The Detroit Institute announced yesterday that it has raised another $27 million towards the $100 million it pledged to contribute to the so-called Grand Bargain solution to the city's bankruptcy. (They keep rolling it out drip by drip and I have to say the suspense is killing me. I wonder if they're going to make it to one hundred. It's a real nail-biter.)
Meanwhile, while I was away last week a new appraisal of the museum's collection showed it could be worth as much as $4.6 billion. This was mostly pooh-poohed by the anti-sale side, and one method of pooh-poohing is seen in this piece by Kriston Capps. "Ultimately," he says, "selling Detroit's art will do more for deficit reduction than for alleviating suffering." The idea is that the money from any sale will only go to line the creditors' pockets, rather than to suffering Detroiters, and since there is an easier way to get rid of the creditors (Judge Rhodes can just stick it to them), why touch the art?
That may be so, but the more interesting question, I think, is: what if it could? What if it could alleviate suffering? That's the question economist Scott Sumner addresses in this post. He points out that "5% of $3.7 billion is $185 million a year, the annual income that ... could be generated by the midpoint of the Detroit art wealth estimate. What else could be done in Detroit for $185 million/year, forever?" (Or, as Michael Rushton puts it, "in thinking about the ownership of a significant collection of art by Detroit (or any city), the opportunity cost of the capital should be taken into account, along with all the other costs and benefits of preserving the collection in that place.")
So yes, in this particular case, a sale of art may not do anything to alleviate suffering (other than perhaps the suffering of the creditors!), but what about cases where it could? What about the university or museum that could be saved from closure through a sale? Or, sticking with Detroit, Sumner also points out that they "could sell a handful of the most valuable paintings for $1 billion and keep the museum mostly intact." (I made a similar point here.) What then?
Or does a billion dollars not do much to alleviate suffering these days?