Art Plus Wealthy Egotists Equaled Chaos – artmarketblog.com
The last post I wrote dealt with the reasons for the beginning art market crash in 1991 in which I said that I would continue with this topic for a few posts. The reason that I have focused so much on the events surrounding the collapse of the art market in 1991 is that many of the events that caused the collapse are extremely unlikely to re-occur. My aim is to show that the current art market is so different to the art market in 1991 that the comparisons that people are making between the art market then and the art market now are not relevant.
As I outlined in my last post, the main protagonists of the art market crash were the Japanese who at the time were riding on the back of a booming Japanese economy and had money to burn. A very limited understanding of the art market and an extremely narrow experience with western art combined with a hunger for acquiring goods that would increase their social status and display their wealth to the world led to a situation that would ultimately prove fatal for the art market boom. What the Japanese buyers wanted from the art they purchased was their photo in the newspaper and as much media attention as they could attract. In order to get this attention the Japanese buyers basically targeted works by the most famous western artists and were willing to pay what ever it took to get hold of these works. As a consequence of this narrow and irrational buying the Japanese buyers ended up paying way more than the works were worth. The high prices being paid by the Japanese gave created a false impression of the state art market which in turn gave people a false sense of security.
Because the main motive of many of the Japanese art collectors was to associate themselves with the famous western artists they were far more likely to purchase a second or even third rate work by a famous western artist than a high quality work by one of the many amazing emerging young Japanese contemporary artists. One example was the collector Yasumichi Morishita who in one month bought 100 impressionist and post-impressionist paintings for a total of $100 million dollars many of which were deemed to not have been worth the money he paid. Coincidentally Mr. Morishita was involved with criminal activity (see previous post “Crashing the Art Market, Japanese Style”), as were many of the rich Japanese art buyers, and had been previously charged with two criminal convictions for fraud and extortion.
The immature Japanese art market that was based on an extremely limited variety of works and on values being artificially inflated was never going to last long. The rich Japanese buyers had such an effect on the art market that when they pulled out the art market virtually had a panic attack and collapsed.
**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.