How art became a market of extremes

As the art market becomes increasingly polarised, Art $ummit looks at the changing relationship between art and money

Work by Vincent van Gogh has appreciated in value enormously. Above, van Gogh’s Noon, or The Siesta, after Millet. Musée d’Orsay, Paris, France/Bridgeman Images

Thu Jun 02 2016 - 06:00

Oscar Wilde, always good for a quote, once said: "When bankers get together for dinner, they discuss art. When artists get together for dinner, they discuss money."

Maybe we are most fascinated by that which we find exotic and rare. For most artists, money is exotic indeed. At the other end of the spectrum, art is synonymous with money, as those at the top echelons of the art market – the 0.1 per cent of the art world – value their sales in the tens of millions. These are the few artists who are probably very friendly with their bankers.

According to arts economist Clare McAndrew, the art market is segmenting. “Over the past 10 years, the market for works over €1 million grew more than 400 per cent. The market for works over €10 million grew more than 1,000 per cent. The increase for everything else is in double digits,” she says.

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It’s important to note that not all art increases in value, but that €10 million-plus price tag, which accounts for almost a third of annual art sale revenues, is met by just 81 artists. “It is becoming very polarised; the high end is pulling away, growing faster and doing better. Ireland,” McAndrew adds, “is in the ‘lower than one million’ market.”

International expert

McAndrew, who is based in Dublin, is an international expert on the art market. Her organisation Arts Economics produces the industry standard annual TEFAF (the European Fine Art Fair) report on global art sales. She also tracks data for the Frieze and Armory art fairs, and will be speaking at the first Art $ummit, a half-day event in conjunction with EVA International at Dromoland Castle in Co Clare tomorrow.

The sessions also include a talk from Delphine Munro, head of arts in the European Investment Bank Institute, and discussions with art insiders including James O'Halloran of Adam's Auction House, gallerist Oliver Sears, the Hugh Lane's Barbara Dawson and curator Catherine Marshall. At €180 per ticket, the event is evidently aimed at those with money to invest, and there will also be sessions on legal issues, collection management and tax advice.

The art in the top tier of TEFAF's report has fallen into the realms of what Turner Prize-winning artist Grayson Perry described, in his brilliant 2013 BBC Reith Lecture, as "an asset class to hang on your walls". This is a world where people frequently make the mistake of, as McAndrew puts it, "equating price with quality".

For some high-level buyers it is probably more important to tell people what they paid for something than what that something actually is. Unfortunately, these collectors, with huge financial clout – who, in partnership with their dealers, alongside a relatively small number of curators and even fewer museum directors – can most influence or even manipulate the market.

“There are two extremes,” McAndrew says. “Pure collectors and pure speculators. Either end is a bad place to be. It’s best to be somewhere in the middle, where you care about the financial side but you’re not trying to flip it quickly.” Flipping means buying an art work, and reselling it almost immediately.

“We tell even smaller collectors to stop focusing on returns and flipping. Buy what you love: it’s good advice. It’s a long-term investment. It’s a great way to transfer wealth through generations, and there are tax breaks if you display things. Smaller collectors would be better thinking of art as a store of value.”

Greater player

Brexit, McAndrew thinks, could give the UK a chance to become an even greater player in the art market.

“It could be a coup for them. There’s a perception that Europe is a complex and costly place to do business, and because art is a mobile and portable asset, they’ll take it anywhere.”

For those only remotely fascinated by the telephone-number deals that characterise the 1 per cent and for those whose love of art is geared towards seeing it, supporting it and sometimes saving to buy it, the market is still important. It provides some of the grease that oils the cultural wheels, enables artists to have careers and helps shape taste, and through that also shapes what the critical and cultural canon of art comes to look like.

Event cofounder Rosanne McDonnell says an aim of Art $ummit is to address the Irish art world and look “not only in terms of art’s economic value but its meaning and significance in a national context”. But although the majority of the world’s art buyers tend to buy from their own country’s artists, how can such a small country as Ireland increase its visibility internationally?

Just as important as cold, hard cash, the entire system operates on reputation, so attendance at the major international art fairs is important.

“Art fairs developed as a competitive reaction to the power that auction houses were having, and they’ve become the central part of most people’s calendars,” says McAndrew. “It’s hard to not go.”

Culture Ireland already helps galleries to attend the leading fairs, although it's a costly enterprise. Another, more counterintuitive move, is for Irish galleries to show more international artists. "Having a two-way flow, mixing Irish and international exhibitions, is encouraging," she says.

The art market is not the only game in town. There are other, parallel art worlds concerned with site-specific projects, performance, engaged practice, experimental projects, installations and art you make because you just can’t not. But it’s worth paying attention to the market, and if you do have money to spend, Dromoland Castle could be a good place to hone your researches.