Scott Reyburn has a column in the International New York Times bringing together a broad range of recent data points to ask how trustworthy are auction prices.
Mixed in are a number of different—sometimes contradictory, often familiar—points about regulation in the art market. The piece culminates with a hypothetical scenario.
The issue here is how the art market is different from other asset markets. Which isn’t a trivial issue because the question of regulation in the art market is not whether to regulate art sales—Reyburn points out there are numerous laws on the books in various jurisdictions—but how to regulate art sales. What are the rules that would bring confidence to a broader group of art buyers who may be sitting on the sidelines?
Here’s Reyburn’s scenario. As you read it, ask yourself what is to stop a real estate developer from doing the same thing in a hip, gentrifying neighborhood? For Artnet substitute real estate records and for the museum show sub in a buzzy trend piece in your preferred news outlet:
Say, for example, I discover a brilliant young artist on Facebook. After a crazy week at my house in the Hamptons, he has made 30 abstract paintings for me, which I’ve bought for a total of $90,000. Having posted examples on Instagram, I enter one of these paintings into a contemporary day sale and ask two business associates, who are cut in on the deal, to bid it up to $150,000. After the sale, a benchmark auction price posted on Artnet, and news of the artist’s inclusion in a forthcoming museum show — which happens to be curated by a friend of mine — establishes my new acquaintance as a hot young artist. Over the next six months, we discreetly sell 20 more paintings at auction and privately for an average price of $70,000 each.
A Tug of War Over Art-Sales Transparency (The New York Times)