Point of view: the beholder

Latin Trade, April, 2005

A woman takes time out to observe a Picasso hanging on the wall of a museum in Valencia, Spain. She probably doesn't know that the painting is now property of Bancaixa, a bank. In the United States, wholesaler Costco is into art. It sold a Picasso on its web site for just under US$40,000. Money and art go hand in hand. A study by New York University's Stern School of Business estimates that the average appreciation of art from 1875 to 2000 rose somewhere between U.S. inflation rates and the S&P 500 stock index. It's a stable investment, good for the risk-adverse.

But returns are not everything. In the art world, talent and value can be measured by many factors such as technique and sophistication, and the true artist probably doesn't have a price in mind when staring at the blank canvas. But it takes money to train that young artist and to keep demand for art alive. That's where business comes in. Investing in a region like Latin America may create jobs and help the economy, which is good. But those investments also lead to economic development that backs the schools and universities needed to produce the next great master. Without money, people soon might wonder where all the Picassos went.