Secrets of the Art Market

A lot of articles about the falsity of the art market have been brewing lately...this one over in the NYTimes was a real eye opener- did anyone else know that there is a practice at art auctions called "chandelier bidding" where an auctioneer will begin by raising his hand to the ceiling, calling out a false bid to get the ball rolling? Seriously? The article pointed out a ton of other not so nice auction secrets too that got me thinking about the other tricks of the art trade that I have come across during my time ghosting around the art world. Some of them are just deceitful, others are near lies...so let me show you around the secret dealings of the art market and why it is all basically a thin veil propped up by oodles of cash, pride and hot air! Also, please enjoy my pathetic analogy to the art market and cookies, cookies at least are a thing of deliciousness and sustenance while the contemporary art market? Not so much...also I would like to eat some cookies.

There are some cookies that sell for $1. The baker says she wants to to buy one for $2. Everyone now thinks the cookies are worth $2 and will pay $2 for the cookies. The main art world sales trick that really got me was the fact that galleries oftentimes buy the work of their own artists. I guess a lot of businesses invest back into themselves of course but in the case of the art world oftentimes buying a work can falsely inflate the value of the artist.  Damian Hirst and his diamond encrusted human skull are rumored to have executed this scheme with his gallery, investors, and even the artist himself buying the skull merely to safe (diamond encrusted) face...if no one else bought the piece the price of his work would lessen in value and the Hirst stock would plummet so everyone wins in this slight of hand! I do have to wonder if this kind of game had anything to do with the artist's recent split with his representation though?

O you want the first cookie? Well...you can have cookie number three! Because "other people" obviously wanted cookie one & two! Editioned art work also greatly suffers from the ghost buyer too, with gallerists often owning an edition (or one, or two, or ten) of a piece (whether it be film or prints or photographs etc.) in order to make the piece seem more in demand than it actually is.  The gallerist pays half price (if they pay anything at all) and then is able to price the remaining editions higher and also create a false demand. I find this practice pretty wrong. Especially since once the fake demand is set the gallerist can potentially sell his personal holdings for even more money.

That cookie is worth $500 but I'll give it to you for $200. Well...the price of a lot of contemporary art is completely arbitrary in the first place. Only artists whose work has been aquired by major institutions, esteemed collections, or somehow had a price set by auctions has any real gauge of market value- and even then, is the initial price tag set by demand & art historical expectation? The rest of the art market really is just a random price decision, walking the line of what someone is willing to pay and what will maintain the illusion of artistic merit. But, the thing here is the secret world of discounts! Repeat collectors, and even sometimes first time buyers for that matter, are commonly given a percentage off of the posted price for a work of art- negating the "truth in pricing" law that NY has in effect but barley enforces. This, of course, is a good business practice but, when considering that the listed price is what people publically think is the final sale price, this discount is yet another way to fool people into an inflated value of someone's work. 

Someone else really wants that cookie, I can put you on the wait list for it and let you know when it, or another like it, is available? This game is one that is sometimes practiced on the up-and-up but has also been known to be used as another trick of the trade. Gallerists will sometimes tell a buyer that a piece is on hold (meaning someone wants to buy it that is more important than you) even when it is not in order to create a false demand and also pressure the buyer when contacted about the piece's "sudden" availability. The other practice, that was dominant in the 90s art market heyday, but I think has calmed down a bit thanks to this little thing called the recession/depression, is the wait list, a system in which someone agrees to buy whatever the next available work by an artist is. This is a weird one, completely dismissing the attachment to the content and treating the work strictly as a money chip of sorts...it isn't wrong but it draws the work from being about art to being solely about money...a terrifying byproduct of the supply and demand nature of most markets but a particularly dreary fact when applied to culture.

You can give the cookie to charity and then declare it as a tax write off...It's no wonder that the last time I attended Miami Basel the major sponsor was USB, and it is also no coincidence that this art fair occurs right on the cusp of the end of the fiscal year! Money can be hidden and moved easily through the asset of artwork. Especially tax deductible money. People buying art as a donation to an institution makes it a tax deductible gift and money is saved in the end. I do know that a lot of places profit from this kind of transaction but buying up art as a means to hide money or get rid of large sums quickly to avoid paying taxes on it is another sad truth of how people treat cultural value today...

So, you want this really delicious cookie? You gotta take all the burnt ones with it too, including the one that someone wanted Grover painted on with frosting because they mistook Grover for THE Cookie Monster! Variation: I own the bakery and the famous grocery store the cookies are now sold in. Well this one is super super awful and also contributes to the amazing ego bloat of many an awful artist AND opens the door for some serious price gouging. Oftentimes when a gallerist or collector is selling or donating work to a museum they will force an institution on a package deal meaning, "You can buy this Picasso but you gotta by all this art by my Nephew too!" And now your Nephew is also in MoMA. And his prices skyrocket because of this. And you, the Uncle, are profiting hand over fist from this since you own all of the Nephew's work and now people want it since it is in a major museum. This practice is also similar in spirit to the boards of many art institutions too....Boards are oftentimes littered with self interest, a gallerist or collector acting as a board member (as this HuffPo article points out),  donating or swaying a collection to buy work that personally benefits their own holdings. Again, institutions benefit from this practice sometimes...but other times it leads to some pretty terrible work being showcased, pedestled, and falsely applauded by the art world.

In trying to think of the best way to avoid the pitfalls of art market bullshit the only advice or comment I have is: buy directly from the artist. This practice supports the work itself, it cuts out the middle man (the gallerist who gets 50% of the sale- which is crazy- and adds to the price inflation so the artist can make money/cover production costs after the split, and in most cases is just adding to the already large wallet of many a rich-kid gallerist), and it ensures that the value of the art is based on something other merely profit. Now I am going to eat some cookies. And try to appreciate art as art and not the smoke & mirrors commodity it has become!