Although economics models goods as unified, in fact artworks are goods that are made up of many different rights. Here, we consider intellectual property, specifically copyright, as part of the bundle of rights. We review fair use and expand to discuss other forms of property artists have in their work, including resale royalties and fractional equity. We consider case studies of Richard Prince, Takis, and the Art Workers’ Coalition, the Siegelaub–Projansky Artist’s Contract, Adrian Piper, Betty Parsons Gallery, Green Gallery, and Shepard Fairey. Although this chapter focuses on a US legal context, it also includes international treaties and systems of moral rights.

Market structure is the type of overall market we see in different situations. A theoretical starting point in economics is the idea of the perfectly competitive market in which the market itself sets the price, there are uniform goods, and there is mobility of resources. In many markets, there are concentrations of power and there is complexity. We study in depth the price-fixing scandal that unfolded between Christie’s and Sotheby’s auction houses in the 1990s, owing to the duopolistic market structure between the two firms. Substantial litigation ensued with fines and penalties around $512 million. We consider US tests for market concentration and monopolistic power.

Cost structure is the engineering of economics. Rather than approach economics as a study of the motivation toward maximum utility or profit, we approach it as a structural design problem for which cost structure is the starting point. The main distinction is between fixed and variable costs, a distinction first devised by ceramicist Josiah Wedgwood after a financial crash in the 1770s. We consider Mine Kafon, the wind-powered landmine removal device designed by Massoud Hassani (collected by the Museum of Modern Art), the willfully inefficient production of Lenka Clayton, who makes drawings on a typewriter, the intentionally market-allergic manufacture of Charlotte Posenenske, the advances of technology that change cost structure and artistic production (tube paints and machine learning), and the costs of the Impressionist painters, especially Camille Pissarro. We use the breakeven calculation and the income statement to organize costs and to diagnose the sustainability of operations.

In this chapter we explore labor as a special category of markets. The supply of labor is governed by two forces – the income effect and the substitution effect. Workers supply their labor in ways that are reflected in a backward-bending supply curve. Workers are willing to take more paid work up to a point at which the opportunity cost of leisure becomes so great that the worker will no longer trade leisure for income. In the arts, so many forms of labor are uncompensated or not sustainably paid. We consider the early history of the Hansa Gallery in the 1950s as a case in point. We look at unions and collective bargaining as strategies and we look at diversity, equity, L16and inclusion as a cost of labor policies. For artists, the organization W.A.G.E. tries to lobby collectively for artists to be paid exhibition fees.

Economics of visual art defies many principles of economics while also relying on them. This makes economics of art a creative and political practice unto itself. The big question in the field is whether economics can explain art – encapsulated economic value – or whether it cannot but is still a useful tool for structurally supporting art. Under the Nothing But argument, all value, including artistic value, can be represented by price. Under the Hostile Worlds argument, art can never be fully described by markets and should be kept separate. We find that economics and art are highly related in systems of institutional and commercial value. Our starting point for the book is looking at artists who make things.