“It was the best of times, it was the worst of times” elegantly sums up the current state of the art market. Dickens’ famous quote focused on much grander stuff, yet the chaos and turbulence of the French Revolution applies in a smaller scale to the volatile U.S. art market at this moment.
As a large part of the globe hunkered down in the recession and fear and trembling seized many investors and consumers, art sales took a thrashing like the rest. Galleries expected that “luxury” purchases such as art, whether as investments or for pure appreciation, would founder and disappear into the mist of the past.
But amid the warnings of imminent doom, some odd and unexpected things are occurring in the art world.
Maybe it’s not so odd, but only a sign of the times that the really big bucks from mega- investors have actually increased, especially in the prestigious auction houses and high-end galleries, which raked in billions last year. The leap between wealth and poverty clearly shows its widening gap, measured by contemporary art sales. More money has been funneled into presenting these grand art shows in the U.S., Britain, Italy, Hong Kong and elsewhere, and their resulting sales have been higher than at any time in previous history, recession or not.
While small, local galleries in the U.S. are shutting down in droves, those catering to the very wealthy and international elite seem to be swimming with the big fish to better hunting grounds. These are more commonly ending up as places like Dubai, Russia and China.
And indeed, the Russians and even Khazakhs are coming to Saatchis’ and Christie’s, and Sotheby’s, snatching up art in a quite refined version of the Mongol invasion. Dasha Zhukova, Anita Zabludowicz, Timur Kuanyshev, Boris Ivanishvili and Viktor Pinchuk are all heavy hitters in the contemporary art world and earn the respect and attention of art sellers.
While large galleries and auction houses painstakingly court big spenders from Asia, Hollywood and even Hip Hop moguls (all new money), they seem to have rebounded, if in an altered form. This phenomenon appears to contradict all type of economic theories. In basic capitalist jargon, demand is down due to recession and a credit crunch, but supply is sky high as panicked collectors dump mountains of world class art onto the market. It’s like a garage sale for Impressionists. Investors are advised to be conservative, searching for commodities with proven track records rather than wildly subjective objects, as art is often labeled. But many, especially the very wealthy, are not heeding this advice.
Artists and their marketers are by definition flexible creatures and extremely sensitive to social and cultural changes, if not economic ones. The big auction houses like Christie’s and Sotheby’s went through gyrations downsizing, cutting commissions and other austerity measures.
Tobias Meyer of Sotheby’s explained that in an effort to make some items more affordable, the price disparity between “good and great (art) has widened to humongous.” Art marketers are training their sights on the very wealthy or serious art collectors wherever they happen to live.
Ironically, while scores of Americans close or thin out their beloved collections, foreign industrialists, investors and heiresses are combing over the pickings and bagging up the loot.
In this the art market is a little microcosm of the larger market and global trends. Art is also becoming a world unto itself, as art work is increasingly seen as a distinct “commodity” of investment, although an aesthetic one. Art experts and their customers are increasingly viewing art as a new class of asset, some even preferring it to gold.
There are even studies to “prove” the productivity of art as investment. Statistics on the average selling price of gallery photographs over a 20-year period actually surpassed the S&P 500 index stock average for the same period (score: stocks 9.6 percent, photos 11.4 percent). Sales also improve immensely during an auction if the market suddenly leaps.
This puts liberal artists in a bit of a philosophical jam, as it is almost a Marxist crime to “commodify the work of creative labor” or something like that (who seriously pays attention to Marxist theory anyway?). It is hardly news to rejoice at for the great majority of artists who are either not being promoted as next great glitterati art star or who are not yet dead.
Proof of the vitality of this new version of contemporary art market, at least for well known and previously collected artists, came with last November’s gargantuan fair “Art Basel Miami.” Although considered a little cautious as compared to former glory days (i.e. less pornography, shock art and the gratuitously bizarre), it was still described as a “stampede” of buyers in a sort of a boom atmosphere. Paul McCarthy and other celebrities, as well as established, contemporary artists such as Anish Kapoor and Ai Wei Wei, did very well raking in millions of dollars and with some even selling out in a few hours of opening.
In other venues, some of the art that is still selling well is by solid artists with a sizable following or who have loyal collectors. It helps if the collectors are personally famous. Blue-chip, mid- or late-career artists who have had major shows or big patrons are also doing well. Art that has been previously owned by a famous collector (the Michael Jackson’s glove effect) also tends to sell quite well.
PR is fine, but the latest art events are overly blinged-out and sensational celebrity-magnets that cheapen art while they fetch huge sales receipts. They also appeal to speculators rather than true collectors who intend on keeping their purchases. Whether a new emphasis on art as name brands or commodity will benefit artists as a whole remains to be seen but seems extremely doubtful.
Art isn’t sold in bundles or barrels (not yet anyway), making it difficult to treat as replaceable, fungible items. It functions on opposing values: irreplaceably, scarcity, uniqueness and singularity. Art needs to be gazed on, loved and appreciated by definition, and that’s not even touching on aesthetic and spiritual qualities.
Will future art transactions sound like this? Buyer: “I’d like 2 lots of anything Italian with lots of gold-leaf as long as long the instrument is solid. Oh, and unload all my 20th century holdings on the downside.”
Personally I find it dismal to think art could be tied to a market like sneakers or beef rather than serve a great, transformative purpose – but perhaps I’m just a sentimental romantic.