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Fragment from the Dutch hyperrealist painter's Gerard Boersma painting, 2010

Art Market: Price of the Question 0

Anna Arutyunova

Piroschka Dossi, “Hype! Kunst und Geld”
Judith Benhamou-Huet, “The Worth of Art” 
Louisa Buck and Judith Greer, “Owning Art”
Don Thompson, “The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art”

In last 10 years the art market has lived through probably the most radical transformations, serious shocks and has suffered formal changes. Interest of the society towards art sales has never been so high. Riding with rapid economic growth art market has landed new customers willing to invest great amounts of money in paintings, sculptures and art objects for various reasons. This kind of consumption was marked in late 19th century by Thorstein Veblen as demonstrative (as in demonstrating one’s social power by wealth); mass media also sparked social interest towards this phenomenon. Numerous stories from the biggest exhibition halls and auction houses have turned art market into an integral part of modern informational field. Gradually prices for Picasso, Warhol and Van Gogh works stopped shocking people and made them wonder and trying to understand how this price system works. Instant price records hide a branched hierarchy of price forming that consists of many interdependent elements. So, there is one basic question: how does price of one or another masterpiece form? What are the main factors defining it?


Piroschka Dossi (“Hype! Kunst und Geld”), Judith Benhamou-Huet, (“The Worth of Art”), Louisa Buck and Judith Greer (“Owning Art”), Don Thompson (“The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art”) are trying to answer these questions in their books. Authors operate same facts, mention same renowned collectors, private deals values and recent auction records. They all describe same events; however, each of them emphasizes different aspect of it, depending on author’s personal position in the world of art. Thus, Judith Benhamou-Huet, political analyst, international lawyer and art publicist, creates quite light-minded image of this world. Piroschka Dossi, lawyer, art historian and art consultant, demonstrates more sensible picture of the art market. She tells how to get understanding of money and its functions, about such phenomenon as denial of the monetary essence, and about historical context of art market development. Book of Don Thompson, on the other hand, doesn’t generalize and tells about business mechanisms in details (like, technical details of auction bidding and step-by-step mechanism of price forming at the art galleries). Thomson, economist and collector, completely withdraws himself from trying to analyze validity of market driven approach to art. He sees an art object as an item of goods to sell and tries to evaluate it applying the same criteria as for any other goods. Journalist Louisa Buck and collector Judith Greer also focus on the material aspect of purchasing art, but avoid making significant conclusions. Their book gives guidance on insurance, transportation of artwork, museum patronage, rules of purchasing artwork at the galleries and auctions.   

Apart from loads of information, endless naming of exhibitions and bold auction sells, one can understand that what’s going on at the 21st century market is not new. Both Benhamou-Huet and Dossi find contemporary artwork promotion similar at all times. For example, in Middle Ages mentioning the connection of the piece of art to a saint, especially Jesus, would make it a bestseller. As an ancestor of modern auction catalogues both name art albums (like ones that were brought to Cardinal Richelieu) with pictures of paintings and sculptures for sale. Benhamou-Huet points out to historically formed triarchy of artist, reviewer and customer, who can probably make significant change in the price of the piece. She also cites an example of Michelangelo’s collaboration with biographer Giorgio Vasari and powerful patrons of the artist. Dossi recalls originating of the first international art market in Great Britain in 18th century and points out that Louvre was opened much later (1793) than many other European auction houses (the oldest one was opened in Stockholm in 1674, Christy’s of London in 1766). 

Andy Warhol - the most "selling" the artist of 2012

However, centuries-long history of art market hasn’t turned it into full object of theoretical research. Obviously, two worlds: world of art and world of commerce have to find compromise. Probably, theory of art market shapes so slow exactly because the way to balance two its basic parts (historic and commercial) is not found yet. Authors of these books rarely are able to keep their balance, but they point out the main problems for deeper research in the future.   

Approaches to the art market. Definition.

A specific of all the books under discussion is that they all are focused on the contemporary art only. It’s no wonder, because exactly this segment held the highest prices, the cheekiest speculations and the biggest sales before the crisis. All the authors give short historic insights, telling how art market has always been a playground to show off one’s wealth and status, and also a place to make money. But it seems that events of the last 10-12 years seem something out of ordinary even for them. Probably, it is because of the narrow problem statement and limited approach to the definition of art market per se. Benhamou-Huet regards new lifestyle of wealthy people which involves art as paramount importance. “Today consuming art has become a social phenomenon, a lot of people throughout the world are involved, but not all of them are learned connoisseurs,” she writes. Author draws a bold parallel between art market and terrorism and points out today’s publicity of art and focusing on external effect. She fairly marks that globally interest towards paintings depends on their price. However, Benhamou-Huet also focuses only on the same external side of the art market that attracts everyone’s attention.

Gerhard Richter, one of the commercially most successful contemporary artists

Thompson imagines the art market as a total scheme of branding: artists, gallery owners, art-dealers, museums, auction houses, everything turns into brands, and interaction between them becomes the essence of the art market at the end of the day. It is also not the last factor in shaping prices. Efforts of all the participants of the market are targeted to create a brand promotion technology. Dossi is the only to associate modern art market to history and she sees it as a continuation of fight for independence. She doesn’t give a clear answer whether market has become liberation from patronage of church and monarchy or is it a new stage of abidance. But she points out the most important paradox of art as an object of commercial relations: the fact that artist should disengage himself from the opinion of people, holding his commercial success in their hands, and at the same time he has to pick their interest.

Evaluating the piece of art

In theory, the main problem of the art market is validity of art evaluation. The problem can be viewed in strictly material aspect, like Thomson sees it, or can be analyzed as an event beyond commerce, where there are no laws of supply and demand, like Dossi does. Benhamou-Huet, on her side, merely compares union of art and money with marriage of convenience, which is only possible if art is lowered to the level of merchandise, which is infamy as author boldly names it. However, artist’s work should be paid.

Authors of these books mark that contemporary art market’s attitude towards money is pretty ambiguous with all the excess commercialization of it. Dossi associates it with classical religious education where greed and stinginess are considered sinful. It’s a well-known fact that gallery owners and art dealers are not willing to disclose sums of their deals. Someone says they do that simply to create a mystique around the artwork, someone says that it is simply not profitable to disclose the price. If the market is not see-through and prices are not available to larger public, disclosing can kill the income.

It is interesting that many artists are willing to accept change in the society and turn commercialization of art into object of their creative research. Principles of economical evaluation of art were investigated by Yves Klein in the late 1950s. His goal was to define fair value: the value that reflects artistic significance of work and introduces it to the art market without turning it into merchandise. In 1957-1959 he exhibited three works at his exhibitions. All three paintings were monochrome and of the same size; however they had different price, but it didn’t embarrass visitors at the slightest. In following up he wrote a small utopian essay about new economic system, where any swap operation is based on objects of art and artwork should replace gold reserve of the Central Bank. In a system like that art would have no value because it would be measure of value itself. Klein’s series of monochrome gold works named Value has become the reflection of this perspective.

 Connoisseurship or investment

 Question of quality of contemporary art is still opened, and potential collectors are not always willing to explore creative achievement of a certain artist. The price is unpredictable and independent of the demand. Authors use this reason to explain unprecedented expansion and amplification of contemporary art market structure and its independence from such concepts as brand (Thompson), label (Benhamou-Huet) and myth (Dossi).

In Christie's auction house

Brand or myth turns into a marker that helps customers orient themselves in the huge amount of artwork. These markers might help decrease their incertitude about quality and make conclusions about the price. Auction houses and galleries are trying to gain profit, it is conditioned by commercial nature of these institutions and shouldn’t be surprising or criticized; however, customer being too trusting to price leads us to the other specific problem of a modern collector, which is not regarded broadly in the books under discussion. Dossi has pointed out the irrational and even escapist side of collecting, and fairly divides collections in two types: those managed by personal preferences of a collector and trophy collections. Without such fundamental division of two approaches towards collecting arts it is impossible to understand duality of contemporary art market, which is based on coexisting of two tendencies in the world of art: world of commerce and world of connoisseurs.

Representatives of the first category are described by Thomson, who considers sensible investment to be the main reason of the collector. In the system of total branding this customer just has to learn marketing codes and to monitor if the piece of art corresponds to external qualities that make it an attractive for investments. Among these qualities are provenance, reputation and professional level of the gallery owner, who represents the artist; also amount of museum exhibitions where his works take parts and such a conditional factor as artist’s position in art-rating. But author seems to cut out of his system such a thing as artistic quality, thinking of it as of something understandable only to an expert. Benhamou-Huet also ambiguously speculates about that figurative art now makes comeback because it is more comprehensible to the amateur and about that understanding of Rothko’s abstract works needs less knowledge than understanding of the Old masters’ canvas.

Gerard Boersma. Art Business - Telephone Bids Auction Painting Rothko Christie's. 2010

The main quality of the connoisseur is the ability to evaluate quality of piece of art from the professional point of view. This is what Greer and Back write about, giving examples of greatest collectors of 20th century whose collections turned into art funds and museums, like Peggy Guggenheim’s collection in Venice, Dominique and Jean de Menil in Houston, Ingvild Goetz in Munich. Authors mark that serious collectors often pay less attention to the opportunity to gain profit and capitalize their collections, and more to the concept and growth of thematic evolution of their collection. Ability to see the work in concept (when it comes to contemporary art), evaluate its condition (when it comes to works of earlier periods), define its significance in the creative career of an artist – that certainly helps to avoid wasting money.