Welfare and Other Frauds, Back to the Third Grade, Cutting Up in Australia, and Other Matters. Still Life With Free Lunch

(FORTUNE Magazine) – Amazing organ, the brain of a Congressman. All those billions of neurons responding frantically to sensory impulses emanating on the PR plane, all those nerve fibers in the outer cortex working tirelessly to screen out the principles of economics. Who but a brain-bearing United States solon could & have thought up S.1619, the Visual Artists Rights Act of 1987? The bill, which seems to have originated in Teddy Kennedy's office, comes at you with much expository blather about the need to protect artists. Basic proposition: It is not fair when some loot-laden collector sells a work of art for big bucks and the palette person gets nothing. Basic solution: Amend the federal copyright laws so as to give the artist a continuing property right in the painting or sculpture, make the right nonwaivable, and require that in transactions involving a sale of $1,000 or more and a profit of more than 50%, the artist (or his estate) gets 7% of the profit. His property right is further secured by provisions enabling him to sue if the owner allows the work of art to suffer undue surgery, as in the case of the antipodal Picasso- choppers. These particular miscreants were brought onstage in the supporting testimony of Democratic Congressman Edward J. Markey of Massachusetts. Ed horrifiedly cited the Australian mail-order firm that had bought a 1959 Picasso linocut print entitled Trois Femmes and proposed to cut it into 500 one-square-inch pieces and sell these for $135 each. (''Yes, your own beautiful framed Picasso piece,'' said their ad, ''in the most original and exciting offer in the history of Australian art.'') Further frustrating the philistines, S.1619 desires to give the artist a perpetual right to take his name off the canvas or marble or whatever anytime he dislikes what Mr. Collector is doing with it, even when the lout in question is not totally committed to the Australian approach. As enthusiastically capsulized by artist Robert Mangold, who testified for the bill, it would protect our cultural heritage ''and not allow the interests of the marketplace to overshadow the interests of its creative people.''

But wait. Why is the marketplace going to smilingly provide this free lunch for creators? Why would Mr. Collector doggedly go right on paying as much as before for paintings to which he no longer has full property rights? Why would any well-run auction house go right on selling valuable paintings in the United States when it could save the 7% by doing the deal elsewhere? At present only a few American states have laws like the one Teddy now wishes to make federal. One of the few is California. Since it passed the law, Sotheby's has stopped auctioning paintings in California. If S.1619 became law, the deals could keep right on moving, to London or Tokyo. Isn't this all too obvious to mention? Not in Washington. One of Teddy's supporters, an Oregon lawyer, argued that sales would not be affected by the law because most buyers have ''emotional ties'' to objects of art and ''will buy what they like.'' In other words, the price elasticity of demand in the art world is assumed to be zero. Just like the price of lunch.