As the art market becomes increasingly liquid, investors are willing to pay more for art: an asset class which used to be very hard to sell is now much easier to turn into cash. That makes it more valuable. Of course, there will still be volatility, but there’s a game afoot now. On Wall Street, it used to be called “pump and dump”: find a cheap stock, talk it up, sell it at a massive profit. That’s illegal, on the stock market. But in the art market, people put out press releases boasting of their prowess in such matters:
“In regular finance, if you have insider information about a stock, it is illegal to invest in that stock. In the art world, it is not only legal, it is done regularly. Peter Hort, along with his wife and family, are the people who create the insider information.”
The trends in the art world are clear: newer money is gravitating towards newer art, which is considered a store of financial value and even possibly a source of significant profit. In order to make money in this world, connoisseurship doesn’t particularly help: what you need is “insider information” and the ability to hype certain artists to the type of collector who doesn’t know whether he’s buying a painting or a photograph. The only barrier to entry is money — which means that lots of rich people have decided to play. Most of them will end up losing, but all markets need losers, and all markets need a marketplace. If Christie’s can become that marketplace, then it will effectively have become the platform responsible for turning the informed appreciation of beauty into a greater-fool game where it doesn’t matter how much you pay, just so long as Christie’s can persuade someone else to pay even more in the future.
– Adventures in art-market commodification, enhanced hammer edition
So essentially the art market is turning into an unregulated financial investments market. It’s not clear who can regulate this or who would undertake such a campaign given the moneyed interests involved.
The author’s piece on the Gagosian deposition, where Gagosian is compared to Goldman Sachs is worth reading for a description of what the stratospheric portion of the art world is like these days. Though, fair warning: it is pretty depressing. It’s basically business deals. The movers and shakers probably know more about finance than they do about art. After all, all the little galleries that hunt out and represent emerging artists are doing the legwork of finding valuable artists for him.