This is one of my favorite paintings by Kandinsky. At the Norton Simon Museum, they have his piece "Heavy Circles" which is from around the same time period. There's a wall plaque next to "Heavy Circles" which describes Kandinsky's thoughts on circles.
"Why does the circle fascinate me? It is:
1. the most modest form, but asserts itself unconditionally
2. a precise, but inexhaustible variable
3. simultaneously stable and unstable
4. simultaneously loud and soft
5. a single tension that carries countless tensions within it
The circle is the synthesis of the greatest oppositions. It combines the concentric and the eccentric in a single form and in equilibrium. Of the three primary forms, it points most clearly to the fourth dimension.”
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