"The mania for collecting contemporary art has become ever more intense
in the past 12 months—in the first half of this year, new auction
records were set for almost 1,000 artists."
This is such a great article from Prospect magazine on the art world bubble and the imminent fall. It's well worth going and reading the whole thing - I've nicked a bunch of great quotes. It will seem astonishing in a short year or so that Hirsty could generate so much new work and flog it all straight off the back of the lorry. Lessons will be learned, money will be lost. And the whole game will start over again.
The prices of contemporary art works have risen to astonishing levels in recent years. Insiders say it’s because we have been living through a golden age of art. Nonsense, argue Ben Lewis and Jonathan Ford, it is a classic investment bubble
Essays: 'A second tulip mania' by Ben Lewis | Prospect Magazine December 2008 issue 153
Even these numbers understate the incredible tulip-like increases in the value of the hottest artists. The Chinese painter Zhang Xiaogang saw his work appreciate 6,000 times, from $1,000 to $6m (1999-2008); work by the American artist Richard Prince went up 60 to 80 times (2003-2008). The German painter Anselm Reyle was unknown in 2003; you could have picked up one of his stripe paintings for €14,000. Now he has a studio with 60 assistants turning them out for about €200,000 each. Any figures for the whole contemporary art market are guesswork, though Christie's chief executive, Ed Dolman, recently estimated that it had grown in value from $4bn a year to somewhere between $20-30bn in the past eight years.
But this bubble is now deflating. Sotheby's share price has lost three quarters of its value over the past year, sinking from its peak of $57 in October 2007 to $9 in early November—close to its 1980s low of $8. The latest round of contemporary art auctions in London has gone badly. In October, the Phillips de Pury sale made only £5m—a quarter of the minimum estimate; at Christie's almost half the lots didn't sell; and an air of denial hung over the Frieze art fair like a fog. Upmarket dealers Matthew Marks and Iwan Wirth claimed to have clinched many big deals, but the reality was surely different. A leading New York gallerist was said to have sold very little and a well-known German dealer not a single work.
Essays: 'A second tulip mania' by Ben Lewis | Prospect Magazine December 2008 issue 153
But, as Kindleberger has shown, it is a condition of a speculative mania that new "assets" be manufactured to meet raging demand—so the recent bubble has focused on the works of living artists such as Hirst, Koons, Prince and Murakami. They, and other stars, have produced scores of very similar works in series, like the slashed canvases of the Italian conceptual artist Lucio Fontana, Warhol's screenprints or Hirst's spins and spots.Essays: 'A second tulip mania' by Ben Lewis | Prospect Magazine December 2008 issue 153
More and more of such work has been churned out by cookie-cutter artists without regard to originality or aesthetic merit. Economist and historian of financial crashes, Edward Chancellor, observed recently: "Most contemporary art is inherently worthless. It is not like Titian and other old masters of which there are few and whose value will not fall away. It's like subprime CDOs."
As the art bubble has neared its peak, the great art-entrepreneurs such as Hirst, Banksy, Prince or the Chinese artists, Xiaogang and Yue Minjun, seem increasingly like these 18th-century promoters. Not only have they pumped out identical works, but they have also sought to capture more of the value for themselves, bypassing the gallerists with whom they are obliged to share 50 per cent of sales and selling direct out of the studio or placing new works straight into auction. Five years ago it was unknown for a work of art that was only one or two years old to be sold at auction. Now this is common—the best example being the Hirst sale of over 200 new works at Sotheby's in September.Essays: 'A second tulip mania' by Ben Lewis | Prospect Magazine December 2008 issue 153
The mania for collecting contemporary art has become ever more intense in the past 12 months—in the first half of this year, new auction records were set for almost 1,000 artists. But the suspicion is that dealers and collectors with interests in particular artists may have been "bidding up" prices at auction and acquiring works. If so, they may be holding large inventories of overvalued work, financed by increasingly expensive debt. At the Damien Hirst auction at Sotheby's, his London dealer, Jay Jopling, bid on an astonishing 44 per cent of the lots in the evening sale, and both he and Hirst's US dealer, Larry Gagosian, bid on two lots after long pauses in the bidding. One cannot know if Jopling was maintaining Hirst's prices at his own expense or bidding for clients.
