Wednesday, March 13, 2013

Economics and Emotion of the Art Market

Art collecting may seem to be all about money and the global economy. Several articles over the past week have speculated on the state of the Chinese auction market in 2013 and discussed methods for integrated analysis of Western and Asian art markets. Acquisitions, however, have an equally significant emotional, political component.
The art market is truly international in that the top-four selling artists are Andy Warhol, Zhang Daqian, Pablo Picasso, and Gerhard Richter, and China and the United States compete for the number-one spot in auction sales. Despite the success, the market has a struggling middle class for which an insightful article in The Art Newspaper offered an economic perspective. In “While the rich get richer…,” Charlotte Burns reported on the expansion of the art market at the high and low ends. Benjamin Mandel, an economist at the U.S. Federal Reserve Bank, offered “It is possible that the bifurcation in the art market reflects a dichotomous growth in the world’s economies,” and Linda Blumberg, the executive director of The Art Dealers Association of America, asserted, “The middle range is absolutely vital to the ecology of the art world.”
As if on queue, the Financial Times reported on a potential solution. Namely, the founders of Art HK: Hong Kong International Art fair, held a new London-based fair. Art13 focused on mid-market dealers and galleries, which featured works by artists from more than 30 nations. Reportedly, the fair fared well in selling works in the mid-market range. The advantage of tapping into an under-exploited market notwithstanding, the strategy of the organizers included inviting major collectors from Miami to Singapore. Collectors from China had more to talk about than the financial value of art and, in a public forum, commented on the rebuilding of the nation’s cultural institutions. A prediction by a Chinese property developer, who built a museum in Shanghai, was particularly telling of the intertwining of emotion with economics.
“We will get the money first, and then we will get our dignity back. When China becomes the world’s number one economy, Chinese works of art will become the most valuable in the world!” ("The Art Market: why 13 is lucky for some," Financial Times, 08 March 2013.)

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