Reactor

Why Is the Middle of the Art Market Vanishing?

by Kyle Chayka on January 25, 2013

Barnett Newman's "Broken Obelisk" (Image via wikipedia.org)

Barnett Newman’s “Broken Obelisk” (Image via wikipedia.org)

As if we didn’t have enough trouble preserving the middle class, the middle of the art market is the latest topic of debate among members of the art world’s commercial side. Why is the high end of the art market constantly booming while the lower and middle sectors suffer?

At times it can seem like the giant blue-chip galleries, among them Gagosian, Hauser & Wirth, David Zwirner, and others, are sucking the oxygen out of the room: The galleries are in all the headlines; their contemporary artists are making auction records, opening museum shows, and starring at fairs everywhere you look. This comes at the expense of less widely heralded artists and smaller galleries. Let’s look at a few hypotheses on the issues at hand.

It’s the Collectors

Art critic Martin Newman in The Mirror blames the rash of mega-collectors for the booming high-end and embattled middle of the market. New, uber-wealthy collectors are “bulk-buying” new art, grabbing enough new pieces from brand-name galleries that at least some of the artists are going to turn out to be famous, right? Smaller collectors (the traditional doctor and lawyer set) are being pushed out and artists aren’t getting the nurturing they need — it’s either sell in the millions or nothing.

It’s the Dealers

It must be said that the writers and editors of ARTINFO are providing a constant, important drumbeat of critical market writing, even from within the auspices of Louise Blouin Media (who isn’t buying those fairs, after all). Shane Ferro notes that the middle market is “treading water” even as prices at the high end are growing. Impressionism and modern art are hurting the most.

Who is to blame? Well, people aren’t talking about the dealers so much, Ferro notes. “The big dealers — Gagosian, David Zwirner, Pace, etc. — and the deep-pocketed collecting families like the Mugrabis and the Nahmads — have almost complete control over the markets of contemporary art’s most expensive artists,” she writes in another piece. The edge of the bubble (if it is that) is being pushed by aggressive dealers who keep prices moving upward.

It’s the Selachian Commercial Landscape

On his blog, middle-market dealer Edward Winkleman noted that many of his compatriots are committed to the classical Leo Castelli model of gallerist-ing, which means discovering an as-yet-unknown young artist and nurturing their career, launching a market, and profiting in kind from the results. That’s all very nice, but large galleries are really into poaching right now — that means stealing high-earning artists from galleries who often depend on their sales for the rest of their program — and raising their prices with a high-profile solo show. The poaching is “destabilizing the landscape,” Winkleman writes.

It’s PR for Tycoons

In one of his characteristically epic Intervention columns, ARTINFO’s executive editor Ben Davis calls the art market a Hobbesian combination of “nasty, brutish, and short.” The superrich are driving the train, and no one seems likely to unseat them. “As an investment, art is… a gamble by the already super-rich that their own wealth will continue to grow,” Davis writes. But that’s not all. He argues that buying art may also provide a genteel, culture-friendly image for the wealthy that they use to draw attention away from the sources of their money:

Maybe it’s not correlated merely to how rich the super-rich have become, but also to how ill-gotten their gains are and how much, therefore, they feel they have to compensate for. But personally, I feel that art is too important to become PR for tycoons, no matter how much they want to pay to make it so.

Bam. There’s no one answer here, and the middle market will continue to persist, as passionate strugglers always do. But what might be facing us is a choice: Do we want an art world full of Gagosians, Hirsts, and Koonses, or do we want something less flashy, more intellectually considered, perhaps less fashionable? Vote with your eyeballs and your allowance.

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  • http://www.facebook.com/rwboyd Robert Boyd

    I’m confused by this post because there are assertions made about “the middle of the art market” without really saying what that is? How much would a collector who is in this middle spend on art in a given year? What range of prices is such a collector likely to look for? Is a “middle of the art market” collector someone who concentrates on prints and other multiples?

    I’m not asking this to be snarky, but because I seriously don’t know. I know collectors at various different strata in terms of their collecting budgets, and none of them are at the top level, but I’m not sure who amongst them are in the “middle of the art market.”

    • Monsoonking

      No evidence was given that “middle” of the art market, whatever that is, is actually starving (at least any more than usual). There are more galleries than ever, and the vast majority are not selling art in the 7 or 6 figure category.

      “Smaller collectors (the traditional doctor and lawyer set) are being pushed out…”
      It would seem that with the mega-rich focusing only on a handful of super-star artists, now would be a great time for the “doctor and lawyer set” to find talent in the middle market at a reasonable price.

      Yes, it’s depressing to think about how many artists a five million fund could support instead of being funneled into a single John Currin painting, but it’s not necessarily an “either/or” situation. The top of the art market is its own insular bubble, but it may benefit the middle market in that it casts art buying as both a prestige activity and a sound investment. Though, it’s hard to argue one way or the other without any statistics.

    • http://twitter.com/chaykak Kyle Chayka

      Hi Robert, I’m not sure of the metrics of the “middle” of the art market, but I think it’s easier to think of the mid-range galleries who don’t necessarily deal with artists who are blue-chip (million-dollar auction prices, big names). When the writers above are talking about the middle, they’re talking not about Gagosians and Zwirners or collectors like the Nahmad family, but galleries like Winkleman, or PPOW, or Rachel Uffner, who work with emerging and mid-career (another nebulous middle term) and develop their careers.

      Admittedly, it’s easier to cite what’s in the “high end” rather than outside of it. I just wanted to provide an overview of a current buzzword in the world of art writing.

  • MaximusNYC

    “But personally, I feel that art is too important to become PR for tycoons, no matter how much they want to pay to make it so.” But it always has been, to some degree.

    • http://twitter.com/chaykak Kyle Chayka

      True! It almost seems like only in the past two-ish centuries have we solidified the idea of the artist outside of state, church, or tycoon patronage.

  • http://coryhuff.com/blog Cory Huff

    Without defining the middle of the market, this article lacks impact. Are we just talking about the gallery market, or independent artists too?

    I know a lot of artists who have completely left the gallery market and make a comfortable living selling their art on their own.

    This seems to be an insular article written for an insular world.

    • http://twitter.com/chaykak Kyle Chayka

      Hi Cory, I’m not sure I’ve ever seen statistics of sales for artists who left the gallery market. Can you point any out to me? As far as being insular, it is indeed about a niche topic, the art market, and it’s a little hard not to be insular — indeed, I feel like having some insularity at times is very valuable.

      • http://coryhuff.com/blog Cory Huff

        I’m not sure how you would even provide those statistics. I probably came across confrontational, but I’m more curious than anything else.

        I do have a survey of ~1000 independent artists that was done last year. Email me and I can share it with you.

  • http://www.facebook.com/dan.fenning Dan Fenning

    Commerce is the last thing I think about art as being. The
    first thing is human.

  • John A Sargent III

    The art world and of note regarding this posting the Art Market is merely a reflection of the larger Markets it inhabits. The world is increasingly being stressed and distorted by the extroardinary concentrations of wealth. (No this is not a political position, but rather an observation, and not a new one) The Art Market is about as distorted, artificial, media driven, and materialistic as it gets.
    Where is the Middle market? I agree with the comments…. what is that?

  • Liz Georges

    There’s two things in play I think with the “middle” of the market at least with respect to the contemporary market — lack of supply and lack of demand. The lack of supply is really a function of two things. the first is correctly noted above, that galleries, the traditional purveyors of art to the buying public, are finding it difficult to operate in the middle of the market because the business model that sustains that position posits that more successful artists will function as “cash cows” to allow the less notable artists in the gallery’s talent pool to build an audience until they can sustain themselves.

    The second problem in the “lack of supply” category is simply a dearth of artists who are capable of sustaining a livelihood at the mid-range level. To build the kind of reputation it takes to command the kinds of prices that sustain the “mid range,” an artist has to have devoted a lot of time investment in things like an MFA, high-profile residencies, a resume filled with high-profile shows. That takes time. And time is money. In order for an artist to be able to afford that kind of time, he or she needs to be able to forego the dayjob. And unfortunately, in this economic climate, the artist who can sustain herself or himself with just the income of his or her work is dwindling.

    Now, for the “lack of demand” issue — I do think the article correctly notes that some of this is a part of larger economic forces. The affluent art collector who doesn’t spend millions but is capable of spending thousands is simply dying in an economy where being a “millionaire” is considered a quaint form of middle class, and to be truly rich, you’d better be able to measure your balance sheet using something more like “b” for “billion.” If you have the bucks to buy from Gagosian, you’re not going to waste your time as a collector on “cheap” work. Unless….

    And here’s the other half of the “lack of demand” equation: educated collectors. Fewer and fewer people are educated enough about art to undertake the role of collector. Indeed, even the role of collector these days is so maligned that even people who can legitimately claim the title in terms of education and finance are loath to accept it. (Interview a collector of mid-range work sometime and see how fast they run from the sobriquet “collector”…) There are collectors out there who take the time and effort to get to know the artists’ work, and understand artistic practice, and put thought into how they acquire work and why. But they too are dwindling in number. Chalk it up to any number of culprits — the lack of art education in schools, which means collectors have to take a lot more initiative to even develop a nascent taste for art, or the fact that the contemporary art world often unfairly maligns anyone who doesn’t wear their dedication to critical theory and general “art-i-ness” on their sleeve as being a “dilettante.” Either way, it’s harder than ever to cultivate the truly educated collector that is going to take an interest in work as something other than a pure investment, and honestly, those are the kinds of investors that support the middle portion of the market. The ones with more money want the bigger names, and the ones with less education will not venture far from the lower end of the market for fear of wasting their money.

    My 2 farthings, your mileage may vary.

    • Joel Frudden

      These are good points to make. I would add to the “lack of demand” theory that while this country as a lot more millionaires now then ever before, their reluctance to collect art might stem from the fact that a lot of these nouveau-riche come from a middle class where there really is no culture of collecting. Furthermore, many of them have done so by virtue of working in the tech industries like software design, computer programing, etc, and have a background in science and math rather than the liberal arts. Could it be that they just aren’t interested in art at all? Perhaps many of these new millionaires would rather spend their money on high-end design, food, cars, and travel, luxury goods for which the value is clear and present. Collecting might not make sense until you get to the billionaire-level–when culture of collecting surrounds you, convinces you, and you join an elite cadre of celebrity for whom collecting is a part of the lifestyle. Exacerbating this problem is the fact that from an outsider’s perspective looking in (on a post-modern cornucopia of mediums and discourses where there are too few insiders making out-reach a priority), there is no objective measurement of an artwork’s value, except the price.

  • http://www.facebook.com/sam.scharf.9 Sam Scharf

    http://deliciousspectacle.com/

    Artists supporting the Middle Market here in DC, Freedom by choice!
    Open Call available til Jan 31st. We can only be the example we’d like to see in the world!

  • http://upr0arstudio.tumblr.com/ upr0ar

    The art critic is Martin Newman not Mark.

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