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Saturday December 13 2008

In an article in the latest Prospect, Ben Lewis and Jonathan Ford say that contemporary art insanity is about to crash in ruins, because it is a speculative bubble:

The mania for collecting contemporary art has become ever more intense in the past 12 months - in the first half of this year, new auction records were set for almost 1,000 artists. But the suspicion is that dealers and collectors with interests in particular artists may have been “bidding up” prices at auction and acquiring works. If so, they may be holding large inventories of overvalued work, financed by increasingly expensive debt. At the Damien Hirst auction at Sotheby’s, his London dealer, Jay Jopling, bid on an astonishing 44 per cent of the lots in the evening sale, and both he and Hirst’s US dealer, Larry Gagosian, bid on two lots after long pauses in the bidding. One cannot know if Jopling was maintaining Hirst’s prices at his own expense or bidding for clients.

The nearest I got to buying into this lunacy was buying and reading this book.  It will be very interesting to see what happens to all the people in it.  Certainly Hirst, Jopling and Gagosian are among the big names.  My guess is many will be spectacularly ruined, but many others will be seen to have walked away, quietly smiling all the way to their boring, solvent banks.

Lewis and Ford again:

As the credit crunch struck, it became evident that American and Europeans would be buying less art. But that, we were told, did not matter because a wave of new buyers from Russia and the middle east would take their place, their wealth buoyed by high commodity prices. Sotheby’s press releases said that every year 20 per cent of their clients were new and, for the Hirst auction, 22 per cent of the buyers were new clients. New records were set by these art virgins - Roman Abramovich paid $86m for a Francis Bacon in July 2008 and the Qatari royal family, previously known for collecting Islamic art, bought the Rockefeller Rothko for $73m.

Yes, according to that book I’ve been reading, insane Russian oligarchs have for several years been funding the most excessive excesses of the contemporary art market.  My favourite bit in it is where it says something like: heaven is two Russian zillionaire nutters having an I’m-going-to-win-this pissing-contest money-no-object fight-for-status-to-the-death-in-the-boy’s-playground bidding war.  That’s an auctioneer talking.

For some while now, I seem to have been hearing grumbles to the effect that Tate Modern hasn’t bought any proper contemporary art.  But soon the word will be: lucky old Tate Modern.  I like Tate Modern, and the fact that it contains very little of significance inside it doesn’t bother me a bit, in fact I think I prefer that.  Soon, they’ll be putting out press releases boasting about how little they paid for their crap.

Yes, according to that book I’ve been reading, insane Russian oligarchs have for several years been funding the most excessive excesses of the contemporary art market.

Well, in truth they have been funding the most excessive excesses of just about everything, from London real estate to skyscrapers in Dubai to 1-er cru claret. I think this is a sign of the times, myself. London’s leading provider of “deep basement conversions” (ie underground swimming pools and Bond villain like lairs below innocuous looking London terraces) has just gone bust.

Oil is now $45 a barrel. It was almost $150 a few months ago. High commodities prices are a thing of the past. From the point of view of the probability of total collapse of the global economy, this is probably a good thing. But it is not a good thing if you are a Russian oligarch.

Posted by Michael Jennings on 14 December 2008

A real cynic might say that, since what pulls in the punters is less a strong permanent collection (boring! we’ve seen that already! what’s next?) than a run of wildly over-hyped blockbuster shows coupled with a good shop, glam social spaces and a sexy building - celebrity habitues, a reputation for ‘edginess’ and the odd Sun-worthy controversy are good, too - Tate’s been quite smart in all sorts of ways.

For what it’s worth, I suspect that high-profile pieces by the more famous of those YBAs of yesteryear will continue to hold some sort of value, if only because their work will continue, at some level, to remind viewers of a particular point in time - something second-rate art can do with great efficiency, since it’s in no danger of becoming ‘timeless’ and making itself at home in each generation - while it’s those more arid, actually quite boring things that are much promoted in e.g. ‘Frieze’ but unrecognisable to 99.9 per cent of the population that will drop like a stone.

The moral? Either buy art as an investment - blind to how ‘good’ it is, but alert to how market-worthy it might be - or buy it because you love it and don’t care if its market value vanishes tomorrow. Just don’t get confused between the two - as I’m afraid some of those oligarchs, who seem often to buy for reasons of social status, with the help of all sorts of expensive advisers, too often have done.

Posted by Bunny Smedley on 15 December 2008

I think it helps to distinguish between different types of collecting:

-Collecting because you want to preserve endangered work or organize historical knowledge, or because you have a vision of the unique value of a collection of particular works.

-Collecting as financial investment.

-Collecting as status competition or toy accumulation.

-Collecting as obsession.

Posted by Jonathan on 16 December 2008


What you say is surely right.  The modern and contemporary art scene seems to be all about disentangling a mass of different influences and ambitions and agendas, financial and social as well as artistic.

The big thing I got from that book about the art market was the that your second category, collecting as financial investment is, for all but those super-rich enough to create artistic trends with one signature in a cheque book, is a mug’s game.

As for collecting as obsession, wouldn’t it be more true to say that one can do 1,2 and 3 fairly rationally, or obsessionally.

My CD collection is partly 2, toy accumulation, but of the sort of toys that I actually like to play with, added to a dash of status competition as when I boast about my refined tastes on this blog, and partly 4, a rather out-of-control obsession.  There is absolutely no money in it, that’s for damn sure.

Posted by Brian Micklethwait on 16 December 2008

The modern and contemporary art scene seems to be all about disentangling a mass of different influences and ambitions and agendas, financial and social as well as artistic.

I doubt that this is any different from any other art scene in history, in truth. Most contemporary art is crap. Most art from any era is crap. Silly prices were paid for all kinds of things that are now forgotten from most eras. What is genuinely good survives. I am sure this is as true of art from the last 50 years as from any other time.

The big thing I got from that book about the art market was the that your second category, collecting as financial investment is, for all but those super-rich enough to create artistic trends with one signature in a cheque book, is a mug’s game.

Investing in art is investing in capital gain. Any investment that depends on capital gain - ie on the assumption that someone will think something is worth more in real terms in the future than it is now - is looking for a free ride and on gaining a share of wealth created elsewhere.  An investment in something that actually generates wealth is something entirely different. A profitable company makes widgets and you have a share of the wealth from the widgets. Investing in commercial real estate that generates rents gives you a share of the wealth created by whatever is done on the premises. (Investing in residential real estate - particularly the home you live in - has elements of both kinds of investment, but in times or a property bubble it tends to the first rather than the second).

I would argue that most “captial gains” investments are a mugs game. That certainly (and particularly) includes investments in gold, which a lot of people seem to be doing at the moment.

Posted by Michael Jennings on 17 December 2008

With respect to Tate Modern, I like the building. The planned extensions don’t thrill me, but I will wait until I see them before making my mind up. (Or, hopefully I won’t see them). I pop into the turbine hall occasionally to see how the latest temporary exhibition there shapes up. Occasionally they are good. Usually they are dreadful. I love the bar on one of the higher floors with the view looking out over the Thames towards the City. It is a fabulous place to take out of town visitors to. However, the art is crap.

Tate Britain is a less interesting building and I don’t tend to take out of town visitors there. In fact, I haven’t been there for a while, even though I have several friends who live nearby and I visit the area often. This is a shame, because the art collection there is wonderful.

But I still haven’t been for a while.

Posted by Michael Jennings on 17 December 2008


As with addictions, I think the question is whether the benefits to the collector exceed his costs. If you collect kitchy little figurines, and doing so costs you little money and yields you much enjoyment, you may be ahead of the game as compared to someone who spends a fortune on high-status art in the hope of making capital gains.

Posted by Jonathan on 20 December 2008

I attended the Rothko show there last week. I thoroughly don’t recommend it, not because of the work (which I like a lot, although I didn’t think it worked in this setting), but because visits to art galleries booked by appointment should not feature screaming children and 200 people in a room.

Posted by NB. on 23 December 2008
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