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The Art World Catches its Breath
Looking Back on the Economic Upheaval
(Note: This article first appeared in the September 2010 issue of Art Ltd Magazine.)
We surely all recall the eminently tumescent art bubble of only several years ago, and its subsequent burst. Hard to believe it ever even happened... but it did. Fueled by an overabundance of easy credit, malignant property values, mortgage lending chicanery, Wall Street wagering and cabalistic investment gambits, the contemporary art market was sizzling and the race to accumulate was on. Publicity around fast rising art prices both at galleries and auctions, particularly with regards to precocious young artists, triggered much of the binge buying. In response to the influx of new collectors, galleries did whatever they had to do to meet the demand, vying with one another to sign the next big art stars, to the point of plucking up promising BFA and MFA students the moment they graduated art school (and sometimes even before), drafting them like professional sports teams draft top college athletes. Never mind that in sports it's how good you are in the sprint, whereas in art, it's whether you've got the chops to go the distance. Never mind that art world darlings du jour are just that-- today's-- not tomorrow's, not next week's, certainly not forever's, and that one or two lame shows can effectively compromise a career.
Hot artists' prices would double, triple or sometimes even more from one show to the next. It wasn't all that unusual for an artist to debut at some backwater alternative space selling in the hundreds or low thousands of dollars, get "discovered," then be selling in the mid-to-upper thousands within several months, and into the tens of thousands within a year or two after that. Never mind that no commodity known to man increases in value that fast. Never mind that speculating on untested artists based on a successful show or two (or worse yet, on promises of what's to come rather than on proven track records of accomplishments) makes about as much sense as throwing money at dot com startups in 1996. Never mind that an artist's selling prices ascend according to a continuous and progressively momentous string of successful shows, sales and reviews.
At the height of it, (approximately between the Banksy Los Angeles show of September 2006 and the Damien Hirst Sotheby's auction of September 2008), galleries were buying up entire shows from artists in advance and selling them out before they even opened. Tenderfoot collectors couldn't wait to cash in on the cow, divest themselves of copious cornucopias of discretionary capital, literally fight with one another for the privilege of first pick, and then proceed to gloat as their "investment portfolios" bloated in value. Never mind that in Artland you can't simply cash in your chips at the end of the night. Never mind that pretty much the last thing on an art dealer's wish list is a buyer who wants to sell back his art (and with profit, yet).
Art fairs were perhaps the epicenter of the insanity with new contestants popping up relentlessly and everywhere like measles on a three-year old. The math made no sense whatsoever. At the apex of the Miami shenanigans, for example, there were close to thirty simultaneous fairs. At let's say an average of 80 galleries per fair, 50 works of art per gallery (not all on display, of course), that would total somewhere in the vicinity of 120,000 pieces available for sale-- enough for everyone in attendance to take home one or two and still have plenty left over. There's way more art out there than all the collectors in the universe can ever possibly hope to absorb, and there's nothing like a good old-fashioned inflationary paroxysm to reveal that truth.
The simple fact is, we all kind of lost our minds. The good news-- certainly for collectors-- is that sanity prevails once again. The speculators are vanquished as are their profligate ways, and prices have in many cases settled to more sensible levels. The true dedicated, informed, lifelong art buyers have crawled back out from under their beds and are more than delighted to be back in the game. And even though the frenzy to accumulate is no longer quite so nuts, pretty much anyone will tell you that pragmatic reality isn't all that awful, and that there's plenty to be said for thoughtful buyers who know how to evaluate potential purchases, and who can intelligently dialogue with galleries about the art and artists they represent. These kinds of collectors buy art because they love art, and established art galleries in it for the long haul sell art because they love art. That's really what art collecting is all about, the way it should be, and in spite of an occasional blip of indiscretion, the way it always will be.