The Costs of Crazy High Contemporary Art Prices

Let's get a few things out of the way to avoid the rush toward strawmen and red herring rebuttals.

I truly do understand the law of supply and demand. I'm in no way arguing for regulating art prices or the further regulating of any of the channels through which people buy art. I'm simply interested in starting a conversation about why crazy high contemporary art prices are inconsistent with what much of the contemporary art world claims to be about. 

Let's start with "the dialog" and the paradox it's increasingly facing in how it operates within the market.

Art is taught in public schools. Galleries are free. Museums have days or times when discounted or free admission permits those with less means to visit. Many artists bemoan the perceived lack of interest the general public have for contemporary art. Combined, these factors project the idea that the art world believes contemporary art is for everyone. Regardless of your wealth or station in life, so long as you're truly curious and open minded, the art world welcomes you to come see what's being created and join in the discussion of it. 

Yet more and more that supposed embrace of a wider audience is bumping up against demands for exclusivity, unhindered access, and an assertion that art isn't really for everyone within the more competitive segments of the market and within certain quarters of the supposedly welcoming dialog. Increasingly the message is evolving into "art is actually only for those with means." 

Consider the trend among certain contemporary art fairs to not only raise their individual ticket prices to more than most working class families of four spend on dinner, but to increasingly limit the total number of people who can even get those tickets (in the service of an air of exclusivity). This is beginning to go even beyond VIP hours considerations, which as an art seller, I completely understand. And there's a central logic here, of course, that's hard to dispute. If you can't afford to buy the art on display, why would you care about getting in earlier rather than later? But the fact is that some galleries rehang after sales at fairs, so those not let in until later can indeed miss out seeing some of the art they've paid dearly to see. Those early-sale works that disapper are simply not for poorer people's eyes. Again, I'm not saying I don't understand the logic at play here, but that doesn't mean I have to ignore its consequence either.

The supposed desire to include everyone in the dialog about contemporary art is changing outside the (declared channels of the) market as well. Consider the change announced yesterday by Bloomberg news, who are downsizing their arts coverage in general:

Bloomberg plans to continue to cover the arts, but with an emphasis on luxury. In an email sent to employees on Monday, Bloomberg editor-in-chief Matt Winkler said that the company has decided "to scale back arts coverage and no longer use the Muse brand." 

He said Bloomberg will align its leisure reporting with its luxury channel on its website, and with Pursuits, its magazine for wealthy readers.

Bloomberg is essentially admitting they believe only their rich readers will care about art. A self-fulfilling prophecy if you reserve your coverage of it for those readers, no?

Beyond the dialog, though, let's also consider how most people in the art world believe their industry plays a role in contributing to the betterment of humankind. Two stories recently, however, suggest astronomical prices in the arts attract more criminals and gangs into that realm, and violent ones in many cases. You can't lay blame for what criminals do on the people willing to legally pay lots of money for art, of course, but there's no question that the headlines of record prices at auctions lead to more criminal activity and that it's still a societal cost that the portion of the art world dedicated to getting art prices ever higher can't pretend has nothing to do with them.

As the BBC reports:

Det Supt Adrian Green investigates serious heritage crime across the country and told BBC Radio 5 live Investigates that objects are being stolen here and then shipped abroad to be sold to dealers and collectors.

"This is top-level international organised crime and it runs into tens of millions of pounds. 

"What we're seeing is that the value of items is increasing but also the level of violence that they are prepared to use is increasing, which is obviously a major concern to law enforcement. 

"It's robbing our communities of their heritage but it's also putting millions of pounds into the pockets of criminals." 

On Monday, an ACPO-led taskforce, made up of representatives including English Heritage, the National Crime Agency and law enforcement professionals, will unveil their latest strategy to tackle this crime.

"They may major in art and antiquities but very often there will be links to money laundering, there'll be links to violence and firearms, and often of course to drugs. 

"Where there's money to be made, organised criminals will move in if we don't stop them." said Mr Bliss.

And, again, of course that's a law enforcement issue. I'm not suggesting the art world need to "stop them" or that they need to do so by artificially limiting the prices or the reporting. Simply that we don't operate in a vacuum and ignoring how things are related is naive. Crime is clearly one of the societal costs of crazy high auction prices.

The other recent story on how art is attracting criminals (in USA Today) needs a bit more investigation (and editorial prudence, in my opinion), as it's currently mostly conjecture and whispers (indeed the subtitle on the article is not at all supported by the actual reporting), and yet the arguments this journalist makes do indeed echo what some folks are asking behind closed doors: 

Art has become an efficient instrument for hiding cash. Swiss banks are no longer a very private place. But a warehouse in Switzerland — or, for that matter, New Jersey — is nicely confidential. 

And art is a way to clean up your dirty wealth. Say you sell, well, drugs. You might buy a painting for $7 million, paying $2 million in cash (helping the seller to avoid taxes), so the transaction is listed as $5 million. You put it in a warehouse for two years, let it predictably appreciate, and then sell it for $9 million. You've not only made $2 million, but you've cleaned another $2 million. Nobody the wiser. 

Art, too, is a market that can be handily manipulated in a way that is likely more beautiful than art itself to financial fixers. If you own, for instance, five Warhols, you might put one up for auction, participate yourself in bidding up the price — you might even buy it yourself at a high price — thereby increasing the value of your other four paintings (which, now you can borrow against at their higher valuation).

I'm not pointing to this article to validate it. Again, it's mostly conjecture and sloppy journalism in my book, but USA Today is widely read across the country and its editors clearly felt the story had legs enough to publish it. The growing perception that the art world is rife with criminals is simply another of the costs of crazy high auction prices.

All of which makes it more difficult to turn the dialog back to issues of the human experience and contemporary art's importance to us here and now.

"But what are you suggesting we do about it?" a steady stream of people have asked, apparently unwilling to accept any criticism unless it's bundled with some solution that frees them personally from any complicity or obligation to think for themselves.

What I suggest we do about it is exactly this. Rather than myopically celebrating the crazy high auction prices as if they were all good and had no undesired side effects, let's have an open conversation about how the practices of institutions whose sole purpose is to drive higher and higher the prices of what art they sell (which is often whatever they can wrestle away from its current owners merely to get it back on the market) are in many ways inconsistent with other goals of the art world at large, including a more inclusive conversation and a role in helping improve the world.