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Secondary Markets – Don Thompson

December 14, 2009 Art Thoughts No Comments

I recently walked into a gallery in New York and saw a work from an artist I was familiar with.  In fact, I had seen the same work a few months earlier at another New York art gallery.  Curious, I asked about the price; the gallerist quoted an amount that was more than double what the work had been selling only a few months earlier.  I asked the gallerist if he was representing the artist.   He said yes, then changed his yes (after he found out I’d been to the other gallery) to a “we have a special arrangement” with the artist.

Special arrangement?

Yes, special arrangement.  What this meant, exactly, wasn’t clear.

So it’s three weeks later and I’m at a party and I happen to bump into the gallerist who “officially” represents the artist in question.  I mention the incident.  The gallerist looks at me in complete surprise.  He sold the piece in question to the above mentioned gallery, but never, for a minute, did he think the work would be put back on the market (at least not immediately), let alone at over twice the price.

Needless to say, the artist, too, had no idea that his work was being sold at a “lesser” gallery for more than twice the price.  Unfortunately, there was nothing either of them could do given that the work did belong to the gallerist and was, therefore, his to do with as he pleased.

The incident raises many questions:  Can you sell something you just bought for over twice the amount you paid?  Can you present yourself as someone’s representative by couching it under the terms “special arrangement” (in this case claiming you are an artist’s dealer when you are simply selling work by the artist that you already own)?  Of course you can,  especially when you stop to consider that art is a business and, like any business, the bottom line is profit.  Moreover, art is not a regulated business.  Anyone can call themselves an art dealer and anyone can open up an art gallery.

Paul Cezanne's Ambroise Vollard, 1899 (Vollard was an Art Dealer)

The bigger question in all of this however surpasses any ethical concerns.  The question to ask is this:  How positive to the artist are inflated prices without merit?   A buyer, especially one who calls themselves an art dealer, turning around to resell an artist’s work for two and a half times the purchase price is not helping to promote the artist.  All that is accomplished is profit for the buyer and over-inflated prices that don’t necessarily reflect an artist’s growth.  More importantly, immediate resale undermines the work of committed gallerists who understand that an artist’s prices reflect an artist’s growth, maturity, demand, and importance.  None of this is accomplished overnight.

When all is said and done, it is up to the collector to inform themselves, especially when buying from a gallery they don’t know.  Read, read, ask questions, visit galleries, visit some more galleries, ask some more questions… Don Thomson’s book “The $12 Million Stuffed Shark”  is a great start.  It is an informative and entertaining economist’s view of the world of art.

On the upside, I did recently visit an art gallery that was displaying an artist’s work that they had bought.  They were not selling it and they were very open about “owning” it.  They had put it up because they believed in the artist and wanted to “expose” the work to a bigger audience.  Now that is positive!
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