Art

Resale Rights, known as droit de suite, provide an artist or his heirs with a small royalty, usually less than 5 percent, each time the artists work is resold. This allows the visual artists to share the increase in value of their works. All of the European Union, including the United Kingdom have adopted the law. There is no federal resale royalty law in the United States except California. Despite the wide acceptance of the law in other nations, the U.S. should not adopt the law because it is harmful for those in the art industry including the artists.

The law will actually prevent a visual artist from profiting commercially. An artists income could be decreased because the artists may be expected to receive less money during the first sale. Considering the future royalties at resale, dealers or collectors might request a discount on the price. If the piece is resold several times, and royalties are enough to make up for the initial loss, the artists can get financial benefits from the resale rights. However, such possibility is very low. The increase in value seldom happens, and the majority of artworks rarely sell more than once.

Resale rights are remote beneficial for most artists. Far from providing benefits to younger or emerging artists, a small number of well-established artists get the benefits. The British lobby group, Artists Against Droit de Suite, which includes David Hockney, Karel Appel, and Emma Sargeant, says that the scheme, while designed to benefit the artists, creates an inequality between famous artists and struggling artists. Most contemporary art is not resold at all since there is barely any market for it. The artists whose works are resold are generally hot or commercially successful. According to a research conducted in the UK, the top 20 artists received 40 of the total collected resale royalties, and the top 10 of artists shared 80
royalties.

The art industry can be weakened by the resale rights. The law is a disincentive for anyone buying or selling the artworks, thereby, deterring those collectors buying the artworks. Having a speculative motivation, collectors will see buying art as less attractive, if more expenses are needed to sell art. In addition, the registration of transfer of works will violate the owners right to maintain the ownership and privacy. Rational sellers or buyers will naturally search for a way to evade payment and maximize profits. They will transfer the artwork to non-royalty countries, such as Switzerland or Hong Kong and prefer underground sale of artworks, which means damage to the art market in the U.S. It cannot be underestimated that Sothebys terminated its operations in Los Angeles after the introduction of royalties in California.

A number of practical problems exist. The administrative costs and burdens associated with the resale of royalties are significantly generated. Administering the collection and distribution of royalties require an extensive infrastructure to work properly and effectively. Besides, the monitoring of payments is also demanding. It is difficult to track the further sale of artworks, especially, in the case of private sale. Some countries levy resale rights only on public sales, but this is against equity.

The laws inalienability is also problematic. Though this was intended to reconcile an artists weak bargaining power, it negates the artists ability to waive this right. It opposes the common law tradition of free alienability of property. Artists in other creative industries are capable of waiving their rights.

Some people suggest that resale rights be required for an artist, but this reasoning is illogical. Firstly, the original intention of resale rights is no longer meaningful. Proponents of resale rights often invoke the example of Vincent Van Gogh. In fact, there are no more starving artists today. Artists can earn the same amount of money as other workers who have gone through similar training process. And todays artists become more socially attention-getting than the past. Secondly, there are diverse factors affecting the appreciation of artworks. It is true that the more famous an artist becomes, the more valuable a painting becomes. However, dealers, collectors, critics, or other players can influence the value of an artwork as well. Dealers in primary market support the artists by promoting the reputation of the artists. Sellers and buyers also support the artists. When collectors acquire a work, they become an integral part of an artists career. Sometimes, a prominent provenance, itself, may significantly drive up the price of a work. Thirdly, the analogy of copyright is false. Proponents argue that compared to other artists, such as authors, composers and actors, the visual artists are not able to benefit from the continuing commercial use of their works. However, in practice, the visual artists typically generate income from one-time transactions on durable goods whereas, novelists and songwriters are more likely to get income from further sales. Moreover, the visual artists already have a copyright about their artworks and can earn royalties from licensed reproductions, such as postcards, posters, and prints.

The first government mandated artists resale right (droit de suite) was put into effect in France in 1920.