Ben Lewis is a foe of the art market. He’s been on a one-man campaign to deflate the art bubble. So you’d think he might have taken a victory lap this last year as art prices collapsed and sales ceased for a time. Instead, he displays a muddled understanding of basic economics in a story on the Royal Bank of Scotland’s £10m art collection. Lewis is quoted as calling for a distressed sale of the bank’s art:
Ben Lewis, an art commentator, said: “All the banks who received state aid should have firesales of their art collections. In fact, governments should enforce these sales. That would take some of the heat out of the inflated art market, and put a bit more money back into government balance sheets.”
In his haste, Lewis seems to have gotten tangled up in two different ideas. One is to return money to the government. That would require careful and calculated art sales that might increase prices as it increased value to the government as it sold the art works. The second is to somehow deflate the already reduced price level of the art market by dumping art in forced sales like the recent Lehman Brothers sale. As we’ve seen with the Lehman sale, there’s no guarantee releasing a large quantity of art onto the market would result in a fall of prices. Quite the contrary, as we’ve seen with a range of art events, a large sale could excite prices if the quality of the works is high.
More to the point, if the sales accomplished Mr. Lewis’s desire of reducing the price level, the return to the government would be disappointing. Surely the £10m valuation on the art was arrived at recently using the same “inflated” prices Mr. Lewis so despises.
RBS Eyes Art Disposals (Wall Street Journal)
