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KRW 6,000,000 (circular investment)

concept

The sum of six million Korean Won (KRW) received from the Republic of Korea (ROK) government via a National Museum of Modern and Contemporary Art Korea (MMCA) grant has been invested into ROK government debt by purchasing 105 shares of a treasury bond-based exchange traded fund (KODEX Treasury Bond ETF, 114260:KS) through Samsung Securities brokerage (1). Money is used as the material for creating an artwork in the form of a processual relationship through a site-specific redirecting of financial flows.

In 2015 I have been invited to an artist residency at the MMCA, an organization funded and managed by the government of the ROK. As part of the invitation, I was given a free studio space to work and live and a monthly stipend of KRW 1,000,000. This sum (2) was to cover my living expenses and art project related costs. I used the money itself as the material for creating the artwork, connecting with the concerns of a number of 1960’s U.S. conceptual artists (3).

Under normal circumstances the expected consumption money flow would have consisted of buying materials and thus returning money into circulation while establishing momentary relationships with the sales persons and corporations (a kind of momentary symbolic investment). With the materials received in exchange for my payment I would have then nourished the creative process leading to a product that in turn would have been culturally consumed, first by the spectators and ultimately by the purchaser of the artwork. Instead, I have constructed a symbolic pipeline that redirected the monetary flow right back where it came from (4). The artwork can still be culturally consumed (as an exhibit) or purchased, but this intervention produces a number of shifts:

-- It circumvents the consumption cycle and maintains money in its pure abstract form. This comes close to the minimalist idea of presenting material as material, allowing for less biased and more direct relationship to be established between the artwork and the spectators. The economic relationships are laid bare in front of the spectator so that she can take a position towards them.

-- It establishes a new relationship between myself and my environment. In addition to being in the precarious position of an artist and an alien temporarily staying in the ROK, I become an investor in the ROK. New rights and responsibilities come into being that are different and independent from my relationship with MMCA. Thus the momentary temporary relationships of material and cultural consumption are transformed into a permanent relationship as long as I maintain my investment.

-- It replaces the friction within the consumption cycle (sales margin) with the friction within the investment cycle (transaction fee) (5). While maintaining money in its pure form “saves” it from being “consumed”, it still takes money to move money. This friction becomes one of the effects to be observed. At the same time, on the contrary to the consumption cycle, I myself become one of the frictional elements within the economic cycle, as I receive interest (6) from the underlying ROK treasury bonds.

The artwork starts from a specific situation (ROK, MMCA and the artist), builds on it with a practice (investing), which becomes the method of art practice-based research into the economic relationships an individual is entangled in. It is a comment on the precarious position of anyone who must maintain a network of relationships while developing his capabilities constantly further in order to secure a living. An artist is a model example here (7) – self-employed, with no guarantees – but more and more people share the same fate. An investment is a capital of confidence in the future, a desiring projection of imagination (8). It is not only a financial decision but a symbolic act of establishing a long term relation.

After the initial investment of time (research) and money (material), the artwork became a self-supporting system in perpetual motion, reacting to the conditions of its environment. It expands (increase in value) and contracts (decrease in value) independently from my intention or desires. This is what sets it apart from a traditional understanding of an investment as such. The artwork does not contain a desire for eternal growth, but it feeds on the desire for eternal growth amongst market actors. The investment is an action here that stresses the nature of art as capital (9).

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(1) ^ Samsung Securities is one of the largest brokerages by equity capital in Korea and it is part of the Samsung Group. KODEX is the brand name for an array of ETFs managed by Samsung Asset Management, also a part of Samsung Group. KODEX Treasury Bond ETF (114260:KS) is an ETF investing in ROK treasury bonds, see details here:
http://www.eng.kodex.com/engProduct.do?fundId=2ETF19&depth2=05&depth3=01

(2) ^ For comparison, the sum (approx. EUR 800) is roughly equivalent to the monthly minimum wage. The hourly minimum wage in Korea in 2015 was KRW 5580 multiplied by 8 hours working day and 22 working days per month equals to KRW 982,080 monthly.

(3) ^ For example in the work of Les Levine, Robert Morris and Lee Lozano:

Les Levine’s artwork Profit Systems One (1969) consists of press releases and advertisements published in newspapers and magazines such as the Toronto Star and Artforum, publicly announcing first the acquisition of five hundred common shares of Cassette Cartridge Corporation for $2,375 in March 1969 and then, a few months later, the sale of those same shares for $7,481.25, a net profit of 220 per cent.

In his artwork Money (1969), Robert Morris offered the services of an investor (investment manager) to the museum. He proposed to use money borrowed by the museum (using artworks owned by the museum as collateral), invest it in financial instruments and share the profit/loss between the two parties. (In the end only a scaled down version of the work has been realized, borrowing $50,000 at 5% p.a. interest rate from a collector and investing them in risk-free certificates yielding 5%, resulting in a zero financial result.)

Lee Lozano’s Investment Piece (1969) consisted of investing $938.25 in warrants. (“Be the recipient of a grant. Invest half the money on the stock exchange, & hold purchase for a minimum time period of six months.”)

Even though each of the artworks looks superficially similar, they diverge in the artist’s position. Levine takes the position of an artist as an investor, judging artistic success or failure in financial terms, questioning what is left of an artist measured solely in market performance. Morris’ work is closer to an institutional critique, tracing the work relations between museum, collector and artist. Lozano’s piece is a durational art/life performance, investigating the impact of the investment onto the lived experience of the artist.

(All three examples are discussed by Sophie Cras in Art as an Investment and Artistic Shareholding Experiments in the 1960s, American Art, Vol. 27, No. 1 (Spring 2013), pp. 2-23)

(4) ^ While the notion of circularity is inherent to the economic system, here it is also a reference to the circular shareholding method popular amongst large Korean corporations (chaebol): Company A invests in company B, which invests in company C, and then company C invests in company A making circle shaped investment. Through this method, combined with a network of family member relations, the owners and their families can maintain control over the chaebol even though they hold a minority share in the company.

The beginning of my visit to ROK in mid-2015 has been marked by the widely publicized Cheil Industries and Samsung C&T merger. Cheil Industries, a company affiliated with Samsung Group, was merged with Samsung C&T, also an affiliate of Samsung Group, against disagreement of foreign shareholders of Samsung C&T headed by hedge fund Elliott Associates who disputed the offer price and highlighted that the purpose of the transaction was to consolidate assets under the control of Samsung’s founding Lee family disregarding shareholder interests. The merger has been approved due to Korean shareholders voting in favor of the merger after being actively encouraged by Samsung, appealing to their patriotism and anti-foreign sentiments. The event highlighted the circular interconnections between family-owned corporations, further fueling my interest in working with this topic.

See Wall Street Journal Online: Samsung’s Shareholder Test; A watershed vote over minority ownership rights in South Korea, 15 July 2015. http://www.wsj.com/articles/samsungs-shareholder-test-1436829774

(5) ^ The “friction” I am referring to consists of the transaction costs I incurred: Broker commission and exchange commission. The former commission is charged by the broker and applicable to each trade independently on the nationality of the client. The latter commission is directly related to my position as a foreign investor, which prohibits me to directly invest using KRW. I therefore had to exchange the KRW I received from MMCA to USD, transfer the USD to my stock brokerage account and then have the USD converted back to KRW, which I then used to purchase the ETF shares. During this process I have incurred additional transaction costs that resulted in an initial investment valued below KRW 6,000,000.

(6) ^ Interest is collected in the form of ETF dividends paid out four times a year.

(7) ^ This element establishes a connection with the exhibition “Please Check Out My Skilltree” by MOUNT that took place at MMCA during July 2015. Artist group MOUNT used the grant received from MMCA to attend academies to develop their skillsets (coding, Japanese, baking, hip-hop dance and badminton), wrapping their project around the topic of sustainable communities (how to develop sustainable artist networks) and self-development (how to improve one’s skills usable within and beyond these networks).

(8) ^ Bernard Stiegler, For a New Critique of Political Economy. Polity, Cambridge, 2010. p. 22

(9) ^ Art = Capital, respectively Creativity = Capital is a well knowns statement by Joseph Beuys. Within the context of his social sculpture theory, it means an understanding of creativity as the original capital (capita = head) and money as a transmission mechanism (rights document) only.