Special FocuS
wasting time shopping around). They said that they went to they were so immense that it was difficult to see how any
St Ives for the light, but the low rent of the studio spaces, in more investment could improve earnings (indeed, now they
a town losing its fishing income, was just as much a draw. were in need of downsizing).
Money was an irritation that got in the way of work. That surplus cash, redirected into other kinds of
But to get it, artists had to indulge the handful of mean assets, created great investment bubbles. The ideal asset
patrons, dutifully remembering their partners’ names and would have a high bar of entry to investment, and some
showing them around the studio so that they would feel kind of intrinsic limit to its expansion, so that it would keep
they were doing more than handing over cash. its value as long as the number of buyers exceeded sellers.
The big change in the artist’s status in Britain is Newly opening markets, like those in Russia and Asia during
marked by one buyer in particular, Charles Saatchi, the the mid-1990s, were ideal. The belief in new opportunities
advertising mogul who, with his wife Doris, bought up was more important than the reality; in fact, the investment
St Martin’s degree shows during the 1980s, launching rush created more market growth than the actual value of
the ‘young British artists’ – Emin, Hirst, the Chapmans Russian state assets. When Russia’s creaky economy proved
and others. And back then you had to phone ahead to see too untrustworthy, the investors pulled out and put their
the Saatchi collection – Jeff Koons’s chromium-plated money into the
dot.com companies. Once again the money
basketballs and other gewgaws were hidden away in St was made on the sale and resale of shares rather than from
John’s Wood. any notional future income these companies might earn.
As singular as Saatchi’s collecting was, it also reflected Nasdaq analysts advised investors to forget the rule of
a broader trend. The art market boomed from the mid-1980s watching the ratio of the price of shares to expected future
on both sides of the Atlantic. Keith Haring’s stick men, earnings, because the new technology market only ever went
Julian Schnabel’s broken crocks and Jean-Michel Basquiat’s up. Elsewhere, as in Britain, restrictions on land use limited
graffiti were snapped up from Gagosian’s showroom by housing construction, making real estate a kind of natural
nouveau riche junk-bond traders. ‘New Art, New Money’, monopoly, so that the housing market boomed, too.
reported The New York Times on 10 February 1985. Then, As a refuge from the flaky world of the ‘dot.cons’ or
in 1987, the Yasuda Fire and taking on Russia’s oligarchs,
Marine Insurance paid just the art market has special
shy of $40m for Vincent Van advantages. Unlike other
Gogh’s Sunflowers (1889).
artworks are unique, and
commodities, artworks are
They could have bought a unique, and so a good store
passable print to hang in the
so a good store of value
of value. The generational
lobby for £18.99. Why did shift that pushed the avant-
they need the original? The garde into the same high-
answer is that the original earning bracket as the Old
Sunflowers is more than a picture; it is a cash investment. Masters has made fine art a sound investment. But the
It was first the existence of surplus capital, followed most important condition of the art market boom is not
by the need of investors to find assets that were going to internal at all; it is, rather, the external need of investors to
appreciate in price, that created the art-market bubble (see find a good place to store their excess capital. This buying
Heartfield, Need and Desire in the Postmaterial Economy, power alone bids prices up to the levels seen today. It is a
1998). In other times, of course, big investors would have self-fulfilling appetite, but one which, like the investments
lent their money to businessmen to invest in some new that preceded it, are subject to market conditions. If these
line of products and made more from the interest paid on conditions change – if art prices rise so high that they suffer
the loan. But in Japan during the 1980s, as in the US and a confidence collapse, or more likely, if another investment
Europe, industry was a bad bet. Why hold low-performing opportunity emerges which offers better appreciation
shares in flabby corporations when you could hold an asset – then prices will fall.
that just keeps appreciating? Of course, artworks cannot lose their intrinsic value
The reason this asset kept appreciating was because in the way that Wilde meant it. The work is good or not
more people were trying to buy it, as Goldsmiths College’s regardless of the price. By the same token, however good a
Suhail Malik explains (see ‘A Boom Without End? work, its price can theoretically fall to nothing if there are
Liquidity, Critique and the Art Market’, Mute, August no buyers. But barring war or revolution, you can discount
2007). But prices were being driven upwards not by what the extreme.
was happening in art, but by what was not happening in The fluctuations in high finance naturally make
industry. The developed world had been investing in people nervous, and there are always Jeremiahs warning
industry for ‘30 glorious years’ – years when Heron and that the end is nigh. But still it is more likely that things will
Terry Frost saw precious little cash spill their way – with the continue as they are. For that reason fine art is a good place
result that industries had become unwieldy behemoths. On to park your money, and a rewarding one.
the one hand they generated vast surpluses; on the other, No need to worry yet, but keep an eye on those sales.
83 Artreview
Collecting_Tasteless.indd 83 6/11/07 11:52:50
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