Guess what: the contemporary art market is...a market!

I didn't say it, Don Thompson said it... (I mentioned him in an earlier post. Just to remind you: the title of his book is THE $12 MILLION STUFFED SHARK, published by Aurum Press, 2008). Of course, he's an economist and not an art critic: he's bound to see the art market in purely economic terms. But he took a couple of years to research it, he spoke to everybody that counts and he makes a pretty convincing case.

If you're interested in contemporary art, this is a read you shouldn't miss!

What I found most surprising is how exiguous this market really is: in the sense that, according to Don Thompson, major players are really FEW. There are, he says, about two dozen superstar "branded dealers", about as many "branded collectors", including Charles Saatchi who's a little bit of both. Then there are two major auction houses (Christie's and Sotheby's) plus a couple of minor ones (Philips de Pury and Bonhams international). What else? There are three or four major art fairs that are mostly a recent phenomenon like Art Basel, Miami Basel, London's Frieze and now Maastricht. Art fairs are largely the preserve of dealers. And, of course, there's a handful of major Museums like the Modern Tate in London, the Guggenhein and MOMA in New York, and I would add Beaubourg in Paris. These are the preserve of art curators. Big cultural events like the Venice Biennale that have been around for a long time are probably better classified as belonging to the world of art curators than that of art fairs.

So you really have just three categories of "branded players" whose decisions are watched by the world press and would-be collectors/new art buyers: (i) superstar dealers,(ii) major auction houses and (iii) "branded" collectors - those in the public eye. These are the people who make and break artists.

What about art critics?

It seems that art critics loudly complain that they're not heard, and as Thompson put it: "dealers, auction house specialists and collectors insist that critics have little influence on the contemporary art world - not on artists'success and certainly not on prices" (p.227).And apparently this is so in every art capital around the world with one exception: in New York, "it is gospel in the art community that a highly favourable review in the New York Times will sell out a show" (p.229).

Some of Thomson's comments are really damning: on p.229, he tells us that critics "compete to be hired full time by editors, to have their free-lance writing published, or to win approval from university tenure committees"; on p.230, he tells us that critics are paid in whole or in part by the artist's dealers and that "the dealer in effect commissions the review, and chooses a critic who is likely to offer favourable comments".

What, are we to believe that contemporary art critics are not independant?? Afraid so. Yeah, welcome to the real world, baby!

Auction houses of course do the same in their glossy sales catalogues. Indeed, in Thompson's opinion, auction houses (the two big ones especially) are the REAL players in the contemporary art game. He doesn't exactly say that but he sure implies it when he writes: "the market is a much better predictor than the critic" (p.231), In short, prices are a much better guide to an artist's value than art critics. And prices are largely set by how auctions go. That's only logical: their sales are public while dealers's sales tend to be naturally opaque. By definition. True, a lot of collectors prefer it that way. And the auction houses know this too: when they engage in "private sales", which they do increasingly often, they compete directly with dealers. But all this doesn't change the name of the game: all prices that become reference prices in private deals have been set at public auctions.

Where does that leave Art with a capital A?
How can an "emerging artist" emerge?

This is where Thompson's book is not very useful.

He argues that to count as a major contemporary artist you have to be a "branded artist". Fair enough. So how do you become "branded"? He comes up with a short list of 25 branded artists that he has culled from different sources (of course not everyone he met could agree on the list). These are mainly the Young British Artists promoted by Saatchi in sensational shows (aptly called "Sensation"), the likes of Damien Hirst and Emin Tracey. Plus blue chip names like Jeff Koons, Francis Bacon, Cy Twombly, Takashi Murakami, Willem de Kooning, Lucien Freud etc

So what did they do to emerge and become "branded"? Hey, they must have done something real special that others haven't been able to come up with! It's always a challenge to stand out in any crowd, and particularly in a huge crowd like this one. Thompson estimates that in London alone there are some 80,000 artists walking around with only 75 that are "superstar artists with a seven-figure income" (p.64)

75 out of 80,000? Less than one tenth of one percent: that's pretty depressing...

So how can you make it to the top of the pyramid? Hard, hard. You need to KICK people in the eyes - or ears (yes, I literally mean "ears": there are collectors who buy works from their trusted dealers sight unseen). And those who know how best to "kick" come from the advertising world: Mr. Saatchi is an emblematic example of what I am talking about. He has brilliantly applied to the art market the talents he had previously displayed in creating the biggest, most successful advertising agency in the world. It is no coincidence that the most famous contemporary art collector is also an advertising tycoon.

In fact, reading Thompson's book, you get the distinct impression that SHOCK VALUE is what "brands" an artist. Damien Hirst, the creator of the shark in formaldehyde whose decaying, stuffed carcass sold for $12 million, is an obvious case in point. And Thompson goes through many more examples that all come down to one concept: shock value. When it's high, you've made it. And shock value has strictly nothing to do with either Beauty or Pleasure, the traditional features of Art. Shock value is all about publicity...

Now is an art market based on "shock value" a market destined to fail over the long run? If you think so because it has nothing to do with Art, well, you're wrong! There is no reason at all why such a market should fail. It is held up by other things, mainly a commercial mentality - it's a market, remember! - and new collectors keep coming to it, for the usual reasons: investment AND status. There are new billionaires every year, and the current figure is 817 with only 360 Americans: the rest are Chinese, Indian, Middle Eastern...

And of course, right below the one billion cut-off point, there are thousands of new millionaires as well - the co-called "rich". According to Wikipedia, there are currently over 10 million people around the globe classified as U.S. dollar millionaires. Doing a quick back of the envelope calculation, one may assume that about 20 percent of these have enough financial muscle to compete with billionaires at any auction of contemporary art (that's 200,000). Of these, some 20 percent might be actively interested in art. That works out to about 40,000 people around the world that may be into the contemporary art market. That makes it a surprisingly SMALL market... Not so surprising perhaps if you think of it as a market for the "really rich" and the "super rich", in short a market for the new global ELITE.

Art for the elite? Now there's nothing shocking about that: it's just like in the past when Art was for the Prince. And it's not about to collapse or blow away even if some people who are sourly conservative and tradition-minded believe art is not just for investment or shock value...

What really surprises me the most is that there isn't ANOTHER art market around that caters to the tastes of the cultivated middle classes. These are people who share with the afore-mentioned elite a similar level of education, but of course not the same income. Since the 1960s, a huge number of people have gone to college - more than ever before. You could speak of the "cultivated middles classes" as being really a new, gigantic class: the MASS ELITE. The total number of college graduates in the United States rose to over 40 million in 2003, an increase of 40 percent in the decade between 1993 and 2003. Over forty million ! And there are just as many university graduates outside America and their numbers are growing. These are people with at least a smattering of art knowledge; indeed, these are the people you see queuing up in front of the Louvre and all the big museums around the world.

Thanks to them, art - especially museum art, I mean the ancient variety - has never been such Big Business. Never have so many people flocked to museums. And among them, there are a lot of people who do not like the excesses of contemporary art, particularly those of conceptual artists that use animal carcasses, elephant dung and unmade beds to make their artistic points. And they do have money to spend on things they like.

So why isn't there an art market for the cultivated middle classes? I guess photographers have taken up the slack, and there's a lot of beautiful "art photography" around that one would like to have in one's home. But then wanting to have Art for one's home is...SOoo petit-bourgeois, isn't it?

Tell me what you think...Who is going to be the next Saatchi, the one to open up the art market to the mass elite?