Tuesday, May 19, 2009

Read 'em and weep: welcome to The New Art Market

The colonization of the art market by speculators of one sort or another has been one of the most talked-about themes in the specialist art press in recent years.

Nowhere was it more evident than at the epochal Damien Hirst auction last September which brought new millionaire collectors scampering like lemmings to the cliff edge. Sure enough, later that very same day, Lehman Brothers collapsed, the global financial markets tumbled and the storm clouds of recession closed in like one of those apocalyptic John Martin paintings.

The Hirst sale catalogue — a four-piece boxed set encased in glossy gold and diamond-spattered gun-metal grey reinforced cardboard, weighing all of 2.9 kilograms — sits on the shelf above my desk, an obdurate emblem of an out-of-control art market on steroids. If it falls off, it will surely kill me stone dead.

Now, with the market in a state of enforced cold turkey, the deep baritone of moral outrage continues to echo around the blogosphere and on the television channels. The market currently looks like a Warhol car crash as prices plummet to new lows, consignments wither, catalogues shrink, galleries close. Commentators and journalists seem intent on apportioning blame.

Some point the finger at millionaire hedge fund managers for driving up prices. Or if it wasn't the hedgies it was the auction houses for acting as principals, clipping the ticket on both the buy and sell sides while blithely waving away accusations of a conflict of interest. And if it wasn't the auction houses it was the dealers for supporting their artists by artificially inflating the bidding when their works came up for sale. Occasionally even the artists are blamed for having throttled up their studios to industrial-scale production levels to meet the new global demand. Hell, when you can't find a scapegoat, blame anyone! Blame everyone!

The most overt instance of this headhunting to date (there will be more) was last night's BBC Four documentary The Great Contemporary Art Bubble, in which Ben Lewis, an Evening Standard journalist in a trilby and spectacles the size of the Brooklyn Bridge, trolled around the world in an electric car like a scruffy public health inspector visiting roach motels. One minute it was the dealers who were to blame by protecting their artists at auction, then it was the auction houses for offering guarantees. What did he expect them to do? Er, they're businessmen, Ben.

Sotheby's CEO Bill Ruprecht told me in an interview in 2003, "You take a different kind of risk when you take a principal position and I expect to be rewarded for that. I have never lost money on a principal position." I bet he wouldn't say that today.

Lewis seemed genuinely shocked that some dealers were in the practice of bidding up their artists at auction, seeing this as yet another manifestation of a venal market. But this too is nothing new. The painter J.M.W.Turner used to send a butcher's boy to London auctions to bid up his pictures incognito to ensure they wouldn't be sold too cheaply.

The genetic code of today's market was written between 1680 and 1750. If Lewis had bothered to cast his eyes back that far he'd have found that a good deal of what irks him about the market today has always been there. That doesn't make it right. But it does help us to understand how we might set about correcting it.

This was the basic problem with Lewis's knee-jerk documentary. It was poorly researched and bereft of historical perspective save for the obligatory excavation of the last boom in 1989-90. That always gets dragged up because you can point the finger at Sotheby's $53 million loan to Alan Bond to buy Van Gogh's Irises (Bond defaulted), among any number of other market-pumping practices rife at the time and since. Corruption is everywhere if that's all you want to see.

It seems clear on the basis of recent developments that a new art market might now emerge out of the present carnage. It will be born out of a shift in axis from the primacy of the seller to the buyer. There will be more, not less, speculation. The availability of information will improve but that won't necessarily mean greater transparency, or not yet. Transaction prices will have to fall; they've already reached unsustainable levels. There could be new alliances between the traditional auction houses and the online data providers — which have already started to appear. The trade will find their roles challenged by a new breed of artists' agents who will work at lower costs (and thus for a smaller cut). Old fashioned connoisseurs — already as endangered a species as art critics — will increasingly give way to the bean counters, number crunchers and other bottom-feeders.

One organism that may survive will be the grizzled hack in a pork-pie hat driving around in a limited edition artist-modified electric car. We'll always need entertainment.