Updated: Jun 14, 2018
Should an artist be in the room, where the members of the art community talk business? I might have risked being unromantically rational and losing part of my creative aura, but last Sunday my curiosity led me to the art market talk “Truth and Truisms", organised by Kunstforum Zürich and University of Zürich Art Market Studies at the Schwarzescafe.
How is the art market evolving? Two notable art dealers – Kenny Schachter and Simon de Pury – are sharing their insights.
Kenny Schachter reminds the audience that the art market has been affected by three factors: the growth of the art fairs, mobile phones and Asian market. Evidently, they make the art world more accessible to a broader audience as well as create bigger supply of art. But what do the art buyers actually demand? K. Schachter doesn't surprise by saying that people want what their friends have. "As the market expands greater and greater, people are chasing fewer and fewer things," says the art dealer.
Simon de Pury shares an example of democratised access to fine art investment. A few months ago Pablo Picasso's painting "Buste de Mousquetaire" was acquired for two million Swiss Francs by 25,000 Internet users via Swiss bargain site Qoqa and went on display at Museum of Contemporary Art (MAMCO) in Geneva. Do these proud art buyers admire the artistic mastery or the fact that gained access to the art trophy makes them feel big?
It's more than that. "Via the blockchain instead of buying a work, you buy a fraction of the work, which means the market will no longer be limited to the people who can afford the whole thing, but will be open to anyone. It will become the whole different game, that will attract many many more into the playground, which means the world record prices that we know now will appear dismal," says S. de Pury. It's likely that such ownership schemes will diminish the gap between the super wealthy and regular people.
"People can buy great paintings for five hundred or a thousand dollars, they just need to look or attend graduate shows and go to the young galleries," says K. Schachter.
However, K. Schachter is more idealistic and puts the artwork back in the spotlight: "Art is never gonna be a financial instrument and that's what we are drawn to so much. People can buy great paintings for five hundred or a thousand dollars, they just need to look or attend graduate shows and go to the young galleries. So I don't really believe that this pricing situation has squeezed out more people. There are always opportunities if you scratch the surface and look a little deeper."
S. de Pury comments on the way broad audiences look at art: "I feel everything is legitimate. Whenever each of us hears a piece of music, none of us feels shy to express feelings about it. Whenever I meet people who are not in the art world, they start feeling so insecure when they speak about art and they don't dare to express what they feel. That's utterly ridiculous. Every reaction is legitimate." He adds that both approaches to art – aesthetic or financial –are right. "I've never seen a collector who would be proud to show me a painting which he paid a million dollars for and now – look! – it's worth a hundred thousand," he quips.
S. de Pury explains the phenomenon of artists that shoot up: "Let's say you have an artist that is very much sought after. You have an exhibition of 25 new works and you have 150 collectors who would like to put their hands on one of the artworks. A smart dealer will be very strategic about it: he won't sell to one person, but he will select key collectors across different geographic regions. So, you have 25 collectors, who are very very happy, and you have 125 collectors, who are very very disappointed. If one of the new owners puts such artwork for auction, those keen 125 collectors make the price shoot up by bidding for it fiercely."
When the moderator asks whether the modern art market needs a new regulation or it should be self-regulated, both the art dealers agree that the necessary regulations are already in place.
"Too much regulation is never a good thing. However, the main auction houses have very very strict and severe codes of conduct. In the end, when you're in this market, the only thing you have is your credibility. It takes years to build it up but it takes a millisecond to lose it. Is it worth risking your most important capital?" S. de Pury asks rhetorically.
"During a conference of regulations Georgina Adam, former Financial Times writer, deducted that there were 169 laws that applied to an art transaction. I can't misrepresent what I'm selling you, I can't apply fraud, there has to be authenticity questions. I think there shouldn't be more regulations, everything is already regulated," notices K. Schachter.
"At the end of the day I think it's individuals who bring the activity to a place," says S. de Pury.
When a moderator asks, what K. Schachter and S. de Pury think about Zürich's art scene, S. de Pury doesn't spend much time talking about Zürich. Instead, he presents Basel as a great example: "At the end of the day I think it's individuals who bring the activity to a place. The person who made Basel what it is was Ernst Beyeler, a number one dealer world-wide. He decided not to have galleries all over the world and I remember him saying "The world should now come to me". Then he co-founded Art Basel, which still benefits from his incredible personality. Basel is a special case because you have some greatest philanthropists such as Mike Hoffman, who has now expanded his philanthropy to Zürich."
However, S. de Pury adds that Zürich also has had a few key collectors, curators and dealers such as Thomas Ammann. He emphasises that the fact that Switzerland has so many individuals playing key role in Switzerland's art scene, suggests that the cities can benefit from it.
K. Schachter is more enthusiastic about Zürich's art scene: "I've been coming to Zürich for 25 years and I think the culture of collecting makes the city so special. I have lived in the UK for 15 years and I think it has no culture of collecting." He also mentions the convenience of the concentration of the galleries in Zürich compared to London's dispersed galleries.
So, how will the art market be evolving?
S. de Pury foresees the growth of it as "there is more and more money being concentrated in a few hands and there is an ever more limited amount of the great art that is available. So the demand will outstrip the availability by very very far. <...> What will, however, fluctuate massively is taste, because taste constantly evolves and not only for contemporary art, taste for art of any period."
K. Schachter talks about the combination of passion and rationality: "Any time you spend more than let's say five thousand dollars, it's ridiculous or irresponsible not to have a notion for value. Also, it's interesting that when I attended dinner with an adviser to the mergers and acquisitions firm called "Kohlberg Kravis Robert", she was mentioning that for 25 years one of the partners of the firm would tell everyone who worked for the company that they should earmark 25% of their earnings for buying art. And that's an incredible thing. I don't think art is or will ever be strictly a financial asset with this fractional ownership and cryptocurrency, etc. Nevertheless, if you're collecting, if you get the bug and you're spending serious amounts of money, it's logical to take a view on the future financial appreciation of it."
He finishes with a note of idealism: "Of course, things fluctuate, tastes change, but quality never changes. Art is a slow-burning process of accruing information and connoisseurship is something that comes over the course of a lifetime and that's part of a glory. Art is learning something every single minute and that will never change. Thats very important whether that's a financial asset or just a passion."