when the Freakonomics crew and the artist Tom Sachs were chased out of Bryant Park for launching a rocket. Well worth the risk.

Greg Rippin, Technical Director
The “What Can Blockchain Do For You?” series, Freakonomics Radio
I feel that we did a really good job of explaining the different applications of crypto without coming across like we were trying to get listeners to (literally) buy into it. Plus, I got to leave my studio for a bit and get some fresh air in the park.

The post Freakonomics Radio Network’s 2022 Staff Picks appeared first on Freakonomics.

The National Institutes of Health is the backbone of health research in the U.S., and Collins has been in charge for more than a decade. Now that he’s stepping down, he ponders the arc of his history-making career, from his leadership of the Human Genome Project to the fight against Covid-19 (not to mention the absolute happiest moment of his life).

Follow Freakonomics, M.D. on Apple Podcasts, Spotify, Stitcher, or wherever you get your podcasts.

*      *      *

Relevant Research & References

The post An Exit Interview with N.I.H. Director Dr. Francis Collins (Freakonomics, M.D. Ep. 16) appeared first on Freakonomics.

Is art really meant to be an “asset class”? Will the digital revolution finally democratize a market that just keeps getting more elitist? And what will happen to the last painting Alice Neel ever made? (Part 3 of “The Hidden Side of the Art Market.”)

Listen and follow our podcast on Apple Podcasts, Spotify, Stitcher, or wherever you get your podcasts. Below is a transcript of the episode, edited for readability. For more information on the people and ideas in the episode, see the links at the bottom of this post.

*      *      *

James DINEEN: I’m Dr. James Dineen and I’m a primary care internist at the Mass General Hospital in Boston, where I practiced for 45 years and retired from patient care in 2008.  

James Dineen is looking through some photographs from a long time ago.

DINEEN: This is my sitting in Alice Neel’s backyard. This is Alice beginning the portrait.

Alice Neel was a painter, born in 1900. Her specialty was painting people — what you and I might call “portraits” — but she didn’t care for that word.

Kelly BAUM: Neel was resistant to the genre of portraiture, which she associated with status and wealth.

And that’s Kelly Baum. She’s a curator at the Metropolitan Museum of Art.

BAUM: Stuffy, stiff, uninspired, overly romanticized, without a critical or radical spirit.  

Neel preferred to call her paintings “pictures of people that are also history.”

BAUM: Neel’s pictures are always more than just the person they represent. 

Baum recently co-curated a massive Alice Neel retrospective at the Metropolitan Museum. It was called “People Come First.” The vast majority of the people Neel painted were not well-known. Dr. James Dineen fits that description well.

DINEEN: One day at the office, she said, “I’d like to paint you.” So this is in early 1984, and my son and I drove down to Spring Lake, New Jersey, and she painted me in her backyard.

How did Alice Neel happen to meet James Dineen, and why did she decide to paint him? Okay, let’s back up. Neel had an eventful, often traumatic life. The early death of a child, another child essentially kidnapped by her estranged husband, a mental breakdown and a couple of attempted suicides. This was all before she turned 30. She did have two more children — one became a doctor, the other an investment advisor. All the while, she painted obsessively. Neel had her fans, especially toward the end of her life, but her work didn’t sell often or for much money. In her later years, she started suffering spells, bouts of confusion; sometimes she’d lose consciousness. She was hospitalized in New York and underwent test after test, doctor after doctor. No one could figure out what was wrong. By this time, her son Hartley was a radiology resident at Massachusetts General Hospital. He arranged for his mother to be examined by an internist there — Dr. James Dineen.

DINEEN: I remember vividly the night before, having received the records from New York, saying, “Wow, they did every test known to mankind and no luck.” So I went in early the next morning and I’m sitting there doing the interview and all of a sudden she starts having one of her spells, which is really vague mumbling and staring at the ceiling out of confusion. And I followed an old rule that I learned from an internist at Yale Medical School: if you don’t know what to do, a good idea is to simply take the patient’s pulse and they’ll think you’re doing something important. 

So, Dineen took Neel’s pulse — or at least tried to.

DINEEN: Well, lo and behold, she didn’t have a pulse. So the problem was she needed a pacemaker. So we put a pacemaker in, and all the spells went away. And she henceforth considered us the golden answer to medical problems, and that’s how our relationship began. 

That’s also how Neel wound up painting James Dineen, in her backyard in New Jersey.

DINEEN: Two things I remember vividly about that experience was, one, she had absolutely no tremor, she could hold her arm extended with a fine-tip paint brush and there was zero tremor, which was really remarkable for a lady who was then almost 84. And the second thing I remember vividly was how smart she was. She talked nonstop. She asked me so many questions about politics and religion and science and everything else. Had I read this book? Had I read that book? And believe me, her worldwide experience was far superior to my Harvard/ Yale experience in terms of general knowledge. And during all this chatter, she’d be busy painting.

The painting of James Dineen was in all likelihood the last painting Alice Neel ever made. She died soon after. Her family then called Dr. Dineen, said they wanted to give him the painting.

DINEEN: So one day we went down and visited her apartment, which was also her studio. And the family gave me the painting. 

The painting shows Dineen sitting at ease, not quite smiling but with a relaxed expression, perhaps slightly bemused. His hair is longish with a side part; it was the 1980s. He’s wearing a green polo shirt and checked pants. His hands are resting on the arms of the chair; one hand is open, the other slightly clenched.

DINEEN: She really focuses on eyes and she also focuses on hands. The hands are what stand out. 

The painting of Dineen has never appeared in an exhibition of Alice Neel’s work.

DINEEN: The painting is in our bedroom. And so when my wife and I wake up every morning and look up at the wall, there it is. I don’t think the painting looks quite like me, but I remember way back, one of the granddaughters, who was probably two or three, awakening from a nap and looking up at the painting and saying, “Gramps.” And I couldn’t believe it, that she at that age could recognize the painting, which she had never really seen before, and no one had ever told her who it was.

Between the time Alice Neel painted James Dineen in her backyard and today, Neel’s reputation has undergone a — well, a “turnaround” doesn’t even begin to describe it. During her life, she was a marginal artist; and now — as evidenced by that massive retrospective at the Metropolitan Museum — she’s considered a master. Accordingly, the value of her works has skyrocketed. As we described in the first episode of this series, a single Alice Neel painting from 1966 — and not a particularly noteworthy painting — recently sold at auction for $2.5 million. What does Dr. James Dineen think about that?

DINEEN: Wow. 

Yes, “wow.” It’s hard to put it much better than that. Today on Freakonomics Radio: the third and final episode of a series we’re calling “The Hidden Side of the Art Market.” In the first episode, we examined the nature of the market and the major players:

Canice PRENDERGAST: It’s one of the strangest markets that I have ever seen. 

Magnus RESCH: Ninety-nine-point-nine percent of the artists that you see at galleries and exhibitions, their value will never increase. 

Amy CAPPELLAZZO: The art market is a fascinating, sexy, intellectually compelling, unregulated global market. 

In the second episode, we looked at the market from the perspective of the artists:

Tom SACHS: It is extremely unregulated and subject to all kinds of monkey business that I can’t fully understand. 

Tschabalala SELF: I think the whole thing is vulgar. 

SACHS: There’s this phrase that was coined by a friend of mine called L.P.M.: lies per minute.

And in this final episode, we explore how contemporary art became such an elite product.

RESCH: It initially started off by Leo Castelli, who is the godfather of the gallery world. 

We’ll look at the disruptors trying to change the market:

Masha GOLOVINA: I would say 99 percent of people signed up have no experience in the market.

Including the digital disruptors:

Kenny SCHACHTER: Imagine all of a sudden you had all this cash and there was no Bloomingdale’s. 

And of course, we find out what Dr. James Dineen plans to do with the last painting Alice Neel ever made.

DINEEN: We did have somebody from Skinner’s come by and look at it.

*      *      *

What’s the point of art in the first place? That question is too big to answer, at least for me. Our species has been making art since the beginning. It has served religious and political purposes; propaganda purposes; it’s been made as social commentary and pure esthetic expression. And that’s just from the maker’s side. When you look at a piece of art, or live with it — it may speak to you, even move you, though perhaps in a way that it doesn’t move anyone else. What art likely wasn’t meant to be was a product in a market that’s become extraordinarily top-heavy. A market where a handful of top artists sell for millions of dollars, even tens or hundreds of millions, with the spoils going to billionaires, the spillover going to museums, and the public largely left out. In a given year, only 25 percent of U.S. adults visit an art museum or gallery; only 20 percent own a piece of original art. Meanwhile, the average price of contemporary art has tripled over the past two decades. You could argue that high prices do offer one big advantage: they create an incentive for artworks to be preserved over time, treated like a treasure. That said, anyone who thinks that art should be a central feature of the human experience is bound to be disappointed. Like I said: it’s a top-heavy market. If you want an uglier word: elitist. How’d it get that way?

RESCH: We somehow lost our love for art. 

That’s the economist Magnus Resch, who studies the art market.

RESCH: We lost it because gallerists made it incredibly difficult to buy art. They established this aura of exclusivity. 

DUBNER: Is that intimidation — if it’s fair to call it that — a strategy or just a product of the kind of people that end up running galleries? 

RESCH: It initially started off by Leo Castelli, who is the godfather of the gallery world. 

Leo Castelli opened his first gallery, in New York, in 1957. He was a dominant dealer for the next several decades, helping launch the careers of artists including Andy Warhol, Roy Lichtenstein, Claes Oldenberg, and Donald Judd. Castelli did this by curating an international network of collectors and tastemakers. He believed the caliber of the buyer was at least as important as the price paid.

RESCH: He wanted to have a conversation with potential buyers, so he didn’t put up the prices. However, now gallerists have pushed it to the extreme where they created this aura of exclusivity, which is just so not state-of-the-art anymore. I’m always fascinated when I see a young gallerist trying to copy the Castelli model that might have worked 50 years ago, but it certainly isn’t working anymore. 

And what makes Resch say this model isn’t working?

RESCH: You have 80,000 people who go to Art Basel in Miami every year. And of those 80,000, maybe 500 people are actually buying an artwork. That’s a very poor conversion. The biggest problem in the art world today is that not enough people are buying art. We need to change that. This starts with price transparency. Right now, I go into a gallery, and I have no idea how much the artwork on the wall costs. I need to ask and then go through a beauty contest where the gallery director comes from the back and then looks at me, and maybe tells me the price. That is not how our generation is used to buy something. I want to have all the information available immediately. 

Resch himself created an app meant to crowd-source gallery prices; as we heard in Part 1 of this series, the app is now in limbo.

RESCH: We gathered over 1.5 million price points from galleries. It worked perfectly well. But then Apple shut us down because all the galleries complained.  

Organizations like ARTnet and Artsy have created databases that include price and ownership history for artwork sold on the secondary market, at public auction. But it’s still hard to get information from galleries and other sellers on the primary market.

RESCH: The primary market is a complete black box. 

Here’s the good news: if you don’t like the hidebound, secretive, exclusionary elements of today’s art market — change may be coming.

CAPPELLAZZO: The art market is in massive disruption. 

That’s Amy Cappellazzo, formerly of Christie’s and Sotheby’s auction houses; she recently co-founded a firm called Art Intelligence Global.

CAPPELLAZZO: A massive amount of information available today that was not available 20, 30 years ago, even 10 years ago. 

But it’s not just information.

CAPPELLAZZO: Technology has also affected channels of distribution. During this whole time in Covid, auction houses, galleries have been managing to transact and sell things without people actually physically getting in front of them. That’s new and astonishing because one would think a work of art needs to be seen in person to fully understand and appreciate it. If that were not the case, I would just cut pictures out of magazines and tape them to my walls, but obviously there’s something about the real thing that’s more satisfying and more interesting. 

Satisfying and interesting perhaps but also — let’s be honest — more exclusive. One simple reason an original piece of artwork can be so expensive is that it’s unique. That said, to Cappellazzo’s point, online art sales did set a record in 2020: $12.4 billion, double the previous year. Online sales now make up 25 percent of the total art market. So if you are an old-school gallery operator — even one of the most successful in the world — these numbers will catch your attention.

David ZWIRNER: All of a sudden, this whole world has opened up for us.  

That’s David Zwirner, one of the most prominent art dealers in the world. He recently launched a separate business, called Platform.

ZWIRNER: Platform is the marketplace. And it’s a marketplace that came about last year somewhat spontaneously when everything was shut down. 

Platform is a hub for independent galleries to sell a curated selection of works at relatively low prices: $2,500 to $50,000. Zwirner takes a 20-percent commission on each sale.

ZWIRNER: We realized that we had a pretty robust website that was able to communicate to a large audience. And many of the young colleagues — dealers — didn’t have anything of that sort. So we invited international galleries to show artworks on our website that we helped sell for them.

Unlike the typical gallery model, anyone can buy the art for sale on Platform — there is no “beauty contest,” as Magnus Resch put it. In fact, it’s the opposite of a beauty contest — as David Zwirner discovered during the 2020 presidential campaign. In normal times, Zwirner would vet potential buyers ahead of time and, if they somehow made the cut, he’d follow up afterwards to add them to his roster of collectors. But on Platform, during the pandemic:

ZWIRNER: We did a fundraiser for Biden-Harris, but we were then told that we were actually not allowed to speak to any of the buyers. That’s against campaign finance law. The buying has to happen automatically. We scratched our heads and said, “What do we do now?” We created a buy-now, e-commerce site just for our Artists for Biden initiative, and that was a ridiculous success. I’m not allowed to say how many millions we raised, but it was millions. 

DUBNER: So your commercial practice was totally changed because of the political involvement.

ZWIRNER: Very interesting. Because all of us were like, what do you mean? We need to talk to the buyers. That’s what we’ve always done. And then we realized we can’t. That taught me the lesson that there is a buying public out there that doesn’t want to talk to me and that there is a much bigger public out there than I had realized.

DUBNER: Okay, so you mentioned that Platform is having other galleries come on to a site that you run. Here’s what your archrival Larry Gagosian says about Platform. “I wouldn’t be interested in doing something like that. It’s a little bit of a wolf in sheep’s clothing. My advice to smaller galleries would be to preserve your own identity and brand. Even if you can’t do it at the level of a large gallery, work within your means and don’t hand over your artists and client lists to somebody who might take advantage of it at some point. The somebody is plainly David Zwirner.” So how do you respond to that fear-mongering?

ZWIRNER: I would say it takes one to know one, right? I appreciate that he’s looking at what we’re doing, because it is an innovation in our industry and it’s good. The point is not at all to steal artists from younger galleries. It’s an absurd assertion here. The point is to create a marketplace where young galleries that have a harder time reaching large audiences can present their work. 

There’s one more benefit that a market like Platform may offer. 

ZWIRNER: So we have a pretty big climate problem out there, right? And one of the drivers of our industries, the art fairs, have pretty, pretty complicated carbon footprints. And also very capital-intense, especially for young galleries. If you’re a young gallery on the Lower East Side, and you have to take your wares to London, it’s going to be expensive. And if you want to take a chance on a young artist, let’s say you want to do a one-person presentation — if nobody buys anything, and that happens often, you might be looking at a hole that you might not be able to fix. So Platform gives you a much, much more user-friendly way to present your work. 

So does a platform like Platform mean the art market is looking to abandon the elite status it has spent centuries cultivating? You might think that, if you squint hard enough. On the other hand, let’s not kid ourselves. For quite a while now, major works of art have been what investors like to call an “asset class.” Here’s what the economist Canice Prendergast told us in an earlier episode in this series:

PRENDERGAST: Maybe 90 percent of the art that’s sold sits in a warehouse, rather than actually being seen by somebody.

And some unknown share of that 90 percent is part of a gray and black market that uses high-end artwork for money laundering, tax evasion, and related escapades. In a recent episode we did about corruption in China, the political scientist Yuen Yuen Ang told us that art is often preferred to cash when it comes to paying bribes:

Yuen Yuen ANG:  Because art is valuable, but the value is subjective. And so in the event that a corrupt official is arrested, he could defend himself by saying, “Well, it’s just a useless piece of Van Gogh,” or something like that.

There are other, more legitimate efforts to treat art like an asset class. Consider the investing platform called Masterworks. It is privately held and is valued at more than $1 billion.

GOLOVINA: Masterworks is the first platform to take a painting public, effectively. 

That’s Masha Golovina, head of acquisitions for Masterworks.

GOLOVINA: We securitize artworks by filing them with the S.E.C. as public offerings. And we make those available to retail investors, which means that anybody can invest.

This may have the whiff of democratization, but you get the sense the shift is more subtle than that. A shift, perhaps, from the billionaire class to the investor class. 

GOLOVINA: We focus on the most expensive segment of the art market. Ninety percent of transactions are estimated to be below a million dollars. We focus on paintings that are $1 to $30 million. We buy from auction, and we also buy privately from the auction houses. And then we speak to dealers, and also individual collectors and collecting families that we have relationships with. I’m on calls probably four hours a day to source paintings for the company.

Golovina herself studied art history and economics, worked in banking for a time, and then at Christie’s auction house.

GOLOVINA: I would say 99 percent of the 180,000 people signed up on the platform have no experience in the market prior to signing up with us. Most of our investors come to Masterworks looking for alternative investments. You know, telling their friends about having invested in a Basquiat or a Keith Haring, is much sexier than talking about a real-estate investment.  

So investors buy a share in a particular painting that Masterworks has bought either privately or at a public auction. The idea is that the painting will appreciate over time, which means investors’ shares will also appreciate, and the profits are locked in when Masterworks ultimately sells the painting.  But what happens in the interim — I mean, what happens to the actual painting that Masterworks has bought?

GOLOVINA: Once we acquire the paintings, our No. 1 priority is the physical well-being, the condition of the painting. So they’re stored in a fine-art storage facility. However, we do loan paintings as we see fit. We’ve loaned several of our paintings out to museums in Europe. But the majority of the paintings we have are housed in a fine-art storage facility. 

“A fine-art storage facility.” Other people might call it something different.

PRENDERGAST: Maybe 90 percent of the art that’s sold sits in a warehouse.  

If you care even a little bit about the art, you have to ask yourself: is this how the art market should be operating? Putting the most desirable artwork in the world into storage — is that a desirable outcome?

Coming up: are there any new technologies that might really democratize the art world?

PRENDERGAST: Many of the N.F.T.s have one very desirable feature, which is that it can be shown anywhere by anybody.

And remember, this is the third part of our three-part series called “The Hidden Side of the Art Market.” If you haven’t listened to the others, they are ready and waiting for you to hear them. They are episode numbers 484 and 485. You can get all past episodes of Freakonomics Radio, for free, on any podcast app — as well as the other shows in the Freakonomics Radio Network. So, get busy.

*      *      *

We’ve been talking about how technology is disrupting the art market in a variety of ways. If you’d like the most pointed example of this, consider what happened at Christie’s auction house on March 11, 2021. An artwork sold that day for more than $69 million. It was the third-highest price ever fetched at auction for a living artist. The top two living artists are Jeff Koons and David Hockney. Them, you’ve probably heard of. I am confident you haven’t heard of this third artist. You ready? His name is Mike Winkelman.  Maybe you do recognize the name under which he makes art: it’s Beeple. The $69 million piece Beeple created is called Everydays: The First 5,000 Days. Aside from the price, there were two extraordinary things about the sale. The first is that Everydays isn’t a physical piece of art — it’s not a sculpture or a painting or an array of fluorescent light fixtures. It’s a digital artwork, a collage of thousands of images that Beeple had been posting online everyday for more than a decade. It’s quite beautiful. The other extraordinary thing about the piece is that it’s an N.F.T. or nonfungible token. That means it was created via the blockchain, the digital ledger you’ve heard so much about — and likely still don’t quite understand. For what it’s worth, we are working on a future episode about that — what the blockchain can do for you. But that’s for another day. The Beeple N.F.T. was bought by a pair of Indian blockchain entrepreneurs, using Ethereum, one of the many currencies that are also created on the blockchain, the most famous of these being Bitcoin. The New York Times headline from the Christie’s auction reads like one of those headlines you’ll look back on 50 years from now and chuckle: “JPG File Sells for $69 Million, as ‘N.F.T. Mania’ Gathers Pace.” So, what is an N.F.T.?

SCHACHTER: Well, I mean, an N.F.T. can be anything — it could be a painting, it could be a photograph of a painting — anything that’s on your iPhone camera roll. In fact, I made a comment that everyone and their grandmother is going to be selling N.F.T.s now and then I ended up making an N.F.T. of my grandmother and sold her. I think I let her go a little bit too cheaply. 

That’s Kenny Schachter.

SCHACHTER: I am an artist, a writer, a professor, and a curator. And I sell art also to make a living.  

DUBNER: If you had to describe the Kenny Schachter brand, how would you describe it? 

SCHACHTER: Pain in the ass? Troublemaker? For me, it’s just one thing. Art — art, art, art. 

The digital image Kenny Schachter made of his grandmother, Blanche, went for a few thousand dollars. Other N.F.T.s have brought substantially higher prices — video clips of LeBron James playing basketball; the first tweet from Twitter co-founder Jack Dorsey. But it isn’t just cultural curiosities that have been selling — it’s contemporary art, too. And many of those N.F.T.s are being sold by artists working without gallery representation. In the first half of 2021, digital art — N.F.T.s as well as film and video art — made up 12 percent of all art sales.

SCHACHTER: It’s not the traditional art-world collectors that were fueling the market. The audience of buyers for this N.F.T. world are tech people that have already been well attuned and comfortable living in technology. And these people don’t know Larry Gagosian, the world’s biggest art dealer, or David Zwirner. Not only do they not know who these people are, they don’t aspire to know who these people are. They don’t care who these people are.

There is a caveat. N.F.T.s are typically bought and sold with Ethereum, a cryptocurrency that has risen steeply in value, like many other cryptocurrencies. But: there hasn’t been much you can actually buy with Ethereum outside of Ethereum-generated N.F.T.s.

SCHACHTER: Imagine you had all this cash and there was no Bloomingdale’s. And then all of a sudden a department store opened, and you could buy 7,000 cashmere sweaters with this wealth that had just mushroomed. So that’s really what happened. There’s this crazy pent-up wealth where hundreds and hundreds of millions into the billions of dollars have been created virtually from thin air. But there’s been nothing to spend it on. Then all of a sudden in 2018 comes the N.F.T. market, whether it’s for collectibles, for moments of sports, and there’s a torrent of pent-up demand that’s just exploded.  

You can imagine how the circular nature of this type of transaction might cave in on itself eventually. But if you look at the art market as a whole, there are a number of other functions that N.F.T.s might serve. Here, again, is the economist Canice Prendergast.

PRENDERGAST: Many of the N.F.T.s have one very desirable feature, which is that it can be shown anywhere by anybody. You can download it, you can show it. It’s trying to democratize art in a way that happens very rarely.

DUBNER: And you like that? 

PRENDERGAST: I do. Blockchain, on the other hand, I feel like, is swatting a fly with a hammer. 

And our other art-economist friend Magnus Resch:

RESCH: Digital art has historically been absolutely irrelevant. Nobody bought digital art. That’s why it’s so good that right now, digital art is really getting the recognition that they deserve. Right now, it’s cool to be a digital artist. Then you can actually make some money. Will it be lasting and will we see a new record price for a digital artwork, N.F.T.? I highly doubt that. Will digital artworks be the new paintings? I also doubt that. 

But, Resch says, on balance:

RESCH: It’s a good development. 

And museums are paying attention too.

Glenn LOWRY: Our stance is that we’re seriously interested in how the N.F.T. world works. 

That’s Glenn Lowry, director of the Museum of Modern Art in New York.

LOWRY: It wouldn’t surprise me if we started doing some pilot projects to see how good a fit the minting of N.F.T.s would be for us.

DUBNER: I saw that the Uffizi is creating N.F.T.s from some of its masterpieces, they recently sold a Michelangelo N.F.T. for $170,000. I would think if this were a priority for your museum, MoMA, that your collection is full of potentially billions of dollars’ worth of N.F.T.s.

LOWRY: At the moment, I’m as interested in them from a cultural perspective as I am from the point of view of their marketability. I am interested in the way in which they might help institutions make their collections more widely accessible. And at the same time, create new communities of users, and generate some capital along the way — although the capital for me isn’t the single most important driver in the way in which N.F.T.s can operate. 

DUBNER: Right. But since you and I are friends now, Glenn, I’m sure that if you decide to do some, let’s say Matisse N.F.T.s, that you’ll give me first shot.

LOWRY: Absolutely. As long as you agree to match Beeple’s $69 million, we’re in. 

There’s one more way in which N.F.T.s, or other digital tools, may revolutionize the art market. In Part 2 of this series, we discussed how artists rarely profit when their work is resold at auction, often at prices much higher than they were originally paid. There have been some attempts to remedy this in the form of artists’ royalty laws, but such laws are rare and, when they do exist, they’re hard to enforce. N.F.T.s could change at least the last part of that equation. Here, again, is Kenny Schachter.

SCHACHTER: So N.F.T.s are issued in Ethereum because you can state the parameters. It’s like a digital certificate of authenticity, which also trades as a currency. What differentiates Ethereum from Bitcoin is that Ethereum has a programmable smart contract that piggybacks on the currency itself. In the past, you would buy, like, Dan Flavin made sculptures out of fluorescent light fixtures. With that sculpture, you would get a certificate of authenticity, the artist would sign the piece of paper and it would say, “You have this piece called X, Y, Z from 1962, and it’s an edition of three. And it is the evidence of your ownership.” Very often, people would have the sculpture on their wall for 20 years, 30 years, and they would lose the certificate because it was just a sheet of paper. So now this whole notion has been turned on its head, where the certificate of authenticity is what’s embedded into the blockchain for perpetuity. This empowers artists to take back control, away from the traditional gallery system, and it enables the artists themselves to have more of a say in the commercialization of their art. 

Many other markets have already been disrupted by the blockchain, the internet, the digital revolution generally. Long-standing frictions have begun to be eliminated. Just think about something as simple as how you order a food delivery, or how you buy books (if you still buy books) or whatever you buy on Amazon. The art market, as we’ve been hearing throughout this series, has so much friction — much of it intentional, or at least self-inflicted — that it’s plainly ripe for disruption. And there’s one last change worth mentioning.

CAPPELLAZZO: We’ve had a massive geographic disruption.

Amy Cappellazzo again. 

CAPPELLAZZO: This used to be largely an American and European event. But truthfully now, it’s a global marketplace and Asia is just a huge and enormous participant.

DUBNER: It sounds like you’re talking about the buy side, but what about artists as well?

CAPPELLAZZO: Well, more Asian artist markets are getting their due. We’ve had all sorts of historical corrections for women, for artists of color, for all sorts of things that correspond with larger cultural sentiments these days, which has, in my mind, been a net positive thing, for sure. It goes a little bit both ways. You have a very thirsty audience in Asia wanting masterworks. And as a net result, there’s a little bit more interest in the West, in what are the important artists from the ’80s in China, or the ’50s in Japan, or the Dansaekhwa Movement in the ’70s in Korea?

DUBNER: Amy, let me ask, if you could own any one piece of art and if neither money nor history nor maybe a museum already owning it were a barrier, what would it be?

CAPPELLAZZO: Well, I will tell you that my feeling on this topic changes frequently. Like, of late, I’d love to own a great Basquiat, like a masterpiece of Basquiat would really speak to me, my time in New York, the short-lived genius of this person that just hit on exactly — Basquiat’s existence gives meaning to, like, BLM and everything we’re going through, right? He is the visual representation of that. Basquiat understood in his short lifetime that people loved Black culture more than they loved Black people. He’s just a cipher of so many things, and like a god. There are moments where I feel moody and contemplative, where I think having a Rothko would be among the most soothing things I could do for myself.

DUBNER: So does this mean you don’t own a Rothko or a Basquiat?

CAPPELLAZZO: Oh, no, I don’t own either of them. I did have chances to buy Basquiat drawings and I tried to bid on them, but they got away from me and probably they’re too expensive for me to ever consider owning now. But I do love them.

DUBNER: I’m sorry.

CAPPELLAZZO: It’s a little bit like unrequited love. Like, it’s hard, but yeah.

DUBNER: Let me just promise that if I ever somehow walk into someone’s house and there’s a Basquiat or a Rothko and I think I can get out with it under my coat, I’m going to grab it for you.

CAPPELLAZZO: Okay. I just don’t want to own something that’s stolen. But I appreciate that, thanks.

Meanwhile, back up in Boston, Dr. James Dineen has had the fortune of living with a piece of art he truly loves — the portrait of him that Alice Neel painted in that New Jersey backyard. Alice Neel, whose work never sold for much when she was alive — but now, in death, is having her moment. What does James Dineen think about Alice Neel’s posthumous second act?

DINEEN: She would be much more interested in the impact of her paintings on people’s behavior, not the commercial side. She was really a pioneer. Just way ahead of her time, and she clearly embraced people who were poor and not famous.

And here’s Alice Neel herself, from an interview a few months before she died.

NEEL: I could have been a great psychiatrist. But it’s more fun being an artist. I see what’s there. I don’t look for anything, I just look.

Neel then recalls going to see a show of Paul Cézanne paintings years earlier, at the Metropolitan Museum.

NEEL: And I was surprised at all the psychological acumen that his portraits had. He said, “I love to paint people who have grown old naturally in the country.” And I say, “I love to paint people torn to shreds by the rat race in New York.”

Now that Alice Neel herself has had a retrospective at the Metropolitan Museum, and now that some of her paintings have sold for millions of dollars, is James Dineen tempted to sell the last painting she made?

DINEEN: It doesn’t tempt me to sell it. It tempts me to remind the six children that we have that this is perhaps valuable and I would hope they would probably sell it and donate the proceeds to some charity that Alice would embrace. That would be my hope. I don’t want them to think of this as a gold mine that they can harvest and then buy a bigger condo or whatever, which is not a necessary part of life.

He and his family have talked about the painting in his bedroom.

DINEEN: And the family keeps kidding me about, “You should be getting it insured and you should be doing this and that.” We did have somebody from Skinner’s come by and look at it and confirm it and appraise it and everything else.

Skinner is an auction house. But James Dineen wasn’t moved.

DINEEN: I like it in my bedroom, and I don’t at all get excited about the commercial value. It’s the experience. The memory is where its value is. You know, life is really the summation of all your experiences and memories. And this is one of the great ones.

It’s been said that an economist is someone who knows the price of everything and the value of nothing. As we’ve explored the art market over these past few episodes, it’s been tempting to think that the same holds true there. But as James Dineen proves, there are exceptions. I hope you’ve enjoyed listening to this special series, “The Hidden Side of the Art Market.” We certainly enjoyed making it. Thanks to all the artists, economists, gallerists, museum folks, and others who spoke with us.

*      *      *

Freakonomics Radio is produced by Stitcher and Renbud Radio. This episode was produced by Morgan Levey. Our staff also includes Alison Craiglow, Greg Rippin, Zack Lapinski, Mary Diduch, Ryan Kelley, Jasmin Klinger, Eleanor Osborne, Emma Tyrrell, Lyric Bowditch, and Jacob Clemente. We had help on this episode from Alina Kulman and Jeremy Johnston. Our theme song is “Mr. Fortune,” by the Hitchhikers; the rest of the music this week was composed by Luis Guerra. You can follow Freakonomics Radio on Apple Podcasts, Spotify, Stitcher, or wherever you get your podcasts.

The post “The Art Market Is in Massive Disruption.” (Ep. 486) appeared first on Freakonomics.

Also: are we getting any better at assessing COVID risk?

*      *      *

Relevant Research & References

The post How Can You Avoid Boredom? (NSQ Ep. 77) appeared first on Freakonomics.

He’s the award-winning author of hugely popular books like Guns, Germs, and Steel; Collapse; and Upheaval. But Jared actually started his varied career as an expert on gallbladders and birds. The physiologist turned geographer talks with Steve about his brushes with death, why the Norse Greenlanders wouldn’t eat fish, and why he has never been invited to a cannibal ceremony.

Listen and follow People I (Mostly) Admire on Apple Podcasts, Stitcher, Spotify, or wherever you get your podcasts.

*      *      *

Relevant Research & References

The post Jared Diamond on the Downfall of Civilizations — and His Optimism for Ours (People I (Mostly) Admire, Ep. 55) appeared first on Freakonomics.

Studies by men published in scientific journals are more likely to include glowing, hyperbolic terms. Bapu talks about this “groundbreaking” research (see what we did there?) in a wide-ranging discussion with physicians and an economist about the gender gap in medicine.

Follow Freakonomics, M.D. on Apple Podcasts, Spotify, Stitcher, or wherever you get your podcasts.

*      *      *

Relevant Research & References

The post The Most “Unique, Excellent, and Promising” Episode (Freakonomics, M.D. Ep. 15) appeared first on Freakonomics.

The more successful an artist is, the more likely their work will later be resold at auction for a huge markup — and they receive nothing. Should that change? Also: why doesn’t contemporary art impact society the way music and film do? (Part 2 of “The Hidden Side of the Art Market.”)

Listen and follow our podcast on Apple Podcasts, Spotify, Stitcher, or wherever you get your podcasts. Below is a transcript of the episode, edited for readability. For more information on the people and ideas in the episode, see the links at the bottom of this post.

*      *      *

When we think about the “art market,” we tend to think of the sellers (the galleries and auction houses) and the buyers (the art collectors, museums, maybe even some speculators). That’s what we looked at last week, in the first episode of a three-part series we’re calling “The Hidden Side of the Art Market.” Those buyers and really, even the sellers, they represent the demand side of the equation. Today, let’s talk about the supply side. In other words: the artists. What does “the art market” look like from their perspective?

Tom SACHS: Well, I would say it’s the world’s largest unregulated commodities market, except I was corrected by a friend that art is not a commodity — a commodity is like orange juice or copper. So you can’t really compare apples and oranges. But it is extremely unregulated and subject to all kinds of monkey business.

That’s Tom Sachs.

SACHS: I’m an artist, 55 years old, and I live in New York City. I’m a sculptor and my priority is making sculptures that really expose the transparency in which they’re made.

Sachs may sound low-key, but he’s a pretty big deal. His work is in the collection of top museums in New York, Los Angeles and San Francisco, Paris, Milan — you get the idea. When we spoke with him, he was in Hamburg, Germany, setting up the fourth installment of a virtual space mission he’s been working on for 13 years.

SACHS: We’re going to the asteroid known as Vesta on a mining mission because we’ve run out of gold here on Earth. It’s a pretty elaborate expedition. You could call it performance art. That’s to me a dirty word. I say “live demonstration.”

Early in his career, in order to subsidize his art-making, Sachs did a lot of manual labor — construction, elevator repair. He has called himself “the second most-talented Jewish carpenter of all time” — after, you know, Jesus. By the early 1990s, he was making art pretty much full-time.

SACHS: I remember once when I first started, I went surfing with a buddy who was an art collector, and he bought a piece of art and then he dumped it at auction. 

This was a piece that Sachs had made.

SACHS: And I was like, “Dude!” And it was a really cool sculpture that I like welded by hand. And burned my hand or whatever — you know, welding is hard. It’s toxic and hot and it’s hard work. And I’m good at it, but I probably wasn’t that good then when I made it. It was hard to do. And so I said, “So you’re telling me that money is worth more to you than this thing that I bled over?”

Stephen DUBNER: Are you still friends with this guy? 

SACHS: I haven’t spoken to him in many years, but I also, years later, understand with death, divorce, and taxes — which are the three reasons why people sell things, usually — things happen. Money’s a funny thing. People have different situations, so I certainly wouldn’t hold it against him. I just think it was the first time it had happened to me, so I was shocked by it.

As we learned in the first episode of this series, there is a lot to be shocked by in the art market. Here’s a quick recap of what we know so far:

Canice PRENDERGAST: It’s one of the strangest markets that I have ever seen. 

Magnus RESCH: The primary market, where most of the artworks are sold, is a complete black box. 

Amy CAPPELLAZZO: Galleries are supposed to keep a price list available for anyone to peruse. But that’s just really not how art is sold.

PRENDERGAST: If I have the money to buy a Mercedes, I get the Mercedes. But that is not true for many artists.

Kelly BAUM: Even the Met has been priced out of the market when it comes to certain artists. 

PRENDERGAST: Maybe 90 percent of the art that’s sold sits in a warehouse.

RESCH: Art is a bad investment.  

CAPPELLAZZO: The art market is a fascinating, sexy, intellectually compelling, unregulated global market. 

We also learned last week about the unlikely rise of Alice Neel, an artist who died in 1984. She had been a prolific painter, but she never sold much, and she spent years on welfare. But today, her paintings sell for millions:

AUCTIONEER: At 2 million, 500,000. And selling to Alex’s telephone for 2.5 million.

But those millions don’t go to Alice Neel’s estate; they go to the family of the man who acquired the painting back in the 1960s. He probably paid a couple hundred dollars. That said, the Neel estate still owns plenty of her work — so will they share in the gold rush too? Today on Freakonomics Radio: how do artists get paid?

PRENDERGST: Truthfully, it’s feast or famine.

What’s it like for a living artist to see something they created sell at auction for 100 times what they were originally paid?

Tschabalala SELF: You feel a moment of like, oh, your stomach drops. This is a horrible decision I made.

If you’re thinking “there ought to be a law” to give artists a cut on the secondary market — well, there is a law.

CAPPELLAZZO: It’s proven to be hard to enforce. No one thinks it has big teeth, if you know what I’m saying. 

And: how much does the brutality of the art market dampen the urge to create?

SACHS: That’s really the question of the day, isn’t it?

*      *      *

In October of 1973, Sotheby’s auction house in New York held a sale of contemporary art. It came from the collection of Robert and Ethel Scull, who had made their money running a taxicab empire. The sale turned out to be the start of a craze that has only accelerated ever since. Robert Scull had been a passionate collector of paintings by Jasper Johns, Mark Rothko, Andy Warhol, Robert Rauschenberg, and many others. When Scull started buying these paintings, often directly from the artists, they weren’t particularly expensive. By 1973, that had changed. Sotheby’s broke several records that night, selling 50 pieces from Scull’s collection for a total of $2.2 million. On average, that’s $44,000 per piece. Today, that number sounds quaint. As we heard last week, a single Alice Neel painting — and not at all a remarkable one — recently sold for $2.5 million. But in 1973, people were blown away by these auction prices. Big prices were one thing for Old Master paintings. But for art that was made recently, and bought cheap? Here’s the art critic Robert Hughes from a documentary called The Mona Lisa Curse:

Robert HUGHES: One thousand to 2,000 dollars on average for a Rauschenberg or a Jasper Johns. 

The painter and graphic artist Robert Rauschenberg, a fixture in the Pop Art scene, was one of the biggest names in the sale. Years earlier, Robert Scull had bought directly from Rauschenberg a piece called Thaw. He’d paid $900. On this night, at Sotheby’s, it sold for $85,000. 

HUGHES: Rauschenberg, on whose work Scull had made such a profit, gate-crashed Scull’s celebrations. 

The documentary shows Rauschenberg giving Scull a not-so-playful punch in the shoulder. And then he says:

Robert RAUSCHENBERG: For Christ’s sake, you didn’t even send me flowers.

In case you couldn’t make that out, the artist says to the collector: “For Christ’s sake, you didn’t even send me flowers!” To which the collector says:

Robert SCULL: Send you flowers? For what? 

Then Rauschenberg says, “It was a great mark-up.”

RAUSCHENBERG: It was a great mark-up.

SCULL: You’re right, you’re right.

RAUSCHENBERG: I’ve been working my ass off for you to make that profit?

Rauschenberg was angry. He felt Scull was disloyal — no longer a collector, but a profiteer. But then, Scull turns the tables. He points out that Rauschenberg would also benefit from these inflated prices.

SCULL: How about yours, that you’re going to sell now? I’ve been working for you, too. We work for each other.

Rauschenberg freezes. He doesn’t seem to know what to say, as if he hadn’t even considered what the inflated auction price would do for him. And then he gives Scull a hug.

RAUSCHENBERG: You buy the next one, okay? You buy the next one. 

SCULL: Well, I’ll take a look at it.

RAUSCHENBERG: Come to the studio.

SCULL: All right, why not?

So that was a quasi-happy ending for Robert Rauschenberg. Still, here’s the big question: when you see an artwork selling at auction for many multiples of what the artist originally received, should you feel bad for the artist, knowing they don’t get a penny?

RESCH: No, you shouldn’t, because auction prices have great signaling power for the primary market. 

That’s Magnus Resch, an economist who studies the art market.

RESCH: Sometimes prices in auctions are much higher than the gallery prices. However, you’ll soon see that the prices in the galleries will go up because the gallerist justifies the price increase by saying, “Hey, look at the recent auction results.” Galleries and buyers are using auctions in order to inflate prices. 

But, Resch argues, there is a catch. A gigantic catch.

RESCH: Ninety-nine-point-nine percent of the artists that you see at galleries and exhibitions, their value will never increase.

In other words, Robert Rauschenberg was lucky to have the problem he had — lucky that his work was considered special enough to be sold for a huge markup on the secondary market, in an auction. This meant he could at least indirectly recover some of that markup by increasing his prices on the primary market. But again, Rauschenberg was in a tiny minority. The art market is a gigantic pyramid, with just a few artists at the top who command high prices.

PRENDERGST: Truthfully, it’s feast or famine — everybody wants to buy your work, or nobody wants to buy your work.

That’s Canice Prendergast, another economist who studies the art market. He is at the University of Chicago, where he also manages the business school’s art collection.

PRENDERGAST: We have an endowment, and our annual budget is a little short of a quarter of a million dollars — which, even though it’s a lot of money, is a pittance to the contemporary art world. 

DUBNER: So, talk about that. I’ve had a little experience with galleries, and artists, and auction houses, and museums in New York, where it seems that there is really almost a handful of desired upcoming artists. But the minute they’re anointed, their price goes from close to zero to quite a lot. 

PRENDERGAST: The way that relationship usually works is that they will show their first couple of times, and the price might be $20,000. Once it becomes known that this is a desired artist, there is a line around the corner. But the price doesn’t change from 20 for a while. Instead, what they do is: they give it to MoMA, if MoMA’s interested.

MoMA is the Museum of Modern Art, in New York.

PRENDERGAST: Or, increasingly, they give it to very well-placed private collectors. And once it gets into that network, that’s what allows prices to go up like crazy. So what you have is that strange interregnum, where people are queueing around the corner. And this is where you also get a lot of the discontent of galleries, where somebody will buy it at $20,000, and the next day they’ll turn around and sell it at auction.

DUBNER: And galleries obviously don’t like that. 

PRENDERGAST: No. In the same way as what happens with Cubs tickets, you know, playoff tickets. They turn around and flip it.

DUBNER: I believe this happens with luxury watches, too, even when they’re sold at market prices. And some high-end cars, like a Ferrari or Lamborghini?

PRENDERGAST: Absolutely. It’s exactly the same thing. Or it’s even true for sneakers, for example. And companies are now deciding how to manage that kind of secondary market in a way that they didn’t before.

When it comes to contemporary art, the gallerists who represent artists have to manage this potentially large gap between their market, the primary market, and the auction market or other secondary sales.

David ZWIRNER: I mean, at the core, we set prices based on supply and demand. 

That’s David Zwirner, one of the most successful art dealers in the world. He runs galleries in the U.S., Europe, and Asia; last year, he did more than three-quarters of a billion dollars in sales.

ZWIRNER: But then we also look at external factors: what’s happening in an artist’s career? Are there major exhibitions on the horizon? Is this artist making very few pieces? And we come up with the right price that’s fair, respectful to the career, but not ahead of the market, so you create a problem down the line. 

DUBNER: Let’s say you find a new artist and this artist has 12 paintings. And the right price is $100,000. Can we work with that number, for starters?

ZWIRNER: Sure.

DUBNER: But you know you could easily find 12 people to buy these paintings, or maybe one person to buy all of these paintings for $200,000 each, or maybe $500,000. What would be the downside of going for the maximum price? 

ZWIRNER: The downside might be that the artist decides to create a very different body of work, and all of a sudden those 12 buyers run for the exit. They don’t like this work. You are stuck out there with very high prices. The downside is also that all of a sudden, three works by this artist show up at auction and don’t sell. And you are stuck out there with very high prices, and you can’t recover. The prices are somewhat miraculously a one-way road. Prices have to go up to sustain careers. And that’s why I’m very much of the philosophy, if you want to be in it for the long haul, be smart about prices. Don’t be greedy. Go step by step. 

This is one of the things that makes the art market such a strange market. For most products, when demand rises sharply, the manufacturer will increase supply and/or raise prices in order to exploit that surging demand. And that works fine if you’re making widgets or t-shirts — you can quickly ramp up supply, even ten-fold if you have to. But if you are a gallerist with an artist who’s suddenly grown hot, you can’t tell them to just paint ten times faster. (Although you’d better believe — it has been tried.) As far as raising prices, that has its own problems too. As David Zwirner told us, you don’t want to have to lower prices later and damage the artist’s reputation. And, as Canice Prendergast told us, you also don’t want to allow just anyone to buy the painting, because that anyone might be a speculator who’s only interested in flipping the painting at auction for a large profit. So what can a gallerist do? Canice Prendergast again:

PRENDERGAST: It’s not pervasive, but does happen, when you buy a work, they will make you sign a contract which gives them — meaning the gallery — the right of first refusal for any further purchases. So if you decide to sell it, you have to sell it back to the gallery. Those contracts exist, but are not very pervasive. 

DUBNER: Because they’re borderline illegal? 

PRENDERGAST: Correct. I think that’s exactly what it is. 

A more common tactic is for galleries to select their buyers very carefully. How do they manage this? Imagine you walk into a gallery and see a piece you really like. Some of the other pieces by the same artist are marked with a red dot, meaning it’s sold. This one has a green dot. That means it’s “reserved.” And what does “reserved” mean?

SACHS: Yeah, that’s a crazy thing. 

The artist Tom Sachs again.

SACHS: “On reserve” means — which is such a bullsh*t thing — just means someone’s interested in this. It’s like, “So I can’t really promise it to you.” But it also probably means, “If you are really important, I’ll  probably screw over the first guy and sell it to you.”

DUBNER: What kind of important do you mean when you say that? Like, is just wealth important enough? 

SACHS: No. I think wealth is very, very important. I think influence, like, “Hey, this guy might buy two paintings and give one to a museum.” 

For another view of how galleries manage their buyers, I went to Amy Cappellazzo. She’s an art-market powerhouse who knows pretty much everybody and everything.

DUBNER: I walk in. Let’s say it’s a gallery showing a relatively new artist. I’ve read a lot about this artist. I think she’s amazing.

CAPPELLAZZO: They’re hot, hot, hot, right? 

DUBNER: Right. And I’m not told they’re sold, but I’m not told the price either. 

CAPPELLAZZO: “I’m sorry, it’s on hold right now.”

DUBNER: And I say, “Well, whatever it’s on hold for, I’m willing to match and increase 25 percent.” What happens now? 

CAPPELLAZZO: Typically dealers won’t do that because you probably have a cadre of four or five that are your mainstay collectors. And you really have got to reward them first because they come back for every show. And they’ll buy something even that’s not hot, hot, hot in your next show. 

DUBNER: Do you find it an ethical practice of the gallery? 

CAPPELLAZZO: I find it a practice of necessity. They might have only 10 paintings and there’s 100 people asking. So it’s going to be some discriminating process that determines who gets what. A lot of small galleries have a roster of artists, let’s say, 10, 12 artists that they sell and represent, and maybe one or two of them is the cash cow for the whole pack. So those two artists become the bait for collectors. And the dealers might say, “Well, I can’t sell you this, but I can tell you this other artist I represent. And if you start buying the stuff you don’t want, it will eventually get you the stuff you do want.” 

SACHS: I heard a story of a gallerist saying, “I’ll sell you this piece by this artist, only if you buy this other piece by this other artist that I represent that doesn’t sell as well.” 

DUBNER: Right. I mean, it’s not like that’s illegal, right? 

SACHS: It’s just sh*tty. Can you imagine if you’re that second artist and you heard that story? I guess you’d be grateful that something sold because it’s money, but like, eww, it’s slimy. 

Just to be clear, that is not the only slimy scenario that Tom Sachs has encountered during his career.

SACHS: So there’s this phrase that was coined by a friend of mine, an art dealer named Hugo Nathan, called L.P.M. — lies per minute. He says, “Oh, she’s got about seven L.P.M. He’s only working at a three.” And the lies are things like — always in secondary market, they will sell a piece for like $100,000. Let’s say you own it, and I’m the dealer, and I sell it for $100,000. And we had a deal that we’d split it 50/50, right? But I tell you that we only sold it for 70,000 bucks. And everyone finds out everything, because they’re bragging about it at the cocktail party. But the art world is so f*cked up that they’ll tolerate a certain amount of lying as long as it’s worth their while to do the next deal. I don’t really understand it. That’s not how I was brought up. But that’s something that happens. And I know that’s happened to me, because I found out. 

DUBNER: And the guilty party in this case was a gallerist then?

SACHS: It’s always the gallerist that lies.

Coming up, we speak with another successful artist, Tschabalala Self, about being on the supply side of this very strange market — especially in the auction market:

SELF: It’s a completely dystopic, surreal situation.

And: what is it that makes an artist keep going, even with all these headwinds?

Phoebe HOBAN: Nothing will stop them. Nothing.

*      *      *

SELF: My name is Tschabalala Self and I’m a painter.

Tschabalala Self grew up in Harlem, got a degree in studio arts from Bard, and then an M.F.A. from Yale. Soon after, she landed a solo show and gallery representation. Now she’s in her early 30s; her career has already been a critical and commercial success.

SELF: I think the art world can be very opaque. And until the point that you are fully immersed in it, many things don’t make sense.

Self is especially known for historically-conscious portraits of Black female figures, mixing paint, fabric, and other materials. In galleries, her work likely sells for the mid-to-high five figures but the art world being what it is, that’s hard to verify. One of her galleries told us, “I am afraid I cannot provide a price range for Tschabalala Self’s artworks on the primary market.” Whatever the case, price isn’t the only thing that Self is thinking about when she sells a piece.

SELF: I care a lot about who buys my artwork. The work has its own life once it leaves your studio. And in it having its own life, it has its own story and part of its story is the person who owns it. I like to know that them owning the work could somehow broaden the narrative around that one particular piece.

Self has had some positive experiences with buyers.

SELF: Like works going to people who are wonderful collectors that maybe down the line, because they’re not huge-name collectors, wouldn’t have been offered works.

And she’s had some less-positive experiences:

SELF: Early on in my career, a lot of people presented themselves as if they were going to be good fits for my work, that they really liked the work, that they respected the work. But in reality, they saw no value in the work outside of it being an object.

If you’re not an artist, or don’t care much about art, that may sound odd, because a painting by Tschabalala Self is, of course, an object.

SELF: Those kinds of people are the ones that have resold the work. Those are the kind of people that have reduced the work to a pure monetary value.

This, too, may sound odd — Tschabalala Self objecting to the idea that the original buyer of her work would focus on its monetary value. There was, after all, a mutually-agreed-up financial transaction that put the painting in the buyer’s possession in the first place. In a capitalist environment, we tend not to think too much about the emotional connection between the things we consume and the people who produce them. This does seem to be changing a bit: more and more consumers want “ethically produced” food and clothing, for instance. But for the most part, free markets train us to not make a strong connection between producer and consumer. That’s what prices are for. A price is the point at which the desire of a consumer meets the need of a producer. But the art market is different. As we’ve been hearing in this series, price doesn’t necessarily perform its standard function in the art market — there’s too subjectivity and too much volatility. But there’s an even bigger issue: the products being sold here are the personal creation of an individual artist; a given artwork is an intimate, emotionally charged extension of the human who made it. So think about it from the artist’s perspective. You’ve already agreed to sell what is essentially a piece of yourself. But then later, the buyer decides to get rid of it? Tschabalala Self has been successful enough to see her work resold at auction for a significant markup: her auction average is over $270,000. How does she feel about that?

SELF: I don’t like my artwork selling at auction. I think the whole thing is vulgar. Especially given the subject matter of my work. The overwhelming majority of my paintings deal with the Black female body, and just the whole idea of having to have conversations about these works being at auction is so gross. It’s a completely dystopic, surreal situation. And I don’t want my work in that context. I don’t want my work being spoken about in that context. I don’t want people bidding on my work in that way. And it’s very exploitative in many ways. The artists don’t gain anything. You’re using their name and all the works that they’ve made to put on this big production. And a lot of people are making money off this, but the artists themselves, they oftentimes feel overly exposed, and not in a way that’s productive.

I asked Tom Sachs how it feels when his work comes up for auction.

SACHS: How does it make me feel? It feels a little bit like a grift. But I mean, not a lot of my work goes up at auction. My work is so great that people love it more than money and they hang on to it.  

DUBNER: Does the auction house even contact you or your gallery to say, “We’ve got this Tom Sachs piece coming up for sale?”

SACHS: They contact me because they want me to promote it. They want to make sure that it looks good and make sure that it’s not broken, that it’s clean. And that I made it. They want to make sure that there’s a certificate of authenticity. And it’s in my interest for it to yield a high price at auction, even if I don’t get any of that.

DUBNER: It’s in your interest because it affects your overall reputation?

SACHS: There’s a hope that it helps and doesn’t hurt the primary market. But I really don’t care about that stuff, because I can’t really control it. I can consecrate that I made it. I can offer help to explain if there’s some questions. But it’s not the motivating force.

Sachs is represented by several galleries in the U.S., Europe, and Asia. Some of his pieces are large, complicated, and very labor-intensive, like the interactive space mission he was getting ready to show in Hamburg. But he makes smaller stuff too — like a sneaker he made in partnership with Nike, designed to hike around Mars in an earlier virtual space mission. His studio in New York employs roughly 20 people, all trained in the intricacies of producing Tom Sachs originals. He even created a film about the proper way to work in the studio. It’s called Ten Bullets and the film itself a work of art — tongue-in-cheek, and quite possibly a masterpiece:

SACHS: The studio is a complex and enigmatic working environment full of precise rules and principles. We call these rules and principles: The Code.

Considering his substantial overhead, I wanted to know how Sachs and his galleries price his work.

SACHS: One thing I never do is say, “Oh, it costs me a dollar to make it, so I can sell it for two or sell it for five.” I never think about it like that. I make the thing I want to make and then I kind of hold it at arm’s length, like Macbeth and it’s a skull in my hand and  I’m like, “What is this thing?”Is this worth $3 or $1?” And then I have to be really honest with myself and put whatever the cost and time aside and just like let it be what it wants to be. Because when Marcel Duchamp leaned that snow shovel up against a wall and the critics said, “How long did it take you to put that snow shovel up against the wall?” And he said, “Only just but a moment, but a lifetime before in contemplation.”

DUBNER: But when the sneakers, let’s say, get sold on the secondary market for like two grand, what’s that feel like for you?

SACHS: I know — it’s eight grand now, by the way, which is super annoying. It’s embarrassing. It wasn’t my intention. We were working to correct that because the whole point of doing a sneaker is to get it on people’s feet and the fun of that, and sharing. 

CAPPELLAZZO: I always tell artists, “Look, stop trying to hide from the art market.”

That, again, is the art-market maven Amy Cappellazzo.

CAPPELLAZZO: And by the way, you need the market, because otherwise, the value of your work is simply a curiosity. There is no real assertation of value. So if you want to make a living, you need that big, bad market out there.

Cappellazzo has sold the work of countless artists at auction, often for prices much, much higher than they sold it for originally. She also knows many of these artists personally, including Tom Sachs.

CAPPELLAZZO: Oh, he’s a high maker, like he’s obsessive maker.

DUBNER: So his priority is not making a lot of money. But he’s got a studio to run. He’s got a family, and so on. Let’s say I buy a piece by Tom Sachs through one of his galleries. Let’s say I pay 50 grand. Then 20 years from now, I sell it at auction for 100 times that much. As Tom’s friend and supporter, how do you feel about that progression? Because the auction house is going to get more money from that commission than he did for making it. Does that strike you as fair?

CAPPELLAZZO: Look, artists used to sometimes call me and say, “I can’t believe you’re selling my work. I just sold that for $50,000” — I was like, “Well, listen, I can put you on the phone with some other artists who sold their work for $50,000 and today it’s worth two. If you want to just balance out your concern, we can talk about what would happen on the other side.” And I’d say, “Did you sell the work for money? Because if you traded it for love or something, maybe there’s a rep-and-warranty problem on the ownership and I’d want to make sure there was a clear title. But if you traded it for money, that’s the way it goes.”

“If you traded it for money, that’s the way it goes.” How can you argue with that? But here’s an interesting fact about the art market: many artists are themselves priced out of it. Even very successful artists. Tom Sachs again:

SACHS: One of the things that’s been frustrating for me about my art career is I’m not an art collector. I don’t have the resources to buy the art that I want.

DUBNER: You don’t have the resources to buy your own art at market price, right?

SACHS: I don’t, and I can’t. Things have come up at auction and I haven’t been able to buy them.

This, we should note, is how capitalism often works: the bounty goes not to those who supply the market, but those who manage it or manipulate it. I wanted another perspective on this idea. So we went to Glenn Lowry, director of the Museum of Modern Art. When it comes to the art market, Lowry is a knowledgeable but largely disinterested party.

LOWRY: If you’re in the museum world, the art market runs parallel and sometimes intersects with what we do. But we are not as focused on the art market as many might think.

DUBNER: Talk to me for just a moment about Tom Sachs, if you would. I understand MoMA owns a lot of his works, practically a complete collection. And Tom told us that he’s grateful for all the support he’s had from everywhere. And he’s hardly a starving artist. But he told us that he doesn’t really have enough money to buy his own work when it goes on the secondary market. And I’m curious what you think of that situation, of the value that’s being accrued to artworks where the creator is often left out of the value chain.

LOWRY: That’s complicated. I like Tom a lot. I admire him. I think he’s one of those artists whose work asks probing questions and is always surprising. He can take you to the moon and beyond faster than any other artist I know. But I’ve never thought about the degree to which artists are capable of acquiring their own work on the secondary market. You can look at that through many different lenses, one of which is it shows that his work is accruing in value. And presumably, that means that the next thing he sells will also benefit from that value.  

This, you will remember, is the same point the art collector Robert Scull made to the artist Robert Rauschenberg back at that 1973 auction.

RAUSCHENBERG: I’ve been working my ass off for you to make that profit?

SCULL: How about yours, that you’re going to sell now? I’ve been working for you, too. We work for each other.

Tschabalala Self has also heard this argument. She doesn’t quite buy it.

SELF: The idea is your work sells for a certain amount of money at auction, then you can raise your prices. But that’s not always the case. And even if you could, the auction is not something that is consistent or stable or even sane, really. So to base your market on something that’s constantly in flux like that is not really a good idea.

As for being priced out of the market, Self is in a similar position to Tom Sachs.

SELF: Could I afford to buy one of my pieces at auction? No, I would not be able to. I don’t know if I could even buy one of my pieces at primary market. Art’s very expensive. But some pieces I would definitely love to buy back in the future. There ae pieces that I miss and have disappeared. They have been purchased at auction and no one knows where they’re at. It’s all very secretive. But if I don’t, it’s okay. I’ve made the work myself. I suppose I can make myself another one? It’s not the end of the world.

But if you ask Tschabalala Self whether an artist should get a share of the sale price when her work is resold at auction?

SELF: Of course, I definitely feel like artists should get a royalty if their work is resold. I think most people would agree with that.

The notion of an artist’s royalty on resale is not a novel idea, and it’s not an imaginary idea. I went back to Amy Cappellazzo for some details.

DUBNER: Can you tell me anything about legislation or regulation having to do with secondary-market sales and the share of those sales that may go to an artist or estate?

CAPPELLAZZO: The art market has a funny history about this. A resale royalty to a living artist or an artist’s estate exists in Europe in something called droit de suite. And it’s for E.U. countries and it includes a couple of other, non-E.U. countries.

Droit de suite means “right to follow” in French. It’s officially known in Europe as the Artists’ Resale Right. The law is meant to ensure that when a physical work of art is sold on the secondary market, the creator or their heirs will get a share of the price.

CAPPELLAZZO: But it wasn’t really constructed right. It’s not an intelligent form of taxation, because you end up writing checks to like Gerhard Richter for 14,000 euros.

As a matter of fact, the royalty is capped at just 12,500 euros. Gerhard Richter is one of the top-selling living artists. His auction record is over $46 million.

CAPPELLAZZO: If there’s ever anyone in the world who doesn’t need 14,000 euros, it’s Gerhard Richter. And the artists who would be beneficiaries of such a thing generally have no markets. So when you sell something for 5,000 euros and they get a check for 50 euros, I mean, it’s hard to say you’re really doing what you intended. Maybe the smarter solution is like in Britain, they started a lottery where a certain percent of the lottery went to support the arts. Because what you’re trying to do is — with all the big rich money flowing into the art world, you’re trying to help artists and help those pursuing artistic practice who might not have commercial output or are more committed to performance or other kinds of artworks that are less commercial — to have a robust culture of that. I think the droit de suite is goofy and misguided. 

Goofy and misguided as this type of law may be, there are plenty of American artists who would like to see it practiced here. But it doesn’t exist here. I asked Glenn Lowry, from MoMA, whether he’d be in favor.

LOWRY: Well, other forms of artistic production, like music, have different copyright structures than the visual arts that permit creators to benefit from the ongoing use for periods of time of their creation. And in fact, living artists today do benefit from any reproduction of their works of art, at least if they belong to one of the many arts collaboratives that have come together. I’m all for artists benefiting from their creativity, and while the droit de suite has been discussed in this country on many occasions, it has been impossible to adopt for a variety of reasons. But we know from Europe that it can be made to work. And there’s no reason why an artist shouldn’t have the same benefit that a musician or a filmmaker has.

DUBNER: What are the reasons that that isn’t possible here?

LOWRY: I’ve been in enough discussions over the years to understand that there just isn’t the kind of consensus, either at the state or federal level to make that happen.

There have been artists’ royalty acts proposed in Congress, but none passed. The state of California did pass a royalties act — backed by, among others, Robert Raushenberg. It set aside a 5-percent royalty when the work of a California artist was sold in California by a California collector. As you can imagine, these restrictions were sufficiently narrow to prevent many royalties from being collected. After some legal challenges, the California royalty law was narrowed even more, and now applies only to artwork created during a single year: 1977. Somehow it seems fitting, given everything we’ve learned about the art market thus far, that an attempt to address this relatively simple royalty issue was so badly mangled. As we heard earlier from the economist Canice Prendergast:

PRENDERGAST: It’s one of the strangest markets that I think I have ever seen.

And Prendergast, who truly loves art, believes that the strangeness of the art market — its illiquidity, its lack of clear and obvious rules — that this has a large consequence.

PRENDERGAST: I think the market structure itself helps to lead to what’s a very elitist good.

DUBNER: Because it is an elitist good and a luxury good, I think I see the obvious downside of that, which is that most people are excluded from participating in or enjoying something that, theoretically, could be a public good instead of a luxury good. Is there any way to quantify the loss of not having art be, for the most part, a public good?

PRENDERGAST: It’s a terrific question. I don’t know quite how to do it. Let me do it in a more negative sense, which is: most forms of contemporary culture could legitimately claim to change people’s beliefs, change political discourse, or whatever. That’s certainly true for music over the last 30 years. I think it’s true for film. I think the great failing of contemporary art is that it leaves no mark, essentially, on the public. And I think it’s because the public simply doesn’t understand it, because the public simply doesn’t interact with it. So it’s very difficult to quantify what the cost is. But I think its great failing is its absence of impact on society more broadly, in a way that I think most cultures have successfully done. And I think what’s so striking is how many artists are trying to have that impact, but instead end up in an art warehouse in Switzerland.

It’s kind of heartbreaking, what Prendergast suggests — that the art market itself is responsible for the failure of modern artists to have a real impact on society. Isn’t that, in the end, the true value of art? But Prendergast also notes that artists don’t give up trying. I was struck by Tom Sachs’s view of the art market, that for all its sliminess and bullsh*t and “lies per minute” — all his words, by the way — that he is as devoted as ever to doing what he does. He’s even fine with the current gallery system, and the 50-percent commission that most galleries take:

SACHS: I think whatever they take, it’s a really good deal for me.          

DUBNER: Because why?

SACHS: They don’t do nothing. They have their expensive real estate. If they’re good, they get out there and they sell it and do their job so I can do my job. My work is my life, so my dealers are really taking care of my life. It’s kind of life and death, so if someone can facilitate that in big ways and small ways, like emotionally, and then just take care of the finances, it means everything to me so I can do the one thing that I’m put on this planet to do better than anyone else, which is make Tom Sachs art. I’m the best at making Tom Sachs art. That’s the only thing I’m the best at.

And Tshabalala Self, who finds the art market opaque and bizarre and vulgar — again, all her words — she, too, is fully committed to her life as an artist.

SELF: Artists are meant to make works that are true and meaningful, that can help change people’s opinions about themselves and about others and about the world in general. It’s something that I’ve always done. It was something I did before I ever got paid, before I made any money. I made art and I wanted to study art and I wanted to be an artist. And in retrospect, I realize that I always was an artist. But just now I’m a working artist. It’s really the only difference. And if I never got paid for another piece of work, I’d probably get more rest. So maybe I would make better work. I don’t know. I’d be a little bit more clear-minded.

And if you’re looking for the ultimate example of the commitment to art-making despite a mountain of hurdles — despite poverty, despite not having your work sell — just look to Alice Neel. In death, her work sells for hundreds of thousands, even millions of dollars; in life, she was marginalized. And yet:

HOBAN: Alice Neel continues to inspire artists.

That’s Neel’s biographer, Phoebe Hoban.

HOBAN: But it’s not just because of the fact that she’s a great artist. It’s also because she never gave up. As a role model, as someone who is so devoted to their passion and to their own creative drive that — nothing will stop them. Nothing. Not the death of a daughter, then the estrangement of a second daughter, the abandonment of her husband, suicide attempts — nothing stopped this woman. Painting alone for 20 to 30 years and just piling up the canvases in the hallway.

*      *      *

Freakonomics Radio is produced by Stitcher and Renbud Radio. This episode was produced by Morgan Levey. Our staff also includes Alison Craiglow, Greg Rippin, Zack Lapinski, Mary Diduch, Ryan Kelley, Jasmin Klinger, Eleanor Osborne, Emma Tyrrell, Lyric Bowditch, and Jacob Clemente. We had help on this episode from Alina Kulman and Jeremy Johnston. Our theme song is “Mr. Fortune,” by the Hitchhikers; the rest of the music this week was composed by Luis Guerra. You can follow Freakonomics Radio on Apple Podcasts, Spotify, Stitcher, or wherever you get your podcasts.

The post “I’ve Been Working My Ass Off for You to Make that Profit?” (Ep. 485) appeared first on Freakonomics.

Also: how do phone cameras affect the way we experience live events?

*      *      *

Relevant Research & References

The post Why Can’t Baby Boomers and Millennials Just Get Along? (NSQ Ep. 76) appeared first on Freakonomics.

He’s tried to shake up the status quo — as a Democratic presidential candidate, a New York City mayoral candidate, and now the founder of the Forward party. Will his third try be the charm? Andrew talks with Steve about what it’s like to lose an election and why a third political party might be the best chance for avoiding a new civil war.

Listen and follow People I (Mostly) Admire on Apple Podcasts, Stitcher, Spotify, or wherever you get your podcasts.

*      *      *

Relevant Research & References

The post Andrew Yang Is Not Giving Up on Politics — or the U.S. — Yet (People I (Mostly) Admire, Ep. 54) appeared first on Freakonomics.

When you need a ride to the hospital, who should you call? Bapu talks with economist David Slusky about how ridesharing services are increasingly replacing ambulances. Plus, an unexpected reason why rideshares may lead some people to unhealthy behaviors.

Follow Freakonomics, M.D. on Apple Podcasts, Spotify, Stitcher, or wherever you get your podcasts.

*      *      *

Relevant Research & References

The post Is Uber Good (or Bad) for Your Health? (Freakonomics, M.D. Ep. 14) appeared first on Freakonomics.

The art market is so opaque and illiquid that it barely functions like a market at all. A  handful of big names get all the headlines (and most of the dollars). Beneath the surface is a tangled web of dealers, curators, auction houses, speculators — and, of course, artists. In the first episode of a three-part series, we meet the key players and learn how an obscure, long-dead American painter suddenly became a superstar. (Part 1 of “The Hidden Side of the Art Market.”)

Listen and follow our podcast on Apple Podcasts, Spotify, Stitcher, or wherever you get your podcasts. Below is a transcript of the episode, edited for readability. For more information on the people and ideas in the episode, see the links at the bottom of this post.

*      *      *

AUCTIONEER: Good evening, ladies and gentlemen. And a very warm welcome to our 20th-Century Evening Sale at Christie’s.  

Earlier this year, in the course of just one evening, Christie’s auction house in New York sold nearly half-a-billion dollars’ worth of artworks by Matisse, Picasso, Warhol — and Alice Neel.

AUCTIONEER: Lot number six. The Alice Neel, Dr. Finger’s Waiting Room, the artist of which is having a retrospective at the Metropolitan Museum right as we speak. And for this early work, we shall start here at 450, 500,000 — at 500,000. 550,000.

There is a good chance you have not heard of Alice Neel.

ATTENDEE A: 600.

AUCTIONEER: At 600,000. At 650,000 with an absentee bid. 

Neel was known for an intense and direct style of portraiture — but most of the people she painted weren’t famous, or rich. Also, Neel didn’t like to call her paintings “portraits.” She called them “pictures of people that are also history.”

AUCTIONEER: At 850,000, $900,000. 

Here’s Neel from an interview on Fresh Air in 1981, describing what she was going for in a painting.

Alice NEEL: What I want to get is the person, the zeitgeist, and a feeling of spontaneity. I don’t like things to look dull and worked over.

 

AUCTIONEER: At 950. Would you like a million?

The Neel painting for sale tonight, Dr. Finger’s Waiting Room, is a picture of — well, it’s a doctor’s waiting room. The Christie’s auction catalog describes it as “a higgledy-piggledy arrangement of items” including “a well-worn upholstered chair” and “a low table covered with … colorful flowers.” It measures 50 inches by 36 inches, oil on canvas.

AUCTIONEER: 1 million, 300,000. 1 million, 400,000. 1 million, 5. 

What’s not pictured in Dr. Finger’s Waiting Room is … Dr. Finger. Which makes this an Alice Neel painting that is absent Neel’s signature style of portraiture. And yet, the demand is strong.

AUCTIONEER: 1 million, 600,000. 1 million, 700,000.

Dr. Finger was Alice Neel’s own doctor. She made this painting in 1966, and it has apparently been in the possession of the Finger family ever since. Did Dr. Finger suggest that Neel paint his waiting room, or was that Neel’s idea? Why wasn’t Dr. Finger in the painting? Did he get the painting in exchange for treating Neel, or did he pay her for it? If he paid, how much? We don’t know the answer to any of these questions. But tonight, that doesn’t seem to matter.

AUCTIONEER: 1 million, 800,000. 1 million, 900,000. 

What we do know is that during her lifetime, Alice Neel never made much money from painting. She spent a good deal of her life on welfare, and she died in 1984. And the proceeds from the sale of Dr. Finger’s Waiting Room are going not to Alice Neel’s family but to the Finger family.

AUCTIONEER: 2 million. 2 million, 100,000.

As the auctioneer noted at the opening of the bid, Alice Neel is having a moment. The Metropolitan Museum of Art in New York had recently opened a full-blown retrospective of her work.

AUCTIONEER: 2 million, 200,000. 2 million, 300,000. 

By the time the gavel went down at Christie’s, Dr. Finger’s Waiting Room had easily set a new sales record for an Alice Neel painting.

ATTENDEE B: Two point five,

AUCTIONEER: 2 million, 500,000. 

The buyer was anonymous, bidding by telephone.

AUCTIONEER: And selling to Alex’s telephone for 2 million, 5. Sold 2-5, to paddle 1886.

How did this happen? How did a painting by an artist who struggled most of her life sell for $2.5 million nearly four decades after her death? That is a complicated question.

Phoebe HOBAN: For most of her life, she painted in complete obscurity.

That’s Phoebe Hoban, who wrote a biography of Alice Neel. It’s called The Art of Not Sitting Pretty.

HOBAN: She was devoted to portraiture. She was a humanist. She coined a term for herself, that she was an “anarchic humanist.”

Neel was born in 1900 just outside of Philadelphia, and attended art school at the Philadelphia School of Design for Women. During a summer program, she met a man she would marry. His name was Carlos Enríquez de Gómez, and he was from one of the richest families in Cuba.

Kelly BAUM: They briefly lived in Havana and actually her first solo and group exhibitions occurred in Cuba. 

And that’s Kelly Baum, a curator at the Metropolitan Museum — she’s one of the curators who recently mounted the Alice Neel retrospective.

BAUM: That moment was formative for the artist. She and Carlos would leave the compound in which they lived with his family to paint ordinary folks, people of color on the streets of Havana. She was also introduced to left-wing politics and philosophy. 

Alice and Carlos had a baby daughter, and moved back to the U.S., settling in New York. But their daughter died, from diphtheria. They had another daughter; Carlos took her to Cuba, with vague plans to meet up with Alice later, in Paris. That never happened. Alice had a nervous breakdown and twice attempted suicide. She spent some time hospitalized back in Pennsylvania. Eventually she returned to New York. Phoebe Hoban again:

HOBAN: In the early ‘30s, she participated in the first outdoor Washington Square Fair and she already was causing scandals. She did this painting called “Degenerate Madonna,” and the Catholic Church made her remove it from her little stand outside the park. So she did have some notoriety in the ‘30s, and even in the ‘40s.

Neel was a devout practitioner of a style of painting called social realism; she was adept at capturing everyday people caught up in everyday struggles. But social realism was being sidelined by a new movement: Abstract Expressionism — painters like Jackson Pollock, Willem de Kooning, Mark Rothko, whose work was considered more cerebral.

HOBAN: And that’s what pushed Alice Neel into obscurity. 

BAUM: I would say the ‘40s and ‘50s, those were the decades when Neel was ignored perhaps the most, when she really suffered some neglect.

Kelly Baum again, from the Metropolitan Museum.

BAUM: It was also the Cold War, and abstraction was being instrumentalized by curators, museums, and even the United States government. 

“Instrumentalized” meaning weaponized, really.

BAUM: Abstract paintings are being exported to Europe and displayed as symbols of democracy and capitalism. 

The U.S. State Department and the C.I.A. promoted the exhibition of abstract expressionist paintings around the world. The idea was to show that American artists, even the most avant-garde ones, enjoyed a freedom that you couldn’t even dream about in a Communist regime.

BAUM: And Neel was a Communist and had been a Communist since 1935. 

How much did the political environment and the rise of Abstract Expressionism contribute to the stall of Alice Neel’s career? It’s hard to say. Whatever the case, she stuck with her style of “anarchic humanism” — figurative painting, not abstract — even as her style grew increasingly outdated.

HOBAN: Ultimately, there’s not any artist who doesn’t want to be part of history, and to be part of what is called the canon. That had always eluded Alice Neel. 

Neel did get some recognition in the last 20 years of her life. But her work still didn’t sell for much. It wasn’t until 1989, five years after she died, that one of her paintings even went up for auction. It featured a man of no known consequence named Robert Gilbert; it was made just a couple years after Dr. Finger’s Waiting Room. Christie’s auction house estimated the Gilbert painting to sell for $7,000 to $10,000. But it didn’t sell even for that. It was what auction houses call “bought in” — which is art-speak for saying that no one wanted it. But now, here we are in 2021. The estimated price that Christie’s put on Dr. Finger’s Waiting Room was $600,000 to $800,000. And you remember what happened:

AUCTIONEER: And selling to Alex’s telephone for 2 million, 5. Sold 2-5, to paddle 1886.

BAUM: It would be almost impossible for her to imagine, even in 1982 or ‘83, that paintings of hers would sell for those kinds of prices.  

David ZWIRNER: So we’ve been working with Alice Neel’s estate for more than 10 years. It’s been, it’s almost a textbook journey in a weird way, how these things can play out.

And that’s David Zwirner. He’s one of the most successful art dealers in the world.

ZWIRNER: You can’t argue that a show at the Met does not impact the standing of Alice Neel. Now, this show is a triumph, right? Incredible reviews, incredible reception. That will move prices.

The Alice Neel story may be extraordinary, but it’s also what can happen in the art market.

Canice PRENDERGAST: It’s one of the strangest markets that I have ever seen. 

That’s Canice Prendergast, an economist who studies the art market.

Amy CAPPELLAZZO: There’s very few people that can index the market, top to bottom.

And that’s Amy Cappellazzo, who used to run contemporary-art departments at both Christie’s and Sotheby’s.

CAPPELLAZZO: So that’s why I’m on this show, is because I’m one of the people who can index the market.

DUBNER: Can you define “index the market” in this case? 

CAPPELLAZZO: Sure. “This Picasso is $100 million. This one is $60 to $65 million. This one is 50. This one is 22 on a good day.”  

Cappellazzo, Prendergast, and Zwirner are just a few of the smart people who will be our tour guides as we embark today on a three-part series: “The Hidden Side of the Art Market.” Now, why do we need three episodes? Because as you’ll hear, nearly everything in the art market is hidden!

Tom SACHS: There’s this phrase that was coined by a friend of mine called L.P.M.: lies per minute.

We’ll hear from the ultimate tastemakers in the art world. 

Glenn LOWRY: I’m Glenn Lowry and I’m the director of the Museum of Modern Art.

We’ll ask artists how they feel about the art market.

SACHS: How does it make me feel? It feels a little bit like a grift. 

Tschabalala SELF: I think the whole thing is vulgar. 

And of course, the economists.

Magnus RESCH: Art is a bad investment.

We’ll also try to see where things are heading next.

Kenny SCHACHTER: I made a comment that everyone and their grandmother’s going to be selling NFTs now and then I ended up making an NFT of my grandmother and sold her. 

In this first episode, we’ll look at what the art market is (and isn’t), who the players are, and where — in this market unlike any other — the elbows are sharpest.

CAPPELLAZZO: It’s hard to offend me, but I’m just pointing out obvious bias you have. 

*      *      *

It seems like every few months, there is a new record set for a sale of contemporary art:

REPORTER: Auction records shattered at Sotheby’s Thursday with the $110.5 million sale of this painting by Jean-Michel Basquiat.

And not just paintings. Digital works too, including NFT’s or non-fungible tokens.

REPORTER: The Christie’s auction for digital artist Beeple. The final bid? $69 million.

So is that what we’re talking about when we talk about the art market? Not really. Here, again, is Canice Prendergast; he’s an economist at the University of Chicago.

PRENDERGAST: It’s the tippity-tippity-tip in a globalized world where very, very wealthy people like to collect contemporary art. Many people think the entire market is the tippity-tippity, but they’re the 0.1 percent people that we’re talking about. 

Okay, that’s good to know. Still, if the tippity-tippity top of the market gets into eight- and nine-figure prices, the overall art market must be massive, right?

RESCH: The short answer is the art market is incredibly small. 

That’s Magnus Resch, another economist who studies the art market.

RESCH: All the players combined — all the galleries around the world, and all the auction houses — their revenue combined is around $60 billion U.S. Let’s put this into perspective. FedEx makes more than $60 billion. And there is FedEx, UPS and so many other companies. So we are really talking about an industry where a lot of people are involved, nobody’s really making money.

DUBNER: I’ve read there are 100,000 art advisors in the world. What’s an art advisor and what value do they add? 

RESCH: So art advisor is almost everyone who studied art history and doesn’t know what to do. The role of an art advisor is to have a client and navigate the client through the jungle of galleries and artists and point at artists that the client should buy. There are probably even more than 100,000 art advisor because everyone can call themselves an advisor. I probably know 2,000 art advisors. 

RESCH: And of those, maybe three are actually selling works. 

Resch has been studying and writing about the art market for years; his latest book is called How to Become a Successful Artist. He has also taught art entrepreneurship at universities including Yale.

RESCH: My students are mostly business students. I always ask them, “What do you want to learn?” They say, “How can I make money in the market?” 

DUBNER: Okay, what’s the short answer to that?

RESCH: You can’t.

DUBNER: Because why? 

RESCH: Art is a bad investment. There are only a few artists that are really worth investing in. 99.9 percent of the artists that you see at galleries and exhibitions, their value will never increase. The art market has too much supply, meaning there are way too many artists meeting very little demand. 

DUBNER: And yet, if all one does is reads the headlines, one would think the art market is the best it’s ever been because we hear about record sales at the auction houses. Christie’s, Sotheby’s, even Phillips just had a massive record.

RESCH: What we’re seeing are two art worlds. One is at the very top. Twenty artists are making 40 percent of the value of the auction art world while everyone else is struggling. Same on the gallery side, you have a few galleries that are dominating the art market, while all the other galleries are failing. 

DUBNER: So Magnus, what is your mission?

RESCH: I’d like to make the art market more transparent. So more people buy art. The biggest problem in the art world today is that not enough people are buying art. Two hundred years ago, it was very common to have 20 to 30 artworks per household. Now, look around you. How many artworks do you have at home? We somehow lost our love for art. We enjoy viewing it in museums, but we don’t enjoy buying it. 

DUBNER: And your argument is that we’ve lost our love in part because most of us have been priced out? 

RESCH: We lost it because gallerists made it incredibly difficult to buy art. They established this aura of exclusivity. They established the story that art will go up in value quite dramatically. So everyone is on the hunt for the next Basquiat and Picasso, but they can’t find it. So they get lost. Why don’t we buy art because we love it, and we are supporting a community? We need to change it. And I think we can bring that change by making the art market more transparent. The primary market, where most of the artworks are sold, is a complete black box. 

When Resch says “the primary market,” he means galleries and dealers who tend to project not just exclusivity but secrecy.

RESCH: So in a perfect scenario, I not only see past prices of an artwork, but I also see past ownership and so on. Similar to when I go and look at an apartment in New York: I see past rental prices, I see comparable prices, and so on. This is what I want to create for the art world.

So Magnus Resch created an app — which he named Magnus. It’s meant to be a Shazam for contemporary art: you point your phone’s camera at a work of art in a gallery, and the app gives you information on price, ownership, etc.

RESCH: We gathered over 1.5 million price points from galleries through crowdsourcing. It worked perfectly well. But then Apple shut us down because all the galleries complained. Galleries were unhappy because suddenly a buyer knew not only what the current price is, but he also could see previous prices and see that, that particular artwork that the gallerist is now asking 15K for didn’t sell last year at an art fair for 10K.

DUBNER: So on a scale of zero to 10, with zero being inscrutable and 10 being totally transparent, how would you rate the art market now?

RESCH: Three. I hope, by the end of my lifetime, we’ll be at a seven. 

One of the lopsided figures Resch that cited has become even more lopsided lately: the top 20 artists now make up nearly 50 percent of the auction market for post-war and contemporary art. If you look at galleries and dealers, fewer than 5 percent of them are responsible for more than 50 percent of the sales value. To be fair, a lot of industries have this sort of top-heavy imbalance. But as we were told by just about everyone we spoke with for this series, the art market isn’t like any other market. Why? There are a lot of reasons. Let’s start with the question of whether it’s actually a market at all. The economist Canice Prendergast again:

PRENDERGAST: It is a market in the sense that there is a mechanism to allocate goods that depend upon willingness to pay.

That, again, is the University of Chicago economist Canice Prendergast.

PRENDERGAST: But it’s a very different market to most in the following sense: most markets are anonymous. If I have the money to buy a Mercedes, I get the Mercedes. But that is not true for many, many artists. It’s a good that gets assigned to those in the know. Much of the information is held in very narrow social networks. Work is priced in ways that just feel so strange, relative to any other market. It’s also not like a regular market in that, for most of us, if we buy something and we decide we don’t like it, there’s recourse for this. If I buy a car and I don’t like it, I can sell it. If I buy a house and I don’t like it, I can sell it. Unfortunately, that’s very much not true for most art. It’s the most illiquid market that I’ve ever seen. And I think it has a very unfortunate side effect, that only those people who can spend $25,000, and if it doesn’t work, it doesn’t work — I think the market structure itself helps to lead to what’s a very elitist good. 

CAPPELLAZZO: The art market is a fascinating, sexy, intellectually compelling, unindexable, unregulated global market. 

And that, again, is Amy Cappellazzo, formerly of Sotheby’s and Christie’s auction houses. She recently co-founded a new firm called Art Intelligence Global, focusing on Asian markets. It’s interesting to hear Cappellazzo call the market “unindexable” because she, you’ll remember, told us she’s one of the few people who can index it.

CAPPELLAZZO: “This Picasso’s $100 million. This one’s 22 on a good day.”  

So what determines the value of a given work of art?

CAPPELLAZZO: A work of art is worth whatever someone will pay for it — until it resells and then you know what it’s really worth. If you go to Santa Fe and you’re shopping in some gallery and they say, “This wonderful artist from Santa Fe, this work is $50,000.” And you’re like, “Well, gee, that’s a lot.” They say, “Okay, I’ll sell it to you at $45,000.” Great. You buy it for $45,000. Then you go to an auction house and you say, “Hey, I need to insure this object, um, what do you think the value is?” And we say, “Well, it’s worth $8,000. It really just has decorative value and it’s kind of big and colorful. So we’ll give you eight.” It’s like, “Whoa, what happened?”

PRENDERGAST: There’s a pricing model that seems to be used by galleries where, unless you price high, collectors will think, “This is not a great artist.” And what happens is: You walk into a gallery. A painting is $100,000. It’s somebody you’ve never heard of before. It’ll probably not sell. But in the view of the art world, this is the only thing that I can do, or else the collector won’t take it credibly. And this is the reason why the secondary market essentially discounts a lot of work so much.

When Canice Prendergast talks about the secondary art market, he means auction houses — versus the primary market of galleries and dealers.

PRENDERGAST: The secondary market, to a first approximation, doesn’t function, even though it’s a durable good in the way that cars are durable, houses are durable, even sneakers these days are durable. So, there are all sorts of components in the market that stop it from working and, at the end of the day, mean that maybe 90 percent of the art that’s sold sits in a warehouse, rather than actually being seen by somebody.

CAPPELLAZZO: The art market is in massive disruption. 

DUBNER: When you say disruption, you mean an inflow of money?

CAPPELLAZZO: Massive amount — well, it can be outflow also, but a huge influx of capital has come into the art market, a massive amount of private wealth accumulated over the last, call it, 15 years. Because after your fourth house and third boat, this is where you turn to.

So the story that Cappellazzo and Prendergast tell is, again, a story of two markets. A handful of contemporary artists like Gerhard Richter and Jean-Michel Basquiat, Yayoi Kusama and Jeff Koons, they sell for tens or even hundreds of millions of dollars to wealthy collectors who’ll put the work in one of their many homes (or maybe in a warehouse). Other buyers and would-be buyers, along with most artists, constitute the lesser art market, whose prices are distorted by the massive dollars flowing toward the upper market. And where does that leave museums? In the old days, wealthy benefactors loved to build museums to give the public a look at their art collections. A modern billionaire is much more likely to keep their collection private. Here’s Met curator Kelly Baum:

BAUM: Well, even the Met has been priced out of the market when it comes to certain artists. 

DUBNER: Could you name a few? 

BAUM: I’d rather not. 

DUBNER: We could probably guess them if we had to?

BAUM: Sure, sure.

There’s one more thing that makes the art market so unusual. This has to do with the nature of the objects being bought and sold. Amy Cappellazzo again.

CAPPELLAZZO: They’re not really a pure commodity market. Like they’re rare, special, unique things.

DUBNER: But can you talk about the value of, I guess you’d call it desire? I mean, it is literally some paint on a canvas. If you came down from Mars, you’d say, “Wait a minute, that cannot be worth $85 million. There’s just no way.”

CAPPELLAZZO: Well, first I’d pull back and just say modern capitalism is predicated on the idea that you would take one raw material and transform it into another more valuable material and commodify it and sell it. So we’ll take some timber and turn it into furniture and sell it for many multiples the price. Similarly, you would take paint, canvas, graphite, paper, whatever it is, make something and turn it into something more valuable. So we’re kind of well past the stage of analyzing why that hunk of cloth with paint on it is worth so much. 

DUBNER: Right, but the multiple of a Picasso versus the multiple of most furniture, at least, is pretty apples to oranges, yes? 

CAPPELLAZZO: Well, but works of art are unique, largely. Furniture is something usually made in editions or put in production. So while it can be rarefied and special and even customized in a certain way, it’s not quite the same thing, and it arguably doesn’t have the same specific cultural resonance that a certain kind of $85 million painting could have. 

ZWIRNER: It’s primarily a one-off object that we’re trading. 

That, again, is the gallerist David Zwirner.

ZWIRNER: High-end artworks are ultimately very limited so you’re really dealing with very, very specific objects that have particular histories — where they have been shown, who owned them, what’s the development of this artist’s career? It’s really a unique set of circumstances that drives what we do. 

What were the circumstances that brought the late Alice Neel out of obscurity and into the Metropolitan Museum of Art? What’s the financial relationship between a museum, a gallery, and an artist? And what tricks do dealers use to get their artists’ work into museums?

LOWRY: It’s understandable why gallerists want to do that, but it’s not, in my opinion, the best way to bring an artist into a collection.

*      *      *

Earlier we met the University of Chicago economist Canice Prendergast. 

PRENDERGAST: Canice — yeah, weird Irish name.

He mostly studies labor markets, but he’s also written quite a bit on the art market.

PRENDERGAST: I come from a family where I grew up with art, and got interested at a young age. 

Because of this interest, Prendergast has a secondary duty on campus: he is essentially the chief curator of the contemporary art collection at the University of Chicago’s Booth School of Business. Now, you might wonder: why does a business school have its own art collection?

PRENDERGAST: The central feature of higher education is the use of different types of languages to transmit information. What we do in the classroom uses statistics, it uses graphs, it uses mathematics. And I see these as nothing more than languages that sometimes are better than the written word to get an idea across. And I think what we’re trying to do with the art collection is think of art as simply a language that tells us something about the world. 

DUBNER: And who are you competing against as a buyer? 

PRENDERGAST: It’s both museums and high-level collectors, and there’s a very notable thing: the art world has a very clear hierarchy, where it chooses who it would like the works to end up with. If you’re a gallerist who has an artist who you feel is promising, the way in which you typically will try to cause that artist’s career to develop is by placing it in what’s seen as the best collections.

DUBNER: Give me the hierarchy? 

PRENDERGAST: Well, MoMA is at the top. The Museum of Modern Art in New York is at the very top of that list.  

 

DUBNER: Could you just say your name and what you do, please? 

LOWRY: I’m Glenn Lowry and I’m the director of the Museum of Modern Art. 

DUBNER: So we are doing these episodes on the art market. What do you think when you hear that phrase, and to what degree is a museum like MoMA a part of the art market? 

LOWRY: If you’re in the museum world, the art market runs parallel and sometimes intersects with what we do. But we are not as focused on the art market as many might think. We’re aware of it. Of course we participate in it, because we often acquire works of art, or people close to our institution acquire works of art that ultimately come to us as gifts. But the way in which the art market operates and the way in which we operate are different. 

DUBNER: What is the relationship between you, a museum director at MoMA, and big gallerists, like a David Zwirner, let’s say? 

LOWRY: I try to go around to the galleries on a very regular basis, generally once a week. I like to know who’s selling art. I like to hear from gallerists why they’ve brought on an artist or what it is about an exhibition that they think is particularly important. So they are colleagues in the larger enterprise, if you want to look at it that way, of the art world. 

DUBNER: In what ways are your incentives aligned with theirs and in what ways are they perhaps at cross purposes? 

LOWRY: They become aligned, for instance, when we want to do an exhibition of an artist that they represent. They can become tangled when we are after a work of art and another entity is equally after that work of art. The responsibility of the gallerist is clearly to do the best he or she can for the artist he or she represents —  first financially, but also in terms of reputation. And we become perhaps important in that equation when it comes to reputation. We do not create financial value. We may, incidentally, create financial value by making a larger public aware of an artist’s importance. But the value we create is art- historical importance. It’s the ability to explain why an artist merits intense interest and why that interest is rewarded over time. 

Let’s pull back here for a moment. Glenn Lowry is so well-regarded that the Museum of Modern Art board rescinded their policy requiring retirement at age 65 in order to keep Lowry in charge through 2025. He is known not just for his leadership, and taste, and his art scholarship but also — as you can tell when he speaks — for his diplomacy. When Lowry says that MoMA is “perhaps important when it comes to reputation” of an artist, that’s a bit like saying that the Pope is perhaps important when it comes to steering the Catholic Church. When he says that MoMA “may incidentally create financial value” when it acquires an artist — well yes, you’d better believe they do. And when Lowry says the art market “runs parallel” to his museum, and “sometimes intersects” — let’s take a look at that intersection, and how it affects not just the reputation of an artist but their long-term financial value. Here again is the gallerist David Zwirner.

ZWIRNER: We are selling art, of course, in the primary and secondary market, but you also have to think of us as talent agents.  

Zwirner represents many of the best-known contemporary artists in the world, and he has galleries in New York, London, Paris, and Hong Kong.

ZWIRNER: We are very often the exclusive managers behind careers of artists that are maybe very, very shy, really just want to be in their studio, make work. So we have to get that work out into the world. We have to place it in museums, get them shows across the globe, grow their audience, tell their story in many different ways.

DUBNER: I’ve read that last year, you brought in around $800 million across the board. A few years ago, 2017, above $500 million. First of all, those numbers in the ballpark? Are they pretty accurate. 

ZWIRNER: They’re in the ballpark. 

DUBNER: For 2017, that works out to an average price of about $350,000 per piece. So I’m guessing that if we were to do an X-ray of the people who buy at galleries like yours, we’re talking not just the 1 percent, but the 1 percent of the 1 percent. Is that pretty much the case? 

ZWIRNER: That’s absolutely correct. 

DUBNER: So let’s say that a random person walks into one of your galleries, David. Let’s say I’m that rando. And I see a painting on the wall and I say, “Wow, I love that. I’d like to have that in my house. How much does it cost, sir?” And let’s pretend it’s that average price of $350,000. And then I say, “Okay, Mr. Zwirner, I have my checkbook. I’d like to buy it.” What happens now? 

ZWIRNER: Um — that’s a good question, because that happens so rarely that I have to step back for a second. I would want to know who you are. So the transaction would not be instantaneous. It would be, let’s get to know each other. And we would find common ground — people that we know, art that you collected that I would know, and we would become friends, and you become a client.

As Canice Prendergast told us earlier, one thing that sets the art market apart from most other markets is that most markets are essentially anonymous.

PRENDERGAST: If I have the money to buy a Mercedes, I get the Mercedes.

But if you or I walk into a major art gallery — well, first of all, there are likely no prices to be seen.

CAPPELLAZZO: Galleries are supposed to keep a price list available for anyone to peruse. 

Amy Cappellazzo again.

CAPPELLAZZO I suppose in some drawer, to avoid being snaked out, someone keeps a price list in a drawer. But that’s just really not how art is marketed nor sold.  

And when David Zwirner says we should “get to know each other,” to find out the “people that we know,” and what art I already own — well, let’s go back to that Mercedes dealership. Let’s say you pick out the model you want. You take a test drive. Perhaps you’ve even settled on the price. And now the dealer says, “Let’s get to know each other a bit. Where do you live, what’s your neighborhood like? What sort of cars do your neighbors drive? What other cars do you own, or have you owned? What sort of cars did your parents own? What do you plan to do with this car after you’re done with it? Do you plan to sell it or perhaps donate it to an institution — and if so, what sort of institution? Do you happen to be friendly with or related to anyone on the board of that institution?” That kind of “getting to know you” doesn’t happen for cars. For contemporary art, it sometimes does. It is true that dealers want to fetch an appropriate price for their artists’ work — and dealers typically receive a 50-percent commission, so they’ve got a strong incentive there. At the same time, they’re trying to protect against speculators: people who buy artwork in the hopes of reselling it later for a profit. If I buy a $350,000 painting from David Zwirner, there is a chance — if the artist is hot enough — that in short time, this painting will be worth $3.5 million. Someday, maybe even $35 million. And if I sell it at auction, that money goes to me — not the gallerist and certainly not the artist. So that’s one concern a gallerist has when deciding who to sell to. But as David Zwirner told us, there’s another concern: the artist’s long-term reputation. If Zwirner sells a coveted piece to some random billionaire, that piece may never be seen by the public. One of the best ways to burnish the reputation of an artist is to get their work shown in museums.

ZWIRNER: When we open a new show, we always give priority to museums that’s just a given. 

The problem is that museum budgets are often no competition for a billionaire’s budget.

ZWIRNER: So what you do then, you talk to the museum and there is the so-called museum discount, right? So the museum will get special terms.

DUBNER: So what kind of discount does a museum get? Let’s say it’s MoMA. 

ZWIRNER: That’s a tough question to answer in public because every negotiation is different, right? 

Amy Cappellazzo again.

CAPPELLAZZO: Often a living artist will want to preference that their work go to a museum because they’re trying to build their legacy and reputation. Like, “I really want this to go to Brooklyn Museum and I’ll take 50 percent less just to know that it’s there.”

SELF: I’m usually relieved for the artwork to go into a museum collection. 

And that’s Tschabalala Self — a young and successful painter who makes large-scale collages.

SELF: It’s now part of this community of other works that are meant to reflect a certain kind of history. If the work goes into a museum, it’s there, and it’s not an issue of me wondering, will this artwork be resold? Will this artwork be moved to some other part of the world? Will I never see it again? It can be in some storage unit in the basement of a museum, but at least you know where it is.  

And David Zwirner again.

ZWIRNER: If one of my sales folks or a curator calls me and we have an engagement with a museum, that will be the first thing we try to figure out. Because that is really what makes a difference for the artist. Being in the Museum of Modern Art or not makes a huge difference.  

DUBNER: So I recently heard of a gallery for an up-and-coming artist in New York who’s already changed galleries once in the last few months because she went from warm to very hot very fast. And the new gallery said they would sell a piece by this artist if the buyer were to first agree to buy another piece by that artist and get it placed in a good museum as a donation.  

ZWIRNER: That’s done a lot. I personally don’t like it and we don’t do it. It’s our job as gallerists to get artworks of our artists into institutions. That’s always difficult. Institutions very often don’t have the funds. So you need private money to help to purchase the work, right? And a quicker way to do it is if you have a long waiting list and you have a high-demand artist to say to somebody who really wants one, essentially you have to buy two, one is yours and the other one, you gift. I always am a little wary of that because it creates a strange dynamic around the work you sold free and clear to the collector. It’s not something that we like to do. 

LOWRY: I don’t know how widespread it is, but it’s certainly out there. 

Glenn Lowry, again, from MoMA.

LOWRY: And even though we are occasionally — and the “we” here is not just the Museum of Modern Art — museums are occasionally the beneficiary, I think most of us are not that comfortable with it. It’s understandable why gallerists want to do that, but it’s not, in my opinion, the best way to bring an artist into a collection in a way that assures that artist’s work will live vibrantly within the collection. 

You could argue that both Glenn Lowry and David Zwirner — Lowry from the museum side, Zwirner from the gallery side — they both have the luxury of staking out the high moral ground. They both enjoy a sterling reputation and have plenty of resources to back it up. Elsewhere in the art world, there is much talk of shady behaviors: self-dealing and double-dealing, broken promises and faked invoices, a slippery stream of hype and hyperbole in service of inflating a given artist’s valuations. For a gallerist like Zwirner, however, any short-term loss from discounting the sale of artwork to a museum is likely more than recaptured in the long run.

ZWIRNER: Luc Tuymans being a great example. 

Luc Tuymans is a Belgian painter, in his sixties. His work often explores the human relationship with history.

ZWIRNER: When we started working with him, his prices were $8,000. Now paintings sell in the primary market for over $2 million. So this has been a very nice, steady development over many years. And it’s been also very logical. He’s got a lot of major shows. He has the institutional support that warrants price development.

DUBNER: Can you tell me, David, how you first form a relationship with an artist like Tuymans, and how that relationship evolves over time?

ZWIRNER: So before I opened my gallery, there was a very important exhibition in Europe, in 1992. Documenta, a big group show that happens in Kassel, Germany, every five years, and used to be an amazing way to survey talent. So I knew I was going to open a gallery and I was really excited to go to Kassel, and I was confronted with a group of small, really enigmatic paintings. These paintings really struck me. And as I walked a little further, I was in a room with works by Gerhard Richter, the great German master. And I thought, my God, these paintings are great, but the paintings I just saw were really great, too. And I’d never heard of Luc Tuymans, so I made my way to Antwerp, where Luc lives and works then and now. And ultimately had to get down on my knees to beg him to join my gallery because he was already somewhat of an art star at that point. And I didn’t even have a gallery. So it took three subsequent visits, but what happened is really what should happen. You should see the work first. Fall in love with the work, then meet the artist and know that there is a chemistry.  

DUBNER: Now to this day, I understand you don’t have a contract with Luc or any artist. Is that true? 

ZWIRNER: That is true. All of our artists’ representations are based on handshakes, believe it or not. Once you start working with an artist, you really have to look out for what this artist needs and wants at every given time, not just in the beginning, when it’s easy. The first few shows are usually the ones where a larger audience finds an artist. But even more so when you hit the middle of a career when things maybe are not as exciting and when it takes more hard work to find new audience and tell an artist’s story. We really are in it for the long haul when we work with an artist or an artist’s estate. 

Another example of Zwirner being in it for the long haul? The American painter Alice Neel.

ZWIRNER: I knew about Alice Neel, of course, but I heard about her increasingly from other artists. Artists are really a point of reference. You really have to listen to what they have to say. Then we searched out the estate and we realized that there’s this incredible voice in American painting that’s been essentially overlooked. And she’s been overlooked because she was a woman in a century where women artists really had a hard time. But more importantly, she was a figurative artist in a century where it was all about American male abstraction, ultimately.

Alice Neel, as we noted earlier, painted in relative obscurity for most of her life. It wasn’t until she was in her early sixties that she finally had formal gallery representation, from the well-regarded Graham Gallery. Over the last couple decades of Neel’s life, Graham put on eight shows of her work, and got it included in several museum shows. She gained some minor celebrity — including a couple of appearances on The Tonight Show, with Johnny Carson:

CARSON: But you paint quite a few of your subjects in the nude. 

NEEL: That’s right.

CARSON: Now is that, is that at their request? 

NEEL: Oh, I wondered if you wouldn’t like to pose nude.

Alice Neel very much enjoyed the attention she got toward the end of her career.  But when she died, in 1984, her work still wasn’t in demand. She’d be thrilled if she got even a few hundred dollars for a painting. So what happened? How did a dead and largely unknown artist turn into such a hot commodity that a painting of her doctor’s waiting room sold this year for $2.5 million? Here, again, is the economist Magnus Resch.

RESCH: Estates that have been long forgotten are getting picked up by galleries, who have the financial power and uh tell the estate owners, “Hey, we are going to help and increase the value of the artist and give the artist the final recognition that she really deserves.” So they use their contacts to museums, to curators, to writers, and to buyers as well. And start by giving a solo show to that artist. Often the first solo show in many years — big rediscovery of the works and so on.

The gallerist in this case was David Zwirner. By the time he took on Neel’s estate, in 2009, the value of her paintings had already been rising on the auction market. Now Zwirner began to heavily promote Neel’s work — a few small exhibitions at first and then a major show in 2017.

ZWIRNER: It all changed when Hilton Als did this incredible show in our gallery called “Uptown.”

Hilton Als is a Pulitzer Prize-winning critic and curator. With the Alice Neel show he curated at the Zwirner gallery.

ZWIRNER: He really took her and placed her in Harlem amongst her friends, fellow intellectuals, fellow artists.

Hilton Als is Black; his curating a show at the Zwirner gallery about a white artist who had lived in Harlem began to change the Alice Neel calculus.

ZWIRNER: What nobody realized is that she really painted the world that we live in. She was truly inclusive in her thinking. She would very early on paint a gay couple. She would paint a transgender person. She painted her friends and neighbors, folks of color.

BAUM: Hilton Als curated a revelatory show — really changed our understanding of that artist.

And that’s Kelly Baum. Remember her? She is one of the curators at the Metropolitan Museum who would go on to mount the Alice Neel retrospective there. I asked Baum what it was about Neel’s work and the moment in history that led the Met to put on this show.

BAUM: There are so many, so many things. First of all, Alice Neel had been on the tips of so many living artists’ tongues’ for quite a while and it was becoming difficult to read or hear an interview and not have the name “Alice Neel” appear as a source of inspiration or influence. We’d been seeing enough Alice Neel to suggest that she was relevant, important, but we hadn’t seen too much, which suggested that there was room to   curate a really interesting show. Additionally, diversity, equity, accessibility, inclusion, justice writ large were issues that we were all thinking about. And there had been a rise in contemporary art of projects that address social justice directly. And that was absolutely true of Alice Neel. She was an advocate for social justice her entire life. And finally, there had not been a large Alice Neel retrospective in the city of New York for almost two decades.

And the Alice Neel retrospective at the Met was very large.

HOBAN: When a major museum devotes five galleries — and primo galleries — to a single artist, that’s a statement. And that’s the statement they made about Alice Neel. 

That’s Phoebe Hoban, who wrote the biography of Alice Neel. That book’s publisher, by the way, was David Zwirner Books.

HOBAN: The Met is considered America’s Louvre — a world-famous, iconic museum. A solo show like that stamps an artist as somebody who will go down for the ages. Somebody whose work will never be forgotten.

ZWIRNER: As we are now handily in the 21st century and looking at each other and trying to understand each other better, there’s this artist that’s helping us, right?

David Zwirner again.

ZWIRNER: It’s such a humanist approach to society and to who we are.   And it’s fascinating. And she’s now rightfully one of the great, great voices and great portraitist, but also great kind of historian.

DUBNER: So was the Alice Neel show at the Met to some degree, a Zwirner production or creation?

ZWIRNER: Not at all. That’s 100 percent the Met doing that show. I mean, that’s the great call you wait for. When you do what I do, you wait for a call from the Met — “We are interested in doing an Alice Neel show.”

DUBNER: To go back to the money part for a minute, though, and away from the art part, the Met having a huge show of an artist whose estate you happen to represent is fantastic news, long-term, for David Zwirner, yes?

ZWIRNER: Of course. You look at objective criteria that impact the standing of an artist, right? I think we had her auction record just a couple of weeks ago.

DUBNER: So what would you say a median Alice Neel painting would have sold for, let’s say, three years ago and maybe three years from now? 

ZWIRNER: I’m going to take a rain check on that question, that’s too speculative for me.

DUBNER: You want to give me a rough percentage?

ZWIRNER: I can tell where we’re coming from, I don’t want to tell you where we’re going. Paintings by Neel were sold between $500,000 and $1 million a few years ago. And now, we’re selling pictures between $2 and $3 million. So there’s been a clear upward trend. But again, a very logical trend. Very defendable trend.

DUBNER: And yet no matter how logical and defendable it is, there’s no guarantee that that trend continues, right? I mean, 10 years from now, Alice Neel could be worth $200,000 or $20 million — there’s no way of knowing, is there?

ZWIRNER: I think that’s actually where the gallery is important.

DUBNER: What can you do, though, as the gallerist to nurture a reputation that’s already at that height?

ZWIRNER: You want to now reach out to museums and collectors in other parts of the world. Alice Neel, I would love to present her work in our Hong Kong gallery. She’s not really been presented in Asia. And there are major shows on the horizon in Europe. You’re really looking at a career globally and you see what you can do to spread the good word.

Think about all the things that had to go right for a relatively obscure, long-dead painter named Alice Neel to become one of the biggest rising stars in contemporary art. Now think about all the artists, living and dead, for whom those things don’t happen. Coming up next time on the show — what it’s like for a living artist to navigate the strange waters of the art market.

SELF: The trajectory of an artist is such a bizarre track, and it doesn’t follow any logic.

And how does it feel to see your work sold at auction for 100 times what you sold it for originally?

CAPPELLAZZO: Artists used to sometimes call me and say, “I can’t believe you’re selling my work. I just sold that for $50,000.” I was like, “Listen, I can put you on the phone with some other artists who sold their work for $50,000 and today it’s worth $2,000.”

That’s the second installment of our three-part series, “The Hidden Side of the Art Market,” next week.

*      *      *

Freakonomics Radio is produced by Stitcher and Renbud Radio. This episode was produced by Morgan Levey. Our staff also includes Alison Craiglow, Greg Rippin, Zack Lapinski, Mary Diduch, Ryan Kelley, Jasmin Klinger, Eleanor Osborne, Emma Tyrrell, Lyric Bowditch, and Jacob Clemente. We had research help on this episode from Alina Kulman. Our theme song is “Mr. Fortune,” by the Hitchhikers; the rest of the music this week was composed by Luis Guerra. You can follow Freakonomics Radio on Apple Podcasts, Spotify, Stitcher, or wherever you get your podcasts.

The post “A Fascinating, Sexy, Intellectually Compelling, Unregulated Global Market.” (Ep. 484) appeared first on Freakonomics.

Also: is a little knowledge truly a dangerous thing?

*      *      *

Relevant Research & References

The post Why Do We Seek Comfort in the Familiar? (NSQ Ep. 30 Rebroadcast) appeared first on Freakonomics.

Everyone agrees that massive deforestation is an environmental disaster. But most of the standard solutions — scolding the Brazilians, invoking universal morality — ignore the one solution that might actually work. Originally released on Freakonomics Radio, Steve gives an update on what’s happened in the two years since this episode first ran.

Listen and follow People I (Mostly) Admire on Apple Podcasts, Stitcher, Spotify, or wherever you get your podcasts.

*      *      *

Relevant Research & References

The post The Simple Economics of Saving the Amazon Rainforest (People I (Mostly) Admire, Ep. 53) appeared first on Freakonomics.

Once upon a time, Bapu Jena was a graduate student at the University of Chicago. His most interesting teacher? The economist Steve Levitt. This week on Freakonomics, M.D., a replay of a conversation between Steve and Bapu from Steve’s podcast, People I (Mostly) Admire, where they cover everything from the ethics of human-challenge trials to why Bapu decided to start his own show.

Follow Freakonomics, M.D. on Apple Podcasts, Spotify, Stitcher, or wherever you get your podcasts.

*      *      *

Relevant Research & References

The post When Bapu Met Levitt (Freakonomics, M.D. Ep 13) appeared first on Freakonomics.

Patients in the U.S. healthcare system often feel they’re treated with a lack of empathy. Doctors and nurses have tragically high levels of burnout. Could fixing the first problem solve the second? And does the rest of society need more compassion too?

Listen and follow our podcast on Apple Podcasts, Spotify, Stitcher, or wherever you get your podcasts. Below is a transcript of the episode, edited for readability. For more information on the people and ideas in the episode, see the links at the bottom of this post.

*      *      *

Hey there, it’s Stephen Dubner. Before this week’s episode, let me ask your help for a future episode we’re working on. It’s about curses and superstitions. Which ones do you believe in, and why? Give us an example! Tell us a story! We’d like you to send us a brief audio recording. Just go in a quiet room and use your phone’s voice-memo app  — and e-mail the file to radio@freakonomics.com. Please include your name, where you’re from, and any other information that might be relevant. And if we don’t hear from you — beware the Freakonomics Radio curse. Thanks in advance. Our episode this week is one of my very favorites, from the vault, published nearly a year ago. It’s called “How Do You Cure a Compassion Crisis?” I thought it was worth hearing again as we start the holiday season. Speaking of which: if you’re looking for gift ideas, how about some Freakonomics swag? We just got in some good new stuff: just go to Freakonomics.com and click on “Shop.” And now, “How Do You Cure a Compassion Crisis?” Thanks for listening, and happy holidays.

*      *      *

Today’s episode is really interesting. There are two ways we could start it, but I can’t decide which is better. One way is nasty and vulgar, like this:

Tiffany INGHAM: Well, why are you looking then, retard?

Or we could start with the uplifting story, like this:

Stephen TRZECIAK: Scientists define compassion as an emotional response to another’s pain or suffering, involving an authentic desire to help. 

I don’t know, I can’t make up my mind. What do you think? All right, let’s just flip a coin. Heads for nasty, tails for uplifting. And it’s tails. Okay, we’ll get to the nasty stuff later. So, let’s start here:

Anthony MAZZARELLI: My name’s Anthony Mazzarelli. I am the co-president and C.E.O. of Cooper University Health Care.

The Cooper Health System takes in about $1.5 billion in annual revenues:

MAZZARELLI: We’re a level I trauma center located — our core hospital in Camden, N.J. But we have over 100 sites.

Mazzarelli doesn’t just run the hospital.

MAZZARELLI: I’m also a practicing emergency-medicine physician.

People who know Mazzarelli call him Mazz. And Mazz is sort of an overachiever. During his medical training, for instance, at the University of Pennsylvania:

MAZZARELLI: I ended up graduating with a medical degree, a law degree, and a master’s in bioethics. And then did my residency training in emergency medicine here at Cooper and have not left Cooper since. 

In 2014, Mazzarelli was promoted to chief medical officer:

MAZZARELLI: And at that time, our institution had engaged a consultant.  

The consultant did what consultants do and suggested ways for the hospital to strengthen its bottom line. One idea: the hospital should focus on improving patient experience and physician engagement.

MAZZARELLI: And there was a list of things to ask our physicians to do, which seemed, frankly, soft. Things that were kind of mushy. Things that I was concerned that I was going to have trouble getting 450, 500 faculty members — I was going to have trouble getting them to do.

Some of these mushy things had to do with the relationship between doctors and patients. Mazz realized that most of what he was being asked to do was to get doctors to show more compassion. Now, you might assume that most people who choose medicine as a profession do so in part because they are compassionate. Or at least that they’re taught compassion during medical school. If that’s the case, where does it go? Does compassion somehow evaporate over time? If so, was there a viable way to increase it? And can compassion even be measured? Before doing anything, what Mazz needed was some research.

MAZZARELLI: So, I turned to our No. 1 N.I.H.-funded researcher, the person with the most publications, the most N.I.H. dollars—. 

TRZECIAK: I’ve been at Cooper for 17 years.

MAZZARELLI: And it was Steve.

TRZECIAK: My name’s Steve Trzeciak. 

Trzeciak is the chairman and chief of the department of medicine at Cooper. And also:

TRZECIAK: I’m a research nerd and I’m also a practicing intensivist, a specialist in intensive-care medicine.  

Here are two doctors — one specializing in intensive care, the other in emergency medicine — who between them had treated thousands of people who were each having one of the worst days of their lives:

TRZECIAK: So, I never doubted that compassion was essential. And I don’t know anyone in healthcare that feels otherwise, or at least no one that would admit to it. It’s what we ought to do. The way that we ought to treat patients. But does it actually move the needle on outcomes in a measurable way? That’s what I was skeptical about.

But remember, the consultants the hospital brought in did want that needle moved. Mazzarelli was willing to consider that a dose of compassion might be worthwhile. So, he reached out to Trzeciak:

MAZZARELLI: And sat with him and said, “Steve, can you science this up for me? Can you look at the data around this?” And he said, “No, you’re crazy. I don’t want to be part of this. This is mushy. This is not what I do. I’m a hard-science guy.”

DUBNER: Is that indeed what you said, Steve?

TRZECIAK: It is, but that’s because I didn’t know there was such hard science available. 

DUBNER: How much time did you think you’d have to waste on Mazz’s silly idea? 

TRZECIAK: Well, it didn’t take long before I started to see the beginning of the signal in the data. And that’s when everything started to resonate.  

What Trzeciak was seeing in the data resonated with something else that was happening in his life.

TRZECIAK: Where I sort of had an existential crisis, like, “What am I going to do with my career?” So, I just want to be clear about one thing. I was not in the market for any sort of a scientific awakening. My research program was hitting every metric for success. We were publishing in some of the best journals. Everything was fine, right? But then I had this question that was posed to me.  

He doesn’t mean the question from Mazzarelli.

TRZECIAK: The question came from my son.

Trzeciak’s son was 12 years old. The question actually came from a school homework assignment.

TRZECIAK: The question was, “What is the most pressing problem of our time?” 

Trzeciak talked over the assignment with his son. But then on his own, he kept thinking about the question, and how it applied to him.

TRZECIAK: I knew that the research that I was working on was very important, but I also knew that it wasn’t the most pressing problem of our time. And I’m not old, but I’m too old to work on things that don’t really matter. It led me to search for what is the most pressing problem of our time.

And after a couple of weeks digging around in this seemingly mushy research project that Mazzarelli put him on, he knew he’d found it — what he considered the most pressing problem of our time. At least in his field.

TRZECIAK: What I found in the data and also just looking around at healthcare, what I see is that we have a compassion crisis. You can either believe it matters or it doesn’t matter. But if it matters, how does it matter? How does it affect people? How does it affect healthcare? How does it affect the economics of healthcare? How does it affect healthcare providers and burnout.

Trzeciak and Mazzarelli wound up writing a book that tries to answer these questions. It’s called Compassionomics: The Revolutionary Scientific Evidence that Caring Makes a Difference. Today on Freakonomics Radio: how strong is that evidence? How has the pandemic changed the equation? And: is it just the healthcare system where we need more compassion?

*      *      *

Okay, let’s start by revisiting that definition of “compassion.” Stephen Trzeciak again:

TRZECIAK: Scientists define compassion as an emotional response to another’s pain or suffering involving an authentic desire to help. 

That sounds like exactly what you’re setting out to do if you become a nurse or nurse practitioner; a physician assistant or a physician.

TRZECIAK: And the hypothesis is compassion matters. We don’t just mean compassion matters in a moral or ethical or sentimental sense. We wanted to test the hypothesis that compassion matters in measurable ways for patients and for those who care for patients.  

Here’s one data point that Trzeciak and Mazzarelli cite in Compassionomics: when patients are asked what they consider “extremely important” traits in a doctor, 85 percent say yes to being treated “with dignity and respect.”

MAZZARELLI: Only 27 percent say they want them trained in one of the best medical schools. Only 58 percent say, “Has a lot of experience.”  

Anthony Mazzarelli again.

MAZZARELLI: Patients want these factors that are more on the spectrum of empathy and compassion.  

TRZECIAK: So, we do want to be crystal clear about one thing. The No. 1 driver of clinical outcomes is clinical excellence. If you’re a surgeon and you botched the surgery or if you’re a physician who prescribes the wrong medication, there is no amount of compassion that’s going to undo that. It’s not an either/or, it’s an and. So, it’s compassion and clinical excellence that produce the best clinical outcomes. 

DUBNER: When you’re going to look at data about the value and effect of compassion in medical care, how do you search for that? I’m guessing “compassion” is not a keyword in all these medical studies. 

MAZZARELLI: Yeah, it’s a great question because you know, you can look up “pneumonia” in PubMed. PubMed is the equivalent of Google. And you look up “pneumonia,” you’ll get every article on pneumonia. If you were to look up “compassion” or “empathy,” you will not necessarily get every article. So, we had to do something which was essentially the equivalent of the Dewey Decimal System. We had to go back and do a systematic review of a reference-of-references approach — whole articles and then read all of those references, and then read the references of those articles, and then the reference of those articles, and keep doing that like a giant tree. That’s why it took a couple of years to do. 

So, rather than seeking out empirical evidence on compassion per se, Mazzarelli and Trzeciak organized their research around a set of characteristics that make up what is called “patient-centered care.” These include kindness, empathy, warmth — pretty much anything that shows doctors being nice to their patients. A lot of the research they looked at involved a 10-question survey called the CARE Measure. Patients are asked questions like: How well did the doctor do “at making you feel at ease?” How well did the doctor do at “fully understanding your concerns?” At “showing care and compassion?” At “making a plan of action with you?” In seeking out evidence on patient-centered care, Mazzarelli and Trzeciak wound up reviewing 281 research articles that formed what they saw as a collage of evidence about the power of compassion.

DUBNER: Before we hear your argument and your evidence for the argument, let me just ask how persuaded are you that you’re right? Because I could imagine that we could identify benefits of compassionate care, but it may be that doctors show more compassion to patients who are more compliant. So, how persuaded are you that the outcomes are not driven by something else, whether observable or unobservable? 

MAZZARELLI: Well, Steve used to have to correct me a lot on this, because I am a lawyer also. He would always say to me, “Look, we’re not making arguments. We’re testing a hypothesis.” He would say, “We need to be equally open that compassion isn’t something that is measurable and meaningful.” 

TRZECIAK: Right. So, it’s important to recognize the difference between association and causation. And causation can only be inferred from certain study designs. But what is really compelling and to specifically get to your question, when you push all the data together and you see it all curated, essentially for the first time, the signal is so consistent across the studies that it really doesn’t make a whole lot of sense to conclude anything else. 

Okay, let’s hear some of the evidence that Trzeciak and Mazzarelli compiled.

TRZECIAK: Sure. So, first, it’s important to think about mechanisms. There are many broad categories by which compassion for patients can be beneficial, and the first is physiological. Compassion for patients can actually modulate a patient’s perception of pain. It can have immune-system effects. There are also endocrine effects, which means in patients with diabetes, there’s evidence that they have better blood-glucose control and fewer complications when they’re treated with compassion on a regular basis. There is also broadly psychological effects. So, compassion for patients can reduce symptoms of depression, reduce symptoms of anxiety, reduce emotional distress associated with somatic illnesses like having cancer.

Those are some amazing (and amazingly concrete) claims for something that both Trzeciak and Mazzarelli suspected might be mushy. So, let’s interrogate this evidence. Consider Trzeciak’s first claim:

TRZECIAK: Compassion for patients can actually modulate a patient’s perception of pain.

How did they reach that conclusion? Their book cites several research papers that take a variety of approaches. One was a randomized-controlled trial done at Harvard Medical School with patients suffering from irritable bowel syndrome. It found that compassionate care — for instance, a doctor simply saying “I can understand how difficult I.B.S. is for you” — this led patients to report significantly higher rates of symptom relief. Another study, this one from Michigan State University, also used a randomized experiment. That’s the good news. The bad news is the subject pool was tiny: just nine patients.

In any case, these nine patients were recruited from the waiting room of a primary-care clinic and randomly divided into two groups. The control group got their standard visit with a doctor. The treatment group got the “compassionate” version, with the doctor engaging in warm conversation, trying to make the patient feel at ease, and encouraging follow-up questions. Afterward, the researchers put all nine patients in an fMRI machine, in order to measure their brain activity. Each patient was then given a painful stimulus while being shown an image of the doctor who’d seen them. The treatment group — that is, the patients who’d received the “compassionate” care — showed 47 percent less activation in the region of the brain known for experiencing pain. Again: it’s a small study and fMRI evidence is hardly perfect — but still: this type of study has persuaded Trzeciak that compassion can indeed modulate pain:

TRZECIAK: So, I didn’t say eliminate pain. But attenuate pain or one’s experience of pain.

And what are the mechanisms by which this happens?

TRZECIAK: One of many potential mechanisms by which compassion can modulate their pain is the release of endorphins. So, when endorphins are circulating, they are essentially natural opioids. 

Trzeciak also believes that compassion creates trust between patient and doctor.

TRZECIAK: In many ways, the touch of a trusted other can reduce one’s experience of pain. 

A study from the University of Haifa in Israel, for instance, gave people a painful stimulus while holding the hand of either a stranger or a loved one. Holding a stranger’s hand didn’t lessen the pain at all. But people reported a 50 percent reduction in pain while holding the loved one’s hand. There’s other research showing broader claims about human connection.

TRZECIAK: There’s evidence that human connection also modulates or can affect one’s autonomic nervous system. So, the autonomic nervous system is the part of the nervous system that does everything that you don’t have to think about. Like controlling your heart rate and your cardio-respiratory system.

Trzeciak points to evidence that compassion also affects what’s known as the parasympathetic nervous system. This can boost the flow of oxytocin, a molecule known as the “trust hormone.” Now, these physiological benefits of compassion are, to me at least, quite surprising. Somewhat less surprising are the reported psychological benefits.

TRZECIAK: That’s probably intuitive to some extent, that treating someone with compassion can help their mental health. But we’ve also seen this in a study that we’d recently published here at Cooper.

This study was led by Brian Roberts, an emergency-medicine doctor.

TRZECIAK: Brian did a study on the effects of compassion and the subsequent development of P.T.S.D., post-traumatic stress disorder. 

He was studying people whose P.T.S.D. didn’t come from war or some traumatic loss. It came from spending time in the hospital.

TRZECIAK: So, approximately one-third of patients that go through the experience of critical illness in an I.C.U. end up making diagnostic criteria for P.T.S.D. at 30 days. Even if you just come to the E.R. with a life-threatening medical emergency, 25 percent of those patients end up making diagnostic criteria for P.T.S.D. at 30 days. 

Here’s the hypothesis Brian Roberts wanted to explore: that treating E.R. and I.C.U. patients with more compassion might decrease the prevalence of P.T.S.D.

TRZECIAK: And what he found was that more compassion from the patient’s perspective was associated with lower development of P.T.S.D. at 30 days. So, perhaps compassion for people while they’re going through terrifying medical emergencies can actually help them with their psychological effects down the road. 

DUBNER: So, I mentioned this compassionomics idea to one doctor friend of mine. He’s a gastroenterologist whose specialty is cancer care. He’s late 50s, early 60s. And he pushed back in the following way. He said that doctors like him used to practice lots of compassion because, he said, there wasn’t much else they could do once someone was diagnosed with cancer. And now that there are so many more treatment options, that he’d rather deliver a lot of science than a bunch of compassion. So, there’s an opportunity-cost argument to this, right? If we’re going to spend a lot of time teaching and/or focusing on these kind of softer skills, does the science suffer? 

TRZECIAK: Compassion actually takes almost no time. Like, less than a minute. There was a randomized controlled trial from Johns Hopkins in a cancer population, and the primary outcome measure was anxiety. If you have cancer or somebody close to you has, you know that anxiety is pretty important. And what they found is that the compassionate care had a significantly better effect on the patient’s anxiety level. But what was most striking is that it only took 40 seconds for the intervention. And we found five other studies which show that it is less than a minute. And some people would argue there should be no time dimension at all. Because it doesn’t take any extra time to treat somebody with compassion. 

MAZZARELLI: I think a fair response back might be, “Okay, fine, you found five studies, and it’s less than a minute. But you’re opening yourself up to a ton more questions, you’re opening yourself up to a much longer visit.” But that’s also been studied, and there is no significant increase in the total length of time that people spend together. I think that the problem is that it is sometimes very hard in medicine to take on a new paradigm shift. 

To say “it’s hard for medicine to take on a paradigm shift” — that is an understatement. The history of medicine is replete with innovations that took years, sometimes decades, to work their way into the mainstream. Hand hygiene, for instance, as basic as that now seems. Medicine is a difficult enterprise, a complicated one, and in many ways a conservative one. With good reason. Remember: first, do no harm. So, imagine you are a hospital administrator. And some researcher comes into your office preaching the virtues of compassion. It has demonstrable physiological and psychological benefits, they tell you. It doesn’t take much time or effort, they tell you. Is that enough to convince you to round up all your doctors and tell them, on top of everything else they’re doing, that they also need to show more compassion to their patients? Maybe. But if not, what if that researcher also tells you that compassion will save you a lot of money? Are you paying more attention now?

MAZZARELLI: So, compassion increased revenue and decreased costs. 

How can compassion increase revenues?

MAZZARELLI: There’s patients who will pay more for that. We have data about hospitals that have higher margins that have better patient experience. 

That’s true, according to data collected by a federal survey of hospital patients. And hospitals that perform well on this survey are also reimbursed at a higher rate by the Centers for Medicare and Medicaid Services.

MAZZARELLI: But it’s the decreasing costs that I think is the most interesting.  

TRZECIAK: There is consistent evidence that when you care deeply for patients, and they know that, they’re more likely to take their medicine. And non-adherence to medical therapy in the U.S. alone accounts for somewhere between $100 and $280 billion of avoidable downstream healthcare costs. 

MAZZARELLI: And if compassion is something that can help people be more adherent, even capturing a fraction of that could decrease costs in the healthcare system, which is approaching 19 percent of the G.D.P. That’s one way it can decrease costs. Another way is in studies where there’s really patient-centered care, the proportion of patients who were referred to specialists was 59 percent lower while those who underwent diagnostic testing was 84 percent lower. 

DUBNER: I can see how fewer referrals to specialists and less extra testing would certainly lower costs. But how do we know that those lower costs aren’t at the expense of better outcomes? Because obviously some referrals and some tests are necessary. 

TRZECIAK: So, there’s a whole section of the book dedicated to the data on quality of care. And we’ve found associations in the data between more caring and fewer errors. And many of us in healthcare have been exposed to folks — and fortunately they’re few and far between — who maybe don’t care as much as we think they ought to.

MAZZARELLI: Or they once did. 

TRZECIAK: Or they once did, right? If they’re burned out. If you go to medical conferences, there is one theme that is drowning out just about every other topic that’s being discussed. And that’s the topic of burnout among healthcare providers. 

Indeed, the World Health Organization recently added burnout to its international Classification of Diseases — not as a medical condition, but an occupational phenomenon. Plainly, medicine isn’t the only occupation where burnout can happen. But it is surprisingly common among doctors. So, what’s this have to do with compassion?

*      *      *

Anthony Mazzarelli and Stephen Trzeciak are doctors and administrators at Cooper University Health Care in Camden, N.J. That’s just across the Delaware River from Philadelphia. They have co-authored a book called Compassionomics, which argues that when doctors treat their patients with compassion, it improves medical outcomes and reduces costs. But there is a problem:

MAZZARELLI: There is a compassion crisis in healthcare. 

How can that be? How can the most caring of caring professions be lacking in compassion? Before we get into the causes, would you like an example? Of course you would. Remember at the beginning of this episode, I mentioned a certain nasty and vulgar incident? Let me just pause here to emphasize that this example is not representative of most healthcare professionals. Most people who get into medicine do so because they want to help people. They take a vow to uphold a standard. But occasionally that standard is violated. In 2013, for instance, a man went to have a colonoscopy at a medical facility in Reston, Va. There was the gastroenterologist who performed the procedure, an anesthesiologist, and a medical assistant. The patient planned to record the doctor’s instructions on his phone once the colonoscopy was over. But he accidentally recorded the whole procedure. From his nervous questions before things got started:

PATIENT: Sorry I have so many questions, I just — it’s just my first time doing anything like this.  

To the doctors talking about him once he was anesthetized:

INGHAM: He’s crazy.

They start talking about an earlier problem the patient had — a genital rash.

Soloman SHAH: He keeps mentioning it like it’s the first time he’s ever talked to anyone about it. I’m like, “Sir, you’ve seen two urologists. What are you telling me for?” And, also, don’t — don’t mention it to me, because I’m not interested. 

INGHAM: And I don’t care, exactly. And then he went on and on about it. And I’m like—.

SHAH: One of the nice things about being a specialist is I don’t deal with that.

INGHAM: One of the nice things about being an anesthesiologist is making people shut the hell up. 

SHAH: That’s why I didn’t become a freaking urologist. 

In case you didn’t catch that, the anesthesiologist says, “One of the nice things about being an anesthesiologist is making people shut the hell up.” And then she continues, alternately talking to her colleagues and the anesthetized patient.

INGHAM: After five minutes of talking to you in pre-op, I wanted to punch you in the face and man you up a little bit. So, just make sure you’re gowned up. Don’t want you to accidentally rub up against it. Get some syphilis on your arm or something. It’s probably tuberculosis in the penis, So, you’ll be alright. Just get a P.P.D. in like a month, and then you’ll take some I.N.H. and be fine. 

SHAH: As long as it’s not Ebola, you’re okay.

MEDICAL ASSISTANT: So, if you see a rash—.

INGHAM: It’s penis Ebola. 

“It’s penis Ebola,” she says, which is not a thing. Then she says she’s going to enter “hemorrhoids” on the patient’s chart.

INGHAM: I’m going to mark hemorrhoids even though we don’t see them and probably won’t. 

“Even though we don’t see them and probably won’t.”

INGHAM: “I’m just going to take a shot in the dark. 

This patient, after waking up and hearing the phone recording, sued the doctors. The gastroenterologist was ultimately dismissed from the case, but the anesthesiologist and her practice were ordered to pay a half-million dollars in damages. Again, this is just one incident, and an egregious example, for sure. But if you want to make an argument for the lack of compassion in healthcare, it’s a good example. On the other hand, if you want to make an argument that having compassion can save money, as Mazzarelli and Trzeciak argue, you can use this lawsuit as an example where the lack of compassion can be very expensive. And yet, they say, there is still a huge deficit in compassionate care. Here’s Trzeciak again:

TRZECIAK: The data suggests that physicians, specifically, miss approximately 60 to 90 percent of opportunities to respond to patients with compassion. 

DUBNER: Give me a simple example of a physician failing to exercise compassion. 

TRZECIAK: Let’s start with the most basic. Recent data from the Mayo Clinic show that physicians will interrupt patients in their statement of their main concern at the 11-second mark. That’s the median time to first interruption. So, patients may not even get to fully explain the main concern that they have. 

This kind of problem is driven in large part by how doctors are compensated. As you likely know, our healthcare system tends to put more value on procedures and tests than on conversation or prevention. This is hard for doctors themselves; many of them are frustrated that their profession — long viewed as a calling — has become so transactional. But there also appears to be a perception gap between physicians and patients. Consider a survey done by the Schwartz Center for Compassionate Healthcare, which included 800 recently hospitalized patients and more than 500 doctors. When asked if most healthcare professionals provide compassionate care, 78 percent of the doctors said yes; for patients, that number was just 54 percent.

TRZECIAK: So, that data, and there are other data to corroborate it, show quite clearly that many of our healthcare providers can have a blind spot with respect to how well they’re connecting with their patients. We are thinking that we’re providing them with the emotional support that they need but the data showed that’s not what we’re actually delivering. 

What’s missing in this equation? It appears to be empathy.

Helen RIESS: Yes. Empathy is a human capacity that allows us to perceive, process, and respond to others’ emotional states.

That’s Helen Riess. She is a Harvard psychiatrist who also practices at Massachusetts General Hospital, where she directs a program that does empathy research and training.

RIESS: There have been many studies, both in medical students and in practicing physicians, that demonstrate that there is definitely a deficit in empathy and compassion.

DUBNER: Let’s say on a scale of one to 10, what is the median American doctor’s empathy level? 

RIESS: I’d say it’s about four-and-a-half.

DUBNER: Oh, that’s discouraging, isn’t it?

RIESS: I think so. And it’s not to blame the doctors. I just think that our system right now is working to get the outcome that we’re seeing. First of all, medicine has become a business, and whereas we used to have time to get to know patients and to really form relationships, it’s much more about throughput now, and how many people you can squeeze into an afternoon. The incentives are much higher to see somebody for 20 minutes to just prescribe their medicine than to see them as a whole person. 

Riess argues that this scenario is a big driver of physician burnout. How is that defined?

RIESS: Burnout is defined when a few things are happening, called depersonalization, where patients are seen more like as a number, or a diagnosis, one on a list instead of like real people. A sense of decreased effectiveness, just feeling like no matter how hard I work I just don’t really feel like I’m doing a good job. And emotional exhaustion.

In 2019, the National Academy of Medicine published a report putting the rate of physician burnout in the U.S. between 40 and 54 percent. That’s roughly double the burnout rate among workers in other fields, even “after controlling for hours and other factors.” It’s also estimated that the rate of physician suicide is double that of the general population — between 300 and 400 doctors each year.

RIESS: In the general population, there are many attempts. But when physicians decide they have had enough, they know how to end their lives and they have what’s called a successful outcome. Of course it couldn’t be farther from the truth.

As bad as physician burnout has been in recent years, Covid made it worse. A recent Medscape survey found that two-thirds of the doctors who responded said their burnout symptoms had intensified during the pandemic; a quarter of them said they are considering early retirement, in part because their income has fallen. Nurses are also thought to have very high rates of burnout — although, frustratingly, there’s less data on nurses. And the lack of data on nurse suicide is even worse. Among doctors, burnout is known to start early. It’s estimated that 44 percent of medical students suffer from burnout before they even make it to their residency. 

RIESS: I talk to medical students and residents all the time. And they say, “When I chose this as a profession, I thought I’d be spending most of the time with patients.” But the average resident spends about 12 minutes a day with their patient. And the rest of the time is all work done through the computer.

This is a complaint we’ve heard before on this show, from Atul Gawande.

Atul GAWANDE: At this point, I’m a glorified data-entry clerk. 

And Gawande is among the most prominent physicians in America — a surgeon, public-health researcher, and best-selling author.

GAWANDE : I spend more time doing data entry in my office than I do seeing my patients. And that’s just broken.

RIESS: If people are feeling exhausted, disconnected from the reason that brought them to the profession, and they’re not feeling very effective in their jobs, their morale is going to decay, and cynicism can start to creep in.

There’s a cult novel, published in 1978, called The House of God, which is still popular among medical students. It follows a group of first-year residents at work in the hospital — the “house of God” is their name for the hospital itself. Here’s one passage: “Before the House of God, I had loved old people. Now they were no longer old people, they were gomers.” A gomer is doctor-slang for “get out of my emergency room.” The passage continues: “I did not, could not love them anymore. I struggle to rest, and cannot, and I struggle to love, and cannot, for I’m all leached out, like a man’s shirt washed too many times.”

MAZZARELLI: When I started medical school, compassion wasn’t a part of the curriculum—.

 Anthony Mazzarelli again:

MAZZARELLI: It wasn’t a title of any lecture. It wasn’t on any test.

And Stephen Trzeciak:

TRZECIAK: Classically, the teaching in medical education — and this wasn’t taught as part of the formal curriculum, this is just what you pick from your peers, there’s this thinking that, “Don’t get too close to patients.” Because that could make you prone to getting burned out.

Trzeciak says the current medical-school curricula are more likely to focus on empathy and compassion. He says there’s no established standard for this kind of training, nor is it likely to be evidence-based. But at least the arrow is moving in the right direction. Also, there’s new technology, like virtual reality, to help medical students learn to interact with patients. Here again is the psychiatrist Helen Riess: 

RIESS: There was a company that made this wrist device that helped you experience what it was like to have Parkinsonism. And when I tried it and I couldn’t even hold a pen, I realized I had no idea how hard it would even be to write anything or zip up your jacket. And it instantly gave me more empathy for people who can’t control their movements. 

Some years back, Riess co-founded a company called Empathetics. It uses live and virtual sessions to teach anyone — but mainly healthcare workers — how to be more empathetic.

RIESS: Empathy is how we perceive the emotional states of others and that gets mapped onto our brain. So, empathy is needed in order to show compassion.

So, how does this translate into advice for doctors?

RIESS: Empathy is in part a shared experience. And so, if your patient is really worried about something, and you’re sitting there flatline, you’re not catching any of the emotion. And we’re not suggesting that you get just as upset as the patient. But there should be a change in your physiology when something very emotionally charged is happening. And that’s why if doctors are looking at computer screens and not catching a facial expression, and they’re not really hearing it in the tone of voice, they can miss something that’s extremely important to the patient.

Reiss herself designed the program that Empathetics uses to teach empathy.

RIESS: On a walk in the woods one day, it kind of came to me that the word empathy could act as an acronym for all seven ways that we connect.

Okay, let’s start with the E:

RIESS: The first way that we connect with anybody is through eye contact that says, “I see you. You exist.” And it goes back as early as a mother-infant bonding, that a child knows they exist through the gaze of the mother or whoever’s holding them, and oxytocin is released when people gaze at one another and it bonds people. And in healthcare, when people feel afraid, small, and vulnerable, that gaze actually means a lot. The next letter is M, for “muscles of facial expression.” And I had to use that because there’s no F in “empathy” for the face. 

DUBNER: It’s fair, there are muscles in the face

RIESS: Well, they are what shape our expression. So, it works.

The idea here is that our facial expressions usually mimic someone else’s concern or sorrow. The “P” in Riess’s acronym is for posture, or body language. “A” is for affect; the “T” is for tone of voice; the “H” is for hearing the patient, the entire patient.

RIESS: In medicine, it’s so easy to focus on the injured body part — the pancreas that has abnormalities or the heart that’s got a murmur. But we’ve got to back up and realize that all these body parts are attached to a person, and only caring about how your wound is healing is not going to make that patient feel very cared about. Even though you’ve done a brilliant surgery.

And that leaves us with the Y:

RIESS: The “Y” is the most interesting one of all. And that is “your response.” And it’s not what you say next. “Your response” is your feeling of being with that person, because most feelings are mutual. And if you’re feeling good after an interaction, chances are the other person is, too. But if you’re feeling a little like something tilted there — we encourage taking some moments to reflect back on what just happened. And ask yourself, “Was I abrupt? Did I seem rushed? Did I cut the person off? Did I not answer their questions?” Like when things are off, we should not just move on and say, “Oh well.” Because oftentimes it’s that gap where you kind of know something wasn’t quite right.

Helen Riess’s argument is that if you want to increase compassion among doctors and other healthcare personnel, you have to start with empathy.

RIESS: Empathy’s the prerequisite.

And if the empathy doesn’t come naturally, or if it gets leached away over time, and if people have to be taught to exhibit empathy — well, that’s what needs to happen. And there’s one more reason why it needs to happen. This is the most radical argument that Stephen Trzeciak and Anthony Mazzarelli make in their book Compassionomics. All that stuff about how compassion is good for patients, both physiologically and psychologically? That’s not so radical. All the evidence that physician burnout is a huge problem? Also not so radical. Here’s their radical proposal: compassion is not a one-way street.

Its benefits accrue not only to patients, they argue, but to doctors and nurses as well. Compassion, in other words, will heal the healers. Several studies have linked compassion or empathy to lower levels of burnout. It’s really hard for studies like that to prove causation, but researchers have documented physiological benefits of dispensing compassion. Sometimes it’s called “the helper’s high,” driven perhaps by a spike in endorphins. Dispensing compassion can also activate the parasympathetic nervous system, which produces a calming effect. Compassion — the thing that doctors need to show — is the very thing that doctors need. That, at least, is the argument put forth by Trzeciak and Mazzarelli.

TRZECIAK: The preponderance of evidence shows that there is an inverse association between compassion and burnout. So, more compassion, lower burnout; lower compassion, higher burnout. Healthcare providers who have lower compassion for patients are more predisposed to getting burned out under the same amount of stress. So, we believe that having a fulfilling doctor-patient relationship, or a nurse-patient relationship, gives you that fulfilling part of medicine, and if you don’t have that, then it’s just one stress after another.

Soon after Trzeciak and Mazzarelli began to focus on the science of compassion, they started a program at Cooper Health System to mentor physicians on how to connect and communicate with patients. Mazzarelli reports that the hospital has since made improvements every year, in patient satisfaction; physician engagement; and financial performance — although Mazzarelli, true to what he’s learned during his compassionomics journey, was careful to note that, “Of course we can only report association rather than definitive causation from these data.”

DUBNER: Let me ask you, since you were the skeptic coming in, Steve, I’m really curious to know what kind of effect this work — the research and writing the book and trying to put it into practice — what kind of effect that’s had on you personally and/or professionally?

TRZECIAK: Sure. So, after going through all of the data and specifically seeing the signal that compassion can be beneficial for the giver too, that really left an indelible mark on me. Because after 20 years of working in an I.C.U. and meeting people on the worst day of their life, I came to the realization that I had every symptom of burnout. Every single one. And I assure you, that’s not a good place to be. So, having just synthesized all the evidence that compassion can be beneficial for the giver too, I decided to do an experiment on myself. And I tried very hard and I still do to this day, working to connect with people more, not less. It’s not only the patients for me. It’s their families. Many of my patients are so sick that they can’t talk. They’re on a ventilator, for example. But connecting more, not less, leaning in rather than pulling back — and for me that was when the fog of burnout began to lift. And you also realize that you can get better at compassion — it can be taught, it can be learned — and you have to be very intentional in practicing it every day.

DUBNER: Can you give me an example or two of something that you say that you wouldn’t have said? Or maybe it’s something that you say differently? Is it the way you touch someone that you might not have touched before? Is it eye contact?

TRZECIAK: Actually, it’s not something that I say. Oftentimes it’s something that I don’t say. It’s just being present. I practice critical care and there are a lot of times when the outcome is not something that can be changed. And sometimes you just need to sit with people and their suffering. “You’re not going to go through this alone.” “I am here with you.” In fact, just in the I.C.U. recently, I had to give — essentially news to a woman whose brother was fighting for his life. We were still hopeful that he could recover, but he was so severe that it was very likely that he might not. And it was devastating to her because he had been her rock throughout her whole life.

At the end of that discussion, she said, “You don’t remember me, do you?” And I said, “I’m sorry, I don’t.” And she said, “I wouldn’t think that you would. You see So, many patients here. It’s okay. But eight years ago, my mom was in that room right across the hall there and you were her doctor. And we had to have this talk and you had to tell me that she was dying and there was nothing we could do for her.” And what she remembered was the nurses and the fact that she never felt alone through that whole experience. She said the kindness of your nurses and how they helped me through that, she said, “It keeps coming back to me. It comes back to me all the time. I think about that because it was so hard at the time. But every time I think about it, I think about the kindness of those nurses.” And so, going back to what we were talking about earlier, even though there are 281 references in this book of original science research papers that show that compassion matters, even when it can’t make a difference in the outcome, it still makes a difference.

That, again, was a replay of Episode No. 444, “How Do You Cure a Compassion Crisis?” You can get the entire archive of Freakonomics Radio on any podcast app.

*      *      *

Freakonomics Radio is produced by Stitcher and Renbud Radio. This episode was produced by Morgan Levey. Our staff also includes Alison Craiglow, Greg Rippin, Jasmin Klinger, Eleanor Osborne, Mary Diduch, Zack Lapinski, Ryan Kelley, Emma Tyrrell, Lyric Bowditch, and Jacob Clemente. Our theme song is “Mr. Fortune,” by the Hitchhikers; the rest of the music was composed by Luis Guerra. You can subscribe to Freakonomics Radio on Apple Podcasts, Stitcher, or wherever you get your podcasts.

The post How Do You Cure a Compassion Crisis? (Ep. 444 Rebroadcast) appeared first on Freakonomics.

Also: how much does confidence really matter?

*      *      *

Relevant Research & References

The post How Do You Deal With Intrusive Thoughts? (NSQ Ep. 75) appeared first on Freakonomics.

He’s an M.I.T. cosmologist, physicist, and machine-learning expert, and once upon a time, almost an economist. Max and Steve continue their conversation about the existential threats facing humanity, and what Max is doing to mitigate our risk. The co-founder of the Future of Life Institute thinks that artificial intelligence can be the greatest thing to ever happen to humanity — if we don’t screw it up.

Listen and follow People I (Mostly) Admire on Apple Podcasts, Stitcher, Spotify, or wherever you get your podcasts.

*      *      *

Relevant Research & References

The post Max Tegmark on Why Superhuman Artificial Intelligence Won’t be Our Slave (Part 2) (People I (Mostly) Admire, Ep. 52) appeared first on Freakonomics.

Ideas are currency. This couldn’t be more true in academia, where it’s the job of researchers to think of questions and, hopefully, find answers. Bapu talks with economists Steve Levitt and Emily Oster about how they come up with ideas for studies, why most never make it off the ground, and what should be done with scrapped projects.

Follow Freakonomics, M.D. on Apple Podcasts, Spotify, Stitcher, or wherever you get your podcasts.

*      *      *

Relevant Research & References

The post Where Do All the Bad Ideas Go? (Freakonomics, M.D. Ep. 12) appeared first on Freakonomics.

You know the saying: “There are no shortcuts in life.” What if that saying is just wrong? In his new book Thinking Better: The Art of the Shortcut in Math and Life, the mathematician Marcus du Sautoy argues that shortcuts can be applied to practically anything: music, psychotherapy, even politics. Our latest installment of the Freakonomics Radio Book Club.

Listen and follow our podcast on Apple Podcasts, Spotify, Stitcher, or wherever you get your podcasts. Below is a transcript of the episode, edited for readability. For more information on the people and ideas in the episode, see the links at the bottom of this post.

*      *      *

Marcus DU SAUTOY: This is a little fairy tale that we all get told as mathematicians. 

That’s Marcus du Sautoy, who is a mathematician, at Oxford University in England. As for this fairy tale:

DU SAUTOY: I don’t know whether it’s true or not, but who cares? 

The story takes us back to Germany in the late 18th century, and a schoolboy named Carl Friedrich Gauss.

DU SAUTOY: The young Gauss, sitting — 8, 9 years old in his class, the teacher wants to get a little bit of rest, decides to set them a problem that it will take them ages to actually do.

Young Carl Friedrich Gauss would become one of the most remarkable mathematicians in history. There are more than 100 theorems, formulas, models, and other math terms named after him. But that was later. At the time of our story, he’s just a very bright young student. And the teacher gives the class this problem to solve. As Du Sautoy said, it’s not a particularly interesting problem. The teacher says:

DU SAUTOY: “You’ve got to add up the numbers from one to 100.” And most of the class set off and they go one plus two, that’s three, plus three, six —.

Go ahead, try it for yourself. Add up the numbers from one to 100. I’ll give you a minute.

Are you done? If not, then you are quite a bit slower than young Gauss.

DU SAUTOY: Carl Friedrich Gauss immediately writes down a number on his chalkboard, slams it down on the desk and says, “There it is.” The teacher thinks he’s being impudent but looks down and sees — “But that’s the correct answer, how did you get that so quickly?” 

You may be thinking, well, Gauss is plainly a math prodigy, so he just added up the numbers in his head really fast. That’s not what he did. According to the story, here’s what Gauss told his teacher:

DU SAUTOY: He said, “Look, the rest of the class, they’re all starting at the beginning and just plodding on through this journey. I combined the beginning and the end of the journey. So one plus 100 is 101, two plus 99 is also 101, three plus 98, 101. So you’ve got 50 pairs of numbers adding up to 101. So that’s 50 times 101, which is 5,050. If the teacher came back and tried to give him an even greater challenge, “Okay, what about the numbers from one to a million,” that’d be taking the rest of the class ages. This is the power of a shortcut — doesn’t matter what number, the way of thinking will get you to the answer.

“The power of a shortcut.” What sort of power are we talking about here? And is it a power we really want? We’ve all been taught, since we were kids, that the right way to do something is to be thorough, diligent, tireless. You’ve probably heard the saying, “There are no shortcuts in life.” What if that saying is way wrong? Marcus du Sautoy believes it is. He has just written a book called Thinking Better: The Art of the Shortcut in Math and Life.

DU SAUTOY: Finding these shortcuts is often hard work. That’s like building a tunnel underneath a mountain. The first dig requires a lot of work and energy and time. But once the tunnel is created, the rest of us can then pour through, once we’ve learned the trick.

You don’t have to be lazy to love shortcuts. But it doesn’t hurt. Today on the show: the latest installment of The Freakonomics Radio Book Club, in which we interview an author and hear key excerpts from their book. Like this:

DU SAUTOY: A shortcut is not a fast way to finish your journey, but rather a stepping-stone to beginning a new one. It’s a pathway cleared, a tunnel dug, a bridge constructed to allow others to quickly reach the frontiers of knowledge so they can make their own journeys into the darkness. Equipped with the tools that Gauss and his fellow mathematicians through the ages have honed, stretch out your arms for the next great conquest.

Today, Marcus Du Sautoy will teach us how shortcuts can be applied to practically anything — music, psychotherapy, even politics.

DU SAUTOY: This is one of the extraordinary powers of mathematics.

Math itself is a shortcut. Language is a shortcut. This episode is a shortcut.

*      *      *

Marcus du Sautoy isn’t just a mathematician. He also writes plays, and he plays music, and he preaches the virtues of math on television and elsewhere in the U.K. At Oxford, he’s the Simonyi professor for the public understanding of science. It’s a position first held by the evolutionary biologist Richard Dawkins. Du Sautoy took over in 2008.

DU SAUTOY: Science is having such a big impact on society. It’s a bit like a superpower, so it needs its ambassadors to try and create bridges between those who might fear the science. So that’s a slightly more outward-looking role.

Stephen DUBNER: You describe the job of a mathematician as “discovering the ways of thinking smarter.” I’m curious how successful you think mathematicians have been in that realm. 

DU SAUTOY: Incredibly successful. What a mathematician is very good at is looking at many examples of something happening and realizing there’s a commonality to them, and that even though the numbers might be very different, what’s making them tick is the same.

Even if you know nothing about math, you know that math underlies nearly everything. Medicine, engineering, computing — even music and art and probably love. As we learned from young Carl Friedrich Gauss, math is a language brimming with symmetry — and with patterns. One plus 100 equals the same as two plus 99, and so on. Being so pattern-based, it also lends itself to shortcuts. Think about how we can draw conclusions from a massive set of data while only having to touch a few pieces of that data.

DU SAUTOY: This used to be an advert in the U.K. for a particular type of cat food. And it said “Eight out of 10 cats prefer this particular type of cat food.” And we had a cat and I never remember anybody coming round and asking our cat what cat food it likes.

Back when that ad was being run, there were about 7 million cats in the U.K. So how many of those 7 million cats — or, more likely, how many of the humans who lived with cats — how many had to be surveyed for the company to make this claim?

DU SAUTOY: It’s an incredibly small number. It’s in the order of 250 cats will give you confidence level of saying, “Well, 19 out of 20 times, that will get me 5 percent away from the true value.” I was staggered when I first learned that at university, but once I’d learned this shortcut, that actually you can get away with quite a small sample set to give you this huge insight onto 7 million cats, that’s an amazing shortcut. But it needs to be used very carefully, because one of the problems is that you can be biased in the way you’re picking your sample.

DUBNER: So assuming that the cats were randomly selected, can you explain how that massive statistical reduction is possible, to survey just 250 cats that will actually represent the 7 million?

DU SAUTOY: Maybe I’ll change the problem a little bit, because it might illustrate how you can get access to a lot of things with a small number. So, here’s another problem: how many people do you need in a room for there to be more than likely to have two people with the same birthday? Now, to start with, you might say, “Well, hold on. That must be a huge number.” What you don’t appreciate is, “Oh I know, actually, I’m asking about all the ways of pairing people up.” So the number of different pairs that I can create with 23 people actually covers over half the possible birthdays in the year. 

DUBNER: So I only need to have 23 people in a room and there’s a 50 percent chance that at least two of them will have the same birthday, is that right?

DU SAUTOY: That’s correct. Which is, I think, very counterintuitive. 

DUBNER: So what are the odds that if there are only two people in the room, they have the same birthday? 

DU SAUTOY: There’s a one-in-365 chance. And that’s incredibly small. 

DUBNER: So, Marcus, my birthday is August 26th. What’s yours?

DU SAUTOY: My birthday is also August 26th. Now are you, are you — so yeah, that’s an amazing —.

DUBNER: You don’t sound as excited as I am. 

DU SAUTOY: No, I actually, I really am, because that’s really unlikely. Is that really true? 

DUBNER: It is really true. I mean, I’m cheating a little bit because I read your book in which you divulge that your birthday is August 26th, but mine really is August 26th. I’m not lying. 

DU SAUTOY: We should become a double act and go do this probability problem, and we’ll always be guaranteed to have two in the room.

DUBNER: So, Marcus you’ve written this book in praise essentially of shortcuts, at least the mathematical variety, but others as well. Now, as you know well, for many people, the very word “shortcut” is a pejorative. But you are making the argument that they are or can be at least a strong positive. So let’s just start there, explain the philosophy behind that argument. 

DU SAUTOY: I wanted to make very clear that this wasn’t about cutting corners. I think that when you hear “shortcut,” that pejorative side is about how you’re not doing it properly. But no, these are shortcuts which get you to your goal, but get you there without having to do a lot of laborious, boring, hard work. I talk in the book about Aristotle’s idea of two sorts of different work — praxis, work that you love doing for its own sake, so you don’t want a shortcut for that. And poiesis, which is work to attain a goal. And in general, that’s the one you want to get to quickly. 

DUBNER: So one thing that I found so interesting is, you make the argument that mathematics is essentially a language or science of shortcuts to some degree, but then you persuade me, at least, that many other things are systems of shortcuts, including language itself. Which, the minute you say it, makes total sense to me, but I’d never thought of it that way. So can you talk about what you mean by that? One example you use in the book is the word “chair.”

DU SAUTOY: Yeah, absolutely. Because you could have had a new word for every single different type of chair there is. I’m sitting at the moment on a swivel chair on wheels, but it could be a little stool, which we also would categorize, perhaps as a chair. Actually Wittgenstein talks already about this power of language, to not have to come up with a new word for absolutely everything, that would be incredibly inefficient. I experienced this when I was doing my doctorate. I had this very complex structure that I kept on talking about. And I was getting bogged down. I just couldn’t see the wood for the trees. And my Ph.D. supervisor said “Give it a name.” I didn’t understand that I was allowed to do that but once he gave me permission, I realized, “Oh my gosh, now I don’t have to get bogged down in all the words describing this and it’s, it’s much easier to go forward.”

DUBNER: What was the name? 

DU SAUTOY: I actually called it “a friendly ghost.” It was a sort of ghost-like structure hiding behind the things I was interested in. And it was very helpful, very powerful. In academia, people don’t really like funky names, and I sent this off to a French journal, and they wrote back and said, “We love your mathematics, but we can’t let you call this thing a friendly ghost.” The French are very controlling of language, perhaps more than the English. But I stuck to my guns and it’s now in the literature.

DUBNER: There have been Nobel and many other prizes won by people like Danny Kahneman for explaining how mental shortcuts or heuristics lead to poor decision-making, and poor outcomes. So is your argument, to some degree, a corrective? 

DU SAUTOY: Yes! In fact, that’s really why I called the book Thinking Better. Because I was sort of bouncing off that book of Kahneman’s, Thinking, Fast And Slow. He explains in that book, thinking fast, our intuitive first go at solving a problem, often leads us to the wrong conclusion. And that’s generally relying on heuristics, the idea of what’s happening locally around me actually is what’s happening globally. Very often that’s not true. So he gets lots of examples where fast thinking leads you astray, and he says, “No, no, we’ve got this system two, this slow thinking, which is much more analytical.” So that slow thinking is what Kahneman says, “Yeah, that’s the way we need to get solutions.” Now my thesis is that, “Hey, that doesn’t have to be slow.” I’m saying maths is full of ways that you can think carefully, but it doesn’t have to be slow. 

Here’s another passage from Du Sautoy’s Thinking Better, one of my absolute favorites, about how shortcuts abound even where people do not.

DU SAUTOY: It is interesting to note that humans weren’t the first to exploit the power of mathematics to assess the best way to tackle a challenge. Nature has been using mathematical shortcuts to solve problems long before we arrived. Many of the laws of physics are based on Nature always finding a shortcut. Nature is lazy, like humans, and wants to find the lowest-energy solutions. It’s extremely good at sniffing out shortcuts. Invariably it has a mathematical rationale to it. And often the discoveries of shortcuts by humans materialize out of our observations of how Nature solves a problem.

One example of a natural shortcut Du Sautoy writes about is the honeybee.

DU SAUTOY: When it’s making its hive, it chooses to make these hexagonal cells. And you ask, “Well, why didn’t it do it with squares?” It turns out that the amount of wax you need to use to make cells, which are hexagonal, is smaller than the amount of wax to make, say, squares or triangles. And wax is very expensive for a bee to make.

How did the honeybee discover this shortcut?

DU SAUTOY: It didn’t do the sort of calculus that we’ve now used to show that that’s the smartest way. It used a kind of evolutionary process. The bees that made the hexagons were the ones that survived better. Take light. Light is a great example of nature finding the shortcut, because if you think about light passing through, when you’re in a swimming pool, and you see your legs slightly foreshortened, or you put a ruler in, you see it bending, that’s because light finds the fastest way out of the medium that it’s slowest in, the water, and spends more time in the air. You might say, “Well, that’s extraordinary. So how does it know?”And that is actually exploiting quantum physics to try out all of the possibilities. And then it collapses into the shortcut solution, the fastest way out to get to the destination. 

DUBNER: Can you talk for a moment about the efficiency of shortcuts used by single-celled slime molds, and how they seem to beat humans? 

DU SAUTOY: Yeah, this is extraordinary, the way that certain natural things seem to be kind of mathematicians. This slime mold, which is tasked with trying to find its way through a maze. One example is they laid out stations where the Tokyo Underground went. And they were interested, what’s the best way to connect up all of these train stations? And to represent the train stations, they put this little bit of food, which slime mold likes. And sure enough, after a while it had settled on a wonderful kind of network through all of the stations in Tokyo. And it had replicated the most efficient way to connect up these stations. Same with ant colonies. Terribly clever at eventually finding these very efficient paths to food and things.

DUBNER: But Marcus, what’s the lesson we should take away from the slime-mold story? Because one could imagine a conclusion whereby humans are stupider than slime mold, which I think we would agree on most dimensions is probably not true. Or maybe there’s a conclusion whereby humans have a hard time staying out of our own way.

DU SAUTOY: Well, first of all, I think that it’s clever to tap into understanding when nature has solved a problem before you and take advantage of that. And in a lot of design cases, we’re understanding this. The skin of a shark is incredibly well made. We don’t have to reinvent the wheel. Let’s understand how that’s worked. 

Shark skin, we should say, is a rough surface that’s patterned with grooves and ridges that make it hard for microorganisms to attach themselves. It’s being used as a model to create similar surfaces in hospitals and elsewhere to cut down on microbial infections.

DU SAUTOY: But there is also a little word of caution you need to use when looking at the slime mold. Because there are cases where you can set out where the stations are, and it won’t come up with the most efficient way to do it. What happens is that the slime mold sort of gets stuck in what we call a local minimum. I think that’s where we humans are sometimes much better at looking at the overall picture and saying, “Oh no, you’ve got stuck.” And that’s the amazing thing with machine learning and A.I., because there’s a similar principle at work there. But very often the A.I. works by moving around a landscape of possibility, and sometimes it can get stuck in these local minimums that it thinks is the most efficient solution. And one of our skills is actually forcing it to sometimes take a step out of where things are getting worse to actually explore the terrain, to see whether there might be even more efficient places to settle on.

DUBNER: Many of the problems we try to solve today as a society are inherently difficult to solve — that’s why they still exist. So, one thing I’ve noticed is that when clever people do solve difficult problems, they often redefine the problem they’re trying to solve — what I mean is, they focus on the root cause of the problem, which many others have perhaps overlooked, since it’s easier to fix the symptoms of that root cause. And solving the symptoms doesn’t necessarily even address the root cause. But if you can redefine the problem and address the root cause, at least you may have some options. With that in mind, I’m curious, do you see, Marcus, in the world that there are categories of problems for which there are viable shortcuts and those for which there are simply not? 

DU SAUTOY: Yes. And I would say this is one of the extraordinary powers of mathematics, to look in on itself and understand its limitations. So we have this extraordinary case of problems that we don’t know yet that they don’t have shortcuts, but we believe that by their very nature, the problem cannot avoid having to go through all the hard work of trying all the different possibilities. And an example of that is something that people may have heard of, the traveling salesman problem. You’ve got a network of cities you’ve got to visit, lots of roads joining those cities, and you’ve got to plot the path which is the shortest distance such you visit all of the cities. Now you might say that sounds perfect for a mathematical algorithm that just looks at the network and then spits out very quickly the shortest path. But we actually think this is a problem where there’s no way you can avoid just having to try all the different paths that are possible.  

DUBNER: And if someone happens to hear this and is able to solve it, they should know there’s a sizable sum of money attached to solving this problem, correct?

DU SAUTOY: Exactly.

DUBNER: I guess it makes me think there are three categories of people, at the very least. Those who successfully create shortcuts through a lot of effort. Those who may use a lot of effort, but fail to create shortcuts. And then the rest of us who just let people like you, mathematicians, work really hard to come up with shortcuts that we can then exploit. So is there any hope that we, the laity, can actually come up with our own shortcuts? Or do we really need to leave that to professionals like you? 

DU SAUTOY: No, I think there is an opportunity for people to come up with shortcuts. You need to be immersed in this world of different ways of thinking, trying to put the beginning and the end of the problem together or lifting yourself out of the landscape, looking from above to see what’s going on. My book is trying to move people from this sort of category two person to category three that says, “Okay, but somebody has done all of this work. I’m just going to sit back and take advantage of it.” But I’m hoping that a little bit of the category three, we can push over to category one.  

DUBNER: What share of category three do you think you could realistically get over to category one? Half of 1 percent?

DU SAUTOY: I was going to say actually 10 percent. 

DUBNER: Oh, you’re so optimistic, I love that.

DU SAUTOY: I am an optimist and I think once people start to see the power of thinking in this mathematical way, often it doesn’t require you knowing a lot of technical mathematics. It just requires you taking a step backwards, understanding that there are some clever techniques. 

 *      *      *

The Oxford mathematician Marcus du Sautoy is a bit of a Renaissance man.

DU SAUTOY: I always really enjoyed things like music, theater, the arts.

But mathematics is plainly his true love.

DU SAUTOY: Yeah, I kind of fell in love with mathematics and decided I wanted to be a mathematician when I was 12 or 13. 

I asked Du Sautoy what the world might look like if the mathematicians were in charge.

DU SAUTOY: I do think it would probably be a much better place. We do have the tools to just look at problems and to not get stuck in the local mess of things. Would there be war, for example, if mathematicians were running the show? I don’t think so. Because I think that it comes down to understanding that there’s more to gain if we collaborate rather than if we compete with each other. 

It’s worth pointing out that Napoleon was one leader who was quite inclined toward mathematics. He is often credited with having discovered a geometric theorem related to equilateral triangles. But the math-loving Napoleon also loved to wage war, so Marcus du Sautoy’s vision of a world without war is perhaps imperfect. Still, it is tempting to think of a system in which more of our leaders were at least conversant with math. Why? Because mathematics is an exceedingly logical language. It’s also a powerful tool for solving problems, or at least untangling problems into solvable components. In the U.S. and elsewhere, a great many of our politicians are trained not in math but in law. Is there logic involved in the study of law? Sure, of a sort. Is legal thinking concerned with problem-solving? Sometimes — although you may have to squint to see it. So if our leadership were more mathematically inclined, what might be the upsides?

DU SAUTOY: Politicians by their nature are having to do several steps down the line to see the impact of things. And often I feel there’s a real inability to understand just very basic logic to see what the impact of certain policy changes would be. One of my beliefs is we should make every politician do a critical-thinking course before they’re let loose on running countries. 

DUBNER: So I couldn’t agree with you more that politics — and policymaking, even — are areas where that sort of logical thinking is underused or underappreciated, and I understand why — the incentives sometimes conspire against it. That said, I would argue that the median politician has more real-world leverage than the median mathematician. So do you think you’re losing by winning with math? 

DU SAUTOY: I think that you’ve put your finger on something really important here, which is, yeah, sometimes the fact that a mathematician lives in this far-too abstract world can mean that they perhaps are not engaging with the social implications of their thought process. I’m not saying that mathematicians or scientists should be running the world. There are decisions that are less scientific in nature. For example, making decisions about legalizing drugs. The evidence is really very strong from a data perspective to legalize drugs. However, I understand that there are other political issues that need to be taken into account in making that policy decision. I think we’ve seen that very clearly with the pandemic that it’s a team effort, and politicians, certainly in the U.K., have been talking a lot about, “We’re following what the scientists do.” But that’s not really true. They certainly are taking into account the scientific insights. But ultimately, this is not just about the science; there’s an economic realm to put this in, there’s a social realm to put this in. And that is what the top politicians are tasked with, is taking all of these components, and making a policy decision. 

DUBNER: When I think about the work that you do in mathematics and the many people who’ve come before you for centuries, creating a language of shortcuts, it’s basically resulted in the fact that I don’t personally need to know any math at all to do quite well in life, and to use all the math that you and your predecessors have come up with. And therefore there’s almost no incentive for me to engage in your dark art of mathematics. So do you see it as a case where shortcutting has gone too far, where it takes a realm like mathematics and removes it from the arsenal of too many people? 

DU SAUTOY: We’ve been too successful and done ourselves out of being part of society? Well, I think first of all, it’s actually really useful to know the power of mathematics as a tool. For example, one of the shortcuts I talk about is calculus. Now I’m not expecting everyone to suddenly do a first course in calculus because that’s quite technical, but—. 

DUBNER: Yeah, and don’t worry, we’re not going to, no matter how much you might expect.

DU SAUTOY: Oh shucks, okay. But knowing what it can do, that if you’re running a business, that calculus can really hone in on that sweet spot between supply and demand, price, that is really useful. So, we need some mathematicians in our team who’ve got these tools. Otherwise, you’re going to be sunk just trying things out and making a lot of mistakes. The engineer is nervous of shortcuts because, yeah, they don’t want to cut corners, they need that building to stand, the bridge to cross the river. But again, that’s what calculus does. It sort of allows you to experiment beforehand, find the low-energy solution to creating your building, and then you build it. 

DUBNER: Given all the technology and the shortcuts that we’ve been afforded by being born in this era, how well do you think we’re using that to our advantage to move on to the next useful thing? I think of the famous quote from Peter Thiel, “We wanted flying cars. Instead, we got 140 characters.” So that’s a little bit reductive to say that all of technology, all of mathematical shortcuts, have been reduced to just Twitter alone. But you see his point. Do you think that our rate of progress using these shortcuts is sufficient or are we kind of coasting?  

DU SAUTOY: I’ve not got such a negative view of the progress that we’re making. We’re in a very interesting stage where artificial intelligence may be taking a lot of work away from us. And obviously there’s a lot of fear about that. But I think this is a potentially very positive moment where, again, we can get it doing the work we’re really not interested in doing, so we free ourselves up for the work that we do want to do. I type in a search term into Google and magically, there’s the website. I could have wasted hours and hours trying to find that website. I mean, I think medicine is one of the most extraordinary. If you look back 100 years, the progress we’ve made — and you could call these some sort of shortcuts, the ability to build up an immune system due to a vaccine, that’s an incredible way of tricking the body into a shortcut. So you’re ready for when the nasty virus comes. So I think we’re actually doing very well in applying our science. I think we’re in a really funny time where in some sense, people are understanding that science is having a massive impact on their lives, the technology they enjoy, the fact that they can access things so extraordinarily quickly on the internet, the vaccines that we’ve been able to produce in Oxford and beyond. Yet there is a kind of strange sense that, “Are we going backwards?”

The fear of new technologies is not a novel concept — in fact, it’s a feature of just about every new technology ever invented. Change can be unsettling, especially when the change affects our livelihoods, as is the case now with machine learning, artificial intelligence, and so on. We wrestled with this idea in a recent episode, called “How to Stop Worrying and Love the Robot Apocalypse,” episode No. 461. Still, it is a natural fear, that we humans could shortcut ourselves right into irrelevancy. Marcus du Sautoy, however, is not concerned; as he noted, he’s more of an optimist. Here he is again, reading from his new book Thinking Better: 

DU SAUTOY: Slackers, take note. I think laziness is our saving grace, what will protect us against the onslaught of the machine. When a computer is faced with a problem, we know what it will say: “Well, I’ve got these computational tools, so I can just bash my way through the problem.” But I often look at a problem and think, “This is just getting too complicated. Let me try to step back and figure out a shortcut.” Because a computer doesn’t get tired and it’s not going to be lazy, maybe it will miss things that our laziness takes us to. Because we don’t have the ability to plow right through problems the way a computer would, we’re forced to find clever ways to handle them.

DUBNER: So, reading your book, it struck me that the greatest shortcut ever invented is maybe the internet because it operates along a couple of really important dimensions: speed and reach. So tell me whether you agree or disagree, and what I really want to get to is what you see as the upsides and downsides of this massive shortcut we’ve all been handed. 

DU SAUTOY: I think for most people, it is being used as a shortcut, and perhaps this is a good example of one of the shortcuts I talk about in the book, which is the wisdom of the crowds. We’re seeing this being used very powerfully in science at the moment with citizen-science projects. For example, in Oxford, we have this wonderful project called Galaxy Zoo, which is looking at all of the images that telescopes have taken of the stars out there. We don’t have enough Ph.D.’s and postdocs to be able to look at all of these images. So very cleverly, they created this citizen science project, where even an amateur can classify galaxies as spiral or elliptical. And I would say that the most successful examples of the internet working, things like Wikipedia, are taking advantage of the fact that we’ve got multiple people building this extraordinary space.  

DUBNER: Let me ask you about a very practical and policy-related category of shortcut. And that’s the one practiced by firms like Uber and Airbnb, who build businesses around models that are kind of illegal or quasi-legal at best. And there’s this old saying: “It’s easier to ask forgiveness than to get permission.” So what’s your assessment of the shortcuts used by firms like that? 

DU SAUTOY: It was in some sense a shortcut that I recognize in mathematics as well, because sometimes the breakthroughs happen from breaking the rules, and you can get very stuck inside a particular system, a way of thinking, and in order to find the new path, the secret passage, sometimes you have to break the rules. And the one I rather like is when we came up with a new number, the square root of minus-one an imaginary number. At first sight, you say, well, there isn’t a number which when you square, it equals minus one. And for centuries, people just wouldn’t admit this number into the canon of mathematics. But we broke the rule and said, “Why don’t we try?” Let’s just try something, see if it works, and then maybe you can change the system. 

DUBNER: What were the long-term benefits, then, of using imaginary numbers?

DU SAUTOY: One of the most extraordinary is that when we were trying to land planes using radar, it turned out the computers just weren’t fast enough to do the calculations if we just used normal numbers. But when we then exploited the power of imaginary numbers — which seemed sort of illegal because, you know, where are these numbers? — actually it allowed us to do the calculations much more quickly. And so we understood where the planes were, we were able to land them, whilst if you didn’t use imaginary numbers, the planes would have crashed. 

Math doesn’t make moral judgments; people do. Some people may find that a firm like Uber creates so much value for consumers that it’s perfectly fine that they skirted the law to do so. Others may feel that laws aren’t meant to be broken, and that the slope becomes very slippery when you start weighing the value of a law against the utility of breaking it. And let’s not forget: there are hard problems where even breaking a law won’t help. Here’s one last excerpt from Thinking Better: 

DU SAUTOY: Sometimes it’s just as important to know when there are no shortcuts to the problem you’re trying to crack. Knowing that the long way around is the only way to your destination will prevent you from wasting time in the hope of finding the shortcut. And if you are going to do all the work, then it’s worth knowing that you are not wasting your time. 

Most problems we try to solve likely lie somewhere in the middle, where a shortcut may help but the attainment of said shortcut is itself a lot of work.

DU SAUTOY: I talked to a cellist, an international cellist that I know. I’m learning the cello at the moment, and I was desperate for some shortcuts to be able to play the Bach Suites, which is my ultimate goal. Now, she said there are some shortcuts, but on the other hand, to physically change your body to be able to play these pieces, that requires hours and hours of practice to get your muscle memory going. Yet she did identify shortcuts that she uses, which is seeing patterns on the page, which she knows how to play already because often they are scales or arpeggios, which is why we get a musician to practice their scales and arpeggios, because those will be shortcuts when you suddenly see this in a Bach passage. It’s like reading. You don’t have to read every letter. I see a word. So there are shortcuts there, even for somebody like a musician.

DUBNER: So your book includes a brief section on whether shortcuts can be useful in psychotherapy. And we should say that your wife is a psychologist. And the focus of what you write is on cognitive behavioral therapy, which many, many, many in the field of psychology have hailed as one of the few true breakthroughs in psychology, as both pragmatic and short-term. So you seemed to become very excited about the possibility of shortcuts in this realm, but then you seemed to become a little bit disillusioned with the realization that the human psyche is complex and dynamic enough to maybe reject that type of shortcutting that might work in other realms. So I’m curious where you land on that? 

DU SAUTOY: Yes, I think that depends on the problem you’re facing. This is a message that applies to many of the shortcuts. So I talked to Susie Orbach, who’s a psychologist, and she had this nice way of describing some of the problems that people are facing, that — you know, it’s hard to learn a language. It’s even harder to unlearn a language. My first language is English, imagine trying to unlearn English. And so that’s the point, some people when they’re coming to therapy have got such entrenched ways of thinking from experiences they’ve had in childhood that you’re fundamentally having to change the way the brain works. So there are some cases where you cannot shortcut the time on the couch that you are going to need to reset the brain. However, there are some modalities where being aware of what your thought process is, is already enough to short-circuit the algorithm which was always sending you into depression. You’re sort of stuck inside the system of the way you’re thinking. What C.B.T. often helps you to do is to take a step up and look at the way that thought process is happening and understand the trigger which always sends you down into depression. 

DUBNER: Let me ask you one last question. I wonder if you can help me come up with some shortcuts for how we make Freakonomics Radio. Because I love it, but it’s very labor-intensive. So it starts with an idea. And then there’s research. The producers will do a lot of research to find the appropriate guests and stories. Then the producers will produce preps for the interviews, and I’ll read those preps and I’ll do my own research. We do the interviews, we transcribe them. Then we take all that, we draft a script, we edit and rewrite and rewrite the script. We record it, we re-record, we fact-check, we score it with music. And even though there are, I’m sure, thousands of shortcuts built into this process — we use computers for everything, and that’s wonderful — the labor intensivity doesn’t seem to change that much. And it’s not like the quality is necessarily improving, either. A current episode isn’t ten times better than an episode we made five years ago with less technology. So I’m wondering if we are broken or if you can help somehow with a wonderful shortcut. 

DU SAUTOY: I don’t think I can, and I think you should celebrate the fact that the quality of your program is because of it needing all of that hard work. And as you say, there are already shortcuts that you’re using as part of the process. You’re not reinventing the wheel every time. And I think you wouldn’t do this work if you didn’t enjoy actually the satisfaction of climbing that mountain each week, each month.  

DUBNER: I am so satisfied by that answer, in part because you make me feel like the effort that I enjoy — and I do enjoy the effort — is the route to where I want to get. And I guess that’s what it’s really all about, right? You have to assess every goal and every possible route and ask yourself, what am I optimizing for here? I’m not optimizing for the 30-second microwave meal, at least not every day. 

DU SAUTOY: Exactly. When you’re going on holiday, I don’t want to shortcut the holiday because it’s about spending time. The point is, I don’t want you to use shortcuts for everything and spoil something you enjoy doing. I’m dedicating my life to mathematics, the art of the shortcut, but I actually enjoy spending the time and having that aha moment when I find a little tunnel, which gets me through to the other side. And if it was all too easy, I don’t think I would enjoy it. 

That was Marcus du Sautoy; his new book is Thinking Better: The Art of the Shortcut in Math and Life. Hope you enjoyed this episode of the Freakonomics Radio Book Club.

*      *      *

Freakonomics Radio is produced by Stitcher and Dubner Productions. This episode was produced by Mary Diduch with help from Zack Lapinski and Jeremy Johnston. Our staff also includes Alison Craiglow, Greg Rippin, Ryan Kelley, Jasmin Klinger, Eleanor Osborne, Emma Tyrrell, Lyric Bowditch, and Jacob Clemente. Our theme song is “Mr. Fortune,” by the Hitchhikers; the rest of the music this week was composed by Luis Guerra. You can follow Freakonomics Radio on Apple Podcasts, Spotify, Stitcher, or wherever you get your podcasts.

The post What’s Wrong With Shortcuts? (Ep. 483) appeared first on Freakonomics.

Also: does knowing your family history affect your identity?

*      *      *

Relevant Research & References

The post Does Reverse Psychology Really Work? (NSQ Ep. 74) appeared first on Freakonomics.