Art Basel Miami Beach

So I have completely forgotten to fill you all in on one of my latest and best adventures. I had the opportunity to go to Miami Art Basel last month in Miami, FL. Art Basel in Switzerland is probably the largest and most well respected art fair in the entire world. People get on these crazy waiting lists to even be up for the chance to participate in the fair and pay some crazy fee to have a tiny booth there. Miami Art Basel is the offshoot of this original art fair. It is a little more party-centric (it is Miami after all) but the quality of art is usually on par. This was the first time I’ve ever been to Miami so I didn’t have much to compare it to. From what I’ve heard this year was much more low key than years past – fewer collectors showed up, gallerists were a bit kinder, and the parties were less extravagant. It’s a bit funny and peculiar that when the economy goes sour, that all those rich folks out there feel like they can’t keeps spending money in the same way they are used to for fear of making the poor people feel bad about themselves.

 

I got the feeling that people were pretty well prepared for poor sales and so when fewer people came to the fair and even fewer people bought at the fair, no one was particularly disappointed. I still got the feeling that people couldn’t quite figure out who I was – is she an art consultant? Is she important enough that we ought to talk to her? Will she buy anything? – and that made it interesting. I saw quite a bit of art that I was unfamiliar with and quite a bit that I liked a lot. There was also an over saturation of Damien Hirst pieces with skulls and butterflies and whatever other else limited pieces he makes. And from what I could tell (and what other, non gallerists told me), prices were pretty steeply discounted and gallerists were offering BIG (20% big) discounts to just about anyone walking in off the street. I think they were really trying to make a sale, whatever it took. It is very expensive, after all, to get all the works down to Miami and they needed to make up their costs somehow.

 

I can’t wait to go to my next art fair and I would always love to go back to Miami next year. 

Is the Art Market Dead?

Everyone has been talking about the demise of the art market since the stock market collapse in October. My opinion of the whole situation probably doesn’t vary too much from other things that you’ve read recently, but I’ll lay it out all the same.

The art market is a market like any other Adam Smith, Invisible Hand-wielding capital structure. It is lodged firmly in the structure of basic free-market economics, governed by the principles of supply and demand. That is, an optimal price is reached when the forces of supply (how many people want a product) and the forces of demand (how many are available for people) collide. People may think that the art market differs from say the market for canned soup because it is not an easily commodifiable good – not every piece of art is exactly the same and so the process of valuation differs per product. Or by the value we derive from art is not just an easier understood Utilitarian value (the more we have of something the better) but is consistent with value as it pertains to ineffable values of cultural capital. While this does make the art market far more complex than other markets it doesn’t make it any different.

 

In any market there have been booms and busts. Booms come about when consumer confidence is especially high and people are willing to wage more money on the fact that the product is going to increase in value. Often times these are built up artificially high by speculators – or those who are not really involved on a personal level in a product but are merely trying to “flip” the good and reap the benefits of the spread. It is a bit like arbitrage in the general market. Once consumer confidence falls apart (it could be anything from a 9/11-like attack, withdrawal of “free-money” in the form of credit, etc.) all these speculators pull out of the market and thus the prices tumble very rapidly. This leads to a bust. We’ve seen it most recently in the credit market and the house market (indirectly) in the US, but also during the dot com era, and in any number of other consumer goods. 

 

I will go into more detail on this later, but essentially, I believe that the art market was highly inflated. And the art market is particularly susceptible to inflation because the means of valuation rests solely on the shoulders of public opinion and consumer confidence – it is little to no intrinsic value. People had been so confident in their artworks as to push the prices waaay high up until they could no longer sustain themselves. I see a major reorganization of the whole market in the coming future and a return to 1990s level.