Rewinding the Artificial Advancement of the Art Market
The price people are willing to pay for an artwork should be based on factors such as provenance, size, subject, artist, period etc. which have not been artificially altered by people for the purposes of monetary gain otherwise the perceived value of the artwork is in fact false. Because the manipulation of the value of artworks is not going to go away, the task of determining the status and health of the art market is made all the more difficult. The current art market boom has caused the manipulation of the value of artworks to increase dramatically to the point where it is as though someone has pressed the fast forward button resulting in the current market prices for artworks being several years ahead of where they should be. It is because of this artificial advancement of prices that the long term stability of the art market is being questioned and people are predicting what could be considered to be a rewind of the art market.
A real view of the current state of the art market would require the removal of the following manipulative practices which cause the value of an artwork to be artificially advanced:
1. Dealers such as Larry Gagosian, Jay Jopling and Leo Castelli bidding on works by artists that they represent in an attempt to drive up the value of the artist’s work.
2. Auction houses giving minimum price guarantees to their vendors to secure the most valuable and desirable works for their auctions.
3. Auction houses paying dealers to begin the bidding for works that look as though they are not going to receive any bids in exchange for a lower buyers commission or a percentage of the commission if the dealer wins the auction.
4. Auction houses manipulating the value of commission bids by subtly convincing each new commission bidder to exceed the bid of the previous commission bidder.
5. Auctioneers increasing the bid on an artwork by pretending that a bid has been made when it hasn’t in an effort to encourage people to make real bids or to encourage people to make higher bids.
Until someone figures out a way of calculating the value of an artwork minus the effects of the above practices it will continue to be difficult to determine the current state of the art market.
**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.