Sunday, March 12, 2006

Art, Money and Fashion

How much money is there in the world? I found this answer via Google which is $46.513 trillion, let's call it $50 trillion dollars. Why would I wonder this? Well, the Forbes list of billionaires was just released (3/9/06). The list has a record 793 members with a net worth over 1 billion dollars. According to Forbes, combined the're worth a cool 2.6 trillion dollars. Expressed another way, a tiny fraction (0.0000122%) of the worlds population controls a suprisingly large amount of the wealth. Carl Marx must be rolling over in his grave.

In an earlier post I made some observations on the art market as we start the 21st century. The art market has expanded considerably in the last twenty years. I am suggesting that the expansion is more or less permanent and caused by factors alluded to in the preceding paragraph.

The question I am pondering is how does this influx of capital affect the art?

While I am not sure how this will play out in the future, I have a few speculations.

From a purely financial point of view I would expect the marketplace to become more tiered in terms of pricing. How the pricing is established is more of a mystery but for the moment it doesn't really matter.

One major difference between Fine Art and other art forms, like music, literature and cinema, is that it offers a singular product (exclude multiples for the moment) In comparison, the other art forms market copies of the "original", razor blades instead of the razor. This mode of distribution has both advantages and disadvantages. In the case of the distributed art forms, the buying audience acts by consensus to establish demand. In essence, the buying audience acts as a group in a critical role. The downside of this methodology is that the "producers", armed with the best market research that money can buy, will often tailor their product to the audience. Sometimes this is effective and sometimes it is not. Regardless, the group critical role helps establish a tiered marketplace sorted first by popularity and second by quality.

Market popularity has also been a factor in the visual arts. In the past the market place was implicitly divided, with "fine art" the term used to label what I am generally referring to as "art" today. In other words, I would discount artists like Kincade and Vettriano as playing to the popular audience, "popular" art or as Greenberg might have called it, kitsch. Never the less, I would suggest the influx of capital into the fine art market has had a destabilizing affect on the boundaries between "fine and "popular" art. When capital flows are directed primarily as "investment", purchasing decisions are based first on the idea the artwork will appreciate in value. For a good speculator, the "appreciation potential" decision is disconnected from aesthetic value, it is totally irrelevant as long as the price goes up. While many art lovers will rail at this comment, years of studying how the auction market for stocks behave, convince me that this is true. A sharp speculator will buy a worthless stock, a bankrupt company with a ton of debt and negative net worth, as long as he believes he can sell it at a higher price. In the equities market a manipulation of this sort is aptly called "pump and dump". The art market is no different, to quote PT Barnum "there is a sucker born every minute" (wahtever)

How does the artist fit into this paradigm? Although the artists are the "source" of the "product", the producer of the art, they are more often than not treated as the low person on the totem pole. The speculator isn't sharing his gains with the artist, he tries to buy the work inexpensively from the artist and sell it at an inflated price. The artists sell the work for what they can get because they need to pay the rent.

In todays upswing of the economic cycle it becomes apparent, even to the most financially inept artist, that there might be a marketplace for what they produce. For most artists, I would suggest that just knowing there is a marketplace has an influence on their production. I know that a lot of artists might say they disagree with me but I would suggest that it doesn't necessarily matter one way or the other. Regardless of the motivation, let's assume it is always personally honest, what occurs in the marketplace, what we see in the galleries affects our thinking about our own studio practice. It becomes the creative zeitgeist, a psychic soup we are immersed in. One can go with the flow, fight against it or decide to ignore it altogether.

It's "fashion week" in the artworld
Saturday afternoon I ignored the "fairs" but took the time to wander through the Chelsea galleries. I'm bringing this up because what I see in the galleries, my so called "creative zeitgeist" is less than impressive. I am a gallery outsider, I don't specifically know what motivates their decisions but I have a fairly good eye. I wish I was wrong but I believe what I am seeing in the galleries is skewed by a desire to capitalize on the current craze for art, as investment or just to look cool. In an affluent period the emphasis is always on "product", marketable product. So, what is a "marketable product"? Something you can sell to the less informed because it carries one of the litany of stylistic identifiers of "art". The "identifiers" are always changing and in themselves are not necessarily bad. Rather than name them, I'll leave that up to the reader, what one likes another may hate and that is how it should be. Never the less, there appeared to be a significant amount of work in the galleries which was marginal at best. There also was a fair amount of work which I would call "polished" or "ready for market", professional, good looking but designed and therefore riskless. In a few cases there were handsome exhibitions of work which relied on obviously high production values but when they failed it was garish.

Now I suspect some smart MFA grad will assail me with the idea of "issues", how this work or that work is addressing certain "issues" I won't disagree but I'll suggest that "issues" are nothing more than a nice term for fashion, one of the litany of stylistic identifiers. Even an anti-art response, the collective attack, "unmarketability", the non-gallery etc will inevitably be consumed by the marketplace.

Art has become a fashion business.


fisher6000 said...

Yes, there is a risklessness that pervades the market. A lot of people are getting somewhere by "Doing It Right", whether It is Janky Formalism, Romancing The Teenager, Crapture, Research Based Conceptual Illustration.... Artists are applying formulas, and are enjoying brief periods of modest success for doing so.

But when wasn't this so?

George said...

I don't disagree with you. I am using the word fashion in a way somewhat equivalent to "style". In past historical periods the artworld had one or two dominant styles. To my thinking the advent of "pluralism" marked a demarcation point where the idea of a dominant style became diffused. I am using the term "fashion" as a way of indicating the increasing size of the marketplace now allows for several dominant styles (appearance or mediums) to coexist ,more or less equally, at the same time in a way similar to the fashion industry.

Fashion in the artworld is a two edged sword. On one hand it elevates all work with a similar appearance to some level of prominence. This occurs somewhat indiscriminately but gives the artists visibility. Fashion is prone to changing suddenly. For artists who are able to produce convincing work it creates a visibility for them in the artworld which can continue to exist even as tastes change. I see this as positive.

As I noted, the art market is currently experiencing a larger influx of money than in any other period in recent history. Some of these capital flows have been diverted from other areas of investment, as a form of speculation on the potential price appreciation, with less concern for specific aesthetic issues. While this can help the artist, which is good, it also has the affect of overextending the attention given to lesser artworks within any given mode. I believe there is a danger this speculative money is a distorting influence in the artworld.

As you noted, in recent art history I think you will see the same thing, just on a smaller scale. I don't think there is much which can or should be done about this but I am concerned the coming slowdown in the overheated state of the artmarket may have a chilling affect.

One final note, my observations here are speculations from one point of view but I am open to other thoughts on the topic and appreciate your comment

fisher6000 said...

Sure, I see what you are saying about the huge amount of money. This does increase the risklessness factor and increase the sense that art is fashion.

We are agreeing, actually. All that money makes more space for people who are working behind the curve. What I would add is ridiculously idealistic, but I will throw it out anyway (it's my due... I just got back from de-installing booth at the armory and am simply busted and disgusted)

The value of art to the rest of the culture drops as art becomes more about pandering to a specific group of curators. The dialogues in art are getting increasingly self-referential, artists are looking less outside and more inside the echo chamber of the market.

This makes art much less powerful, less capable of creating or describing change in the entire culture. And right now we are living in a world that actually needs all the cultural help it can get. Bad, scary times... and visual art is a potential existential tool that has been seriously blunted.

George said...

The art world has always used the word "style" to label and differentiate different modes of artwork. Styles are born when they come into fashion, so I'm just calling them (styles) what they are, fashion. It can be pejorative or not which is just right.

You are getting to the crux of the questions which vex me with, "The value of art to the rest of the culture drops as art becomes more about pandering to a specific group of curators." and with "we are living in a world that actually needs all the cultural help it can get. Bad, scary times... and visual art is a potential existential tool that has been seriously blunted."

I sense a growing discontent among some artists with the materialism currently exhibited in the art world, others seem to think the party's great and it will last forever. While a strong art market can help the artist financially, your comments point out a subtle, or perhaps not so subtle, cost of doing business.

Unfortunately, short of an economic collapse, I think the commodification of the artist is now an attribute of the current era. The question is how do we, as artists, interact with the art world and still maintain our artistic integrity? I suspect a number of artists might feel these issues don't affect them, they are continuing to work as always.

However, money is coloring the artistic zeitgeist, changing a certain sensibility of the environment, the view we see when we stroll through the galleries. It has affected the scale of the enterprise. In the past, a trip to the galleries encompassed a certain percentage of art you liked, art you hated and stuff you thought was noise. It was all in manageable quantities. Scaled up, the percentages today are probably about the same but the noise level is a lot higher.

So what is an artist to do? I'm not sure, it is one reason I started blogging, to see if there might be a subterranean vein of the zeitgeist with an interest in exploring thought and art, straight up, neat without ice. I feel that certain areas of the critical discourse have become obscure in their language and that at the moment plain talk is what's needed. Plain talk about life and art.

Hans said...

I am pretty far away from a functioning art market but followed the recent developements just online. I am wondering, if the shift is not that much on the Artists side, but on the buyers ?
Especially very rich people often know very well where to spent a dollar and where better to waste not. So how comes, that now they are spending easily 15.000 USD and more on absolute Newcomers. Is it really the hope on a future revenue, or just the exitement to buy a unikat ? Maybe they realize, that the biggest and most expensive values are ideas, even those ideas wich maybe will fail on a long run ? So maybe we really reached the age on information, where information it is the highest valued upon the others. So one could say, that the most valuable information, is the one frozen in a piece of art, because it is information for arts sake, the purist form of all information ? Somehow I see here some parallels with the run on shares of (more or less virtual) online companies, like Google and others, whose biggest capital are also 'just' ideas.

George said...

Hi Hans, The evidence points to a rather large increase of wealth world wide over the last 10 years. This increase in wealth is unlike any period in the last 100 years, the closest parallel would be the late 19th century as a result of industrialization. The current causes are complex, but among them was the world wide expansion in the technology industries (computers, communications, etc and the internet) along with the economic boom in China, India, Russia. A portion of this money will find its way into the art market and the overall size of the art market increased for all categories including contemporary art. As a result the world wide art market has increased in size significantly.

If the market gets bigger, then I suspect the number of artists and galleries will increase as well although I don't have any statistical numbers to back this up. If the increase in size was the only factor then the situation would be more or less as it was in the past just bigger.

What is different at the current time is that, a much larger amount of money then in past booms, is buying "art" as an "investment asset" and even more troublesome as a "speculative asset" People buy "speculative assets" with the idea of trading them, trying to buy them cheap and sell them for more money. Now, I am sure some of these "collectors" are serious about the art but, as a group, speculators are partly in it for the game, to them it's more about trading and winning than the art.

What I am suggestion is that the sudden increase in demand for art (for whatever reason) is not typical. It is not the same as the booms in the 60's early 80's or 90's. It is a somewhat unique shift, as if all of a sudden there is 10 times as much capital flowing into the art market (in past booms it might have been just 50% or 100% more) I believe this sudden change over the last few years has caused a temporary distortion in pricing.

Increasing prices leads to increasing demand. Part of what you are questioning is a result of speculation. Collectors, investors and speculators are all chasing after the same limited set of goods. This causes the prices to rise and like they say "a rising tide lifts all ships" A speculator might use the shotgun approach and buy works from 10 "emerging" artists, they then have 10 artworks for their collection and if one of the artworks appreciates considerably it makes up for the rest. Although I do not know the exact details, I suspect "investors" are more discerning and conservative in their approach. One would expect these collectors to focus their attention on more expensive artworks, the ones already with an existing historical validation and this would account for the recent record prices paid for "contemporary masters"

You said, Maybe they realize, that the biggest and most expensive values are ideas… While this might be true, collectors have a passion for collection, possessing the object. A speculator or group of speculators may buy an "idea", as a style of work under the umbrella of the "idea", promote the artists and the work, and reap the profits when the works are sold at auction. In other words, the "object" may just be a trading vehicle for the ideas. The idea of actually "trading shares" on an artist has been tried before, unsuccessfully. As an activity it has none of attraction of the art world as a club, none of the social cache.

In the end, I think or at least I hope, the distortions will level out, that the market place will "raise the bar" on quality. Before this occurs we may need to see a downturn or stagnant period in the market place and that is just around the corner.

One slim possibility, maybe it's the start of a new Renaissance.

Hans said...

Hey, George, thank you for the clear set up. Yes, possibly we are already in a new Renaissance ;-)and Edward is the new Vasari.

Dilettante Ventures said...

You mention in your post "the collective attack" of which I may or may not be a part...There are certainly a number of collectives operating squarely within the parameters of the market, but there are many engaged in creating alternatives to that market. This, of course, is easier to do as a collective rather than a lone artist. I see a glimmer of hope in this DIY movement. The art market is ravenous and loves to internalize its critical/oppositional foes, but that needn't leave us paralyzed with a fatalistic surrender. Of course this is admittedly a whistling-past-the-graveyard appeal.

George said...

I was trying to list out some of the alternatives, sounds like that's what you are trying to do, good.