The high end art market – normal pathology?
July 18, 2013
A debate has broke out over Allison Schrager’s piece ‘High-end art is one of the most manipulated markets in the world‘.
Schrager: “The nature of art as a commodity inherently makes efficient prices, meaning prices that reflect all available information about value, impossible. Value is subjective; the intrinsic value of a painting is paint and canvas—beyond that value is often a matter of taste. This is why the industry has developed an intricate signaling process where the approval of a handful of galleries, collectors and museums, determines what is good and valuable.”
Salmon: “Again, the problem is that the art market isn’t allowed, by its practitioners, to be a real market, and instead operates on a series of conventions which make it deeply broken on many levels.”
But Mostafa Heddeya at the art-blog Hyperallergic, begs to differ.
Heddeya: “The truth is, Schrager’s bad taste aside, the art market, though corrupt in its own right, demonstrates identical pathologies to the world of finance, from venture capital to hedge funds, yet the difference is that the fiction of legitimacy that sustains those industries actually costs working people real money.”
He goes one step further, arguing that scapegoating the art market only serves to sustain the ideal that real markets are efficient.
Heddeya: “The financial press requires cartoonish demonizations of the art market to illustrate that it could be worse, that real fraud lies not with them but elsewhere, that culture is an indulgence of the silly ultra-rich, that once we venture outside of the “efficient market” — structured, global finance, facilitated by low taxes and minimal government meddling — we end up with this diabolical system, the art “market,” a seat of unfairness and villainy masquerading as high-mindedness.”
A further post at Hyperallergic drives home Heddeya’s point.
Hyperallergic: “Salmon concludes that “the art market, more than ever, is controlled by a handful of large international galleries.” But swap “banks” for “galleries” and “global financial system” for “art market,” and we get closer to a more relevant truth.”
Thanks to David Schleifer a fellow STSer with his ear to the ground in Brooklyn.