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The peculiar economics of the global art market

In order for emerging artists to navigate the art world, it helps to know the terrain. This is, however, much easier said than done. The art world, with its elite coteries of gallerists, curators and collectors, is opaque and seems to obey different economic rules than that which apply to other markets. Why do some artists struggle to sell anything at all, whilst a handful sell work made of oil paint on canvas or glass and formaldehyde for millions? Why do obscure, dead artists suddenly shoot up in price decades after their death?


Sensationalism aside, the art market is fascinating to understand. A great place to start is Don Thompson’s The $12million Stuffed Shark: The Curious Economics of Contemporary Art. An economist by trade, Thompson spent time speaking to auction houses, galleries, collectors and artists in order to try and puncture the traditionally mystifying art market. Although Thompson’s figures and data are not all current (the book was written in 2008), I found his argument very pertinent. In a nutshell, he claims that the success of an artist has little to do with the aesthetics or originality of the artists themselves, but more so with trading, marketing, price-fixing, and speculation on the part of collectors, galleries and auction houses. What these players are driven by, and what in turn drives the art market, is a smattering of ego and social status hunting.

The book is insightful, single-minded and harsh; it makes for sobering reading for an emerging artist. Thompson’s analysis of Charles Saatchi’s impact on the art market is particularly interesting: by investing in promising young talent, Saatchi helped raise the value and status of the Young British Artists and set a new standard for stratospheric contemporary art sales. Overall, Thompson has a good stab at unpicking the ways in which the different actors in the art market play a part in constructing a complex system into which artists’ works are fed and undergo a speculative bubble which relies on egos and the savvy of galleries and auction houses. A quote from the book, attributed to art critic Jerry Saltz, sums it up best for me: ‘The [art] market is a perfect storm of hocus-pocus, spin and speculation [...] where an insular ever-growing cast enacts rituals in which the codes of consumption and peerage are manipulated in plain sight.’


If you enjoy listening to podcasts more than reading, I recommend listening to the Freakonomics Radio’s podcast series on the Art Market from December 2021 (episodes 484 to 486) for insight into ‘a fascinating, sexy, intellectually compelling unregulated global market.’ The case it makes is rather similar to that of Thompson but in addition, I found the interviews with artists poignant in recognising the forces at play and their lack of recourse about how their work is traded, in particular how they do not tend to benefit from the resale of their work on the secondary market. The tale of Alice Neel, whose work 'Dr Finger's Waiting Room' is featured here, is particularly fascinating in this regard.


What the presenter Stephen Dubner also explains particularly well is the rise of art as an asset class and the establishment of advisory platforms, such as Masterworks or Maddox Advisory, that enable investors to buy a share of expensive masterpieces that are then stored in secured warehouses never to see the light of day. Artworks are traded as commodities and in many case no one gets to see them - is that really what artists created them for?


Finally, I strongly recommend an article from 2015 in the Atlantic that tracks the art market through the evolution of the status of artists in Western society. From skilled artisan employed by a patron, to spiritually-inspired loner producing unsolicited works of genius, to the social critic and political activist of the 20th century, what an artist is and what they produce has hardly stayed the same. Synthesising William Deresiewicz’s recent book The Death of the Artist: How Creators Are Struggling to Survive in the Age of Billionaires and Big Tech, the article characterises the 21st-century artist as a creative entrepreneur who has to be equally adept at running a business as at creating content. Whether this is a democratising development (anyone has access to the tools and knowledge to become an artist / creative) or whether this means no one can afford to be a specialised artist anymore - the article questions whether art as we know it will persist in the Digital Age.


The Carrot Piece by Lubaina Himid


If this has left you feeling a little jaded, then I recommend watching a few of Louisiana’s Museum of Art’s excellent series ‘Advice to the Young’. Each is three minutes long, and features an established artist giving frank advice to emerging practitioners. My favourite words of wisdom are from David Shrigley, Kiki Smith and Martin Parr. What do they all have in common? They encourage emerging artists to focus on their work, live it, breathe it, bore everyone with it, and think of nothing but it.

So, forget about the goings-on of the global art market and create!

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