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Business Smarts for the Creative Arts (October 2014): The Art Market

By Caley Cannon

The Art Market

No consideration of the economic aspects of the creative industries would be complete without a brief consideration of the art market and the value of art in society.  In The $12 Million Stuffed Shark, Don Thompson offers insights into the contemporary art market.  While his 2008 book predates the recent recession, his description of contemporary art markets and auctions is just as applicable now as it was at the time of its publication.  The title of the book refers to a sculpture by Damien Hirst titled The Physical Impossibility of Death in the Mind of Someone Living, which consists of a tiger shark immersed in a vitrine filled with formaldehyde.  The work became famous because of its exorbitant price tag, and Hirst himself became a symbol of the surreal nature of the contemporary art market and the often incomprehensible sales records achieved by artworks at auction.  Thompson delves into this intriguing world with pleasure, investigating the psychology behind auctions, galleries, and the values collectors and dealers assign to the fine arts.  His book also considers the impact of forgeries and of art critics in the demand and prices for contemporary art.

In a related vein, Michael Findlay explores the commercial and social value of art, but also considers another measure of worth—what he terms the essential or intrinsic value.  He examines the effect art has had on culture and vice versa in The Value of Art: Money, Power, Beauty.  Findlay uses the Three Graces from Greek mythology as a framework to illustrate the three elements that contribute to the value of art; however, as he points out, art’s value is inconstant since each of the three components (commercial, social, and essential) alters with time and culture.  His book is divided into four parts.  The first three parts are devoted to a consideration of the value of art as represented by each of the Three Graces.  Factors that contribute to commercial value include “collective intentionality” based on supply and demand, institutional holdings, the reputation of (or myth surrounding) an artist, and the provenance and condition of an artwork, among other considerations.  Findlay identifies human social experience as the primary component in the social value of art, including the interaction between people and the arts in places such as museums, and the desire to use art to enhance one’s social image.  The essential or intrinsic value of art is more elusive, and includes consideration of the emotional, spiritual, and psychological responses that an artwork may elicit.  The final chapter of The Value of Art considers the past, present, and future of contemporary art and the manner in which the art market has recovered since the recession.

Judith Benhamou-Huet provides further insight into the art market and the value of art in a 2008 updated edition of The Worth of Art, first published in 2001.  She argues that art is not expensive; instead, money has lost value as an indicator of significance and merit in a consumer society fixated on excess and conspicuous consumption.  Benhamou-Huet’s book reads like an exposé of the dark underbelly of an art world consumed by greed, social status, and vanity, while aesthetic quality and art historical context are largely ignored.  She asserts that the art market is merely a place of economic exchange that responds to supply and demand, and she considers the inherent challenge of placing intrinsic value on a creative work that does not have absolute value.  Such intangibility contributes to the lack of transparency in the art market and the price at which a work is sold.  Does all this mean that artists and designers do not play a part in the value of their work in the market?  Benhamou-Huet suggests that creative professionals can influence the value of their work, based on its conceptual nature.  Much of the value of art is immaterial and influenced by the perceptions of consumers, whether they are individual collectors, museums, or the general public.  In this instance, the perceived importance of artists or designers—or what the author calls the “artist myth”—directly influences the market value of their work.  Benhamou-Huet cites Andy Warhol as one artist who became adept at self-promotion by creating and selling a persona that fascinated the public and thus drove sales of his work.  The Worth of Art concludes with a consideration of what it means to be a creative professional and weighs the possible dichotomy between professionalism (in the sense of approaching creative work as a profession) and idealism in the work of an artist or designer.

Works Cited