By Rodi Bineth | 01/05/2011
Transactions in the art world are conducted like many other commercial transactions in which objects change hands. Nonetheless, an artistic creation is not simply a product. Unlike other products targeted for investment, such as real estate or stock market shares, artistic creations possess a component that is not just financial; they have an aesthetic component. Even the very nature of commerce in the art world is unique: Economists have already defined it as commerce based on relationships that have a familial quality.
These relationships transpire between five chief agents or agencies: the artist, the art gallery (that is, the art dealer), the collector, the museum and the expert (that is, the art historian or art critic). American Pop artist Andy Warhol, one of the first artists to achieve stardom in the last quarter of the 20th century, is quoted as saying, "Making money is art, and working is art and good business is the best art.”
The value of an artistic creation can drastically change through the influence of any of the above agents/agencies, but primarily through two of them: the commercial bodies dealing with objects of art and the major collectors.
Artists
The romance that accompanies the act of artistic creation is compelled to find itself in conflict with the need of artists to sell their works in order to make a livelihood. Even in antiquity, artists were commissioned to paint or sculpt by patrons and this kind of connection still exists today. Large economic institutions, such as banks, for example, turn to artists and commission them to produce works suited to a specific space in a given building. For instance, a work by sculptor Nahum Tevet, "She-Bear” ("Hadouba”), appears in the
Since large-scale commissions do not come along so often, some artists choose to function as their own art dealers. Painter Reuven Rubin sold his works from his studio, which was located in his home, and marketed his paintings with very considerable success without the mediation of any art gallery. Another modus operandi is to create an artists’ cooperative. The Agripas 12 Gallery in
Most artists prefer to use art galleries in order to sell their works. There are various ways in which artists can connect themselves with a gallery; all of these options represent an attempt to deal with the basic conflict involved in pricing a work of art and in striking a balance between the artist’s investment and the art dealer’s. In order to achieve peaceful coexistence with this conflict, transactions in the art world are based on personal relationships and generally eschew formal contractual arrangements.
Galleries
Prior to the 18th century, artistic creations were marketed in
One of the 20th century’s most colorful art dealers was Joseph Duvin, who was born into an Anglo-Jewish family of art dealers and who died in 1939. Understanding that art was to be found in Europe while the money was in
Another gallery owner who strongly influenced the art world was Ambroise Vollard, who was active in
Indeed, the picture today is more complex, primarily because three additional and dominant players have entered the world of commerce in artistic creations: art auction houses, art fairs and commercial transactions conducted on the Internet. Sotheby’s conducted its first public sale as early as 1744; however, auctions moved into high gear and accumulated influence only in the middle of the 20th century. In
There are several important differences between the activities of art auction houses and galleries. Auction houses sell artistic creations that do not belong to them; most of the works sold are by past artists, with only a minority by contemporary ones; auction houses do not maintain any connection with the artists; and, since the nature of the commerce in this channel is public, the social and competitive components are a drawing card – one that the galleries cannot offer. In contrast, galleries sell works that they have either purchased or have received on a loan basis from the artists they represent; the collector interested in making a purchase can survey a range of works by a given artist; and the connections between seller and buyer are frequently of a social nature.
The sale of artistic creations in recent years is taking place in the context of international art fairs. The major ones are the fairs held in
In addition to the galleries, auction houses and art fairs, there are also websites on the Internet that sell objects of art. For instance, the online marketplace eBay offers for sale thousands of artistic creations and serves as an online window for auctions held in various places around the world. The large auction houses upload their catalogue onto the Internet before the auction takes place and thus can increase their target population to an almost infinite degree. The world of online commerce in art objects not only bypasses the human connection between the artist and the gallery; it also reduces to a bare minimum the connection between the collector and the person selling the particular work of art.
Collectors and mega-collectors
The phenomenon of private individuals collecting works of art was first recorded in the 16th century and is a unique development of the tradition of collecting objects such as fossils and butterflies. The typical collector is motivated by various considerations and impulses, including social, psychological and financial considerations. It could be said that, to a certain extent, the collection of objects of art defines the collector’s identity and is thus so challenging. The act of collecting can indicate not just financial capacity but also social standing and, of course, personal taste and artistic acumen.
Are financial considerations of secondary importance in the collection of art objects or have they become, over the years, a major consideration?
As early as
Major collectors – or mega-collectors, as they are now called – exert considerable influence on the art market. For instance, in the 1980s, Charles Saatchi established a gallery in
On the other hand, when Saatchi decided to part with dozens of paintings by Italian artist Sandro Chia that were in his collection and to sell them, the artist reported that the telephone stopped ringing in his studio. Saatchi has recently announced that he will donate his entire gallery to the British government as well as 200 works of art – all of which with a total value of more than 25 million pounds. All the objects of art will then be displayed in a museum that will have a total area of
Saatchi serves on various committees of
The number of major art collectors in
According to figures issued by the Ministry of Culture and Sports’ Culture Department, in 2007, the source of 36 percent (NIS129.36 million) of the total revenue of
Museums
In business terms, museums serve as "banks” for art treasures. The artistic creations are like gold ingots in bank vaults and are meant to protect the value of the national currency. Despite the often-heard argument that museums are dodos in this day and age, it is important to remember that, in an era of art objects whose exhibition is complex and costly, museums alone have the operational and professional capacity for ensuring their exhibition.
Most of the world’s museums constantly grapple with budget problems. As a result, we are today witnessing the phenomenon of museums organizing non-traditional activities and events in order to raise funds. The current situation raises an entire series of questions: To what extent do the personal taste and the interests of very wealthy collectors have an impact on the selection of exhibitions and on the acquisitions made by a public institution? Should a museum organize an exhibition that might attract large crowds but which might not have much artistic worth? Should social events be held at museums? Should questions such as whether certain artistic creations are worthy investments impact a museum’s acquisition policy? Should museums be allowed to be involved in commercial activities in order to raise funds? The reality in
Since the mid-20th century, the number of art historians and art critics who also serve as curators has grown, although their influence on the prices of art objects is less than that of the other agents and agencies enumerated above. Granted, when the subject is a work of art from an earlier period, the experts’ appraisal of the work’s authenticity will have a tremendous impact on its value; however, today the impact of advertising and public relations on the art market is greater than that of the experts.
In fact, in recent years, we have been witnessing a dramatic amplification of various phenomena in this market. The prices of works of contemporary art are increasing at an unprecedented rate. This is a phenomenon that chiefly characterized the boom years of 2003-2006; the 2008 financial crisis also impacted the art market, although today the market is in a process of recovering. For instance, a statue by Giacometti was recently sold for more than $100 million, and a painting by Chinese artist Zhang Xiaogang was bought for $6 million – a 600-percent increase over a period of only two years.
A record price for a work of art by an Israeli artist was achieved by a painting by Ardon, which was auctioned in 2006 at Sotheby’s for $643,200. The Israeli art market has reacted to the global financial crisis like other art markets around the world. In recent years, the major auction houses, Sotheby’s and Christie’s, have stopped holding auctions in
Postmodernist theories have also had an effect on commerce in art objects. As in other fields, there has been a proliferation of new perspectives in art criticism. For instance, art critic Douglas Davis argues that the 21st century presents artists with technological challenges that are now taking precedence over form and aesthetics. Other critics, such as Arthur C. Danto, claim that art per se has ceased to exist because it has become totally immersed in philosophy, while there are those combine their artistic criticism with psychoanalytical perceptions.
This pluralism reflects the rich variegation in artistic creation but it also undermines the authoritative status of the theorist as the one who determines the criteria for evaluating quality. The authoritative vacuum has been filled by authorities from other fields, primarily, the owners of major galleries and the directors of art fairs. Thus, we are now seeing a new phenomenon: The value of an artistic creation is measured today primarily by the price that can be obtained for it in the marketplace. Art historian Meyer Schapiro noted the radical difference between the spiritual value of an artistic creation and its commercial value. That distinction is also relevant today; however, the gap is increasing rapidly – to such an extent that, when one talks about the upper limit of prices, the commercial value totally swallows up the aesthetic aspect.
In addition, there is now an intermingling of fields in commerce in art objects. The fact that British installation artist Damien Hirst, without his gallery’s mediation, conducted an auction of his own works has had a substantial and practical inpact on the art market.
Another kind of intermingling of fields – the decision of art auction houses in the
The record prices of modern art objects reflects only a partial picture of the world of commerce in art. Only a limited number of super-artists – not more than 200 – whose works are players in this hot market benefit from these unprecedentedly high prices. The impact of the upper-end market is apparent: Many artists from all over the world try to become part of a certain stylistic trend and to participate in major exhibitions. However, artistic creation in the romantic sense of the term continues on the margins and we are today witnessing the blossoming of art that ignores, and even refuses to participate in, the play of forces that are dominant in the art market today. The commercial value of this marginal art will only be determined many years from now.
Rodi Bineth owns the Bineth Gallery in Tel Aviv and is a lecturer in the
