“Occupy Art” happened
to appear in the U.S. edition of Reuters,
while “Art as an investment” appeared in the South China Morning Post. Western and Eastern perspectives were
distinct. “Occupy Art” passionately suggests that tastes, or lack thereof, of high-end
“collectors” control the market and have degraded the practice of collecting. “Art
as an investment” takes a pragmatic look at the ways in which art has developed
as an asset class.
What do sales prices
of $250 million (Cezanne’s The Card
Players), $140 million (Pollock’s No.
5), $120 million (Munch’s The Scream),
$87 million (Rothko’s Orange, Red, Yellow)
say about the quality of the art? While the prices may seem extreme, at least
each of the sales, which occurred over the past decade, reflects vetting through
a history of ownership. What do sales prices of $8 million (Hirst’s The Physical Impossibility of Death in the
Mind of Someone Living) and $33.7 million (Koons’ Tulips) say about quality of the art? The artists appear to have a
following of wealthy collectors who somehow decide on the financial value of
the artworks. “Occupy Art” refers to the “art market oligopoly system,” in
which money and perceived prestige guides acquisitions.
The multibillion-dollar art market offers a spectrum of
investment options. Masterworks, many with market values over $10 million, are
the “blue chips,” with paintings by Pablo Picasso and others selling for over $100
million. Although, reportedly no work acquired for over $30 million has ever
been resold at a profit. “Art as an investment” points out options to mitigate
risk in art investing. Indices, such as the Mei Moses Art Index, and on-line
statistics, such as Artindex.com, provide more transparency in the art market
but fall short of comprehensive risk assessments. The Fine Art Fund Group in
London and Art Futures in Hong Kong offer shares in diversified portfolios of
artworks, but art funds of major banks have folded in the past couple of
decades. The success of the market over the past two years notwithstanding, art
is still developing as an alternative investment.
On the other end of
the spectrum, “affordable art” comprises prints, by recognized artists
such as Henri Matisse and Andy Warhol, which sell on-line at Costco and “penny
stock” works by aspiring artists that are increasingly accessible through
on-line galleries. In the present-day art market, on-line access to affordable
art creates the possibility of crowdsourcing aesthetics as a complement to the rarefied
perspectives of art critics and high-end collectors. It’s yet to be seen if and
when the volume of trading develops into a significant share of the $60 billion
international market and whether decisions follow aesthetics or profitability.
The two articles, and
the debate that lies in between, characterizes the broader political economy of cultural property. On the political
side, artworks and monuments play a role in cultural identity, which causes
conflict in calls for repatriation and is put at risk when political violence targets monuments. In economics, China’s increasing share in the art market and the
financial potential of contemporary art in emerging nations illustrate a
relationship between cultural property and development.
Perhaps the passion
and pragmatics of art collecting can serve as a barometer of sorts for the
political economy of cultural property?
Learn about the framework for Cultural Intelligence.
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