Monday, January 06, 2014

Markdowns, gluts, and technological innovation: features of illicit antiquities trading in Egypt today

Four important tidbits of information in this brief article:

First, "only stupid people get caught." Clearly this statement must be taken with a grain of salt, reflecting some bluster here on the part of the dealer (and in talking to the press at all the dealer is already showing some lack of discretion). On the other hand, that he feels he can get away with talking to the press -- and even allowing Al Arabiya to film his stock! -- shows how unafraid of getting caught dealers can be.

Second, the risk of getting caught and the consequent costs of selling clandestinely are carried by the seller: "The trader, who allowed Al Arabiya to film his stock of illegal artifacts on sale, said every smuggled artifact loses about 70 percent of its value" -- presumably compared to what it would be worth to the dealer if the artifact were licit. And yet even with this markdown the dealer still finds it worth selling.

Third, the illicit market continues to function, despite lower profitability, not just in normal times but in the special conditions of a glut caused by the breakdown of site security and consequent looting of Egyptian sites:  'An artifact like this one, which I sell now for $718 used to be worth $7186, and it wasn’t easy to find such a piece.'” Prices for illicit antiquities have dropped by 90% - and yet the dealer continues to deal. Presumably the illicit $7000 piece would have been worth $23000 if licit, so the collector now can buy for $700 a piece that might someday or even today if he/she can get away with selling it as licit be worth thirty times its purchase price. 

Fourth, the extraction of antiquities is becoming more efficient thanks (sic) to the adoption of advanced technology in the form of higher-quality metal detectors. Just to give some sense of how clear the industrial tie-in between antiquities looting in Egypt and this equipment, here's a screenshot of the site of the company selling the jeodetector:

Metal detecting is supposedly illegal in Egypt without a permit, by the way.

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