There are many people who feel that for 20 years or so Dietmar Machold personified everything totally wrong with the business of buying and selling fine string instruments. Developments in the last week might hearten those who have been waiting for some public validation of their concerns. Reports here and here detail the possible extent of Mr. Machold’s alleged transgressions. Of course, he has not been proven guilty of anything, but even for a business that has often been cloaked in secrecy and sometimes questionable business practices, these are pretty extreme allegations. I think it’s the best public example to date of what can happen in a largely unregulated field in which dealers (some with limited expertise) are also the authenticators and appraisers. Contrast that with the real estate world (for example)- would you buy a house from a seller who individually appraised and vouched for everything in the transaction, with no outside oversight or regulation at all?
I should be clear- I’m a fan of free markets, and if someone pays $10,000 or $17 million for a violin, obviously that’s what the market will bear. Nothing wrong with dealers being paid well for their services, as long as they follow the law.
Full disclosure: many years ago, in a transaction involving Machold and another very well-known dealer, I was personally impacted by his practices. Unlike many customers, I was fortunate to have some experts at my disposal who helped me navigate out of a surprising and odious predicament, and I learned a lot. My experience was a far cry from the allegations he’s currently facing, but there are certainly similarities from an ethical and accounting perspective.
In fact, my sense is that the rarefied world of fine string instruments has actually become a bit more customer-oriented over the last 15 years. Part of this has to do with the general knowledge base and exchange of information, along with certain technological advances involving authentication. Perhaps some of it also has to do with the various legal cases over the same period. If there’s a silver lining to the current dreary saga, perhaps that upward trajectory will continue as it further unfolds.