It is long known that the “art market” is filled with speculators and asset hounds who are hoovering up the “hot” artists not for aethestic purposes but as investment. The horror stories of what that has done to the art world abound. But I confess, I had to read Georgina Adam’s article, “In Debt We Trust” in The Art Newspaper several times before it began to sink in and I started to realize, with horror…..My God…..this is really happening.
Those same investors who have been turning the art world into a kind of Thunderdome are now part of an increasing trend: Art-secured lending. What does this mean? It means that the owners of art-as-asset are now borrowing against that art in yet another layer of frenzy – creating a bourgeoning market for lenders smokin’ hot to get in on the action.
Adam writes, “Warhol or a Wool hanging on your wall may give you great pleasure, but it used to be that art gave you no monetary return—unless you sold it….No longer. Today that work of art can remain on your wall and at the same time give you cash in hand, allowing you to buy more art, inject some money into your business, cover a guarantee at auction or pay off an urgent tax demand.”
If you have any doubt that this is becoming a huge market, “…according to a report published last year by Deloitte and ArtTactic, in 2017 the global total of loans outstanding against art was eye-popping: between $17bn and $20bn.”
Evan Beard, who is a national art services executive at US Trust claims that “the market” of art-buyers are less likely to purchase art for aesthetic purposes, but as what he called a “strategic asset”.
Aside from the overwhelming nausea and disgust I feel toward the kind of people who treat the creative effort of the arts community as little more than a stock option, I have questions about what this means for the artist him/herself. It has long disgusted me that art is sold, resold, sold again, auctioned — and that the rising prices of any given piece of art do not benefit the creator of that work of art, but those who “own” it through purchase. It seems to me that some portion — if not the lion’s share — of the increasing value of a work of art should go to the artist or his/her estate. I know that this is distasteful to those who don’t want to monetize art at all — and I understand that completely. But my argument exists within the boundaries of a rapacious capitalist economy, fueled by greed, where it seems that the same, very few, elite at the top of the food chain are the ones who see ALL the increase. If we are forced, as artists, to live in this world, why shouldn’t there be new kinds of contracts upon the sale of a piece of work that withhold a certain portion of any financial increase for the artist alone?
Another question: If these purchasers and speculators of art can borrow against the value of their collection, can an ARTIST borrow against the value of his/her own unsold work? Or is such financialization reserved only for those 1%-ers who play in this game of capitalist roulette?
I’d love to hear from you about this. As visual artists, what do you feel about what has happened to the art market? As collectors, how do you feel about the direction that art-speculation is going?