Essay on Financial Innovation and the Market for Pop Art

Jasper Johns ‘Flag’ (1954-55) Museum of Modern Art, New York. The work was included in an exhibition at the Leo Castelli Gallery in 1958.

The art market owes much of its success to tax policy. A new essay in the Columbia Journal of Law & the Arts examines many of the financial structures used by Pop Art gallerist Leo Castelli in the middle of the 20th Century. The Essay is authored by Michael W. Maizels (visiting researcher at the Harvard metaLAB) and William E. Foster (Associate Dean for Academic Affairs at Arkansas School of Law)

This essay focuses on the efforts of an enterprising art gallerist, Leo Castelli, to aggressively promote his stable of Pop artists through the development of several financial structures, including some designed to leverage the relatively generous income tax deductions and anemic enforcement regime of the time. In doing so, Castelli not only seeded the ground for the international ascendance of American visual art, but also engineered financial arrangements that fostered the development of a lucrative and resilient art market that endures to this day. With the aim to provide insights into both the legal-political and the art historical registers, this essay describes a tax law framework that provides a key piece missing from the art historical puzzle.

Maizels, Michael and Foster, William E., The Gallerist’s Gambit: Financial Innovation, Tax Law, and the Making of the Contemporary Art Market (November 21, 2019). Columbia Journal of Law & the Arts, Vol. 42, No. 2, 2019. Available at SSRN: https://ssrn.com/abstract=3491207 or http://dx.doi.org/10.2139/ssrn.3491207

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