The Economics of Everyday Things - 66. Stradivarius Violins

Episode Date: October 14, 2024

Why are these 300-year-old instruments still coveted by violinists today? And how do working musicians get their hands on multimillion-dollar antiques? Zachary Crockett is not fiddling around. SOURCES:Frank Almond, professional violinist.Ziv Arazi, co-owner of Rare Violins of New York.Bruno Price, co-owner of Rare Violins of New York. RESOURCES:"When It Comes to String Instruments, Stradivariuses Are Still Pitch Perfect," by Ted Scheinman (Smithsonian Magazine, 2022)."Study Confirms Superior Sound of Stradivari Is Due to How Wood Was Treated," by Jennifer Ouellette (Ars Technica, 2021)."The Case of the Stolen Stradivarius," (FBI News, 2015)."A High-Strung Market," by E. H. B. (The Economist, 2013)."Violins For Music — And Investment Returns," by Michael S. Fischer (Financial Advisor, 2013)."Stradivarius Fetches Record $16 Million in Charity Sale," (Reuters, 2011). EXTRA:A Violin's Life, album series by Frank Almond (2013).

A few weeks ago, I talked to a guy who's been extremely lucky. Twice. Hi, Zach. I'm Frank. Hey, Frank. How's it going? Okay. Frank Amand is a professional violinist in Wisconsin. He was concertmaster for the Milwaukee Symphony for 25 years. He also performs in chamber ensembles and has made a number of recordings. I'd reached out to Amand because he plays a Stradivarius violin.

It's nicknamed the Lepinsky, a tribute to one of its many previous owners, and it's worth nearly six million dollars. The Strad is just gorgeous. It's like this Lamborghini sitting there. The music in this episode is from a series of albums that Amand recorded called A Violin's Life. The series is inspired by the history of the Lepinsky. It was made in 1715, which is sort of dead in the middle of what most people consider as Stradivari's quote-unquote golden period, where he was really at the height of his powers. When you're playing an instrument like that, do you sort of feel the weight of the history

in your hands? I certainly did with the Lepinsky from the second I got it, because it was so well documented. It really was like a novel. So many famous people and figures in history were associated in one way or another with this violin. S1 How exactly did the Lepinsky end up in Amman's hands? S2 It started with a mysterious email 16 years ago. S1 It was like, we have this instrument and it's part of an estate situation and we're looking for advice

on what to do with it. It was, you know, a one paragraph thing. And I mean, all of us get these things a couple times a year. I found my Stradivari at a garage sale or, you know, it's been in my family for 25 years and it's got a Stradivari label on it, so it must be a Stradivari. And 99% of the time, it doesn't work out for him. This time, it did. A violin dealer accompanied Amann to the bank vault where the instrument was being held.

He opened the case and quickly knew it was Lepinski. You can imagine the capital gain on that if you're not a musician with a tax loss at that time. We strongly advised them not to get rid of it if they didn't have to. Like how often does the Strad sort of drop out of the sky into the city of Milwaukee? Eventually it wasn't right away. She said, you know, what if you played it? You've had these things before. What if you looked after it?

About two seconds later, I said, hey, that's a great idea. I think that's a really, really excellent plan moving forward. So I wound up with a violin. For the Freakonomics Radio Network, this is the economics of everyday things. I'm Zachary Crockett. Today, Stradivarius violins. Unless you're a wealthy collector or a very fortunate musician,

Stradivarius violins are not the kind of thing you see or touch every day. But you've probably heard them when you've streamed a Mozart concerto or listened to a classical radio station in your dentist's waiting room. The bright crisp resonance of these instruments means they're still used by the world's greatest players over 300 years after they were made. That longevity is a testament to the genius of a luthier named Antonio Stradivari. Stradivari grew up in the Italian town of Cremona. It was the center of the string instrument industry.

As a young man in the 1660s, he began making and selling his own guitars, cellos, violas, and especially violins. People think of Antonio Stradivari as kind of this old guy like at a bench carving stuff. And that's not really what it was. He took the existing model of instrument that was dominant at the time, which were these little kind of puffy Baroque instruments, and gradually over his entire lifetime transformed it into something that no one had really ever experienced. Acoustically it could be much more powerful.

Again, that's violinist Frank Amund. There was no laser cutting back then. Everything was done by hand in his workshop. Because he was so famous and so wealthy, so early in his career, he was able to afford materials to make these instruments that a lot of his competitors were not. Three centuries later, Stradivari's violins are cradled by top performers.

Joshua Bell, Maxim Vengerov, and Sophie Muter, Itzhak Perlman. They're on all the most celebrated concert stages. And yet, fewer than a thousand violins ever came out of Stradivari's studio. Today, there are maybe 500 of them left in the world. There's some dispute about how many instruments he actually made during his lifetime, but what is clear is that whoever bought them basically took care of them in a really careful way through generations. No one knows this better than Zeev Arazi and Bruno Price.

I first met Zeev while he was still a student at Juilliard and the plan was always at some point to have our own shop. Price and Arazi own a company called Rare Violins of New York. It's one of the nation's top antique instrument brokers. It sells, loans out, and repairs million-dollar stringed instruments. And it works with some of the most famous artists in the world. Rare instruments are cherished by musicians and by investors, especially in recent years. In 2010, the soloist Anne Akiko Myers purchased the 1697 Molotor Stradivarius, which may once

have belonged to Napoleon. It went for $3.6 million, at the time the most ever paid for a violin. Just a year later, a 1721 Stradivarius called the Lady Blunt sold at a cherry bee auction for more than four times as much. Arasi and Price say those high-profile auctions aren't the whole picture. The real record-breaking sales are done privately through dealers, but those are the sales that no one hears about, because most times people do like their privacy. So it becomes a very sort of hush-hush transaction.

It's a strange market because it's so emotional. There will always be periods where the values go up really quite dramatically for a specific type of instrument because soloist is using that particular maker and it becomes the hottest thing. But generally we find that the investment side going back over the last 30, 40 years. It was about 8% a year, year over year. Yeah, around the 7 to 8% is actually a lot more accurate than some of our colleagues like to suggest. Most of the great instruments at Rare Violins of New York are held on consignment and kept in a high-end climatized vault.

As brokers, a Razian price get a percentage when a sale is made. It ranges depending on the value of the instrument. On the lower end, it would be 20% and on the higher end, it would be a lot less. 5% is standard. ["Pomp and Circumstance"] More than sales though, they like to see that instruments they sell are still in the hands of musicians, not locked in a safe.

What our goal in the process is to convert the investors into benefactors. It's the enjoyment from hearing the instruments on stage that really sort of pushes it beyond just an investment. Arrausian Price created a program called In Consortium. It matches instrument owners with promising artists. The main function for us is to really try to find the next custodian for those great instruments that are in our care, and make sure that the next owners understand the need for them to still be used by musicians. At the very, very top end, as musicians are less able to afford the quality of instrument that they need. The actual buyers have changed. There are some individuals still buying, but sometimes now it's institutions or foundations. It makes it certainly a lot more complicated.

There are more musicians today than there were 20 years ago, and less really good violins available. Some institutions don't loan them out, and it's just a continued scarcity. That's really what it is. That's maybe one of the incentives for the buyers to loan out the instruments. They feel like they're playing a creative and poetic role in the performance itself. Yes, very, very much so.

Between a sponsor and a performer, even the financial benefits can flow both ways. If a young artist is building their name as a great artist, the instrument that they use will become more valuable because it's associated with them and consequently will sell for more money next time. The terms of these instrument loans are usually spelled out in a signed contract. Typically the performer covers any required maintenance,

but Frank Amund says those costs aren't too bad. Actually, most of these places that I've taken it to, they're so thrilled to be able to look at something and hold it and work on it. That a lot of the time, it's either a modest charge or you're paying for strings that need to be replaced or something like that. The performer also has to pay for insurance, which usually runs around two grand for each million dollars of valuation on the instrument.

The premiums are generally not as bad as one would think, for the simple reason that usually things don't happen to them. It's actually a very low-risk item. But that doesn't mean that the people who take care of them don't have worries. It's like having a child with you. Just a really expensive child. My biggest fear was to do something stupid with it. The idea of a theft had occurred to me, but it was so dumb that I never really took it that seriously.

That's coming up. Stradivarius violins are famous the world over. Even people who don't listen to classical music have heard of them. But the musicians who prize them, like Frank Almond, are often asked what it is that makes them so special. That's one of the fundamental questions that people usually have when his name comes up. What's the big deal? Why are they so expensive? The obvious answer is that their value comes from their scarcity. Almond says there's more to it than that.

There are these really amazing functional antiquities. They really are better than almost anything that you would play in your lifetime. The sound of a violin is largely determined by its engineering and materials. The front and back plates are made from spruce and maple, respectively. People have long speculated about the special density of Stradivari's wood and how it was treated.

Some consider the impact of the varnish he used, a mixture of honey, egg whites, and gum arabic from sub-Saharan trees. In 2006, a biochemist at Texas A&M found that the top craftsmen from Cremona had soaked their wood in borax, zinc, copper, alum, and lime water to protect against wormholes and fungus. This might have conferred other properties. People talk about the varnish or the kind of wood he used or the expert engineering that was involved with it.

And a colleague of mine who's a spectacular violinist named James Ennis also has a 1715 Strad and he, I thought, put it in great terms. It's not the varnish, it's not the wood, it's like a thousand different things that all came together. Many of the Stradivari that have survived this long have had some adventures. A 1732 violin called the Duke of Alcantara may have been absentmindedly left on top of a car after a 1967 rehearsal. It was found on the side of a Los Angeles freeway by a Spanish teacher and brought into a violin shop 27 years later after the teacher's death.

Yo-Yo Ma left his cello in a New York City taxi cab in 1999, and some instruments have been caught up in even more drama, like what Frank Amand and the Lipinski experienced one winter night in 2014 after a chamber performance in Milwaukee. I was walking in my car and I see this van backed into the parking space next to my car. And this is like Scooby Doo level, right? So I'm trying to put my violin in the back seat and this guy walks around, it was really hard to see him. And he just, at the very last second, I saw these little flashing lights

and he shot me with a Taser. I was back up very, very quickly in time to see the van driving around the corner and the violin was gone. This is where Amand had his second stroke of luck. The city's chief of police was a huge classical fan and had served on the board of the Milwaukee Symphony. And I knew this guy.

He understood the magnitude of it right away. To him, this was like Jeffrey Dahmer level. And all of a sudden, instead of one squad car, there were 10 and an ambulance that I didn't want and forensics guys and lights. So that was a huge part of the equation in the end because he threw everything at it and that's why they were able to find it in nine days. But those nine days were way longer than nine days, if you know what I mean. The Milwaukee Symphony offered a hundred thousand dollar reward for the

return of the violin. The whole world was looking for these guys. And you know, in the end, it turned out, after all this craziness, it turned out they'd planned this thing for like three or four years. Which that's even weirder, because it hadn't occurred to them, apparently, what you do with it after you steal it. Maybe the smartest thing you can do is just hold on to it. That's what the thief of the Ames Stradivarius did. It was taken from the Cambridge, Massachusetts office of famed violinist Roman Totenberg in 1980

by an aspiring musician who was seen in the hallway. Here's Zee Verrazi and Bruno Price from Rare Violins of New York. Everybody knew pretty much who must have stolen it, but it disappeared for 35 years. It's not that if someone could just walk into a shop with a very famous Strad and say, I would like to sell this because it will be very immediately known that it's stolen. I liked the story with the lady bringing in the Totenberg, the Ames Stradivari to the dealer. He said, well, I've got good news and bad news. The good news is it's a Stradivari.

The bad news is it was stolen and I have to call the police. The Totenberg family did get the Ames back. And Frank Amund, he was reunited with the Lipinski, too. Through an anonymous tip, the thieves were apprehended. And after two more days of searching, the violin was found wrapped in a baby blanket inside an old suitcase in an attic crawlspace. You know, to this day, according to the FBI, it's the only targeted high-end instrument armed robbery on record. I guess it's another notch in the violin's crazy history, right?

Yeah. We always think that these things are passing through our lives, but really it's the other way around. I mean, you just, another kind of blip in its life. It's going to be around a lot longer than I mean, you just another kind of blip in its life. It's going to be around a lot longer than I will most likely. Today, Frank Amand is still the steward of the Lipinski Stradivarius. Yes, although I'm not the owner. I am technically still looking after it. I'm quite aware that

it could go away at any time. And something I think about, you know, what are you going to complain? Did your insurance cost go up after the theft? No, amazingly. In fact, the value of the instrument itself went up about a million dollars. For the Economics of Everyday Things, I'm Zachary Krakat. This episode was produced by Sara Lilly and mixed by Jeremy Johnston.

We had help from Dalvin Abouwaji. You've been in possession of this instrument for a decade now. Have you ever had a desire to own it, or is playing it enough of a reward for you as a musician? Well, if anybody's listening that wants to, you know... Ha ha ha ha! The Freakonomics Radio Network, the hidden side of everything. Hahaha!