Sunday, November 19, 2017

Why do people applaud at high-end art auctions?

Attributed to Leonardo da Vinci
Salavator Mundi
$450.3 million, Christie's New York
Last week the art market witnessed another epochal moment. A painting known as Salvator Mundi, purporting to be by Leonardo da Vinci, leapt clear of all rational expectations and sold at Christie’s in New York for almost half a billion dollars. It is not as if there had been a consensus in the art world as to the picture’s authenticity. While a certain amount of scholarly disagreement is a healthy thing in connoisseurship, majority approval was often required of successful transactions at the apex of the Old Masters market. Not any more. 

Even had Leonardo contributed significantly to the creation of the Salvator Mundi — which many doubt — the picture was in such poor condition, its materiality so compromised by manifold interventions over time, its subject matter so lugubrious, its composition so bluntly ill-conceived, that many were left stupefied by the hammer price of $450 million (including fees). 

Instead of encountering the numinous majesty of a benevolent Christ, the Saviour of the World, we’re fixed by the narcotised gaze of a spaced-out rock guitarist from the 1970s whose spliff has been summarily snatched from the fingers of his right hand. 

Leaving the price aside for a moment, what happened in New York last week conformed to a now familiar pattern at high-end auctions, with those present bursting into rapturous applause as the hammer fell.

Blue-chip art auctions are, of course, a kind of baroque theatre, albeit to which only a chosen few are invited. Present at all such events is a carefully parsed cross-section of art world rainmakers, global hedge-fund managers, selected members of international royalty, music celebrities and a sprinkling of Hollywood glitterati. The fact that so few, if any, of those present will actually participate in the bidding does not negate their importance to the unfolding drama. They are crucial to the optics of the market. They give it meaning. 

Evening auctions are thus not just efficient ways of selling unique works of art of high value, they also convey a powerful symbolism extending beyond the realm of art. Under these conditions, the object's historical significance becomes an irrelevance compared with its wider ramifications for the business community. The reification of the art work from its relatively humble historical role within the regime of aesthetics into its exalted status as an instrument of high finance is one of the most notable trends in the art market in recent decades. 

A mere nanosecond after the hammer fell at Christie’s, the room erupted into cheering and clapping. As the camera phones twinkled, a chorus of whispered elation rippled around the room. Is this juissance, art market style? Or is it the sound of the herd after the kill.  

But why all the cheering? Exactly what or whom were they applauding? The buyer? The seller? Perhaps it was just a discharge of gratitude for having witnessed a defining event in modern art market history. The auction houses may sense in the applause an acknowledgment of their commercial acumen. Privately, they may read it as a vindication of their carefully cultivated wooing of, inter alia, Wall Street investment managers, sovereign wealth funds and a couple of dozen billionaires from developing economies. Abracadabra! At the wave of a gavel, even an object as visually repellant and cack-handedly modified as the Salvator Mundi can be transformed into half a billion dollars. This is surely one occasion when the museum community will not be resenting their limited acquisition budgets. I mean, who'd want such a thing hanging on the wall?

Paul Gauguin
Still Life with Apples
Is auction applause ever comprehensible? One of the first occasions in the modern art market when an audience broke into spontaneous clapping was in Paris in 1957 at the sale of the Biddle collection at Galerie Charpentier. One of the highlights of that auction was Gauguin’s Still Life with Apples (right) It was bought by Basil Goulandris of the Greek shipping family for $297,142. The New York Times reported at the time that when the hammer fell,“…the entire audience rose and burst into applause.” 

The Biddle sale was one of a number of game-changing moments in the post-war market for Impressionist and post-Impressionist painting. Unprecedentedly high prices at a string of black-tie auctions in London, New York and Paris seemed to confirm the promise of a post-war affluence in which everyone would share. Nascent art investment schemes also began to appear at that time. Art follows the money and money follows the art. x

The applause in 1957 was a genuine response to the new theatre of conspicuous consumption which is now in overdrive. Where else can you watch the world’s wealthiest people gambling vast sums of money, in public, in a glacially slow and pin-dropping transaction lasting anything from two to twenty-five minutes in duration and where each single bidding increment is a million or multiples thereof? 

Just about everyone knew beforehand that the Salvator Mundi would sell on the night. Christie’s had already broadcast that the picture had been “guaranteed” for $100 million prior to the sale. In other words, whatever happened in the room, the picture could not fail to sell because someone had privately already offered that price. 

The possibility of a very high-profile work of art remaining unsold on the night has been almost entirely massaged out of the economics of blue-chip art auctions. This is the single most significant contribution to the art market by the world of finance. Downside risk has been shifted from the auction side and a confidential financial structure erected that will disproportionately benefit those party to the transaction while seeming to preserve an element of the theatrical unpredictability of the auction process itself. 

Imagine if the Salvator Mundi had been offered within an auction system that had not hitched itself so irrevocably to the wagon of Wall Street, where no secret arrangements had been made between auction house employees and prospective buyers prior to the sale. The outcome would thus be left to the vagaries of the market productively allied to the raking light of scholarly opinion. Those circumstances — which prevailed until not so very long ago — tended to result in a twitchy equilibrium between connoisseurial judgement and business instinct. Today, the former has all but disappeared. If the Salvator Mundi confirms anything, it is the marginalisation and downgrading of connoisseurship and critical discernment within the big auction houses. The sale is all that matters.

Someone, somewhere was persuaded by Christie’s that the Salvator Mundi was worth half a billion dollars. That’s not a triumph of art, but of the art of persuasion. That’s who they were cheering in New York last week. Folks, lets hear it for… The Persuaders.