Why Are Some Institutions Above the Law?

It amazes me how some institutions, both public like our government, and private institutions can arbitrarily create their own rules that supersede written laws. You may quite capriciously not be admitted to an antiques dealer association as easily as being denied acceptance into a country club. And just as randomly, you could be expelled for an action erratically enforced by the group.

Private schools and the enforcement of their rules on expulsion are meant to intimidate both students and parents on their one-sided methods to maintain control of the actions of both. Step out of line and your transcript will be blemished. The methods to control the situation by the institution are commiserate with how damaging was the cause and enforcement of the student expulsion. Embarrassing situations can sometimes be the best PR. Lies, deception, fraud, intimidation, these things however don’t enhance one’s image.

The risk of suing for “justice” from the wrong inflicted by any institution can be a frightening task. The shield that a private organization is surrounded with can be quite impenetrable. As the membership or acceptance by the institution comes from within, there is the same instinctive need within the group to survive without that member. Survival of the institution is based on the need for a controlling interest in the group to take the initiative. It could be civil servants or a board of directors; it could be management or a wealthy interest group. The cost of litigation to break the institution from wrongful control can be daunting when measured against actually winning. The emotional toll also has a significant cost.

Discrimination is a term that connotes lost opportunity. Institutions that base their membership on any form of this really could be missing the prospect of enhancing the group. Maintaining a certain level of requisite wealth or skills needed by the organization to function is of paramount purpose to survive. However, when an institution bends the law to insulate itself from a threat to its control of its marketplace, the stakes for manipulation gets higher. Just ask Microsoft or Google how they approach threats to their turf.

Of course this thought gets me back to the Sotheby’s/Christie’s duopoly in the art and antiques industry. These two branded institutions have controlled the market with lies (undisclosed conflicts of interest), deception (secret reserve), fraud (irrevocable bid kickback), intimidation, and oh yes, price fixing (an ever rising, non-negotiable buyer’s premium). Their growth and survival have depended upon these methods. Perhaps President Obama’s recent justice department statements to pursue antitrust practices can find its way into this state of affairs.

4 thoughts on “Why Are Some Institutions Above the Law?

  1. Hi,

    I love your blog.. it’s rare to find a well-written and smart blog about antiques! I really enjoyed reading your thoughts. I agree that a little bit more democratization in the antiques field is needed, but maybe the appeal of antiques is slowly filtering down to non-industry insiders. Look at sites like antiquespider.com which are like ebay (and what’s more democratic and open than ebay?) for antiques. I think slowly this whole industry is becoming a little less stuffy…

    thanks for reading, keep up the good writing!
    -alice b.

  2. LOL, WOW, pretty hard hitting indictment on sotheby’s/christie’s, do you know specific examples of this type behavior?

  3. James,

    Thank you for your comment. To cite just a few examples: (1) they can sell an item and own an interest in it but do not disclose the financial amount of that interest or what kind of interest it has, (2) the deception on the bidder with a secret reserve requires the bidder to make bids that the auctioneer cannot or will not accept under any circumstance. The deception of a secret reserve is meant to deceive the bidder into thinking that they might get a bargain by starting the bidding at an artificially low price, (3) the irrevocable bid scam I discussed in a blog on December 24, 2008 (http://newelsantiqueblog.com/?p=83); it requires giving the irrevocable bidder insider information, (4) price fixing has been part of this duopoly’s actions since being convicted of it and collusion in 2001. Has their buyer’s premium ever come DOWN, or been something you as a buyer could negotiate? (5) Lastly, they have intimidated dealers, especially with the threat of not taking their goods or making it difficult to buy when confronted with their methods.

  4. GEE WIZ, as a collector these past 30 years, i had no clue the antique business was this “grubby”. When every dealer i talk to says “where are the young clients”, this sort of thing can’t help at all. Thanks for taking the time to inform the public about issues that should be of concern to everyone, i follow your blog with great interest.

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