The interesting metric in this relationship is the amount of money that actually goes to the artist.
A recognized artist at a mid-high level gallery is usually promised a show approx. every 18 months. Average earnings for such a show is commonly expected to be around $100.000, (10-15 works each selling for between $5.000 and $10.000).
That would be a decent amount of money for that time but here comes the crux; the gallery takes 50%.
This leaves the artist with an income of $50.000 before taxes. Say you live in Sweden, where you have to tax nearly 50% for sales in a private company that leaves you with $25.000 every 18 months in disposable income, hardly something you can get a flat in Stockholm for.
What's even worse is that if you are tied to a gallery you are most commonly prohibited to sell privately or show with other galleries.
50% actually makes a lot of sense given the nature of the market.
In my opinion, the high art world depends heavily on the manufacturing of taste, brand, and scarcity for survival.
We have a $100,000 valuation for a painting that would never exist if we didn't get a bunch of people together who agreed, perhaps by mutual delusion, that the painting is worth $100,000, despite all the other artworks by other artists that are comparable that sit in other galleries for a meager $1-10K--if they'll ever even sell for that much.
This market only exists because both the artist and the gallery foster the illusions necessary. And the artists brand depends on getting into a high-tiered gallery just as the high-tiered gallery depends on attracting well-branded high-tiered artists.
So the market has decided a 50% split, and remember these splits are actually negotiated by the people involved since these are very high touch markets.
If the artist complains to much, there's always some other artist to groom. If the gallery complains to much, there's always another gallery for a "worthwhile" artist.
Now compare this to how developers pay 30% for a fixed price app in a store.
Given all the voodoo in the valuations, I could easily see why a gallery could negotiate for 50%.
It’s a fair argument, but of the dozens of examples I’m personally aware of, from the tiniest and newest galleries to the very biggest blue chip ones, the 50% split basically never varies. The galleries compete on other things including attending art fairs (where many galleries do most of their sales), controlling access to networks of collectors, good exhibition spaces, money and assistance to send works to museums and other non-commercial shows which raise the artist’s profile, insurance and storage of works, fancy dinners after openings, and advances to cover production costs.
I know less about how the gallerists balance sheets look at the end of their careers, but I’d suspect that more of their net worth has come from having insider knowledge to make strategic acquisitions of rising stars (at 50% off sticker price) and then talking up their book, than simply accumulating what profits are left over from their 50% after paying for all of that.
Well, kind of, except that's not really right. A Gallery usually represents an artist in a specific area. For example, in the US it might be that a gallery represents an artist in San Francisco, while another gallery does so in Los Angeles, another in New York, etc. Generally anywhere with a big enough market is going to have separate representation. That means that a mid career, or later, artist could have many galleries representing them. Generally they will be doing way more than one show per 18 months, generally around 3 to 4 per year in major areas, maybe even more if they have international representation.
Also, $5K to $10K per work is somewhat misleading. I depends a lot on the work, painting tends to be more expensive than photography for example and unique photographic works are generally more expensive than editioned work. A mid career photographic artist doing unique work can expect to start at $10K per work but it certainly goes up from there. A recognized artist with international representation is generally commanding much higher prices.
None of this takes into consideration other work, such as commissions, installations, advertising, books, etc. which can be very lucrative avenues of revenue.
Artists who have good representation in major areas are generally doing much better than $50K per year.
AFAIK the 50% is pretty standard but "mid-high level galleries" both sell a lot of work for more then 5-10K, and sell a lot of work outside the exhibitions.
I know a couple moderately successful painters and they are selling bigger pieces for well north of 10K and have a lot of collector interest, i.e. it's a conversation between the galleries and the artist about what gets reserved for a show and what might go to a collector as soon as it's dry.
That's not to say they're getting rich, but I think they're doing better than your example suggests.
[Edit] Also in case it's not obvious to folks w/o art-world experience, the gallery usually does a LOT for their 50%. Basically they take over the "business development" work -- all the schmoozing, the selling, the legitimizing. At least the good ones do. It's not just paying for the wine and hanging the art. Many even help arrange studio space and pay a stipend (against your share of future sales) if you need that to stay focused on the work.
> the gallery usually does a LOT for their 50%. Basically they take over the "business development" work -- all the schmoozing, the selling, the legitimizing.
This, of course, varies. An interesting/tricky part is that the gallery acts simultaneously as a manager, agent, and distributor of the artist's work. Imagine if Brad Pitt worked with the same company to handle his day-to-day affairs, negotiate his fees, and then sell the resulting movies. Not saying it's a conflict of interest, but it is an oddity of the art market.
Very true. Not only is there some conflict of interest built in, but unscrupulous gallerists can and do take advantage of the relatively weak position of emerging artists.
From what I know, If you're self-employed you'll also have to pay payroll tax, which makes taxes end up close to 50% without even taking taking sales taxes into account.
Your post uses periods for thousands separators and mentions Sweden, so apologies if my US-centric view is a tangent.
If you're including the taxes the artist pays, shouldn't you include the taxes the gallery pays as well? Both are presumably taxed on net income after expenses. Thus it's not as if the gallery gets to run off with 50% of the revenue (which you called "earnings," but I think you meant revenue) and deposit it in the bank. In the US, a professional such as an artist would file a Schedule C to deduct business expenses from business income and pay only the remainder.
Re your later comment, why does the gallery calculate its percentage before VAT rather than after? It seems lopsided that the artist but not the gallery should be subject to a tax on funds that neither ever sees. The artist's business relationship is with the gallery, not with the buying patron, so it seems VAT should be charged on the amount the gallery pays to the artist. Maybe that's just how it is, and maybe it's an artifact of an imbalance of negotiating power between the gallery and artist. But it seems wrong.
Well of course the gallery will take 50%. They're the ones doing all the work. I don't know if you've ever met an artist, but most of them are quite unsocial and naive people. They don't know shit when it comes to selling, and I'm telling you this from the perspective of a computer geek, and they don't even care to learn. The gallery not only finds the people to buy the paintings but they also do constant PR work for the artists they represent, past well any exhibition, they talk with museums and collectors trying to promote the works, they provide legal and financial advice and so many other things.
Your comment is getting downvotes for your casual absolutist statements, but you have a point.
An interesting illustration is that one avenue for artists to get paid for making art that side steps their gallery arrangement is public art for municipalities or integrated into new building construction. Lots of artists end up doing more poorly than they expect with these projects, because they lack or are never taught good project management skills, and they suddenly have to manage a budget in the hundreds of thousands, and attend or lead meetings with engineers and architects. OTOH, artists who have more of these skills can end up doing really well once they have a few successful projects under their belts.
Whoever thinks that galleries take too much of a cut could very easily try and market their work themselves. Or better yet, try to disrupt the art world by building an online art gallery that takes let's say just a mere 10%. After all, online sales are on the rise.
But guess what. Even online platforms take a significant cut. Why's that? Because marketing to the rich and well-off has a significant cost that's much higher than running a targeted AdWords campaign. You have to be out there, talk to people, attend art fairs and galas, socialize, then socialize more, network with critics and journalists who are considered influential, negotiate with collectors who will try to rip you off and do it constantly. On top of that, if you're one of the renowned galleries and an artwork for an artist you represent goes on sale at an auction at a low price you pay from your pocket to keep the price high in order not to hurt the reputation of the artist.
So yes, I'm making generalizations but I've also happen to work in the art world and I've seen how things work. Owning and operating a commercial art gallery is all about personal connections and that costs.
>I don’t know if you’ve ever met an artist, but most of them are quite unsocial and naive people.
This is entirely no longer the case. The competition and the art school system now eliminates those who cannot market themselves to the galleries. Being an artist is almost entirely a marketing profession now. I’ve done development for a handful of contemporary artists and it is very clear they are not on any idealistic or creative journey. They are simply salespeople.
Making art is arduous, risky, expensive, and often a very lonely endeavour. Galleries can do a lot of great things, but they are not the ones doing all the work.
A few years back I talked to someone involved in the business of international sales and procurement of luxury watches. Although there are a few genuine collectors, most of the business seems to be in aiding money laundry and dubious financial transactions (a $50k watch is easier to smuggle than a bag of $50k in cash, especially when the price is sufficiently stable).
EDIT: To be clear, what he was doing was perfectly legal but he had no illusions about who his customers actually were.
I was told that a while back Bulgari (and probably some other high-end jewelers) operated one of the largest illicit money transfer networks - primarily for bribery.
Want to bribe a public official? Give his wife a $100k bracelet, and mention that it can be returned anywhere in the world for CASH (less a 10% “restocking fee” of course). Then you might mention how nice it would be to spend a weekend in Geneva - and coincidentally there is a branch of that jeweler just down the street from some very discreet Swiss bankers (back when they were discreet)...
The other user who replied on this thread saiya-jin is [dead] and has been so for over a month. Their comments appear to be entirely reasonable to me, can we un-dead them?
You can un-dead individual comments yourself by clicking the time of the comment, then clicking "vouch". I think the mods see that and can choose to do more significant un-deading (what a fun verb!).
I don't dispute that very high end watches can be used for money laundering, but there are quite a bit more than a "few" collectors for watches, even in the $50k range. Blogs like Hodinkee have a large readership of collectors at this level, and relatively speaking a $50k watch is not uncommon among collectors at, say, a watch conference. $50k buys you access to the second tier (right above entry level) for brands such as Patek Philippe, A. Lange & Sohne, Vacheron Constantin or Audemars Piguet (and even smaller "independent" watch houses like F.P. Journe). If you go to the /r/watches subreddit, you can reliably see collectors posting watches well beyond this price, even if the day to day items are <$20k.
Based on my experience with watches and collectors, I'm (weakly) doubtful that your friend's perspective is indicative of the industry overall. Again to be clear, luxury items in general can be used for laundering, but I can't see any basis for calling "most of the business" an effort to frustrate money traceability. For one thing, off the top of my head, there is a clear awareness of disrepute among watch collectors, and savvy collectors (particularly those spending five figures on a watch) engage in due diligence and transparency for most of their purchases that would make laundering pretty difficult and inefficient. Obviously a complicit buyer and seller would have no reason to do this, which implies a bit of a sampling bias to what we can see. That said, these practices are widely and reliably enough used (even on, say, eBay, or among jewelers) that it's clear a very large volume of watches change hands "in the light", so to speak.
There's also a question of valuation. For most of the brands I mentioned above, purchasing them new results in a reliable 30% reduction in worth, though you can stymie that a bit by keeping the watch in excellent condition with its box and papers. The watches which retain their valuation the most are brands like Rolex. A Rolex Submariner can actually appreciate in value over time, even past inflation, because the brand is so recognizable. These would be a good target for money laundering because of their liquidity. On the other hand, brands that retain such value tend to be the most visible, which means they are the most imitated and faked. In 2018, I don't think I'd feel comfortable purchasing a Rolex unless it was new and directly from an authorized dealer. It's become extremely feasible to create fraudulent Rolexes that cannot be distinguished from a real Rolex by anyone, save for an extensive review at a Rolex inspection center.
Don't get too hung up on the $50k number, I just picked that at random because $50k in currency is a large enough stack of cash to be considerably harder to conceal and transport than a watch.
This was a few years back and he (understandably) didn't go into much detail. This is of course just a single data point, so I can't tell whether it's representative for the entire industry.
Funny, I have a friend who sells luxury watches in downtown San Francisco and he says there's a strong correlation between purchases above $10K and startup funding events.
Tangentially related: if this article isn't written about you or your friends, a great place to find really nice art for relatively cheap is at a student art sale for your local art school. Money typically goes to the students directly to help them pay their tuition.
Some of them even have "VIP" opening nights, which end up being just kind of a nice date night. $125 gets you food, booze, and first crack at the art, most of which will be in the $100-$1000 range. An example, in Minneapolis: https://mcad.edu/about-mcad/events/art-sale
There will be a lot of stuff you'll probably not like, but there's some absolute gems. Bought a lacquered painting of Ai Weiwei for $300 that I wouldn't sell for $3000.
One thing I've never understood - and if I ever become absurdly wealthy I will try these kinds of random absurdities - is how few of the rich use the power they have to create new definitions of art. For instance, sure you can commission paintings and trade them. But how trite and boring.. imagine commissioning your own RISC-V implementation, or a file system, or something similar that millions of people come to rely on. You could do these kinds of things for a few million dollars each. Without any commercial expectation you could do pretty audacious reaches that would occasionally deliver humanitarian value. Maybe I'm a weirdo..
You're not a weirdo. This is something I feel similarly about, but here's the thing about rich people:
1. The path to becoming rich puts them in a social class that warps their view of what matters and leaves measuring themselves against arbitrary hierarchies of their own making.
2. The path to becoming rich in modern society is such that the kind of people who would commission RISC-V implementations or security audits of popular open source software or cheap medical interventions simply cannot succeed. It may require too much of a compromise of those beliefs to actually win.
Don't get me wrong it would totally be about ego and about how excellent your own design tastes are. You'd name all the stuff after yourself. That's why it'd be considered art :D
Some of the robber barons did some interesting eccentricities like Carnegie libraries.
The Long Now clock is the most recent thing I can think of.
As soon as there's a committee it's almost certainly going to be philanthropy rather than art. The presumption is that you have excellent taste and exercise Steve Jobs-esque tyrannical control over the aesthetics.
I think there is something more to why the wealthy buy art besides just the intrinsic artistic value of it. In my mind I compare it to how in the past a person would gain status by wielding a certain sword, or by wearing a certain crown. I think it could be similar to art -- who has previously owned the piece, or who created it could be a huge part of its value. I also think there is something to it being a sort of currency/store of value that can be exchanged outside of the normal currency system. Maybe it is to avoid taxes, or to have a record of a shady transaction
That is what two guys are doing. One is named Larry and other is named Sergey. There's actually a third one named Elon too. Actually there are two more named Bill and Warren who maybe actually be doing it was well if you don't just look at it from a purely engineering domain (i.e. beyond filesystems, networking, CPUs).
Larry, Sergey, and Elon are called entrepreneurship, or at least I've never heard of anything they've done outside that. They are accountable to many people in their public acts, and especially in the case of G almost none of what they do is artful, quite the opposite really. Elon is a visionary, but still very much an entrepreneur.
Bill and Warren are engaging in philanthropy, which is equitable and far more commendable than my suggestion.
What I am suggesting is simply individualist exuberance outside the normal tangible goods and conventional arts.
At least one (absurdly?) wealthy person did something like this. Check out the Museum of Old and New Art[0][1].
Obviously it's not file systems or whatever, but he's definitely pushing the "definitions of art" for stuff he's interested in. Helps to have your own museum.
I was astonished when I met this 20-something art dealer here in Sao Paulo at an event.
He was talking about how, after graduating he developed a passion in dealing art, some 2 years later the guy has opened 4 or 5 galleries around the world.
Quite a star, right? Then I found out he's the son of one of the most notorious corrupt politicians in Brazil...
Casinos and jewelries as well, anything that might have a lot of non-tangible value and can be inflated without questions.
I am not too aware of markets outside of Brazil, but I'd assume sports teams and auctions are big too. I remember that in the last 15 years there were a lot of football team acquisitions by russians in europe.
Some time ago real Banksy prints were sold for $60 at a street stall in NY. They didn't sell much but people who bought one later discovered they are worth around $20,000.
A week later some guys (Dave Cicirelli and Lance Pilgrim) sold fake Banksy's with a certificate saying they were real fakes. They sold out in an hour.
This was a great way to show the real value of art.
In a funny way, I cannot but draw a parallel between the bitcoin folks and 'modern' art folks:
Very little intrinsic value; mass produced but still the producers and consumers feel like they are part of some niche (and somehow the rest of the world doesn't 'get them'). And dare I say, an easy way to launder dirty money out.
I just don't get why either of those two things deserve any attention other than it's just another way that money exchanges hands.
Things like gold, bitcoin, stamp collections, art, expensive cars etc serve a similar function: the function of "saving", as opposed to "investing".
With "saving" I mean storing some excess purchasing power in something that doesn't have a counterparty and doesn't generate income, but also can't be duplicated easily so is likely to at least not loose a lot of value.
Of course, all these saving devices have different properties.
Gold and bitcoin are liquid, whereas art is extremely illiquid. Gold and bitcoins are egalitarian, in the sense that a poor man buying gold gets the same thing as a rich man buying gold. Art is elitist and susceptible to huge winner-takes-all effects. All are susceptible to stealing, but cryptocurrencies are susceptible to total failure because of their complexity (bugs, mathematical weakness, ...)
Art = Tax Haven. Long time ago in my teens I worked in art outside of NYC and my friend's whole business was a Art Moving Company. Art isn't about art but to a very small number of people. I can't tell you how many times people would say that they don't even like the art they own.
Art is stored away where no one is able to see it, and all for tax havens. You can put your art into storage where the art sits and the owner doesn't have to pay taxes on their purchases.
I was just about to post this. I really love planet money. I regularly listen to their podcast as part of my regular runs and this really was a very interesting new information for me
The only thing that thing accomplishes is proving that a contractor had moved a rock from A to B, about as useful as figuring out how to get a certain number of zeroes in a hash.
Modern art is rather like bitcoin - mostly pointless work of no value with pseudo-randomly attributed value, used for portable hoards of those capable of dealing in it.
I really don't mind the goofballs, it's their enablers, the modern art dealers, critics and collectors, that I have a problem with.
I even like some of the things that came out of the movement from an aesthetic point of view, for example much of the stuff that came out of pre-PC IBM. But I don't consider it to have much artistic merit, if any at all.
One angle on the modern art world I heard is that it is used as a bribe that is tax deductible. They briber buys the art from the person they are bribing and then they donate it to a museum at the paid value and deduct it on their taxes. The IRS can't set a fair price for a painting after all.
For those who missed it there was a pretty good article/discussion here a few weeks ago about how the art market is systematically manipulated for profit, and nobody wants to fix it: https://news.ycombinator.com/item?id=16200100
Sorry to embark on a conspiracy theory rabbit hole, but when i read something like that, I am left wondering who really conned whom? Who was the real mastermind? The CIA, in some far fetched scheme to control the world? Or did bohemian artists con the US Government and American people into bankrolling their lifestyle? There is a surface narrative, to cover up the ‘real story,’ but why should i be so naive to believe this telling of the story either? Without a doubt , for any interpretation, the American taxpayer certainly was on the losing team.
Hardly need to read the rest of an article with a headline that includes, "the Rich," as fairly clear what it's about.
An acquaintance recently (2011) wrote a book about the world of art theft. (https://www.amazon.ca/Hot-Art-Chasing-Thieves-Detectives/dp/...) The point I remember him making was that the stolen art was often used as collateral for black market transactions, owing to the opacity of the market in general.
It's an asset class like any other. Depending on what it is, it will have different liquidity, volatility, and portability properties. The notional value can be used as collateral in other transactions, with no real transparency on rehypothecation. New appraisals can mark it in support of other calculations, and you can insure it. It can be a bit of a financial black box.
Also, art is and always has been a path to social mobility. Hence the parties where young people go to meet older wealthy ones. The real business of art is brokering relationships and transactions, with the art as a pretext. If you have money and fewer relationships, you can go buy art in any major city as a short cut to local society. If you want access to partners and the kind of social networks that provide opportunities for your future family, it's surprisingly accessible. Gallery owners perform a kind of social gate keeping role without a lot of the insular baggage that comes from establishment networks.
These relationships and transactions are culture.
The idea that someone can just make money, participate in culture by buying art, then move easily between social classes seems offensive to some people, but that's really how it works.
It also provides a perfect straw man for people who go on about "the rich."
It's difficult to see how a lurid view of how some people with money live (e.g. the article) improves peoples lives any more than say, porn.
The idea class mobility needs some sort of moral "defense," is certainly challenging. Sure, it hollows out the ranks of the aggrieved, but that's the point.
Views of how the 'rich' live are vitally important today, when wealth inequality is the central social issue of our time, impacting government, policy, wages, and consumer markets alike. (Piketty).
Class mobility is good, of course - it's been a central tenet of American values, even if it's been smaller than thought. But I'm not sure that mobility between the 0.1% and 0.01% is the key flow - mobility between the middle 50% and top 5% is probably what we should be caring about.
Well if you're an artist with an MFA over time its easy to be sitting on over 250k in debt. The key point is the artist is selling a piece for $750, the collector then can turn around and sell the same piece for $40k+. The art doesn't start gaining real value until the artist is no longer participating in the value chain of their work.
Honestly, as a collector with 16 years of collecting under my belt, I can tell you this does not happen very often. I do have a few things that I paid hundreds for that are now worth thousands, but I also have works that I paid hundreds (and sometimes thousands) for that are worth nothing (although I really treasure them).
If you happen to catch an artist at the beginning of their careers, and are willing to take a chance on them, then this might happen but more often than not it won't.
Also, as a collector you actually want artists to be successful so you want them to be growing and continuing to get more recognition and keep producing work. In order for them to do that you want them to get better and better value from their work.
The artists mentioned here might not have done so well in that auction but they certainly went on to very lucrative careers.
> no longer participating in the value chain of their work
I'm not sure what you mean by that.
If you mean the value chain of the gallery/dealer/auction world is where prices go up then yes, that's true, but the artist is very much participating by creating and selling new work. In the $750 -> $40K+ example the artist will definitely get a lot more than $750 per piece in the future.
If you mean art only gains real value after the artist is no longer making any (i.e. is dead), then actually that's not true for contemporary art.
I would say that your explanation is simplistic, but really it's no explanation at all (and has little to do with the article, so I'm not even sure what it is that you're responding to except your own interpretation of the title). What does it mean that art is "an asset class like any other"? First, no asset is like any other when its particulars are the subject under discussion. Food isn't like transportation, and neither of them is like art. Second, what does "that's really how it works" explain? It's like saying money is just money. The question is what power structure and dynamics it creates. It's not that "the rich" are "offensive", but they do create a certain dynamics, which is important to understand. And so what if "that's how it works"? Does that mean that the dynamics must never change? It's changing constantly, both in the small (e.g. the particular tax tactics that artworks are used for, discussed in the article) and in the large (the relative power of the rich vs. that of the rest of society). Highlighting the power structure in society (both in the small and in the large) is neither an expression of offense (at least not in the sense of taking offense you seem to allude to) nor an immutable law of nature. It is both an interesting subject of study as well as a subject for change.
Interesting. To me, "highlighting the power structure," is a critical technique that frames one party as a moral antagonist and there is nothing neutral, objective, or rigorous about that. I should perhaps have been more brief and said only that the article was tawdry marxist outrage porn, but I my intent was to contribute a view that untangled it from its tendentious frame.
> To me, "highlighting the power structure," is a critical technique that frames one party as a moral antagonist
That's unfortunate. Exploitation does not imply a moral failure on the part of the exploiter (just as "sexist" and "racist" aren't moral accusations like misogynist/xenophobe) but is a description of a dynamics where all parties can (and often do) have good intentions. It seems like the moral reading is your own interpretation, and it is you who is taking offense. Note that the desire to fight the dynamics also does not imply an assumption of a moral failure on the part of those you wish to fight. For example, much of civilization is about fighting nature, yet this does not imply that we believe nature has an ill intent towards us.
I would be very surprised if anyone outside a few fringe email newsletters would agree that racism and sexism are not moral accusations. In a case where that statement were true, where sexism and racism were intrinsic facts of a struggle between exploiters and exploitees and not circumstantial beliefs to be mitigated by discourse, there is no possibility of peace, tolerance, or coexistance. And yet, these manage to exist today almost everywhere where people who do not believe that sort of thing live.
The main implication of such a view is that discourse is just an artifact of that oppression, that only postpones an inevitable conflict that is necessarily fatal for one of the exploiter or exploited. It also excuses the exploited from being held to the ethics and morality of the exploiter.
Hard not to see such a system of belief as beyond reason and even incarnate evil, but as they say, the devil's greatest trick was convincing us he didn't exist. :)
You're conflating character assessments with moral ones.
A racist may be both immoral and good natured.
Exploitation is a moral term. It says that the mere existence of a whole group of people is immoral. It's not clear that it is, nor even really what "exploitation" means.
Moral culpability assumes responsibility. I'm racist and sexist because I was born in a racist and sexist society -- that was not my fault. I spread disease because germs exist, and that's not my fault. But now that I've learned to see and recognize racism, sexism and germs, I try to fight them and not to spread them. If I don't wash my hands or do not fight sexism and racism, then I am morally culpable now, but those facts in themselves do not imply moral culpability even though they do imply harm (in all three cases).
Your statement about exploitation is just an expression of laziness and anger. It is hard for me to believe that you believe that scholars believe that the existence of a group of people is immoral. If that is what you believe, then you aren't paying attention.
> “It’s an asset class like any other” says a lot about how market economics affect people’s conception of value.
Indeed. There is a strong argument (does this go back to Kant?) that art only "works" when it is not pragmatic. That a tool is not art, no matter how elegant and functional. Hence, if art nowadays works primarily as a financial instrument, it is not actually free to do the work of being art. If an art fair is visited with an eye to current and potential economic value, and the art at the fair is represented and even made with that eye, then it ceases to have the "that image saved my life on a sad day" or "I see in that painting the terror and fragility of existence" or such energy that we actually seek in the arts.
(Of course, you could argue about whether anything pragmatic is not art, e.g. that industrial design is art. And things get really slippery with ceramics. As the article suggests, much great art has been made within very strict economies, often via commission. But a well made bowl or a portrait of a bishop are still not asset classes...)
Your analysis is all perfectly correct if you presuppose that "art" is purely epiphenomenal. But if you start from the perspective that "art" is something in and of itself, with its own set of values that economics only tangentially interacts with, then you would view the ways in which economics reduces art to "mere" exchange value as positively immoral, if that's the right word.
To adapt a Father John Misty line: Maybe art is just an economy based on resource scarcity but I fail to see what that's got to do with you and me.
This is a fascinating article. But what I'd like to know about is the effect of this activity on the other side of the table: the modern artists who produce the works the rich purchase and auction.
How does one become a top modern artist? (I'm thinking primarily of painters and sculptors).
1) Move to NYC, get a job working for a near blue-chip artist. Look for one with the fewest assistants. Accept $20 an hour.
2) Go to art openings, sign your name in every gallery guest book and attend every after-party.
3) Have a studio, and get your friends, employer and his gallery contacts to visit
4) Start showing your work, or repeat steps 2 and 3 until someone shows your work.
5) The ball is now, rolling. To add some momentum do the following:
- Curate a summer show at a gallery somewhere
- Upgrade your studio to someplace people like to visit.
(Dark wood floors, on the waterfront in Red Hook, Brooklyn perhaps) Throw good parties.
- Grow a lumberjack beard. Or, only shop at comme des garcons. Or thrift-store jeans and a white T, for all occasions.
6) Make friends with writers and critics. (Their needs are human, just like yours)
7) Get shown, written about, and finally get collected.
8) Now...this is the part where most artists discover how life as a successful artist is actually appalling. You'll need to socialize with and be popular among some very wealthy, but ultimately superficial people who treat you and your art as a certificate of their cultural sophistication.
9) If you have made it this far, and still want to continue, you probably have what is takes to be a successful modern artist whose work will appear at auction in a few years. Just keep in mind -- you'll receive none of those auction proceeds, and there's no promise you'll every go to auction again.
Or, to translate all that to HN-speak -- learn an industry, network, do marketing, and cultivate a brand, until some day down the road, your product becomes big, and all your backers take the lion's share of the exit.
How is all that any different than what the rest of us do to grow our business? Seems to me like the process of building a business doesn't differ by industry as much as people might think.
Now, if we think that art SHOULD be different, that is a completely valid (and possibly more interesting) question.
Processes are similar. Likelihood of success, impact of your actions on outcome, and ownership of upside (both real and social capital) are very different!
Art is a black swan industry where compensation for effort is a lottery ticket. Only the fringe of "wantrepreneur" culture comes close to extracting as much effort for equally uncertain reward... And even then the efforts develop and demonstrate skills (tech and business) which can be transferred to low risk / well paid jobs. Artists who don't become famous can't recycle much of the investment.
This is very true. I was involved in the NYC art market for about a decade. The smart artists either became professors or started over in a new career. Most of my art world friends are now programmers, lawyers, etc. A very small number of the people I knew actually made it, most of whom had a social or financial advantage to aid them. I knew exactly one artist who briefly made it on talent alone, and he was the art making equivalent of Lebron James.
During all of the above, to become a top modern artist: say and do stuff that is very disturbing or controversial to the plebes, but avoid real controversy at all cost when it comes to your art friends.
However, to be a top future artist: say and do stuff which is super controversial to your art friends. Have an actual vision, be fanatic about it and avoid everyone except those who are truly interested in what you do. You'll probably die penniless even when you're supremely gifted.
It's also possible to life off the art alone and skip all marketing. I think ordinary people tend to value classical (i.e. non-abstract) art more - it won't ever go into millions, but people are actually happy to pay a couple grand to hang beautiful/evoking/haunting masterpiece in their living room. Check out Beksinski's art for example [1]. He was your typical artist hermit type that hated self-promotion, and yet he lived off his art for 50 years. This route requires a boatload of talent and hard work though.
> Grow a lumberjack beard. Or, only shop at comme des garcons. Or thrift-store jeans and a white T, for all occasions.
This is because you need everyone who meets you or sees you to say "oh, that guy with the lumberjack beard, that's so-and-so."
I know a couple artists who have been doing this successfully for 20-odd years. One has a funky haircut and always wears a bright yellow jacket.[0] Great artist though.
You can also do it with things other than your hair and wardrobe. A certain German artist made it big and for the first 10 years or so had:
A) only one size of painting
B) a reputation as "painfully shy"
C) uh, Germanness (German painting was and is A Thing)
I dont really buy premise that art is supposed to look pleasant on the wall and have uplifting message (opening in the essence). To the extend it is, it is pretty easy to find very good looking unique paintings for reasonable price.
The key is to get a gallery to represent you. And not just any gallery, but one of the few hundred around the world with any influence - the kind that would have a booth at Art Basel or some of the other major art fairs around the world.
But for that to happen, you actually need to be talented and create amazing work, since it's a lot easier for a curator to push for you if you create something that's compelling.
If you look at the works in the elite galleries, the artists that are represented by them are much, much better than your everyday artists that you'd see at your local art fair.
So, the process is:
1. Create some awesome art.
2. Show it someplace - could be in a local fair or student exhibit or on the internet someplace.
3. Have some people talk about it by sending out press emails.
4. Get a major gallery to notice your work. The good galleries are always on the lookout for new, marketable talent, and if you have some buzz, that helps influence them.
Be interesting to the key galerists who define the first hand market. Outdo your peers in skill, aesthetics, novelty, materials, scandal. Ideally in all five of them, but exceptions happen. Then get very, very lucky.
Edit: oh, and keep in mind that few pieces that later became coveted collector items already commanded a high price on the initial sale.
> Outdo your peers in skill, aesthetics, novelty, materials, scandal.
Fortunately this part is completely optional. There are many very successful conceptual artists with terrible ideas and a complete lack of technical skills (you can tell by looking at their early work). All the hard work of material, skill, and aesthetics gets done by studio assistants.
Can someone explain what the downside is? I'd much rather the rich spend their money on art than activities with huge negative externalities like flying around in private jets, buying land or employing servants.
> * tax evasion (kindly fuck of with "it's legal so it's avoidance", it's evasion even if it's legal. Spirit of the law)
At its heart, modern tax law separates people into classes and then allocating the burden of maintaining society unequally between those classes.
The spirit of the law that you are defending here is that people should shoulder unequal responsibilities to their society. Although that isn't controversial, it also doesn't automatically have a moral high ground; it could be a better outcome if everyone contributed equally. It just happens that everyone contributing equally flat-out won't work, because most people can't contribute enough.
The spirit of the law is unfair. That is an unfortunate reality of taxes - in a sense they can't reduce the total unfairness in the world, only shift it to people who can better deal with the burden. That people should ignore the detail of the law and voluntarily subject themselves to an unfair burden is not clear-cut. The clear cut part of this is that the law should be clear, pass through the usual channels and be enforced with due process - ie, as written or as commonly interpreted by the courts.
If you want to call it tax evasion, someone is going to have to change the law so it is actual tax evasion. Until then, it is legal so it is avoidance.
All of those usual channels and law-making are easily influenced by wealth and power. By avoiding taxes they have committed a crime against the state and the people and should be punished.
Tax avoidance is not a negative externality, since it does not impose a cost on any party. Money laundering is also not an externality, though in some circumstances it could facilitate activity that generates negative externalities, like extortion, racketeering, etc.
I also don't see how more demand for art could destroy the market. The supply is flexible and can grow to meet the extra demand.
>Tax avoidance is not a negative externality, since it does not impose a cost on any party.
If you don't pay the taxes you are supposed to pay, you use public goods without paying for them. This is stealing from society. Unless you live on a float in international waters without using GPS or satellites
>Money laundering is also not an externality, though in some circumstances it could facilitate activity that generates negative externalities, like extortion, racketeering, etc.
By this logic lead in the drinking water is not a negative externality, because it only in some circumstances generates negative externalities like reduced IQ, death etc
>I also don't see how more demand for art could destroy the market. The supply is flexible and can grow to meet the extra demand.
There isn't demand for art. There is demand for a vehicle for money laundering/tax evasion
>>If you don't pay the taxes you are supposed to pay, you use public goods without paying for them. This is stealing from society.
Of course, but it's not always the case that tax avoidance leads to someone paying less taxes than the cost of the public goods they consume.
Also, as an aside, technically, consuming 'public goods' (defined in technical terms as non-rivalrous and non-excludable) does not generate negative externalities. What you're referring to is common and private goods, which are rivalrous, meaning one person's consumption reduces the amount available for others to consume.
>>By this logic lead in the drinking water is not a negative externality, because it only in some circumstances generates negative externalities like reduced IQ, death etc
Polluting public waters with lead is always a negative externality because the damage done to the water itself is a negative externality. The water can be seen as property of society, and damage to it as property damage. The increased risk posed to humans is also guaranteed, whether or not that risk materializes.
With money laundering, with some sources of revenue, there is no risk imposed on society at large. It depends on what activity produced the money that is laundered.
>>There isn't demand for art. There is demand for a vehicle for money laundering/tax evasion
And that demand for a private store of wealth for tax evasion and money laundering translates to demand for art pieces. I'm arguing that this additional demand doesn't ruin the market for other art buyers, since economic theory would suggest that in the long run the supply expands to prevent increased scarcity and higher prices.
It's wrong to assume that "everyday artists" and people who actually care about art are insulated from this. Some worthwhile artists get promoted into this high-prices world of prestige, and their production/careers get distorted.
For better or worse, the humble $500 "everyday artists" you seem to be affirming are, for the most part, not intellectually or culturally relevant. But this isn't about affordability, it's about the valid art culture (the mainstream) being corrupt and overheated. Good artists get swept up in it.
> In her follow-up Dark Side of the Boom: The Excesses of the Art Market in the Twenty-First Century, Adam, a longtime editor at the Art Newspaper and contributor to the Financial Times, considers the negative effects this influx of money has had on the art itself. As contemporary art is increasingly viewed as an asset class—alongside equities, bonds, and real estate—Adam sees artworks often used as a vehicle to hide or launder money, and artists encouraged to churn out works in market-approved styles, bringing about a decline in quality.
I remember many artists complaining that what they like to make I vastly different than what sells. I’m pretty sure it’s been that way for a long time.
Completely agree. This is way better than the rich gobbling up finite natural resources. Art is virtually infinite since you can always create more. And it allows more people to actually be artists.
The most expensive postage stamp was sold for more than 2 millions, and initially was worth a few cents. Antique items are also usually ridiculously expensive compared to the initial value. Even old legos are being sold for thousands of dollars. That's what collectors due, overpay for rare or otherwise "special" items, and of course, when there's money in the market there will be people turning it into a business. Art is just one (very lucrative) piece of that cake.
Yes, perhaps, but the difference with art is that artists are encouraged to pump out works to cater to the whims of these rich collectors in a way antiques dealers cannot.
Have you ever felt encouraged to pump out code to cater to the whims of rich overlords?
I can't tell you how many $50,000 (our fee) tax returns I filed with...questionable sections because I was being encouraged to pump out work to cater to the whim of partners that didn't even come into the office anymore.
Artists do not directly create work to satisfy collectors.
They make work that over time creates a persona for them that is differentiated and carries meaning within the context of the art world.
Once that persona is created, work can be sold. In general, the work needs to maintain consistency with that persona. If the artist wants to change their work, they must first adjust their persona to justify the change.
Certain types of artists, yes, but it's still their own choice whether to sell out or not. It's the same thing as with the majority of modern music, literature, etc. Just look at how the music industry works...
OK, sure, but an art critic is presumably more interested in the effects on the "ecosystem" of art. Besides, I don't think it's that unusual to find someone decrying, say, the importance of the blockbuster leading to a glut of superhero films at the expense of films that might be of more interest to some viewers.
This has always been the case to an extent - see the Esterhazy's patronage of Haydn and the Prince of Salzburg's sponsorship of Mozart.
The exception is the 20th century when the Soviet system pushed art as something for the people [though the incentives on who was sponsored was again skewed at the top], and the various publicly funded arts programs in Western Europe - driven by social democratic ideals.
> Yet the most troubling examples of the exploitation of art for financial gain are perfectly legal. As Adam outlines, collectors and their agents have continually found creative ways to use their art holdings to defer paying taxes, including the establishment of private museums and foundations, storing artworks in offshore freeports where they can be exchanged without incurring customs duties or VAT, and loopholes in the tax code such as “like-kind” exchanges. Originally set up in the 1920s to aid farmers by enabling them to defer taxes on livestock trades, “like-kind exchanges” are now regularly invoked by art collectors in order to avoid paying taxes on the sale of artworks: So long as a collector uses the proceeds of the sale of one work to purchase another within 180 days, the tax obligation can be perpetually kicked down the road.
If you want to see the richest art markets in terms of consumer participation and artists succeeding (and don't care about adult nature), look no further than the anime and furry communities. It is a THRIVING market for commissions and patrons - tens of thousands of artists running the gamut from $5 sketches to $10k oil paintings. Its the best example I've ever seen of a lower/middle class art market working well. What you're "buying" is a representation of your individual expression.
The high end "art world" and NYT/New Republic articles could not be further away from these artist communities, both in terms of accessibility and relevance outside the ultra-rich circles that traditional art galleries serve.
I don't see the similarity. I can't see any notion of recruitment rewards in modern art.
It's more like Pez dispensers and Beanie Babies and all that nonsense. Over-priced and over-hyped collectibles with no real-world (not even aesthetic) value.
Yes, I should have said bubble, like the original tulip bulbs. At least the tulips did have some aesthetic value. There is recruitment reward: buying early, hyping up modern "art" and making a profit.
I always hated middlemen but as I got older and saw the difference between creators and capitalists. You don't see the 50% being spent to maintain the relationships that bring buyers in and interested in supporting the artist. Arts subjective, you can play the free game and use the internet but if you want a network of people that support galleries it's because they gained something from that gallery at some point. Also that gallery isn't free, some are cheap and some don't earn their keep but you get free choice and no known test to differentiate the honest from the dishonest but experience.
tl;dr: Art markets are unusual or unique in several ways, including thin demand (few buyers are interested in a given artwork, and their reserve prices will be very different), contempt for "flippers" (including shunning by galleries), and refusal to reduce prices, which would cause an artist's personal bubble to pop.
Well, I had to search for the actual terms, because I didn't find them in the post. They're in a comment to the post. So the actual post isn't even using "euphemisms".
In any case, my point is that "zionist" isn't a euphemism for "Jew" or "Jewish". It describes a specific political (at least) ideology - which has radical, extremist militants.
"Zionist" cannot be anti-semite unless one believes all Jewish persons are zionists.
I understand why radical zionists would want to pass that on as true, but it's not.
Many Jewish people oppose Zionism on political, humanitarian and religious grounds.
> "zionist" isn't a euphemism for "Jew" or "Jewish".
Yes it is. It doesn't literally mean Jewish but it absolutely is used as a euphemism for Jewish.
It's usually easy to tell the difference. If it's being used in the context of the social and political events leading up to the establishment of the state of Israel then it's likely to be the literal meaning.
If it's being used in almost any modern context, but especially in the context of conspiracies, secrets or money, then it's very likely to be euphemistic. And anti-semitic.
Correct, it's not even obfuscating the fact that they're merely referring to "Jews". Being pro-Israel is hardly the defining factor as to why they've been signaled out.
Or maybe he was claiming that art has been divided between Zionists on one side and the communist branch of the Rothschild family on the other? Or the Rothschild branch of communism? Either way, we will never know.
But it seems clear that modern art has turned into a speculative multi-million dollar business, so "Rothschild" doesn't seem out of place, with them being the most know financial capitalist family.
And since the artists themselves tend to lean on the left and extreme-left of the political spectrum, "communist" doesn't seem an inept term either.
I feel a little dirty getting into this thread, but surely you've heard of Kibbutz? Many early Zionists imagined Israel as an idealised Jewish-Marxist utopia.
Of course for every Zionist that was socialist, there was another that was ant-communist, and for every communist that was Jewish there were many more that were anti-semitic. But don't let that stop the conspiracy nuts.
Are you talking about the century where (all attributes based on self-identification) a realm ruled by a socialist party was waging war against socialist republics ruled by a communist party? Doesn't really sound like they were fighting over semantic pedantry. Or maybe they were, and they were just incredibly good at hiding it.
In the context of an alleged "art hijacking", I say it doesn't matter at all.
Yes, I was thinking about the different kinds of socialists and communists killing each other. (Edit: but I’m not talking just about state vs. state, within a country different factions were not always nice to each other.)
A recognized artist at a mid-high level gallery is usually promised a show approx. every 18 months. Average earnings for such a show is commonly expected to be around $100.000, (10-15 works each selling for between $5.000 and $10.000).
That would be a decent amount of money for that time but here comes the crux; the gallery takes 50%.
This leaves the artist with an income of $50.000 before taxes. Say you live in Sweden, where you have to tax nearly 50% for sales in a private company that leaves you with $25.000 every 18 months in disposable income, hardly something you can get a flat in Stockholm for.
What's even worse is that if you are tied to a gallery you are most commonly prohibited to sell privately or show with other galleries.