"Composition V" (1911) by Kandinsky. (Neue Galerie)

Art collecting is an area in which, to paraphrase Fitzgerald, the mega-rich are different from you and me. Ronald Lauder, Neue Galerie cofounder (along with dealer of Austrian and German Expressionism Serge Sabarsky), was born in the Bronx to beauty magnate Estée Lauder. It’s edifying to see his personal collection now on view in celebration of the museum’s 10th anniversary, in a spectacular display of what, for better and worse, happens when you can buy the best of everything.

Let’s start with the tough stuff, because that’s where Mr. Lauder started. In his 20s, inspired by the Metropolitan Museum, he started a collection of arms and armor, and bombastic, duck-toed suits of gleaming metal guard the exhibition’s first gallery in all their baronial splendor. Dozens of swords, maces and daggers, a war hammer and a nasty-looking instrument called a falchion menace and bristle from various vitrines.

Eleven helmets in a row are the most visually arresting pieces: most are Austrian or Italian, some made for Emperors and Archdukes in the 15th and early 16th centuries. One helmet from Innsbruck, circa 1515-20, attributed to Konrad or Hans Seusenhofer, has a theatrical face embossed on its steel surface, with eyelashes and mustache picked out in imaginative detail. Others are as smooth and abstract as modern sculptures, their organic forms echoed in Brancusi sculptures upstairs.

Above this headgear, six paintings by Cézanne are clustered, salon style. There is an extravagance to this display. To mix arms and armor with Post-Impressionism is an eccentricity reminiscent of the Barnes collection, that museum-in-a-mansion outside of Philadelphia. The paintings are hung high and are difficult to see; still, it’s a rare chance to glimpse Still Life With Drapery and Fruit (1904-06), or the early, famous Picnic on the Grass (1869-70), in which moodily lit, eerily still picnickers and their dog contemplate a repast of three bright oranges.

The next gallery features Austrian art from the first decade of the 20th century. These psychological portrait paintings are the guiding spirits of the Neue Galerie collection, among them Peter Altenberg by Oskar Kokoschka (1909) and Gustav Klimt’s Portrait of Adele Bloch-Bauer (1907). The oil, silver and gold painting of Bloch-Bauer is always in the same spot in the museum, the paintings changing around her with the room displays like patrons in a crowded café.

Mr. Lauder’s collection of Weiner Werkstätte is the largest outside Vienna. Several vitrines of applied arts include brooches and necklaces by Joseph Hoffmann and Koloman Moser circa 1904-12. Most of them are squares inlaid with agate, coral, lapis lazuli and diamonds, studies in the designers’ commitment to unembellished forms paired with extravagant materials. Joseph Hoffmann’s silverwork, from the same period, shows the ethos of his era: functional, modern design, elegantly stripped of ornamentation.

The Group of Seating Furniture for Ladislaus Remy-Berzenkovich von Szillas and Margarete Hellmann (1904), a couch and chairs in stained black wood and green upholstery by Koloman Moser, rounds out this elegant instantiation of the museum at its best. Such displays combine applied art and painting, resulting in an intimacy and aesthetic totality of detail that puts to shame the comparatively sterile, traditional white box display.

Upstairs, among selected paintings by German Expressionists and Neue Sachlichkeit, or “New Objectivity,” and Bauhaus artists, are some real knockouts. A stark Christian Schad, Two Girls (1928), depicting two masturbating prostitutes with the cool, stylized confidence of a Prada ad, and a devastating Otto Dix of a busty and despairing nude (Half-Nude, 1926) are both repulsive and psychologically compelling. A great, small gridded painting by Paul Klee features a fascinating articulation of incremental color changes through tiny squares. In another room, Composition V (1911), is simply the most magnificent Kandinsky you’ll ever see.

Much of the postwar work upstairs is by German artists on Austrian themes. It is spectacular but overdetermined. Anselm Kiefer’s lead-on-photo-paper portrait of Empress Elisabeth of Austria kicks off this subset of the collection, along with a Gerhard Richter painting of Freud (Study for Serial Number 324 (Freud), 1971), and another Richter of a blurred deer in a forest (Stag, 1963). A Sigmar Polke (Japanese Dancers, 1966) rhymes with Klimt’s The Dancer (1916-18) downstairs, Polke’s layered, capitalist realist polka dots in contrast with Klimt’s dreamy Japonisme in pinks and greens. Beuys and Baselitz round out the classic contemporary art Mr. Lauder collected during the 1980s and ’90s. This contemporary grouping shows Lauder at his most conservative: he rarely bought art made in the years he was buying, preferring the vetted work of a few decades earlier.

Lauder’s taste in modern art was formed by the Museum of Modern Art, where he was once the museum’s youngest trustee. Four terrific Brancusi sculptures (1919-20), perched on rough-hewn pedestals placed on a small, white stage, compose a tableau reminiscent of the Modern’s collection.

Drawings shine in this collection. There is a wall full of Matisse and Picasso works on paper, and another wall of black Conté crayon Seurat drawings that are among the best stuff the artist did. You can see the grain of the paper Seurat used, how the black Conté is rubbed right to edge of the sheets, and how a skein of black line is thrown over the surface of each page.

A narrow hallway is hung salon-style with lapidary works on paper by Hanna Höch, Kurt Schwitters, Schad, Klee, Franz Marc, George Grosz and dozens of others, the way a proud mother might crowd family photos in an apartment hallway. The impulse is at once possessive, enjoyably intimate, and preposterously extravagant.

Downstairs, a room of dreamy Alfred Kubins, Oskar Kokoschka charcoal and ink works on paper, and Egon Schiele images of landscapes, lakes and erotic scenes hangs in the semi-gloom of a room darkened to prevent works on paper from light damage. One of these Schieles was the first artwork a 13-year-old Mr. Lauder bought.

Ultimately, there are two Ronald Lauders on view here. One is the naughty boy who bought a dirty Schiele drawing—the libidinal second son who also seems to have purchased the Schad, the Dix and the Baselitz and generally found in art a form of sexual frankness and rebellion against social expectations. The second Mr. Lauder is a more conformist character, one who seized upon art as a means to bolster his social aspirations by buying the work everyone wanted with the money few had. This man collected the arms and armor, with initial aristocratic airs, but ultimately discovered that respect came from “buying the best”—the Kandinsky, the Brancusis, the Richters—a selection that both fulfilled the expectations of his family and made him impossible for serious curators to ignore.

Fortunately for us, the Neue Galerie lies somewhere between these two impulses. Early 20th century Austrian and German art was a little too dirty for the first draft of high modernism, and becoming its early and vocal advocate has allowed Mr. Lauder to leave as his legacy a great museum. There’s something psychologically naked about seeing the work that led to this resolution, however—here, the privacy of collecting made public looks like the raw revelation of one conflicted character’s lifetime of fulfilled desires.

editorial@observer.com

Mr. Lauder (Photo courtesy of Getty Images)

Next week, the British Treasury will announce a series of tax breaks for individuals and companies that donate works of art to museums, a model the Financial Times describes as similar to the one already in place in the United States.

Museum directors are reportedly ecstatic. Sir Nicholas Serota, director of the Tate Modern, described the tax breaks as “a major step forward, both in encouraging philanthropy and in helping to strengthen public collections across the country.”

The news comes on the heels of a front-page investigation by The New York Times into the tax breaks received by the major art world philanthropist Ronald Lauder.