Saturday, 19 January 2008

A dangerous game

"Contemporary art sales could contract as rapidly as they expanded. A ludic element rather than passion drives many new buyers. Should worries about the economy instill fears in them, the newly affluent Chinese or Russian or Arab buyers might not find it difficult to defer the acquisition of status symbols or to renounce the temptation of making patriotic statements by overpaying moderately coveted works."

In the International Herald Tribune, Souren Melikian (again) warns us that dangerous games are being played in the art market.

Auction houses

"An old saying in the art world is that the difference between the two houses is that Christie's (still in European ownership) are gentlemen that try to act like businessmen, whereas Sotheby's (under primarily US ownership) are businessmen who try to act like gentlemen."

(Clare McAndrew, The Art Economy, 2007)

Tuesday, 15 January 2008

The Art Economy

"Driven both by external demand and internal developments, the modern art market has begun a process of evolution, and is emerging as an international financial trading platform, in which art works and information about them are exchanged by a widening group of investors, many interested in the financial nature of the asset class as much as it aesthetics."

That is one of the first sentences of 'The Art Economy - An Investor's Guide to the Art Market', a new book by Clare McAndrew that I have just begun to read. I hope it contains some interesting insights.

To boom or not to boom

"Auction rooms will be less fun in the year to come than in the year gone by. Throughout 2007, stories of astonishing sales records tumbled out of the press offices of Christie’s and Sotheby’s. Christie’s boasted the highest half-yearly sales in art-market history; Sotheby's claimed the highest global turnover in the company's history “by a wide margin”. Some enthusiastic players in the game came to believe the boom would go on and on. But it can’t, and it won’t."

The Economist on the art market in 2008.

A story

"There is an often told story of a boy who
found two ripe apples as he was walking home
from school with a friend. He kept the larger one
for himself, and gave the smaller one to his friend.
"It wasn't fair to keep the larger one for yourself",
the friend replied. "What would you have done?",
the first boy asked. "I'd have given you the larger
one and kept the smaller one for myself", said the friend.
To which the first boy responded, "Well,
we each got what you wanted, so what are you
complaining about?" (Rabin, 1998)

Yes, I'm following a course in behavioral economics.

Artists and the market

"In an era in which there is open discussion of many previously forbidden subjects, including race, sex, religion, and drugs, why is it that the nexus between money and art remains perhaps the last taboo subject for many in the art world?" David Galenson is an economist at the University of Chicago writing on the relationship between artists and the market and many other art-related topics.

An industry or a luxury?

"Is art an industry or a luxury?", asks the Wall Street Journal. "Wrong question", argues Tyler Cowen.