This talk was presented by Todd Levin at Art Cologne as part of a panel discussion with Harald Falkenberg + Andreas Rumbler titled “Development of the International Art Market from the viewpoint of top players.”
Art Congress Cologne – 17 April 2015
I am delighted to be back in Cologne, and I would like to thank Daniel Hug for the generous invitation he extended to me to attend this year’s Art Congress Cologne and share some thoughts with you here on this dry and lovely morning.
Pascal called the imagination “…the mistress of the world, the superb power…it disposes all things….it creates beauty, justice, and happiness…” If we accept Pascal’s premise – that the imagination is the power of the mind over things, then we immediately realize that the Artist’s role is not to lead us out of the havoc that we find ourselves in the midst of everyday. Nor is the role of the Artist and their imagination to comfort us while we are constantly barraged with an onslaught of information from myriad sources. I think that the role of the Artist is to make their imagination ours, to gradually watch their imagination spark in our mind. The role of the Artist, in short, is to help us live our lives. The Artist does this by creating a world to which we can turn to, again and again, so that we eventually are unable to conceive of our lives without that Artist’s imagination and feeling. Art is the crucial interface between the imagination and reality, the thing that makes life deeper and broader than what it might be without such insight.
Art, therefore, is fundamentally about generating new ideas and new forms through the creation of the Artist’s personal language. As a creator of language (rather than a packager of language), Artists do not belong to a social group already molded by culture, but to a culture which they are themselves building up here and now, at this very present moment in time. In order to create a personal language, every great Artist continually breaks with the past by refracting the entire historical and cultural range of earlier ideas and forms.
The Art market, on the other hand, is only about the packaging of the Artist’s personal language, and the marketplace where that language can be branded, bought, and sold. The Art market, therefore, is simply an apparatus through which the Artist is threaded into the Art world. The recent vertiginous rise in demand for contemporary Art is already well documented, will be repeatedly discussed here today ad nauseam, and requires no additional proof. But one must logically ask the question “what is responsible for this exponential growth curve?”
Certainly, what drives this surging market is not supply – it is not the sheer availability of more contemporary Art than ever before that sustains the seemingly infinitely expanding number of galleries, auctions, and Art fairs worldwide. And there is more exhibition space world-wide in institutions, galleries, auction houses, and Art fairs than there is good Art that actually deserves to be exhibited. Nor is it quality. Art today is no better or worse than it was 10, 20, or 30 years ago, the number of historically important Artists in any given decade or generation is no larger or smaller than it was 10, 20, or 30 years ago, and gallerists and collectors are no smarter or dumber than they were 10, 20, or 30 years ago, when I began working in the Art market. The force behind all of this, quite simply, is increased demand.
It is the existence of tremendous amounts of surplus capital, followed by the need of ultra high net worth individuals to find over-size financial returns that creates this exceptional level of demand. Prices are driven upwards not by what is happening in Art, but by what is not happening in the world of business. All of this surplus cash, redirected into speculative purchases such as Art, diamonds, gold, or wine creates bubbles. Therefore, the most important condition of this Art market boom is not internal at all – it has nothing to do with the quality of Art, Artists, gallerists, or collectors; rather, it is the external need of ultra high net worth individuals out in the world of finance to find a good place to store their excess capital. If Art prices rise so high that they suffer a confidence collapse, or more likely, if other investment opportunities emerge that offer better appreciation – demand will fall.
Contrary to what anyone else tells you here today, one cannot invest in Art. An investment is where one looks at a rental building, or a company’s stock, in terms of the ongoing revenue stream that it will produce. One is basically committing some funds now to get more funds later on through the ongoing operation of the asset. But with Art, as with the other commodities mentioned earlier, such as diamonds, gold, or wine, one can only speculate – one cannot invest. Speculation is solely focused on the price action of the commodity – you are basically buying an indexed future – or more simply, you are betting that what you purchase for ‘x’ today you can sell for ‘x + extra’ to some other buyer at some point in the future. You are not demanding that the Art continually produce an ongoing revenue stream like a stock produces dividends or splits, or real estate produces a monthly net positive cash flow – the Artwork has no underlying bricks and mortar value, and therefore produces no ongoing revenue stream as an investment normally would.
In addition, in the majority of cases, Art is not even an efficient speculative vehicle. Most Art will not appreciate, and in addition, there are high transaction costs including dealer markups, auction house commissions, insurance, crating, storage, shipping, and customs costs, and taxes when a work is sold (in most cases). So every Artwork has a quantitative price. But every artwork has something else – a qualitative value. And these two terms – quantitative and qualitative – or stated even more clearly – price and value – are used interchangeably more and more every day by people in the Art world who should know better, even though these terms have little or nothing to do with one another.
In his well regarded book “Talking Prices: Symbolic Meanings of Prices on the Market for Contemporary Art” Sociologist and Professor Olav Velthuis suggests that the defining historical characteristics of this gap between market (or quantitative) price and symbolic (or qualitative) value arose in the 19th century. It is worth noting that dealers of that time such as Durand-Ruel, Kahnweiler, Rosenberg, and Vollard heavily relied on critical appraisal to support an Artist’s market – a ‘dealer-critic’ system. This political economy of the ‘dealer-critic’ system was active for more than half a century, through the period of Clement Greenberg and Harold Rosenberg in the late 1950’s or early 60’s, when a shift began, gradually displacing market power from critics in favor of museum and institutional curators such as Harald Szeeman, with mega-sized exhibitions such as “Live In Your Head: When Attitudes Become Form (1969),” documenta 5 (1972), and the 1980 Venice Biennale.
As Isabelle Graw noted in her book “High Price,” during this next ‘dealer-curator’ period, gallerists articulated a new point of view that, for the most part, they did not want to be a factory, a marketplace, or just a ‘dealer,’ (which was by that point in time a descriptive term having pejorative connotations). Gallerists inferred they had a moral/ethical responsibility towards Art and the Arts community at large; that they were co-involved intellectually with the Artists they personally represented; and that they were ‘playing for history.’ Gallerists often stated in general terms that they did not want the Art they exhibited to compromise its emotional or intellectual value, they did not want it to degrade into ‘capital,’ and that they did not want their gallery to be viewed simply as a ‘showcase for commodities.’
But it seems that more and more, it is indeed the gallerists themselves who are responsible for constructing and participating in these ‘circuits of commerce’ such as international Art fairs, and it is the gallerists who are transitioning more and more into the merchants and marketers of Art they earlier claimed that they did not want to become. The bulk of gallerists’ time is increasingly taken up with creating and protecting their gallery brand, and then inserting that brand into all possible markets, whether it be Asia, India, The Middle East, Russia, South America – or here in Cologne.
This has given way to the current state of affairs and the most recent paradigm – we have moved from a ‘dealer-critic’ system, to a ‘dealer-curator’ system – to where we find ourselves today, in a ‘dealer-collector’ system – where private collectors and money now influence the rise and fall of Artistic careers, particularly as the international Art market increasingly lacks a clearly identifiable center. This lack of centralization means that many collectors go to galleries and museums less and less these days (with the exception of so-called ‘blockbuster’ exhibitions). They just go from Art fair to Art fair. And Art fairs are meant to cater to one niche of people within the Art world – the collector.
In fact, collectors are now embraced as celebrities in and of themselves, as Artists were in the past. Those that doubt that current power in the Art world is now held by collectors should wonder why tours of collector’s houses and their private museums and their inclusion on panel discussions are now an essential component of various Art fairs. Many theories have been offered about what drives people to collect Art. One view prevalent is that collecting is a search for social status. Collecting was, and is, still an activity identified with the elite. Collectors not only are interested in having collections, they wish to be identified by their collection; they wish to glorify, pore over, and preserve them. Fixity and memory are special goals of collectors.
I enjoy as much as anyone in this room discussing the economics of the Art market. I’ve spent a considerable amount of my life immersed in such issues. But it is impossible to interact with Art in any meaningful way – aesthetically or monetarily – if the only discussions taking place in this room at Art Congress Cologne are about its price. The value of Art collapses under the brute weight of pure quantification of data, without the requisite education and real world experience to qualify that information meaningfully. And if the value of Art collapses, so will its price – sooner or later. Art is not a growth industry.
Today, the most popular Art magazines have turned into simple picture sheets, charting the shifting micro-fashions of the newest Art and Artists. The avant-garde has fallen away because, as in the fashion industry, there is now the desperate expectation of novelty – but no longer of development. The shift from seeing Art as an intellectual pursuit (and, therefore, curating or advising as an intellectual pursuit) to one that is seen as a lifestyle issue is a profound one. This populist growth in the audience for Art has wrought a deep change on Art itself, and therefore, on how one curates, advises, and collects. Art is faltering, and it feels as if the desperation of tricks to which many Artists have recently had recourse, and in which many collectors have recently taken comfort, is suggestive of this faltering.
We all live in the mind. And if we live in the mind, we live with the imagination. Art is the imagination of life, so intensely felt, that it has entered into, and become an integral part of us. But we can lose sight of this crucial force if we only discuss the Art market, until someone like Pascal reminds us of it. The world about us would be bleak except for the world within us, and all Art bears witness to this fact. It is plain then, in this world of apathy and vanity, when we actually do encounter great Art, that we experience something that staggers and deeply affects us. All Art should aspire to this, namely, to lead us to a fresh conception of the world…
as does Gerhard Richter
who was affected by Pollock
who was influenced by Kandinsky
who was inspired by Malevich
who was inspired by Mondrian
who was influenced by Monet
who was beloved of Degas
who was inspired by Manet
who was influenced by David
who worked alongside Poussin
who was taught by Domenichino
who was inspired by Carracci
who was influenced by Raphael
who was influenced by Masaccio
who was inspired by Giotto
who was influenced by Cimabue
who was informed by Roman sculpture
and all the way back to where we began our discussion this dry and lovely morning, with ancient Greek sculpture.
Art, in one way or another, has always offered me a way to better understand myself. If we only attempt to quantify Art as this counterfeit asset class and divorce it entirely from why it was created in the first place, then art and money exchange roles: money becomes ‘divine’ by being translated into art, and art becomes commonplace by being translated simply into money.
For allowing me the opportunity and privilege to have shared these ideas with you, I leave you with my warmest thanks.