Saturday, October 28, 2006
The art market
For the last few years, the media have trumpeted contemporary art as the hottest new investment. At fairs, auction houses and galleries, an influx of new buyers--many of them from the world of finance--have entered the fray. Lifted by this tidal wave of new money, the number of thriving artists, galleries and consultants has rocketed upwards. Yet amid all this transformative change, one element has held stable: the art market's murky modus operandi. In my experience, people coming from the finance world into the art market tend to be shocked by the level of opacity and murkiness," says collector Greg Allen, a former financier who co-chairs MoMA's Junior Associates board. "Of course, there's a lot of hubris--these people made fortunes cracking the market's code, so they tend to think the opacity is someone else's problems. But the mechanisms are not in place to eliminate ethical lapses or price-gouging, and the new breed of collectors is definitely more likely to pursue legal options. And once things go to court, a lot of the opacity gets shaken out." The art trade is the last major unregulated market," points out Manhattan attorney Peter R. Stern, whose work frequently involves art-market cases. "And while it always involved large sums of money, there was never the level of trading and investing that we have now. I'm increasingly approached by collectors who have encountered problems." Stern represented collector Jean-Pierre Lehmann in his winning case against the Project Gallery, which captivated the art world by revealing precisely what prices and discounts Project Gallery Chief Christian Haye had offered various collectors and galleries on paintings by Julie Mehretu--information normally concealed by an art world omerta. --Time To Reform The Art Market? by Marc Spiegler for The Art Newspaper, 2006.
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16 comments:
very interesting set of topics. I go to art school here in miami and heard about you blog through an artist friend... i wished we had this sort of approach to art history....
Until last class I had not really thought about the world of art and the feedback loop that usually makes an artist's work rise as collectors purchase their pieces. I have not studied economics or the ethics of economics - if there truly is such a thing. But it does strike me that having an auction house fund a bidder so they can bump up the price of art when the general market of the masters is effected by raising the bar seems highly unethical. What is the difference between that and the payolla scandal of the music world where people paid DJs to play songs to force them into popularity?
The world of art is so subjective in terms of value. There is one level of the piece being valued by the recognized artistic establishment of museum boards and other experts in the field and then the is the popular value of something brought on by story surrounding it. Munch's "The Scream" is bound to be even more popular and sought after because it had be "kidnapped" by thieves until recently.
This is like the controversy about lobbists going on in government. People are paid to present things in a certain way so that it tilts opinion so that others profit from it. It happens every day in our world. Things that are clearly wrong happen every day.
And what of Carlos Betancourt and his purposeful investment in one of his portraits so that is presented itself on every popular object so as to present itself as popular as say, the Coke logo. Some would call it marketing. Some would call it manipulation. Some would say it was an artistic experiment and commentary on the economics of art.
In my little corner of the world - I am a notary public. I am not allowed to notarize anything that I could personally gain from. So how could it be ethical for Sotheby's to fund a bidder? It's called conflict of interest. Is there the equivalent of an art ethics board?
AT, this is pretty cool. I'm curious to see what comments your students have on my article. The full piece is here.
Feel free to email me as well. There's a link for that on the homepage.
A lot of reasons in these articles why a "business of art" course--to include both marketing and legal components--is needed.
I think there are two categories of phenomena here: one involves general market processes or customs that some find unethical ("insider trading" type situations, auction house subsidies, etc), the other relates to unscrupulous behavior in individual transactions (failure to pay, falsifying invoices, etc.). I find it hard to get up any sort over indignation over the former; while the latter disgusts me as it would in any context. Why?
I am not convinced the analogies made for the first group are valid. Michelle's activities as a notary and stock trading are somewhat more public than the art business, which seems to be a more private system ("closed" system might be a better term). Or maybe just a more elitist one than even stock trading. In any case, my concept is based on the idea that in those cases, regulations exist to protect a wider public (if only theoretically in the stock market) than participates in the higher level art market. Why this makes a difference for me is based on my belief in limiting government controls to essential areas affecting the general public (too involved to go into here).
Payola in the music doesn't necessarily disturb me either--I have a rather low opinion of the quality of most pop music so I can't get concerned if the "contest" is won by graft when the contestants are generally speaking equally unworthy. But I can see where it might prevent a quality act from breaking into the market; I am not convinced that the mechanisms to which it is being compared to in the art market would have the same effect as the media are so different. Any research on this?
As to incidences of falsely proclaimed motivation (e.g. the photo museum) being used to influence sales, it would seem to be a more appropriate area for individual court action rather than "regulation" as such (if by that one means specific laws) given the variables that can exist in establishing that the motivation was falsely stated, i.e. who said what when, to whom and how often, etc.
As to the individual artist being violated, so to speak, by the dealers (there used to be a rather crude allegorical cartoon circulating of a sheep (labeled "the artist") interacting with "the dealer") that does alarm me. My question here is--and here is another reason why dedicated courses are needed in art legal issues--if written contracts are not customary (which implies it is not an option to insist on if one wants to show), what are the options if any, for securing one's rights?
Thanks to Marc Spiegler for the link--there is a ton of interesting material on his site in addition to this article. Is The Art Newspaper still online? I tried to find it but got a message (in Italian) that no such URL existed.
This article opens up an important issue involved in the art market, the issue of sort of fakeness. Although there is a lot of good that comes to the artist and to world of art by allowing this sort of economic inflammation, I think it also degrades the truthfulness and rawness that should be involved in art. It really has become a business, and unfortunately in some cases it becomes a business of “corrupt” deal making. Even in the case of making it as an artist. It’s all a bit fishy at times. There’s so much to like about what galleries can do for the world of art, but for every good gallery and galleries out there, there are a lot of shady ones. And the fact that collectors are being taken for ride by these gallerists also has something to say about some collectors themselves. The whole bureaucracy of the cycle of the art market is quite weird. I’m not sure what else to say? I don’t know at times it all seems a bit fake and annoying, the market that is…
The current situation with the art market seems to be something that was inevitable, especially since it is unregulated. Artists are worth nothing and everything at the same time. So, who is to say how much an artist is worth? The galleries? The collector? The problem occurs when you try to place a price on something that has no value, except to the individual purchasing it. In my opinion, the price of an artist’s piece of work should be based on how much the buyer/collector is willing to pay for it. If a collector is complaining that he/she has paid a gallery too much for the artwork, then it is their own fault for paying for it in the first place. If someone is looking to buy art as an investment, then they should be doing their research before purchasing anything. On the other hand, if someone is buying it for his or her own personal enjoyment, then there is no standard price because it is up to the individual how much he wants to pay for it.
Marc, thanks for jumping in (which you're welcome to do anytime you want).
More and more, as I attempt to understand to basics of the Art world including the Art market, I seem to get more confused. The impression I have is that everything is relative; nothing is set in stone. When it comes to the Art market, as it’s been mentioned, who is it that makes the decision about how much a piece of Artwork is worth? Is it right that a gallery owner makes that decision? This means, it doesn’t really matter what kind of an artist you are; if you can arrange for the “right” representative, you will succeed. Even so, I understand that investing in the art market does require a certain amount of knowledge of the art market and the individual artists.
-J. Tao
On the topic of Carlos' talk to the class - I greatly enjoyed his body of work, his sources of inspiration in his family, his ancestors petroglyphs, his spirituality, his physical presence in his conceptions, even the installations. No wonder so many museums what him in their collection. He does seem at least a decade younger than the calendar bears witness - perhaps it's the joy in his work. The fact that his family and patrons want to "get in on the act" as it were, is both humorous and witness to their trust in his eye. They want to tag along on the artistic journey. That says a lot about the man.
I had never thought of art as a "business", but it is true that nowadays art has become more of an investment for some people. Well, I would buy an art piece as an investment if I were not too involved into art. This "hottest new investment" has impacted me so much since last class, because I had not analyzed how art is more an investment rather than ART. We all know that everything deals with money and money is governing the world, so after the analysis made in class it all made sense to me.
It is also true that artists don't really care if the person who buys their work is interested in it as an "art piece" or as an "investment". Some artists just want to sell their piece and let the buyers do whatever they want with it, but there is something I would like to know now... Is art losing its special meaning?
The art market is the most difficult aspect of art to understand and become part of for myself as an artist. Color Theory, Composition, ideas of art are able to be taught. The art market can be talked about, the ways can be taught, but becoming part of it cannot. Being “a Player”, as Fred Snitzer called it, playing in “the game” is difficult. The idea that art cannot stand alone and speak for itself is disheartening; that an artist has to sell himself, his ideas, and his art, as though it were a used car. I do not like the idea that a curator has control over what art is shown to the public, and about the direction an artist under his influence takes. I enjoy being an artist, but I have yet to see an aspect of the art market that I feel the same about.
I used to have mixed feelings about the art market, but opinions aside, I think what we've discussed in class in undeniable. The players in the market (artist, dealer, collector, etc) are interconnected, and the artist is reliant on those connections in order to subsist. Of course it helps, in a way that no amount of talent can, to be part of a well-connected network. Of course it helps to know certain people, look a certain way, foster a mystique about yourself. It seems, often but not always, that the art world interests itself with the artist's identity. I think the market is more anonymous for writers than it seems to have become for artists. The visibility, the philosophy, the lifestyle... all undeniable components. I don't think we should be scared of art as a social experience or the artist's role as a player; we should embrace and enjoy the shifting dynamic. This isn't a new phenomenon; artists have been running in intellectual circles for centuries. This was a useful class discussion, relevant to every artist, especially to those who hope to establish themselves in some sort of scene.
The art market is so intimidating for a young artist like myself. The progression of the value of art is a logical process, however, getting into the ebb and flow of the market seems an impossible task. Another thing that is unpredictable about the art world is how fickle peoples taste in “good” art can be. An artist could be at the height of popularity today, but in 10 or 15 years could be completely forgotten. I understand now what Fred said about an artist as a “player” in the art game. Without a dynamic understanding of how the market works one could be enormously talented and die in obscurity. Bert said that the art is in the interaction between the viewer and the work not the actual construction hanging on the wall and this intrigues me.
Brief comment on Marc Spiegler's article: Are we headed for market regulation? I think it's a far off possibility at this point. But, public subscription to a code of conduct and sale registries would help draw a few lines. Despite the sociability and "murkiness" of the market, seems like all players (especially newbies) should demand written contracts, if only to protect themselves. And it seems there's a new player in the market that we haven't discussed--the art market attorney. Thanks, Marc.
Is there is s difference between art and marketing? If an artist is to survive on their art, they must produce marketable art. Marketable are is art that is sold in art galleries to art collectors. Another venue is government granted art. Artists submit proposal to governmental institutions to get funded. In the first case the gallery director decides what is viable in the market they know. In the case of government, many countries support their artists unlike the present US administration the seems to be tearing down support for the arts.
The solution is to vote for a government that supports art not war.
the art market is interesting in a lot of ways. I think that one of the most important things about it is how much it can control an artist's or a movement's future. If a particular market feels the need to price things highly it may add a level of prestige to certain pieces and make them seem better than they are. this could make a no name artist famous and his art highly priced if it were marketed correctly. It can also take an already huge artist, and make them even more well known or sought after. In the case if Picasso's work, it continues to rise in price each year. I vaguely remember a piece of his selling for, what at the time was a world record, roughly 80 something million dollars. Now a piece of his has just been sold for aproximately 120 million. The art work did not get better, it hasnt changed at all. The times, the market and the intrinsic value of the piece to the art world are what make the prices continue to skyrocket. By the same token however, it would appear the total oppostie is quite possible. If low prices were associated with someones work, granted people may buy it, but it would not be given the same respect or attention as many other pieces due to the fact that someone thinks it is cheap. More of it would get sold at lower prices, but i feel as though, in the art world, the best pieces cost the most. This too is a function of clever marketing. Lastly, a dealer could take a no name, with no formal abilities and put them on the highest pedistal possible by their clout or "pull" in ther art market. I cant help but feel like that persons art would sell well based solely on the dealers merit. although this doesnt speak too highly of the art worlds perspective of art, the art market is still a business.
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