Posts Tagged ‘art market’
“In the absence of value judgements, value goes up in flames. And it goes up in a sort of ecstasy.”*…
When Pablo Picasso’s “Les Femmes d’Alger (Version O)” sold at Christie’s in New York for $179 million dollars in May 2015, it was only the 36th time in the past 315 years that a world auction record had been set, and the sale raised questions well beyond the art world. How could a single painting be worth so much? Why is art so important to wealthy households? What economic and social factors could lead to enshrining Picasso’s colourful near-abstract portrait as the most valuable picture in the history of the modern world?…
Three economists offer an an explanation based on an analysis of art auctions dating back to 1701: “A History of the Art Market in 35 Record-Breaking Sales.”
* Jean Baudrillard
In this sense, therefore, inasmuch as we have access to neither the beautiful nor the ugly, and are incapable of judging, we are condemned to indifference. Beyond this indifference, however, another kind of fascination emerges, a fascination which replaces aesthetic pleasure. For, once liberated from their respective constraints, the beautiful and the ugly, in a sense, multiply: they become more beautiful than beautiful, more ugly than ugly.
Thus painting currently cultivates, if not ugliness exactly – which remains an aesthetic value – then the uglier-than-ugly (the ‘bad’, the ‘worse’, kitsch), an ugliness raised to the second power because it is liberated from any relationship with its opposite. Once freed from the ‘true’ Mondrian, we are at liberty to ‘out-Mondrian Mondrian’; freed from the true naifs, we can paint in a way that is ‘more naif than naif’, and so on. And once freed from reality, we can produce the ‘realer than real’ – hyperrealism. It was in fact with hyperrealism and pop art that everything began, that everyday life was raised to the ironic power of photographic realism. Today this escalation has caught up every form of art, every style; and all, without discrimination, have entered the transaesthetic world of simulation.
There is a parallel to this escalation in the art market itself. Here too, because an end has been put to any deference to the law of value, to the logic of commodities, everything has become ‘more expensive than expensive’ – expensive, as it were, squared. Prices are exorbitant – the bidding has gone through the roof. Just as the abandonment of all aesthetic ground rules provokes a kind of brush fire of aesthetic values, so the loss of all reference to the laws of exchange means that the market hurtles into unrestrained speculation.
The frenzy, the folly, the sheer excess are the same. The promotional ignition of art is directly linked to the impossibility of all aesthetic evaluation.
In the absence of value judgements, value goes up in flames. And it goes up in a sort of ecstasy.
There are two art markets today. One is still regulated by a hierarchy of values, even if these are already of a speculative kind. The other resembles nothing so much as floating and uncontrollable capital in the financial market: it is pure speculation, movement for movement’s sake, with no apparent purpose other than to defy the law of value. This second art market has much in common with poker or potlatch – it is a kind of space opera in the hyperspace of value. Should we be scandalized? No. There is nothing immoral here. Just as present-day art is beyond beautiful and ugly, the market, for its part, is beyond good and evil.
The Transparency of Evil: Essays in Extreme Phenomena
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As we appreciate appreciating art, we might recall that it was on this date in 1862 that (in order to create liquidity to finance the Civil War) the U.S. government issued its first official paper money. “Demand Notes,” the first federal issues of the Civil War, were immediately exchangeable in gold or silver “on demand” at seven banks spread across the country. They were quickly replaced by very similar-looking “legal tender” notes that could not be readily converted to specie. These issues were notable for the bright, dark green imprints on their backs, and ever since then American paper currency has been familiarly nicknamed “greenbacks.”
“Money laundering is giving oxygen to organized crime”*…
The United States Treasury Department is putting art galleries and museums on notice over the high risks of financial crime in their trade, warning that various aspects of the art industry makes “it attractive to those engaged in illicit financial activity, including sanctions evasion.”
The advisory, published on Oct. 30, calls out the art industry’s heavy use of shell companies. Citing the “high degree of confidentiality and anonymity” in the art trade, the advisory cautions that art dealers may find themselves unwittingly working with criminals seeking to move illicit funds. It also notes that artwork’s often “subjective value” creates an additional attractive value to financial criminals — who are known to manipulate invoice prices to covertly shift money around the globe.
“The advisory serves as another reminder that the $28.3 billion American art market is the largest unregulated industry in the United States,” [said] Tess Davis, executive director of the Antiquities Coalition, which advocates the return of stolen relics to their home countries…
The U.S. Treasury urges new safeguards against financial crime, money laundering, and sanctions evasion: “Secretive high-end art world can be vehicle for dirty money.” From the International Consortium of Investigative Journalists, part of their on-going investigation of international money laundering, FinCEN Files.
Turns out that a U.S. Senate investigation led to the same conclusions: “The art world has a money laundering problem.” So did a House investigation: “Art and Money Laundering.”
And for the curious, here is a look at how it’s done: “Laundering money through art, if you’re into that sort of thing.”
All-too-appropriately, Hasbro has released, in collaboration with the Metropolitan Museum of Art, a fine-arts edition of its flagship game: “Monopoly: The Met Edition.”
* then-President of Mexico, Enrique Peña Nieto, June 2012. It’s alleged that he spoke with authority based on personal experience: in 2020, his successor as President, Andrés Manuel López Obrador, asked Mexicans if they would like to see former Mexican presidents face trial against allegations of corruption (a move deemed constitutional by the Mexican court and laws); the people will vote to decide in a referendum in 2021. According by a survey by newspaper El Universal, 78% of Mexicans polled do indeed want the former presidents of Mexico to face trial– and Enrique Peña Nieto is the one they most want to be incarcerated.
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As we note that cleanliness isn’t always next to godliness, we might spare a thought for Jean-Baptiste Say; he died on this date in 1832. An economist and businessman, Say argued in favor of competition, free trade, and the lifting of restraints on business, and was among the was among the first economists to study entrepreneurship– and to valorize entrepreneurs as organizers and leaders of the economy.
He is probably best remembered for the assertion that supply creates its own demand– “Say’s Law“– a label first used by John Maynard Keynes, who went on to argue that it is wrong… the debate (e.g., as between Steven Kates and Paul Krugman) continues to this day.
“Making money is art”*…
In 2005, an unusual painting appeared on the website of the New Orleans Auction Gallery, a small operation headquartered on the banks of the Mississippi River. Twenty-six inches tall and 18 and a half inches wide, the painting depicted Christ in Renaissance-era robes, one hand raised in benediction, the other cupping a diaphanous sphere. “After Leonardo da Vinci (Italian 1452–1519),” read the description. “Christ Salvator Mundi. Oil on cradled panel.”
Among the people to click on the listing for Lot 664 was a Rockland County art speculator named Alexander Parish. Parish has spent his entire career in the art world, first as an assistant, later as an adviser to a major European gallery, and now as what’s known as a picker — a dealer who purchases art from minor auction houses and antiques sales and resells it to wealthy clients at a profit. “A major part of what I do,” Parish told me, “is educated gambling. You get a good feeling about a piece of art, and you place a bet that you know more about it than the auctioneer does.”
Parish felt very good about Lot 664. In fact, although he had only a few postage-stamp-size JPEGS to work with, he thought he might be looking at a piece by a student of Leonardo’s — perhaps the Milanese painter Bernardino Luini. That same afternoon, he sent a link to his friend Robert Simon, the owner of an old-master gallery on the Upper East Side, who has a doctorate in art history from Columbia University with a specialty in the art of the Renaissance.
“My first reaction was that it was a very intriguing painting,” Simon recalled. As he knew, the original Salvator Mundi, painted by Leonardo around 1500, possibly for the French king Louis XII, had been one of da Vinci’s most copied works — dozens of replicas hang in museums around the world, but the original had been lost to history. It seemed possible that another period copy dating to the Renaissance would exist. Simon and Parish agreed to invest in the painting together, with a bid ceiling of $10,000; Parish would handle the bidding via phone. “My memory of the auction is that I just sat there waiting for the price to go up,” Parish said. “But it became apparent that no one else was interested.” His winning bid came in at $1,000.
Today, of course, the contents of Lot 664 are worth far more than that: The picture has since sold once for $127.5 million and again, in a record-setting auction at Christie’s, for close to half a billion dollars…
Find out how to turn a $1,000 art-auction pickup into a $450 million masterpiece: “The Invention of the ‘Salvator Mundi’.”
* Andy Warhol
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As we appreciate appreciation, we might recall that it was on this date in 1934 that a team of FBI agents went toe to toe with John Dillinger, Baby Face Nelson, and their gang. The lawmen tried to capture the outlaws at their temporary hide-out, the Little Bohemia Lodge (in northern Wisconsin)
As the agents approached the lodge, the owner’s dogs began to bark. Since the dogs barked incessantly, their warning was ignored by the gang. A few minutes later, a car approached the agents. Thinking that the gangsters were inside, they opened fire in an attempt to shoot out the tires. Shooting high, which often happens when firing on full auto, they hit all of the occupants of the car, and killed one of them. To make matters worse, they had the wrong guys. Dillinger and his crew were still inside the lodge.
Barking dogs you can ignore, but submachine-gun fire will get your attention every time. Dillinger and the boys heard the shots and knew that the heat was on. They opened fire on the agents from the lodge. After throwing some hot lead at the G-men, the gang bolted for the door. Dillinger and two of his guys turned one way and made a clean getaway. Nelson turned the other way, and wound up at a nearby house in a car with the owner of the lodge and a neighbor.
A car containing two of the FBI agents and a local constable approached Nelson. Nelson pointed his gun at them, and ordered them out of the car. When they complied, Nelson shot all three of them. Agent W. Carter Baum was killed; Agent J. C. Newman and local constable Carl Christensen were injured.
The final tally: two dead (one lawman and one innocent bystander), four injured (two lawmen and two bystanders), no gangsters in custody. [source]
Little Bohemia Lodge
“Damien Hirst should run Lehmann Brothers”*…
Peter Wilson presiding over the Goldschmidt sale at Sotheby’s, October 15, 1958. For maximum drama, Wilson limited the sale to seven star lots. Guests included Kirk Douglas, Somerset Maugham, and Lady Churchill. The rising prices paid for Impressionist paintings during the 1950s caught the attention of the press and attracted a surge of new buyers
“Works of art have proved to be the best investment, better than the majority of stocks and shares in the last thirty years.”
This was the confident declaration of Peter Wilson, the then chairman of Sotheby’s, during his 1966 appearance on the BBC’s Money Programme. Though he was only eight years into his chairmanship, Wilson had already overhauled the fusty image of the art trade. His ingenious pre-sale marketing efforts, celebrity invitations, and black-tie sales had transformed Sotheby’s auctions into major news affairs, and deepened the perception of Christie’s as an antiquated rival.
Reacting shrewdly to the post-war wave of prosperity, Wilson was determined to bring newly moneyed buyers into the fold. He sought to convince businessmen and bankers that collecting was no longer the exclusive preserve of cultured, old-money dynasties such as the Rothschilds, Rockefellers, or Mellons. Crucially, Wilson wanted to instill the notion that art can be an investment. The sudden and precipitous rise of the Impressionist art market during the 1950s may be cited as proof of this. If you inherited an Impressionist painting, you could now sell it for vastly more than your family paid to acquire it. Wilson’s idea just needed to be packaged in an immediate and compelling fashion.
A year after Wilson’s television appearance, twenty-seven-year-old Geraldine Keen — now Geraldine Norman — received a letter in Rome. A graduate of Oxford University and UCLA, Norman had left her job as an editorial statistician for the Times newspaper in London to work for the Food and Agriculture Organization of the UN. The letter was a job offer from the paper’s City editor, George Pulay, asking Norman whether she would consider returning to London. He wanted her to spearhead a new editorial collaboration between the Times and Sotheby’s.
Few people active in the art world today have heard of the Times-Sotheby Index. Those who have are most likely veteran art dealers or retired auction staff…
But it had a lasting effect: the project galvanized the concept of art as an investment asset. Find out how at “‘Your Money Is Safe in Art’: How the Times-Sotheby Index Transformed the Art Market.”
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As we diversify our holdings, we might spare a thought for Berthe Marie Pauline Morisot; she died on this date in 1895. A pioneering painter, she was one of “les trois grandes dames” of Impressionism (with Marie Bracquemond and Mary Cassatt).
In February 2013, Morisot became the highest priced female artist, when After Lunch (1881), a portrait of a young redhead in a straw hat and purple dress, sold for $10.9 million at a Christie’s auction (exceeding the $10.7 million paid for a sculpture by Louise Bourgeois in 2012).
Berthe Morisot
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