Art + Auction’s Critic Doesn’t Think Much of the Record-Setting Art Buyers Snapped Up in June

Souren Melikian is a smart man with a very good eye. But his approach to the art market can be so Olympian as to beg the question. High prices are adduced as signs of a buyer’s taste and discernment when he approves of a work, but a sign of cynical marketing or collector ignorance when he does not. In this Art + Auction report Melikian is at pains to explain why the art he considers great is not the art valued by the market:

When prices become arbitrary to the point of defying the finest experts’ predictions, the temptation grows among speculators to press for gigantic estimates in the hope that beginners will want to match them when confronted with very desirable works. This explains the failure of Joan Miró’s enchanting 1944 abstract pastel and gouache fantasy on paper, which came with a pie-in-the-sky estimate of £3 million to £4 million ($5.9–7.9 million). The composition, as fresh as the day it was created, was the victim of its extraordinary quality, which led its consignors to believe that anything was possible in a market starved for art.

This last sentence is so convoluted it almost distracts us from the gigantic leaps of the first sentence. Here the market is warped by the presence of speculators who demand, one presumes from the use of the term, a quick return. But much of behavioral economics tells us that aggressive pricing is not confined to short-term speculators. Indeed, as we’ve seen in other markets, the longer an owner has possession of an asset, the more likely they are to demand the greatest possible return. A consignor, therefore, pushes for a high estimate not because they are speculating but because the consignor is willing to keep the work unless a magic number has been reached. That still doesn’t explain why the work would be a victim of its own quality.

Melikian tries the same approach again here as he tries to explain why collectors with means won’t pony up for the works he values:

The relative underpricing of the subtler masterpieces of Impressionist and early 20th-century avant-garde painting may well continue until the last of these works finally leaves the market. The very few multimillionaire collectors who have been around for a long time are either deterred from buying by the overall price level or hold so much art already that they are rarely tempted to acquire more. And the ultrarich mostly hunt for obvious trophies in the areas into which the auction-house marketing teams shepherd them. It would make little sense for these marketers to encourage big money to take an interest in vanishing rarities.

What makes this all worth noting is that Melikian has an easier out. He could–and should–ignore the market valuation. What a buyer pays for a work doesn’t change the quality of Melikian’s contribution.

Rarity Rules (ArtInfo)