Relationship between Money and the Global – The action of Money in Art Market:

A Review and response to the Art Market Watch’s “SPEED! MONEY AND THE GLOBAL ART MARKET” by Piroschka Dossi

“Art is Art. Everything else is everything else.”(Ad Reinhart, 1913-1967) It is the famous mantra of Ad Reinhart, a great purist among the of the 20th century. However, in these days, can Art still be itself only? I cannot say whether it is fortunately or unfortunately, but it cannot. In 21st century, Art is not only represent its art value but something more, a quantitative value – money. How this happened?

Dossi stated that money is playing an increasingly important role in the dynamics of the global art market, it accelerates and enhances the art market, not in temporary but changed it structurally. Money functions as a medium of exchange, a unit of account, a store of value.1

Her viewpoint is also held by Deloitte, in their Art and Finance Report 2014, which stated that art investment fund will continue to play an important role, it is supporting Dossi’s opinion is still working in 2014,now. 2

I would like to in response that money is also playing an important role in art aspect but not only art market, I will explain it later in the essay.

For Karl Marx, trading is “the continuous transformation of capital-as-money into capital-as-commodities, followed by a retransformation of capital-as-commodities into capital-as-more-money.” 3And this M-C-M formula is then spread by Robert L. Heilbroner. 4 This economic cycle can also be observed in the art market, but Dossi feels that the art market is not change in cycle way, it is structural and has transformed both the art market and art itself.

Dossi explained that the difference between 21st century and 20th century art market is that money has become more important in evaluating of art. The root of this situation was started in 1904, it is the time André Level established the first art investment fund, La Peau de l’Ours, which was liquidated in 1914, quadrupling the initial investment of the original partners. After half a century, this idea had gained momentum and introduced a new “spirit” into the world of art -- the spirit of money. The turning point was appeared in 1960s, there were a class of new riche appeared in the horizon of economic change. Then, there is a man, Peter Wilson, the farsighted chairman of Sotheby’s auction house, spotted these riche as potential art buyers. He label that art is both a profitable investment and also a status symbol to attract this group of people who had the financial condition but had no appreciation of art. In 1967, Wilson invested the Times-Sotheby’s Index, which is to chart the cost of just like any other commodity. With Times-Sotheby’s Index, the changing prices, more likely the rising prices of art was become easy to observe and its future profitability seems like true. In 1973, only six years later after the index was invested,

the art market was transformed to investment market with the Robert Scull auction of Pop and other contemporary artworks, for a then-unprecedented total of $2.2 million.5

It is so impressive that the price of a kind of product can be increased so fast, this situation mostly happen in the situation of munitions during war. So, as an investment tool, artwork is really nice for that rich people.

Dossi found that the rising of treating art as investment tool has broke the taboo which had always eagerly defended, which is “Art is Art. Everything else is everything else.” Art became easy to access to a group of buyers that much more than the limited number of those art collectors who is passionate to art. In those decades, the globalization of the capitalistic market system, and the deregulation of financial markets had changed the global financial a lot, which cause a significant increase in income among the regal, with the consequence that the art market was flooded with ever-rising levels of liquidity. This change had led to the expansion of the art market and the phenomenon of fast rising prices of artwork.6

As a consequence, Dossi thought that the art market underwent a structural transformation from a closed cycle of art lovers to a globally expanding industry. New group of collector is entering the market, often from the financial sector, and focus on the profitability of art not the idea of art. Contemporary art has become a status symbol and an investment that can promise to gain both monetary profit and social distinction. All this cause the worldwide turnover at art auctions, now estimated at $60 billion, has tripled since that of the millennium.7

Fig 1. Size of the art market over time

Art and money used to be not so related, but today, they are mentioned in a same field -“Art & Finance”. It is a new business field, art funds move larger sums of money, gather with fund managers at Art & Finance conferences and maybe the funniest issue, the standard for evaluating art shift from artistic standards to the quantitative economic part.

Fig 2. Boundary of art and finance is broke

As more and more index are invested and used as indicators of artistic quality, the determination of quality has become a problem of quantity. Artwork is considered to be a good one when it is successful. And it is considered to be success when it cost high. The price has become a signal for quality thereby bypassing the artwork itself. This logic can be explained by the story of Jeff Koons’ Hanging Heart, it is just a hanging heart made by chromium stainless steel and sold for $23.6 million – the buyer even ever look on it.8

Fig 3. Hanging Heart by Jeff Koons

Dossi also pointed out that art indexes and art rankings reinforce the tendency of the art market to concentrate demand on a few star artists. The art market is a “winner- take-all” market. Its main feature is a huge price different with marginal differences in performance and quality. This structure leads to an increasing gap between a tiny top price segment and a huge low price segment. As a result, the artist with no fame is so hard to become famous, this hinder the development of the whole global art.9

All in all, the consequence is a structural acceleration of the global art market, which transforms artistic achievements into products measured. The competition for artistic expression has progressively shifted to a race for economic success and media attention which generates few highly rewarded artists as winners.10

For my own opinion, I found that the relationship between money and art is not just as simple as the price value become the main value to determine an artwork. I think that artist’s mind changed under this trend nowadays.

In this day, many of so-called artist is around us, for example, on the Avenue of Stars,

there are always some cartoon drawers setting their booth, they use the name of art, but I believe that they just treat the as business, they just use the attractiveness of art to induce others to buy their . In my view, I think that creating an artwork must have an emotional touch to force the artist to create it, otherwise, it is just a drawing or a but not an art. Then, back to these “artists”, they can draw for anyone that pay to them, if there is not an original sensation, where is the difference between this “art” and an image made by computer?

Although these artist have a not-bad drawing technique, they yield to money, maybe is the difficult living, maybe of the materialism, they forgot their original intention that support them to learn art. I think the effect of the art market change lead to the mind of artist changed, in my opinion, this is why there is much less masterpiece appear in these days.

Moreover, I think saving the artwork as a money value is not a wise choice. Even though many regal will show their property by artwork nowadays, I think that whether determine a piece of art is good or not is very subjective. The price of an artwork is changed when someone buy it from the auction, but here is my question. You think this artwork worth a million but from my point of view, it is just like my three years old nephew’s work, then why should I agree the price you set? As a result, I think that you can buy an artwork with a lot of money because you like it, but it should not be a saving as it can be nothing if others think it is not a great work. As consequence, I am in believe that“Art is Art. Everything else is everything else.” Art has its own spirit, it should not be mixed with money. Nevertheless, in today community, it is not possible that art is only itself again.

Reference 1. Dossi, P. (2012, February 24). Art Market Watch SPEED! MONEY AND THE GLOBAL ART MARKET. Introduction part. Retrieved December 16, 2014, from http://www.artnet.com/magazineus/features/dossi/money-and-the-global-art-market-5-29- 12.asp

2. Art and Finance Report 2014. (n.d.). Retrieved December 16, 2014, from http://www2.deloitte.com/content/dam/Deloitte/lu/Documents/financial- services/artandfinance/lu-en-artandfinancereport-08092014.pdf

3. Money Circles (C-M-C and M-C-M): Marx, Ch.4 "The General Formula for Capital" of Das Kapital, Vol.1, Part.2 Retrieved December 16, 2014, from http://piratesandrevolutionaries.blogspot.com/2011/07/money-circles-c-m-c-and-m-c-m-marx- ch4.html

4. Heilbroner, R. (1985). The nature and logic of capitalism. New York: Norton. Retrieved December 16, 2014, from http://books.google.com.hk/books/about/The_Nature_and_Logic_of_Capitalism.html?id=T1RDb d9clMEC&redir_esc=y

5. Dossi, P. (2012, February 24). Art Market Watch SPEED! MONEY AND THE GLOBAL ART MARKET. The Redefinition of Art. Retrieved December 16, 2014, from http://www.artnet.com/magazineus/features/dossi/money-and-the-global-art-market-5-29- 12.asp

6. Dossi, P. (2012, February 24). Art Market Watch SPEED! MONEY AND THE GLOBAL ART MARKET. Eternal Factors of Acceleration. Retrieved December 16, 2014, from http://www.artnet.com/magazineus/features/dossi/money-and-the-global-art-market-5-29- 12.asp

7. Dossi, P. (2012, February 24). Art Market Watch SPEED! MONEY AND THE GLOBAL ART MARKET. New Collectors. Retrieved December 16, 2014, from http://www.artnet.com/magazineus/features/dossi/money-and-the-global-art-market-5-29- 12.asp

8. JEFF KOON'S HANGING HEART SETS RECORD AT AUCTION. (n.d.). Retrieved December 16, 2014, from http://www.culturekiosque.com/art/artmrkt/koons_hangingheart.html

9. Dossi, P. (2012, February 24). Art Market Watch SPEED! MONEY AND THE GLOBAL ART MARKET. Quantitative Rating Systems. Retrieved December 16, 2014, from http://www.artnet.com/magazineus/features/dossi/money-and-the-global-art-market-5-29- 12.asp

10. Dossi, P. (2012, February 24). Art Market Watch SPEED! MONEY AND THE GLOBAL ART MARKET. The Value of Art. Retrieved December 16, 2014, from http://www.artnet.com/magazineus/features/dossi/money-and-the-global-art-market-5-29- 12.asp Picture Fig 1. Size of the art market over time Retrieved December 2, 2014, from http://hyperallergic.com/wp-content/uploads/2013/01/money-and-the-global-art- market-5-29-12-7.jpg

Fig 2. mealys-art-finance Retrieved December 2, 2014, from http://mealys.ie/media/wysiwyg/artandfinance.png

Fig 3. The High Line + Koons Retrieved December 2, 2014, from http://ad009cdnb.archdaily.net/wp-content/uploads/2012/03/1333030247-jeff- koons-hanging-heart.jpg