The market for classified and contemporary art.
But what is a classified work?
Most people are neophytes when it comes to the arts, and even more so when it comes to the very lucrative market in these works. There's a big difference between admiring a work in a museum and putting a value on it. Even more so when it comes to knowing the market and its commercial niche. More complex is the technical ability to tell the real from the fake. We can all fall in admiration of the altarpiece (1) triptych (2) by the Master of Moulins (3), but hardly anyone can put a value on it, apart from professionals in the sector. Classified works, in the sense of classics, are ancient or modern works that are already part of our historical heritage. On the classified art market, as on the contemporary art market, extremely heterogeneous goods are traded, with values ranging from a few tens of thousands of dollars to several hundred million. There are two major dividing lines in the art market and in the organisation of sales, whether at auction or in the private market: pre-Impressionist works on the one hand, and Impressionist and modern works on the other. The first is that of rarity and what is commonly called the judgement of history. They are rare, irreplaceable, rarely copied, without equal in the history of humanity.
Assets (4)?
However, while major works by artists who occupy a leading historical position constitute flagship works that are relatively stable and can be considered financially secure, factors of uncertainty are not absent from the listed art market. The assessment of artistic value is coupled with an uncertainty linked to the specific characteristics of the work, in particular its authenticity, and to the instability of the hierarchy of aesthetic values over the medium or long term. The work offered for sale, whether a painting or a sculpture, will be unique and irreplaceable; it is indivisible and non-substitutable. This original effect of scarcity is compounded by two temporal factors of rarefaction. On the one hand, works of art are not physically imperishable. It is therefore impossible to take stock of those that have been lost through natural disasters or human destruction. The vagaries of artists' posthumous destinies have also diminished the chances of survival of certain works, and for some it is impossible to produce a clear catalogue of their complete works. Finally, there is the artistic capital frozen in museums, which ensures that works are preserved and made available to the public. In France, for example, these items form part of the national heritage and are permanently withdrawn from the market. The works are thus protected from the effects of fashion, even if, depending on the moment, they disappear into the reserves or reappear on the walls.The existence of the Musée d'Orsay in its current presentation, which revisits art pompier (5), testifies in favour of this permanence, even for classified works, which are almost worthless today.Further still, even if a listed work is in private hands and is classified as a national treasure, it is almost impossible to remove it from France (6).The legal situation is different elsewhere; for example, it is not the same in the United States, where the alienation procedure (7) authorises the sale, under certain conditions, of works belonging to a museum.In the case of Singapore, things are very different, because the country is very young and has an extremely small surface area, which makes it a place where heritage works are not as numerous and diverse as in other nations.But the country does have a solid legal basis surrounding the various buying and selling processes, even for rare heritage items or museum property (8).
Price drivers.
These unique works of art are the ideal type of rare goods whose differentiation confers a monopoly, in the etymological sense of the term, on their owner. Whether or not an auction is involved. The seller of a painting is the sole seller of a single painting. However, it is well known that the monopolist is never as totally in control of the price as he may appear to be. Variables relating to demand must be taken into account. For example, the income of potential buyers. The rate of return on shares and bonds, or even interest rates (9), and general economic conditions. Since the work of Edward Chamberlin (10), it has also been accepted that there is a certain degree of substitutability between goods that are a priori heterogeneous. For example, a master painting that cannot be substituted for another may, as such, offer identical uses as a source of prestige or refuge value. It must be understood that the uniqueness of the work imposes a monopoly situation, but the complex motivations of potential buyers, who do not always buy the unique work, but the social symbol or solid investment, reintroduce competitive elements within the monopoly. The degree of substitutability of supply decreases as artistic excellence approaches. And extreme scarcity. In the market for graded paintings, where monopolistic elements dominate, in the typical ideal case of the almost absolute limitation of supply, a kind of economic peak is reached on condition that this rare rarity is first constituted as artistic value, i.e. that it is defined. In addition to the artist's place in art history and the place of a particular work in the artist's entire oeuvre, the price ultimately depends on the final competition between 2 bidders, their desire to own the work and their means of purchase. As such, it is largely unpredictable. The art market, classified at the highest level, is a very narrow market, built on extremely precise information networks and whose unit of account is US$1,000,000. It is subject to legislative and regulatory constraints associated with various national heritage protection policies. The trade remains essentially in the hands of a few major international dealers and auction houses. The prices achieved place the competition on a global scale. The main buyers are private individuals, institutions and companies, as well as dealers acting for themselves or as intermediaries. Most museums and foundations are not financially equipped to acquire the rarest works by the most sought-after artists. Museum directors are very often forced to put together financial packages involving patronage.
Identifying works.
The market for old paintings involves works that are often neither dated nor signed, and require lengthy documentary work to identify. The market for modern paintings is not immune to forgeries either, and the hype surrounding certain names, such as Van Gogh, contributes to their proliferation. False attributions are not forgeries. The fact that a painting is the work of a late pupil of Rembrandt does not make it a forgery or alter its aesthetic characteristics, but it does affect its place in art history, its appropriation and its financial appreciation. Subsumed under the notion of attribution, the procedures for appraising classified works fall within a unified frame of reference.Experts use several methods of objectivity, which are not identical but complementary.For example, technical, stylistic, historical, scientific, X-ray and chemical analysis.Nevertheless, the authentication of works of art is shaped by conflicts and coalitions of players, and the work of experts is not immune either to commercial initiatives that compromise the independence of clerics, or to the noise of battles between experts. Any change in attribution becomes a monetary event and possibly the starting point for legal proceedings (11). The case of the Poussins painting ‘Olympos and Marsyas’ (12) is a textbook example of this.It is an example of the asymmetry of information between the expert who assisted the auctioneer in 1968 and the museum curator who pre-empted the painting on behalf of the State.This has led to many changes in attribution, accentuating the rarity of rare works and raising the profile of artists considered to be of secondary importance. Current revisions to the catalogues of the great masters are reducing the number of their works, while increasing the number of their pupils. Paintings that have been forgotten in museum reserves, or that have recently appeared on the market without an initially designated author, are attributed to a school or an anonymous author, only to be finally allocated to recognised artists, after expert appraisal.
Value.
Artistic values are established at the interface between the artistic field and the market. In the artistic field, aesthetic assessments are made and revised. In the market, transactions take place and prices are established. Although each has its own system for determining value, these 2 networks are closely interdependent. Three categories of movable property are traded on the art market. Works of art, antiques and collectors' items. With regard to the most important works of art and contemporary art, while all art markets are contexts where uncertainty reigns over the value of works, the contemporary art market is indeed the place of maximum uncertainty. The difficulty of analysing art markets is not simply a matter of denying the widespread economy of the art world. It stems from the uncertainty and asymmetry of information that characterise the various art markets. Incomplete information, which is not identically shared by all or accessible to all, authorises a multitude of strategic and highly symbolic manipulations that contribute to the specificity of art markets. Only the results of public sales (13) are well known, but interpreting prices requires a subtle knowledge of the market. Reserved for regulars, not to say insiders. Let's stay with France. In France, the price paid by a French museum with public money for the acquisition of a work by a living artist is neither communicated nor communicable. French case law considers that disclosing this price would constitute an invasion of the artist's privacy. Gallery prices are not transparent either, and are sometimes open to negotiation. Lastly, some transactions take place in secret, and phenomena that cannot be ascertained or seen take precedence over apparent and measurable data. Because of the origin of the works and the money, there is an underground economy whose scale is difficult to assess.
The market segment.
The works of living artists constitute a plethoric and heterogeneous offer within their vast market. A first segmentation is imposed by the characteristics of the works. The most obvious boundary, and also the most watertight, is between the traditional figurative art market. For want of a better term, I will adopt here (14) the one used by the galleries that distribute it: the first category of works is built on a routinised tradition. They supply a relatively homogeneous market. The second category of works, which is highly diverse and unstable, feeds a dynamic and fragmented market, subdivided into multiple sub-segments. The first market is broad and stable, while the second is narrow, evolving and ephemeral, and there are many examples of this (15).
Traditional figuration and consumer sovereignty.
Contemporary art, for which there is a vast customer base and which supplies most of the regional and local markets in various countries, is not approved by art intellectuals, who ignore it, and the major art magazines only mention it in their advertising pages. They hardly feature in government purchases, except as assistance to artists in difficulty and for the reserves of national funds where these exist. In France, and more broadly in the West, the withdrawal of public support, triggered by Malraux (16), has continued unabated ever since. Finally, traditional figurative art is not allowed to enter the International Contemporary Art Fair. The artistic goods distributed in this segment of the market share some common characteristics. They are easel paintings, often framed and sized for private use. The themes and style of the works obey rules and conventions commonly accepted by producers, distributors and customers. The sales arguments focus on the decorative value of the works rather than their historical value. They emphasise the excellence of the craft demonstrated by the painter or sculptor, rather than the charisma of his or her person. At this level, the values of tradition through the different schools are opposed to those of avant-garde internationalism. Galleries devoted to traditional figuration, in their selection of artists to represent, exclude the risk-taking associated with innovation. The choice of artists is made according to the expectations and purchasing power of their clientele: submission to demand versus the creation of demand, rapid stock rotation versus the capitalisation of unsold works. Ordinary marketing techniques versus the implementation of a cultural network. These are the main differences between the management strategies of figurative galleries.
The label of contemporary art.
Definitions of contemporary art do not refer to a strictly chronological criterion, and in its international version and its market existence, so-called contemporary art is not confused with the production of living artists. Specialists - historians, contemporaneists (17), art critics and curators - do not dissociate periodisation from the aesthetic characterisation of works. They tend to agree that the birth of contemporary art occurred in the 1960s and 1969s. The term contemporary, a major issue, is constantly being re-evaluated as a result of international artistic competition, which came to the fore in the 1980s. Competitions within the artistic field were no longer clearly divided into 2 camps. The old and the new, the figurative and the abstract. As in the 1950s. Nor was it located in the restricted sector of the successive avant-gardes of the 1960s and 1970s. The end of the teleological vision of the modernist avant-gardes (18) has favoured the substitution of the label contemporary for that of avant-garde, to designate both creations associated with the modern tradition of rupture and postmodern creations. Nourished by references to a deconstructed history, which have paved the way for cultural pluralism. Today, artistic research is highly diverse, with multiple labels. There are networks of players in competition with each other. All categories of players - artists, critics, dealers, collectors and curators - are represented in each network. Given the pluralism of the art scene, the term ‘art actuel’ is increasingly being used instead of ‘contemporary art’.
Establishing the value of contemporary artists.
The constitution of artistic values, in both the aesthetic and financial senses of the term, takes place at the interface between the market and the artistic field. Since the end of the nineteenth century, the keystone of the system has been the merchant entrepreneur, in the Schumpeterian sense of the term (19). In other words, risk-takers, financial backers, organisers and innovators. Insofar as he is the exclusive intermediary between a creator and his potential customers, he is temporarily a monopolist. The entrepreneurs commonly referred to as gallery owners are distinct from dealers, who restrict their activities to the resale of works that are already recognised. But mixed types are more common than pure types. Entrepreneurs do not always exclude a brokerage activity, and the most rational strategy is to combine the distribution of established artists with the promotion of emerging artists. Today's entrepreneurs differ from the founding fathers of the industry, such as the American John Dogget, and, chronologically and geographically closer to the Europeans, Paul Durand-Ruel, Ambroise Vollard and Daniel Henry Kahnweiler. As far as Singapore is concerned, Cheong Soo Pieng, originally a painter, is the country's precursor. All these ‘art dealers’ are not only for a different use of time, but for new relationships with artists. We need to understand that the cultural authorities and the public are in opposition to 2 conceptions of the market, one based on the eternity of art and the other on the perpetual whirlwind of innovation, the opposition between the strategy of long time and deferred success on the one hand, and that of short time and continuous renewal on the other. In the United States, these new entrepreneurs are no longer at odds with cultural institutions, which have adjusted to a contemporary aesthetic, and they have a new clientele that is largely subject to the opinions of national specialists. The contemporary art sector is structured around a limited number of leading galleries, which help to mark out the world's artistic territory and set the dominant trends at any given time, in an artistic field devoid of a normative aesthetic. Several choices are possible, and regulation takes place through conflicts between the major cultural and economic players who name and terrorise movements and control supply. The leading gallery, once it has secured a monopoly on a trend, implements a promotional strategy designed to manufacture the demand likely to appreciate new artistic creations. They combine the techniques of commercial promotion with those of cultural dissemination. The likelihood of a dealer's success in organising a promotional strategy in a limited time depends on the financial support he has at his disposal, and even more on his cultural reputation, i.e. his ability in the past to get new artistic creations accepted by the advanced section of the artistic establishment, i.e. influential collectors, museum curators and renowned critics. The leading gallery is able to mobilise a large international network of galleries. In this way, an informal coalition of dealers come together to promote the same artistic innovation, each in their own sphere. The forms of agreement vary, but more and more often they involve short periods of time, mobilising all the economic and cultural players around the leading gallery, acting quickly and in concert to ensure that artists are placed wherever they are needed, in major magazines, museums, collections and major international cultural events.
How contemporary art promotion works.
The short-term strategy of ‘hype’ and international promotion contributed to the starification of young artists, who were expected to produce a great deal during the limited period of their launch. This was notably the case with Keith Haring (20). There is also a category of players known as mega-collectors, who work with the galleries to establish the social and economic hierarchy of artists and works. They are few in number, very wealthy, internationally recruited and wield great power over the market. They buy a large number of works, including several by the same artist, at a relatively low price and in agreement with the dealer or dealers promoting the artist. Ultimately, they control supply. This is an unusual collusion between buyers and sellers to restrict supply and drive up prices, widening the gap between the top artists, whose works they own, and the rest of the market. Entry into a major collection has a very positive effect on an artist's reputation. What's more, the participation of mega-collectors on the boards of major museums ensures the presence of the artists they support in cultural institutions. Mega-collectors are not art traders. If they do sell, it's into solid hands.They are constantly concerned not to devalue the artists whose works they own, which will eventually form the nucleus of a museum in their name.As both a cultural and economic player, the mega-collector alternates between the roles of dealer, buying and possibly selling, exhibition curator, patron, donor and foundation.Examples: Peter Ludwig, a German industrialist (21), Count Panza di biumo (22), an Italian businessman, Charles Saatchi, a London advertising executive (23).The foregoing considerations concern the primary market, the one from which the artist originates.The observations made highlight the development and anarchy of the secondary market, that of resales.Art that is immediately contemporary has taken on a greater role in major international public auctions.Alongside the promotional galleries, the number of intermediaries has multiplied.Art dealers, brokers and agents have taken over from the entrepreneurial dealer in the transaction chain.Public auctions of immediately contemporary works and the proliferation of art fairs have facilitated the circulation of works outside the control of the artist and his regular dealer.
The international cultural network.
The internationalisation of the art trade, which is contemporary and inseparable from its cultural promotion, is based on the link between the international network of galleries and the international network of cultural institutions. The transformations in the system for organising their artistic lives have less to do with changes in the market. From the museums that have been seized by the fever of the immediate, to the major international events such as the Venice Biennale or the documenta in Kassel (24), these mark the periodic rendezvous of the cosmopolitan world of international art. They are key moments in artistic sociability and privileged places for the exchange of information. The assessments and outlooks drawn up by the organising committees of biennials and quadrennials, by taking stock and setting the tone, help to standardise the choices made by collectors and museum directors. The artists themselves are confronted with the social image of their works, as well as other aesthetic trends. Like the Parisian salons of the eighteenth century (25), these events also served to qualify artists. Acting as an informal academy, it is involved in drawing up a list of aesthetic values and constitutes the obligatory stages in an artistic career from the dual point of view of the reputation of the author and the price of the works. Museums of contemporary art are, through the aura of the place and the expertise of the curator, the major forum for validating art. The contextual, ecological and institutional role of the contemporary art museum has often been emphasised. Many creations originally conceived to challenge art, the market and the museum require the accompaniment of critical commentary and the separating effect of the museum in order to be understood in the complexity of their intent, or even to be perceived as art. The museum draws the line between what is art and what is not, or not yet art. The certification of contemporary art does not, like that of ancient art, involve the great privilege of attribution, but rather validation as art. It is not about the authenticity of the work as a relationship to its true author, but about the authenticity of its existence as art. The museum director's guarantee relates firstly to the identity of the object as art and secondly to the value of the work.
Conclusion.
Although art has existed since the beginning of human history, it has undergone many changes. Throughout the long history of art, various artistic movements have emerged, and with the birth of new artistic movements, artists of genius have been born who show us a new world and bring us new inspiration. But the real break with human chronology came only recently. Art Nouveau, at the dawn of the twentieth century, created new trends and shattered something in the temporal and traditional space that we had come to expect from the arts. But when it comes to the market, things are rather different than when it comes to the eyes of the artists. While some people think that collectors' eyes are turning towards modern art, this statement is false in the face of the craze for historical collections. Collectors who used to flock to antique art fairs such as Maastricht in the Netherlands have turned to Switzerland's ‘Art Basel’, which specialises in modern art. As I explained, auction houses have also been auctioning modern art for over 70 years. The wind for modern art seems to be the same on the surface. This is because the flow of money and the the newly rich has formed a huge flow centred around the distribution area of modern art. But this seems more like a kind of speculative bubble. We need to understand that ancient and medieval art is overpriced, often protected by national and international legislation, and when it is saleable (donations outside the museum monopoly), in the hands of a very small selection of very wealthy buyers, including family trusts, corporate groups and billionaires. So-called Renaissance works, more accessible if you like, are in a price bracket just as inaccessible as their predecessors, and are still in the hands of the same groups of buyers. With Impressionism, things changed. Fashion niches began to form, with pompier (academic) art devalued, artists forgotten, works put aside, and greater production of paintings with the industrialisation of materials and the expansion of their accessibility.
EmbunDH.
Reference.
1: https://www.britannica.com/topic/retable
2: https://www.atxfinearts.com/blogs/news/triptych-art-history
4: https://academic.oup.com/raps/article/10/3/490/5716334
5: http://www.dezenovevinte.net/ha/pompier_mgj_fr.htm
8: Treaties, Time Limits and Treasure Trove: The Legal Protection of Cultural Objects in Singapore, 2004, Jack Tsen-Ta Lee, Singapore Academy of Law.
9: https://www.artsy.net/article/artsy-editorial-interest-rates-impact-art-market
10: https://www.jstor.org/stable/1807525
11: Hence the importance of having, well beyond the insider market, a solid international legal background, as well as knowledge of the various laws in force, governing areas as varied as articles and codes on sales, copyright, asset protection, insurance and many others, but throughout the world. You also need to have a notable minimum of expertise in one of the key areas of the art market in which you are professionally involved.
12 : https://www.jstor.org/stable/40766478
13: People often imagine that the art market is limited to auctions. This is not true. But some works, especially the rarest ones, often antiques, but not exclusively, are only negotiated between two entities, privately, with the same issues of expertise and the same legal framework, but without the heavy publicity.
14 : But others, with much more experience than me, may well have a better definition.
16 : To find out a bit more about the fabulous man Malraux was, here's the official website about his life and works: https://malraux.org/
In terms of his criticism of art, the following books are the most interesting: Les Voix du silence (1951), I have personally read the 1953 Gallimard edition and the three volumes of La Métamorphose des dieux (1957, 1974 and 1976).
17 : https://www.lalanguefrancaise.com/dictionnaire/definition/contemporaneiste
18 : https://modernismmodernity.org/articles/playing-avant-garde
19 : http://www.econlib.org/library/Enc/bios/Schumpeter.html
22 : https://www.nytimes.com/2010/05/02/arts/design/02panza.html
23 : https://www.charlessaatchi.com/
24 : https://www.documenta.de/en/
25 : https://www.worldhistory.org/trans/fr/2-2374/salons-parisiens-et-siecle-des-lumieres/
