buying approaches

Markets and mazes

“Art is not a real business.”

The art market is complicated. As a prominent Swiss collector-client of ours often says, “Art is not a real business.” He means the art market defies the rules and behaviors of conventional sectors and enterprises.

From its beginnings in the 15th century at biannual markets that often lasted for six weeks to the emergence of auction houses in the late 1700s, the art market was rather staid. The economic distance between sellers and buyers was short with few middlemen. By the late 18th century, a new class of entrepreneurs emerged, women and men who were artists’ agents, private dealers, early speculators, and gallerists. In Post-War Europe, the market expanded gradually and cautiously. The United States—specifically New York—replaced Paris and London as the epicenter of art commerce. Galleries were few.

The rise of auctions

Following the 1973 auction of the Robert C. Scull Collection at Sotheby Park Bernet, the art market changed, spurring financial speculation and glamorizing social mobility through “culture.” The art market was no longer “ordinary” retail. It was a tight, cozy commercial sector—with injections of celebrity, scandal, and exceptional wealth unleashed by Ronald Reagan’s tax cuts—until the expansion of art fairs and the more recent introduction of the Internet and technology in the 1990s. These were game-changers.

Collectors became consumers, often anonymous ones. Buyers could simultaneously have 3, 4, or more roles in the market web, which was made easier by a lack of transparency and regulation. Collecting and connoisseurship were shaped by wealth and dominated by fad and fashion. The art market became a multi-billion dollar industry. Its financial dimensions are estimates at best. The pandemic has took a significant toll. Statistica suggested the global art market was $50.06 billion in 2020, about half of the size of the US $99 billion pet industry. The number of participants who spend more than $50,000 annually is probably fewer than 150,000. Plus, the art market is dominated by North American and European market makers. New entrants—whatever their identity or nationality—remain outside of the market and the discourse. Change is slow.

More a maze than market; more a market than a world

The art world is different. It’s populated by all manner of beings—earthly and otherworldly—who participate less in the nuts-and-bolts art business and more in the dizzying whirl of vernissages, air kisses, fairs, and galas. Invariably, what gets our attention is a heady elixir of money, celebrity, and power, flavored with fad and fashion. Few other industries catapult their stars so quickly and then let them fail so hard.