With the Whitney Biennial, Armory Show, ADAA Art Show, Independent, Moving Image, Nada, Scope, and Volta fairs, their sundry offshoots and side events, innumerable gallery openings, and the auction season about to rain down on us here in New York, this may be a good time to talk about artistic overproduction. And right on cue, along comes Adrian Ellis’ cogent essay on the supply-demand problem in Grantmakers in the Arts Reader, an obscure but important journal for cultural-policy wonks.

“Some Reflections on the Relationship Between Supply and Demand in the Formalized Arts Sector” is more titillating reading than its title suggests. It’s framed in response to NEA Chairman Rocco Landesman’s refreshingly impolitic claim, not long after his appointment, in 2009, that the arts sector may be overbuilt. The Chairman was met by predictable howls of indignation at the time. The reigning orthodoxy is that no amount of art can be too much—economics be damned. But let’s admit he had a point.

Ellis credits Landesman (brother of Artforum publisher Knight) for sparking a conversation about the imbalance between the amount of art emanating from the cultural-industrial complex of 501c3 organizations and the amount of art that regular folks actually have an appetite for consuming. In fact, this debate has been quietly raging for years, especially inside foundations. In any event, the article is a must-read for anyone who wishes to speak knowledgeably about our besieged arts infrastructure, and what should be done about it. Read More »

Sarah Thornton in The Economist magazine recently described the art market as a bubble bath – an apt metaphor for a market made up of a myriad distinct markets for individual artists, each one expanding or contracting at any given time. It appears that, as of late, the foam is getting frothier, or the bath is getting bigger, or both.

At an Art Basel dinner earlier this month, a dealer told me about a collector who missed a chance to buy a work on opening day because he came back to the booth “twenty minutes after the reserve deadline” – a prime froth indicator. There were signs of invigorated confidence everywhere.

The auction market is likewise pushing into boom territory, as last week’s London auction sales attest. Christie’s evening contemporary and post-war auction saw twenty-five works sell for over $1 million, including a 1953 Study for a Self-portrait by Francis Bacon for $28.6 million, two-and-a-half times above estimate. Netting $126 million, it was the second biggest sale in its category for Christie’s in London. Sotheby’s contemporary art evening sale did even better, totaling more than $174 million, the highest ever for a contemporary auction in London, with forty-five lots going over $1 million. Both sales produced stellar sell-through rates, set numerous records, and drew buyers from all over the world.

In the early build-up phase of a boom, the market can achieve a kind of self-reinforcing pattern. Formerly cautious sellers offer up material they were reluctant to test on the market earlier. Quality work stokes more buying and bidding, which coaxes more quality inventory off walls and storage racks, propelling yet more sales and price increases. Read More »

Looking back over the season that just passed, consolidation is the word that best describes the dynamics of the art world now. Large entities are getting larger; smaller ones are still squeezed or struggling. The art system is mirroring larger trends in society, where recovery has come sooner to the more fortunate and the gap between the haves and have-nots has, if anything, widened.

Large institutions and corporate entities have locked in gains and begun to expand franchises. It’s a good time to make a deal, whether inexpensive real estate, cheap credit, or distressed partners prompt the opportunity.

Here in New York, large museums are showing anew an appetite for expansion. The Whitney had reason to celebrate at its gala last week, having just leased its Madison Avenue Marcel Breuer building to the Met, clearing the way for downtown construction of its new Renzo Piano headquarters. For the Met, this will be the first foray off Fifth Avenue since the opening of the Cloisters. Meanwhile, MoMA has paid $31 million to buy the beleaguered Museum of Folk Art. And the Guggenheim is eyeing a branch in Helsinki.

On the commercial side, the three main auction houses booked respectable quarters, and Phillips has moved into its flashiest digs yet, on Park Avenue. The houses are aggressively building markets overseas and pushing the boundaries of their operations into new aesthetic, digital, and financial territory. Hiring is back. Furloughs have yielded to pay increases.

Consolidation continued in the gallery business, too. Gagosian’s far-flung satellites are filling mailboxes with thick cardboard invitations almost daily. A small cluster of galleries with a truly global reach is leaving everyone else further behind. Corporate muscle is the most obvious in the seemingly never-ending expansion of art fairs. In a long awaited move, Art Basel has planted its flag in Hong Kong. Frieze announced a bold incursion into the Armory Show’s back yard, on New York’s Randall’s Island, and is also launching an old master’s fair back in London. Read More »

That heading would be funny in any context but here the article in Skate’s is referring to an apparent push to regulate “Art securitization” and Art Investments in Russia.   We have for some time, on ArtWorld Salon, commented on the relative lack of oversight of the opaque and enthusiastically “managed” system that is the Art Market.   The private dealing, auction pumping, ability to cellar works that aren’t selling, and lack of any form of reliable pricing register, all make the Art market a challenging environment for anyone thinking of buying that painting on the wall as a possible investment.   For that reason, and because I am old fashioned, I would always encourage every buyer to think of the work as something they could love for a long time, rather than a way of trying to hedge the currently volatile stock markets, or that condo in Vail.

So it is rather amusing to think that Russia might try to regulate Art funds without tackling the underlying market; never mind the difficulties they will have actually enforcing such regulation in a reasonable and effective manner.   But then I read beyond the title.   Apparently a “powerful local asset management firm controlled by Putin loyalists” launched 2 Art funds on August 27; so now this new regulation starts to look like something else.   Am I the only one that thinks this looks like a way to help market the Funds? The illusion of oversight to support the notion that these are investment grade propositions?   Or am I being too cynical here?

As I have said previously on ArtWorld Salon, to get real transparency into the Art Market, and create a basis for any genuine oversight of market practices, we need a price register for each and every work of Art that someone tries to promote as “investment grade”; with NO exceptions and NO omissions.  Read More »

While North Korean art is making a bid for attention in Vienna, in South Korea, where I just spent a week at the UNESCO World Conference on Arts Education, the art world is showing remarkable vigor. This peninsular country of 60 million, one-fifth the size of France, is the real miracle of Asia. It suffers from few of the chronic structural weaknesses of Japan, or the social and environmental ills of China or India, or the artificiality and overreach of newly rich Gulf nations. It’s the Switzerland of the East. And art is a key part of the equation.

There is no shortage of science-fiction-like mega-projects here, including the Global City of Saemangeum, to be built on the world’s largest reclaimed land mass behind a 33 km sea dyke, the world’s longest, which was just completed after 19 years of effort. But this is no Dubai. I asked a government official in the ancient city of Jeonju, which hosted my group in a bid to become a UNESCO Creative City, what’s the goal for South Korea in the years ahead. He said, “to get to between 5th and 10th in GDP in the world.” He didn’t mean per capita.

Underlying South Korea’s epic success, of course, is the most comprehensive public education effort in its hemisphere, and possibly the world. South Koreans are simply obsessed with learning, and the results are plain to see. Korea’s literate, world-wise population is, among other positive traits, deeply interested in the arts. This is probably the only place in the world where Bach can be heard in the bathrooms at a highway rest stop.

Here’s the most impressive thing about South Korea: It seems to have found a balance between warp-speed development and respect for local identity. As part of this balancing act, the state is extremely generous to local art. Seoul alone installs more than one thousand public art works a year. Historic sites are preserved and documented meticulously. Local governments are building creative complexes for artists where they can live, create, and interact for six months at a time. Arts patronage is considered obligatory for big firms and wealthy business clans, for reasons of both national pride and marketing. There is no interest in the wholesale franchising of Euro-American culture here. The country is open to foreign influences—Seoul’s top Zagat restaurant is Italian, the pastries of choice are French, Starbucks is ubiquitous, and women are as label conscious as anywhere—but the country has avoided drowning in globalization. Read More »

There’s been much fuss over “Nude, Green Leaves and Bust,” the 1932 Picasso that sold for $106.5 million at auction last week. Roberta Smith devoted an article in “The Week in Review” section of the New York Times to the guessing game about the anonymous buyer. Bemoaning the “irksome” secrecy of art sales, she conjured a rogue’s gallery of possible bidders, including “Buyer X,” a “puppet master,” a “Russian oligarch” fearing “home invasion or too much unfriendly attention from Vladimir Putin,” and “someone with vast sums of money stashed in a Swiss bank account or a dubious tax shelter.” All very James Bond. Buyer X must be smiling.

Anyway, on one score, the article, along with most others I have read, is unambiguous: The Picasso claimed “the highest price ever for a work of art at auction”—a “world record.” Technically speaking, the number is the highest—the largest pile of US dollars ever spent on an artwork at auction. But adjusted for inflation, this Picasso is a far cry from Van Gogh’s 1989 record-setter, “Portrait of Dr. Gachet,” which, at $82 million at the time, would be worth about $140 million in today’s dollars.

Leaving out inflation is a bit like measuring one high jumper’s performance in inches and another’s in centimeters. It’s worth noting, for context, that we have had at least three private sales in the neighborhood of $140M in recent years. And there have been a couple of auction sales exceeding $106 million in 2010 dollars, including a Picasso, “Garcon a la pipe,” which sold in 2004 for just over $104 million.

All of which is to say, Buyer X doesn’t get the gold medal after all. As Smith rightly points out, record mania is something of an irksome diversion in itself. In any event, the search for the mystery collector continues. Anyone have a clue?

Those living in Europe are sometimes surprised by the shockwaves that private sector economic turmoil creates for Arts Institutions in the US.   If you come from a region where large portions of a Museum’s budget comes from the public purse (in some countries it is all government funded) it can be eye-opening to learn that those well-funded US institutions that out-bid the Europeans at Auction are often largely privately supported.   So an article in this week’s Art Newspaper by our own András Szántó is well-timed.

Private donors remain skittish. Corporate support is hard to find and ever more tightly tethered to marketing priorities. Public funding is jeopardised by imploding budgets and competing needs. Foundations, too, are smarting from losses. Some are rethinking their support for culture altogether. Venerable charities like the Ford and Rockefeller foundations no longer have divisions with “art” in their names. Museum income from tourists, members, publications, shops, rentals and restaurants is stagnant. It has been a perfect storm.

Whilst András is right to highlight the woes of incumbent institutions trying to fit existing plans into shrinking budgets, I wonder if some of this wasn’t inevitable?   The hubris of recent years and the multitude of new small private museums seeded by privately amassed collections has spread curatorial resources rather thin and scattered good works into more buildings.   Maybe we have too many institutions?   András again.

Museums are joining forces more readily on publications and web projects, such as Artbabble, a kind of YouTube for art videos. But while content partnerships are proliferating, museums have stopped well short of the kind of consolidation that reshapes other distressed industries. “There is a pride factor that makes it very difficult to merge,” notes Maxwell Anderson, director of the Indianapolis Museum of Art.

One hears a gentle sigh of relief around the globe, as the financial markets rebound, so this may all soon become academic.   But I wonder…   So what do you think?  A disaster for Art Lovers everywhere?  Or a much needed shake-up amongst our venerable institutions?

In the wake of the October auctions in London, Kamrooz Aram wrote a piece about the appendage of “Arab and Iranian” artists to Sotheby’s sale of Contemporary Art (full disclosure: I assisted Aram in the editing of his piece and ushered it up online).  Aram rightly points out that this was of course not the first time an auction house or other outlets have used ethnicity as a means to promote a broad spectrum of art works which might otherwise bear no connection to one another; nevertheless, it was the first time that one of Aram’s works had been put up in such an auction and, as Aram notes, solely as a speculative move, given that the work had been purchased from his gallery only months earlier.  What is more, the notes that accompanied the piece in the auction catalogue demonstrated the persistence of some orientalist perspectives at work in what we might as well call the ‘positioning’ of Aram’s work for sale.

One of the many implications of Aram’s piece is its challenge to the not altogether unfamiliar use of ‘identity’, both questioned and not, as a tool of the market.  ‘Identity’ has been a major theme not only for contemporary art, but for contemporary literature and, indeed, politics itself; and it seems part and parcel of this thematic’s rise that it is, exactly, marketable.  One of the questions then is this: are we witnessing a neo-orientalism in the marketplace?  One that is interested to–as the Sotheby’s auction notes do–keep in play the divide between a modern west and primitive east?  Or is what Aram identifies as neo-orientalism more like a single facet of what someone like Walter Benn Michaels would call neoliberalism in art in general–an art that is itself more interested in identity (i.e who belongs to this or that group) than in class (i.e. who has the money and who doesn’t)?

This just in from Art Newspaper Editor, Georgina Adam.

The saga of the Chinese bronzes hammered down at auction during the Yves St Laurent sale and then not paid for, as a political gesture, raises many thorny questions.

Briefly, (and for those of you who were on Mars this week), the two Qianlong bronze heads, of a rat and a rabbit, were looted from the Yuanming Yuan Summer Palace in Beijing by Franco-British forces in 1860 during the Opium Wars. They were two of 12 heads which adorned a Zodiac fountain, five of which have never resurfaced.

The heads were offered for sale by Pierre Bergé, the late Yves St Laurent’s former lover and business partner, in Christie’s block-busting sale of their collection last week in Paris. The Chinese have been calling for the return of the heads, and a French association (AFACT) with links to China attempted to block the sale by bringing an emergency injunction in a French court shortly before the sale started. The demand was thrown out in no uncertain terms by the French “procureur” (prosecutor) for a number of reasons, some technical and others more fundamental. I was in court and subsequently at the sale when the bronzes were sold.

China was not able, legally, to claim the bronzes under international law, and does not want simply to buy them back – its position being that they were looted and should be returned. At no point did AFACT claim that Bergé was not the legal owner of the heads, and prior to the sale Bergé stated that he would be prepared to return the heads “when China respects human rights and frees Tibet”. This did nothing to improve Sino-French relations, which hit a new low after French President Nicolas Sarkozy met with the Dalai Lama last December in Poland.

At the sale, the two heads were “sold” to a bidder on the telephone, underbid by two other telephones for the first, and one for the second. The price was  £20.4m each, including premium, and contrary to usual practice no paddle number was announced – “the buyer wanted absolute discretion,” auctioneer François de Ricqlès said afterwards.

On Monday this week a Chinese collector and auction house general manager, Cai Mingchao, announced that he was the buyer and that he was refusing to pay, as a patriotic gesture.

So here are some of the questions this saga raises. Read More »

Amongst all the excitement about new movements (see Ossian’s piece below) I find it hard to get my head out of the markets.  To wit, there is a nice Konigsberg feature in the NYT Online this weekend about the Mugrabis and their buying styles.  The title is slightly misleading (Is Anybody Buying Art These Days?) as it is entirely about the Mugrabis and mostly about their buying history, but it is an interesting read about one of the more focused market-makers of the last 20 years.  Features of their approach include the somewhat indiscriminate purchasing of their favorite artists (supporting the notion that name matters more than quality, at least in a rising market), and their “addiction” to collecting. “We are addicts. That is what addicts do,” Alberto Mugrabi is quoted as saying. Many collectors would recognise that sentiment.

The addiction of art collectors got me thinking about the broader context of contemporary art-market values.  At various points in the article, there are references to buying when cash was in short supply and to extending a collection even when the collectors were nervous about the market.  Even quite recently, works were sold to free up cash for a possible market-downturn buying.  That could be sensible triage, or an indication of how stretched the Mugrabis might be. Which raises a question about how stretched or indebted collectors are overall.

The current global economic woes are debt based. They have to do with the difficulty of companies or individuals who rely upon borrowing to conduct their business or run their lives.  Operating on debt is not necessarily a bad thing. It can simply reflect the cyclicality of cash flows (people or companies needing to spend before they can sell or earn, and therefore needing to borrow to fund that spend).  However, when lending dries up because of losses in another part of the debt market (high-risk mortgages in the current case), then companies or individuals who rely upon debt to conduct their operations run out of fuel.  The only way to then raise cash is to sell existing stock, if they have any to sell.  But when there is less cash to go around, sellers start to outnumber buyers, and prices plunge.

So here is the question: How stretched are the top collectors of the last five years?  In any part of their lives? Read More »

Sarah Thornton’s book Seven Days in the Art World, which documents the frenzied peak of the recent art boom, arrives next week in American bookstores, just as that boom appears to be sputtering out. Some would call this bad timing. In fact, it’s a stroke of good luck. It puts Ms. Thornton, a Canadian-born, London-based sociologist-turned-journalist, in the enviable position of having captured an epic chapter in art-world history in its entirety. It’s all here, a message in a bottle to be consumed now, to reflect on what just happened, or later, when the action heats up all over again, as something of a cautionary tale. Each chapter examines a facet of the art world – auctions, dealers, art fairs, and so on – in a fluid, breezy style that masks some serious heavy lifting. The intrepid author has spoken to “everybody” in the art world. No detail escapes her attention, from the desk arrangements of her interviewees to their designer footwear. Underneath the glossy surface, however, lurks a sociologist’s concern for institutional narratives as well as the ethnographer’s conviction that entire social structures can be apprehended in seemingly frivolous patterns of speech or dress. And clearly, Sarah (a friend of artworldsalon) was having fun. We caught up with her on the eve of her US book tour to ask her some questions about the book:

ARTWORLDSALON: You are a sociologist turned writer. What was your biggest discovery about the art world?

SARAH THORNTON: I never had a Eureka moment. Instead, I experienced unfolding revelations. I think that’s how the book reads, too. One reason the art world fascinates me is because it is so full of conflict. It’s at once idealistic and materialistic, exclusive and open, petty and lofty. Moreover, the art world is so full of warring factions that writing this book has been like walking through a minefield.

Your book appears in the US just as global markets, and it seems the art market along with them, are entering a period of turmoil. How does it change the book’s message?

I see the book as having a handful of themes. It is a social history of the recent past - a remarkable period in which an unprecedented economic boom infiltrated every corner of the art world, even the consciousness of art students sitting in a left-wing conceptual art think-tank in the middle of the desert. It helps to have documented the structures and dynamics of a bull art market, because we forget them so quickly. Read More »

Bloomberg today reported the dramatic drop in prices achieved at all the major auction houses this weekend.

Sales by Sotheby’s, Christie’s International and Phillips de Pury & Co made a combined 59 million pounds ($102 million), against minimum estimates of 106.2 million pounds, according to Bloomberg calculations. They follow a five-day auction by Sotheby’s in Hong Kong this month that raised HK$1.1 billion ($141.7 million), also about half the presale estimate, as buyers shunned some top lots for being too expensive.

This is of course to be expected as much of the collector market focuses on wealth preservation rather than spending. And galleries in New York have noticed a softening for some time.  Interestingly, though, one normally expects an art market correction 6 to 9 months after stock market crashes.  The question now is whether this is the start of a rout in the contemporary art market or merely a short term, financial market correlated, “correction.”

It also, by the way, raises a question about the other major art story of last week about recent moves by two former senior US museum directors to the private sector. Robert Fitzpatrick moved from the Museum of Contemporary Art Chicago to Christie’s Haunch of Venison, and David Ross moved on from his days at the Whitney and the Museum of Modern Art in San Francisco to be a partner at Albion.  Whilst I fully understand the attractions of better salaries and less stifling boards, I wonder if their timing was all it could be?

Not everyone is worried though.  I have spoken to two collectors this weekend who said, in effect, “finally a correction: maybe prices will come down to a more reasonable level and we can start buying again.”

So what do you think: Short term correction or start of a rout? A good thing or a bad thing?

The art world’s love affair with Russian money continues. After Roman Abramovich snapped up works by Lucian Freud and Francis Bacon, he then shipped half of London’s arterati to the opening of his girlfriend Dasha Zhukova’s CCC Garage in Moscow. Now auction house Phillips de Pury & Co have been bought by Russian retail giant, the Mercury Group, who also hosted Gagosian’s first foray into the lucrative emerging market with a 2007 showcase at their Luxury Village mall. Although Simon de Pury will remain chairman and no doubt auctioneer, the obvious next step will be to try and set up shop in Russia and shore up some of the lucrative business opportunities there.

This seems to be part of a concerted masterplan to muscle in on traditional Sothebys and Christie’s territories, not least back in London where Phillips de Pury have done a sponsorship deal with the new Saatchi Gallery to allow free entrance for the public when it opens this week. Not only does the auction house get a dedicated gallery in the Saatchi Gallery, but there’s also a tacit agreement that the collector will sell through Phillips in the future (although how the relationship will weather this news remains to be seen). What next for the great Russian takeover? White Cubeski, Tate Petersburg or MoscoMA?

The topography of Wall Street and the financial system was redrawn over the past weekend. So what’s next? And specifically, what’s next for the art market? In recent months, heightened anxiety about the credit crisis and the meltdown in global finance did not translate into a flight from art purchases. Quite the opposite. Will the current jitters cause collectors and investors to look to art as a safe haven, or will they put the breaks on a long boom that has persisted, with a brief interruption in the early 1990s, for almost a quarter century? What does it mean for nonprofit institutions which rely on donations, and for art sales that depend on loans, guarantees, and credit? Who stands to lose or gain from the next round of transformations? And on the eve of a historic single-artist sale, are we going to witness a turning point in the psychology of the art world and the art business? I invite our panel to submit educated guesses.

Damien Hirst’s decision to sell 223 new pieces direct to auction at Sotheby’s on 15 and 16 September represents the breaking of an unwritten rule: thou shalt not defile your dealer. While threatening the very gallery system that helped to make him a household name by selling his work in the first place (and supposedly nurturing and protecting his interests too), Hirst’s solo venture simultaneously slopes the playing field firmly in favour of the artist. He’s not only temporarily freed himself from his artist-dealer honour code, but now attempting to exercise some influence, if not exactly control, over his own market.

It’s recently become clear that Hirst’s 100-strong production line of artisans are producing more than his London gallery can handle, which in turn suggests that he needs this new outlet (if not going so far as to prove that supply has outstripped demand just yet). But could this firesale of familiar-looking works not perhaps herald a brave new world for artists and turn out to be a good thing for the market, allowing some transparency and public visibility into how artist’s reputations are made, for example? Or will such sales be more like grisly art market entertainment, providing on-the-spot popularity contests and some gallows-style bating if the sales should flop disastrously?

There are even suggestions that Murakami will be the next to follow suit, signaling an even deeper shift of power from galleries to auction houses, which may then open the floodgates to similarly commercial-minded artists the world over (Chinese artists are already used to this practice I believe). Hirst has never played by the rules, famously flouting the usual 50/50 split with his galleries, but does this spell the end of the art market as we know it? He divides opinion like no one else, so let’s have a vote. He’s either Damien 666 – the devil in disguise – or Damien 999 (dial 911 in the US) – the art world’s very own emergency services, coming to save the day. Which way do you see it?

Last week came news that a reputable economist at the University of Chicago, David Galenson, has devised a quantitative method to measure the importance of 20th century artists. His rankings, which received major section-front coverage in The New York Times, are based on how often paintings or sculptures by a given artist are reproduced in each of 33 art history textbooks published between 1990 and 2005. Science accords merit on the basis of citations in the expert literature. Why not art?

And the winner is… “Les Demoiselles d’Avignon” … followed by … Vladimir Tatlin’s “Monument to the Third International” … followed by … “Spiral Jetty” … followed by … Richard Hamilton’s “Just What is That Makes Today’s Homes So Different, So Appealing?” Huh? The last picture—you know, the collage with the bodybuilder in the living room—came in just a nose ahead of “Guernica.”

Economists are irrepressible when it comes to drilling down to the essence of things. They peel away layer upon layer of history, nuance, and context—so much “noise”—to get to the hidden underlying algorithms of societal and human behavior. But methodology can devolve into mind mush—as in the case of asserting that looking at pictures in art history books can reveal much more than, well, the likelihood of finding certain pictures in certain books.

This exercise in solipsistic reductionism is a bit like mistaking the warped reflection in a fun-house mirror with reality itself. Even that may be giving too much credit to the theory. A fun-house mirror does reflect all that is placed in front of it, whereas the mirror of institutional art history has some conspicuous blind spots.

I am reminded of another quantitative economic study, of the auction market, which started off with eliminating the top 10 and bottom 10 percent of all auction results: A perfectly legitimate and common statistical maneuver to cleanse the data of trend-obfuscating outliers—only one that removed from the study all the data points that most people concerned with art values actually care about. Nonetheless, one has to admire the chutzpah, the sheer rationalist braggadocio of it all. Read More »

A side benefit of the boom has been a stream of new books on the business of art. Given the lack of independently verifiable data, especially about the gallery trade, these books usually promise more than they can deliver. Don Thompson’s The $12 Million Stuffed Shark: The Curious Economics of Art and Auction Houses (until recently available only in the U.K.) is no exception. But it qualifies as recommended reading for anyone looking for a quick overview of how the art world works.

Thompson, an economist and branding expert, undertook a yearlong “journey of discovery” for this entertaining study of the “economics and psychology of art, dealers, and auctions.” By his description, the book “explores money, lust and self aggrandizement of possession, all important elements on the world of contemporary art.” He admits “much of the anecdotal material and some of the numbers in the book are single-source stories and facts,” which are often “embellished in the retelling” and “accepted as fact because they are repeated as fact.” The candor is refreshing. And to be sure, Thompson has a keen eye for the telling statistic.

With these provisos out of the way, and no endorsement of the accuracy of what follows, here is a glossary of facts and figures from the book (all offered by the author without the benefit of direct references or footnotes):
• “Eight of ten works purchased directly from an artist and half the works purchased at auction will never again resell at their purchase price.” Read More »

Now that we know who has been paying top dollar at the auctions (Russian oligarch Roman Abramovich, the owner of Chelsea Football Club as well as a whole lotta gas and oil) this more or less proves that we are relying on the super-rich to hold the buoyant market aloft. There has been a lot of talk about how the art world is staving off signs of a recession thanks to these new ‘emerging market’ buyers, but might this trend have further ramifications for the business?

For example, will the dealers cease to hold back their best work for the supposed ‘best’ collectors and museums, preferring instead to keep cashflow high by offloading to those simply holding the biggest, loosest purses? Maybe galleries have been disingenuous all along, merely paying lip service to the sacred idea of artist representation and not really carefully vetting what sells to whom at all. While you can’t stop anyone from buying at auction (indeed, Abramovich might start to be taken seriously as a collector after his recent purchases), will money run roughshod over the hearts and minds of those in the primary market in the same way? Or should I just take my rose-tinted blinkers off?

Sothebys latest Market Review, issued last night, strikes a slightly defensive but none-the-less optimistic tone, using two key arguments to support their optimism.

The first is their contention that the market of today is unlikely to suffer a crash and sustained down period similar to that of the 1990s. They base this view on the not unreasonable statement that there are more sources of buyers than was the case when Japan was the source of new money bidding up markets in the 1980s. At that time, the argument goes, there was no-one to take their place when the Japanese retreated from the market in the 90s; things are different now. Well, certainly this time we have seen new buyers from Eastern Europe, Russia, China and India entering the fray, in addition to all the new money in the US and the UK. But, as we have seen with the recent US sub-prime driven hiccup, all markets can catch a cold at the same time in today’s globally interlinked financial markets. In addition, that greater diversity of buyers is buying a greater diversity of Art, including contemporary and traditional works from their own regions (China and India being prime examples). They are not just focussed on traditional Western Art markets. So I am not sure there is the greater depth of buyer support for the traditional European and US modern and contemporary markets that Sothebys believes is there.

Their second argument for optimism is that there is a rise in the average price of lots sold over recent months.

From those price increases, however, we can infer a larger market of potential buyers.

Well, from their own figures we can see that over the same period: total sale value has actually fallen steadily since May 2007, and number of lots per sale have also fallen steadily from November 2006. With number of lots sold falling, average price per lot rising, but overall sales value falling, that actualy tells us that a few buyers are paying more money for (presumably) top works, but that fewer people overall are buying, less money overall is being spent and fewer works are being sold. Perhaps there is a larger market of potential buyers. But at the moment it looks like, aside from those at the top end of the market who are generally immune to financial market troubles, there are fewer buyers actually buying, not more.

Still, if it means a return to auctions being about quality of works, rather than quantity, it might make them interesting to attend again…