The modern art market

by Hamish Keith / 10 November, 2012
The highs and lows of buying and selling art.
The modern art market


Buying and selling art seems a swashbuckling kind of a business. It certainly has a long and colourful history, with its share of dodgy dealers and breathtaking deals. New Zealand has had its moments, too, clearly shown by the recent discovery that a Gottfried Lindauer portrait of a Tainui chief, bought by Trust Waikato for $120,000, is a fake. In this retail market, the motto caveat emptor ought to be rigorously applied. The marketing of art can sometimes be a rowdy mix of taste, fashion and vigorous manipulation in which the difference between price and value is easily confused.

There probably is no better example of the highs and lows of the trade than the story of turn-of-the-century dealer Joseph Duveen. He made the shrewd observation that “Europe is full of art and America is full of money”. His transfer of one to the other made him very rich as he filled the faux chateaux of America’s robber barons with some of Europe’s greatest works of art. In that enterprise, he was helped by one of the 20th century’s greatest art historians, Bernard Berenson, who could, in the pay of Lord Duveen and on matters of historical detail, be as forgetful as a New Zealand politician. He also became very rich. Rascals the pair may have been, but our collections would have been richer if we’d had a gullible robber baron of our own in their sights.

The modern art market probably began at the end of the 17th century with the sale of the art collections of Charles I after he and his head parted company in 1649. His collections were sold by auction. Probably for good reason, there is no record of who the auctioneer was and the works were eventually “recovered”. The great English auction house Sotheby’s was established a century later and Christie’s 20 years after that. Those two have dominated the western market since, with probably the only major technological innovation in those two-and-a-bit centuries being telephone bidding.

Nowadays, offsite bids could account for some 60% of auction-house sales. The day of the packed salesroom with excited applause at high prices might be coming to an end. Online auctions, after a shaky start in the 1990s, are beginning to get some traction. They’re still a long way from the hundreds of millions in commissions generated by traditional sales but their turnover is edging up. The picture is a little like that of the early performance of Amazon. New Zealand now has its own version – Ocula Black – set up by Simon Fisher and Chris Taylor last year. Auction houses are using online innovations to extend the reach of their catalogues but their sales are still anchored to the hammer and podium. The obstacles online art auctions have to overcome are formidable – not least the physical nature of the stuff they sell. But there is something very attractive about art work being auctioned five days a week.
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