Hedge fund manager R. James Breiding provides a compelling synopsis to explain how the city of Basel came to be the pivotal art fair in the shadow kingdom of art fairs that girdle the globe serving as a playground for the Ultra Rich:
Historically in Europe, artists had been Catholic and collectors Protestant. Basel was at the center of the Protestant Reformation, and, later, of Switzerland’s great chemical and drug industries. The Geigy, Hoffmann, Oeri and Sandoz families all built their fortunes there. With abundant wealth, Basel became awash with rich private collections and museums housing rare and valuable art.
Basel, it turned out, was also the right place for a global art fair. Value-added taxes are low in Switzerland, and banks are comfortable taking art as collateral. There is a vast infrastructure for safe storage and transport. Switzerland is the world’s largest offshore banking market, and there remain few assets one can purchase anonymously with undeclared money.
Art Basel was founded in 1970 by an intimate club of dealers who wanted to let a bit of fresh air into the staid, old-money Swiss art world, where art was something that stayed in the family for generations. The thought of displaying works of art like products at a trade fair or promoting young, undiscovered artists was taboo.
A new class of wealth was emerging, however. These people were desperate for contemporary art, as classics were too expensive or not for sale. Hence Art Basel’s swift rise from a clubby affair to last week’s circus, where roughly 300 galleries showed works from 3,200 contemporary artists, pocketing some $2 billion.
A Matter of Taste and Millions (Wall Street Journal)