Nobody Expects the Spanish Inquisition...

A young artist I adore recently told me that a gallery in another city she had scheduled a solo show with told her they were closing instead. I felt awful, because I know she had been looking forward to that show, but I was a bit surprised when she voiced the opinion that the other gallerist should have been able to prepare for the economic crisis hitting us all and made contingency plans. "He should have expected and planned for this," she told me. Again, I was quite surprised.

Most of my surprise came from knowing that in normal markets it takes 3-5 years for a young gallery showing emerging artists to turn profitable (the reason for that becomes clearer when you realize many seasoned collectors wait for a new artist's second or third solo show to start buying their work, even when they're intrigued upon introduction). So this gallerist in the other city never really stood a chance to get prepared for the downturn...he was in the every-dime-goes-back-into-the-business phase of building his business.

Another reason the statement surprised me is that I know how long in advance most dealers put things in motion. You have to pay for many of your key promotional efforts way in advance (like advertising, or art fair fees) and having that much money wrapped up in something that may not pan out can seriously impact your cash flow and ability to respond to rapidly changing economic realities.

But the final reason the artist's response to the news surprised me was that in an era when companies like Lehman Brothers, Circuit City and possibly even General Motors are failing, it seems a bit much to expect a small business owner with less than 2 years' time to plan to be able to predict and prevent what teams of high-powered captains of industry were not able to predict and prevent.

Indeed, the key sensibility that keeps jumping out at me as I read the art market press and hear the speculation from the rumor mills (they are cranking at full speed these days, don't ya know) is how focused everyone seems to be on expectations of effective prognostication. Consider these quotes from the New York Times report by Carol Vogel on recent auction sales, titled "In Faltering Economy, Auction Houses Crash Back to Earth":

Still, given the depth of the global economic crisis, auction house experts were expecting worse. [...]

But timing was not kind to the auction houses. The sales were put together in summer, well before the financial picture darkened, and were overloaded with works from sellers trying to cash in on the last several seasons’ wave of inflation. [...]

Mr. Ruprecht of Sotheby’s expressed similar sentiments: “We’re preparing for a different market. We are out of the guarantee business at least for a while. It’s too hard to predict what tomorrow looks like.” [...]

Indeed, the situation everyone finds themselves in at the moment is unprecedented in our lifetimes. Predictions are somewhat of a fool's game at this point. This leads me to believe that normal expectations aren't so applicable any more. That leads me to feel that everyone involved should give everyone else involved a bit more benefit of their doubt. Don't assume the worst motivations (or competency) of people simply trying to stay ahead of a situation unlike any they've ever seen before. That cuts both ways, for sure. Collectors, artists, auction houses, and dealers...everyone is in unchartered territory right now.