Practices at the top end of the art market lay it open to the risk of manipulation. But it is the culture that allows this to happen that is the biggest threat
COMMENT: Scott Reyburn, an erstwhile colleague of mine and certainly one of the finest writers focusing on the international art market today, creates an imaginary scenario to illustrate the risks of market manipulation in his September 25 post for the International New York Times.
Titled A Tug of War Over Art-Sales Transparency, it brilliantly illustrates the sort of thing that happens at the top, or even top-middle, end of the art market.
The scenario has a fictional dealer grooming a young artist for stardom and then manipulating auction prices to build the legend around him/her with the help of a few friends before cashing in.
While Reyburn remains enigmatic as to whether this sort of manipulation has indeed happened, I do not. I’m quite certain that it is as accurate a picture as can be drawn of some people’s behaviour in the Contemporary art world.
What is particularly interesting about the piece is that although the scenario focuses on the manipulation of an unscrupulous dealer, it is more concerned with the opacity of auctions at the top end.
“Just what exactly is going on when a dealer tops up the bidding on a young artist in whom he has taken an investment position? And are there conflicts of interest when an auction house shares a financial guarantee with a third party?” he asks.
Serious questions indeed, but actually whether there is a conflict of interest or not, whilst hugely important, in my opinion is of secondary significance in the wider debate over competition at the top end of the Contemporary art auction market.
Loss of perspective is what’s really scary
To me, the really scary part is the loss of perspective at the top; the detachment from the real world and what that means.
It’s scary because it is exactly the same sort of loss of perspective that led to the MPs’ expenses scandal at Westminster, the phone hacking crisis among the British national press and, in years gone by, the groping and worse behaviour of 1970s and ‘80s DJs and TV presenters.
Everyone does it and it goes with the territory so that means it’s ok… doesn’t it?
As I wrote in Antiques Trade Gazette last December, in an article entitled Smoke detectors, the essential tool for Christie’s and Sotheby’s in today’s art market, “as far back as 2011 The Economist reported a list of leading dealers as guaranteeing works at auction. It remains unclear whether the trade are guaranteeing works by artists they represent directly or have a clear financial interest in propping up, but if so, then this is surely a step too far along the road of market manipulation.”
As I argued last December, “It might be clever; it might even be legal, but as far as I (and I suspect the man in the street) am concerned, one thing is certain: it isn’t right.”
The fact that this sort of behaviour is seen as acceptable at the top end of the auction market supports my belief that the pressure to perform in such a highly competitive atmosphere has caused decision makers to lose touch with reality.
““Such loss of objective perspective can make one genuinely consider all sorts of practices normal and acceptable, only to discover in the cold light of day, once the party is over, that the rest of the world deems them anything but.”
Act soon or live to regret it
My view remains unchanged, as does my conclusion:
“The test is: would I feel confident attempting to justify my actions in front of a government select committee or the equivalent committee in the Senate or House of Representatives if they decided to review practices within our industry?”
Having moderated the main debate on market regulation at this year’s Art Business Conference, I am not in favour of outside regulation for the art market beyond what we already have. However, Scott Reyburn, along with my fellow moderator Dr Tom Flynn and fellow panelist the art market lawyer Pierre Valentin, are right in taking a shot across the bows of the auction houses as reminder for them to get their act together.