With apologies for reviving a pet peeve, the art world meme of blaming the bubble on ignorant speculators who have now left the market surfaced again last week in this Marketplace interview with art dealer Richard Polsky. The speculators meme states that greedy art flippers drive prices too high. How they calculate “too high” is never made clear.

Three or four years it was like everyone into the pool. You had all these people who loved art, but you also had a lot of speculators. People saying, hey, art’s got the hot hand. It’s a tangible asset, I’m going to move some money into it. And they were grossly overpaying. You also had these Russian oligarchs just overbidding on blue chip paintings. The market was really international back then. It’s kinda slimmed down now. Anyone buying now long-term player, connoisseur, wants to live with the art, not buying to flip.

Since Polsky is commenting on the results of the Impressionist and Modern sales, these comments are doubly confusing. One of the busiest bidders at Sotheby’s successful sale was a Russian specialist. At both houses, Chinese buyers were clearly evident. One Chinese buyer was eagerly jumping bids. These are hardly “long-term players” though they may be connoisseurs, who knows.

Furthermore, there’s been no credible evidence that new buyers are flippers. Instead, time and again when we see works return to the market or be sold soon after they were made, the seller is usually a “long-term player” who was savvy or lucky enough to have bought early and spotted value. (Which, by the way, is the definition of a speculator.) From Doig to Warhol to Basquiat, some of the best works on offer in this week’s sales come from discretionary, market-timing sales by sophisticated art world players. The one’s with guts are taking advantage of a quick recovery in the market. As speculators, they’re willing to take the risk of having the works fail in return for the reward for having taken the risk and getting the market right. Choosing to put these standout works on the market when there’s little competition for collector’s dollars is also a hallmark of speculating.

Other art world stalwarts recognize this. CNN‘s coverage of the sales contains this:

“I predicted a year ago that contemporary art sales would rebound”, said John Smiroldo, publisher and founder of Antiques and Fine Art magazine. “There was an enormous amount of money standing on the sidelines and people are now putting it into less risky investments” added Smiroldo. “It’s a good thing for the market. What has happened is it made people think they can get good value for artists that stand the test of time. It was a great auction of blue-chip artists.

“With the dollar weakening and inflation soon to hit consumers there’s a flight to blue-chip artists and many are turning art into an asset class,” Smiroldo said.

In other words, speculators are providing liquidity and pricing pressure to support the art market. And that’s a good thing.

Art Sales Recovering in Slow Economy (Marketplace)

Sotheby’s $180 million take buoys hope for contemporary art market (CNN)