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.

Christie's Images Ltd. - Zeng Fanzhi's "Mask Series 1996 No. 6". A record for Chinese Contemporary Art of US$ 9.7M was paid in 2008.

In May, 2008, contemporary Chinese artist Zeng Fanzhi’s “Mask Series 1996 No.6” sold for U.S$9.07 million at the Christie’s Hong Kong art auction.  A month earlier, another contemporary Chinese artist, Zhang Xiaogang, sold his “Bloodline: Big Family No.3” for U.S.$6.06 million at the Sotheby’s Hong Kong art auction.  In case you are wondering, Fanzhi was born in 1964.  Xiaogang is a little older.  He was born in 1958.

Could anyone have predicted these prices?  Apparently not even the auction catalogues predicted such prices judging by their pre-sale estimates.   On a slightly more personal note, I recently walked into a not-too-snooty art gallery.  The gallery director was forthcoming, and genuinely believed in his artists but then – “You should get this artist before his prices go up” – pops out of his mouth.  Nothing bothers me more than a gallery director telling me that I should buy NOW before the somewhat affordable piece I’m looking at appreciates by 20% or more.

First and foremost, what is it about my clothes and appearance that makes gallery director think: Look lady, buy now because chances are you’ll never be able to afford more than what the artist is currently valued at!

Second, what guarantees I won’t contact the artist directly and hound him until he has a nervous break-down and sells me his piece for half-price?

Zhang Xiaogang's "Bloodline: The big family no. 3". (Artnet.com)

Third, even if the snowball does survive hell and the work in question does demand a  million dollars plus while I’m still alive and faculty-intact– so what?  Do I allow myself to get pressure-pushed into buying a piece on the sole criteria that there’s a molecular off-chance it will exceed its current value by an astronomical jump?

All of which leads to the ever-enigmatic question: What is art worth?

I guess for some things the answer is fairly straightforward.  Take real estate, for example, and its “three golden rules” – location, location, location. The value of art, however, is not so straightforward.  It is too subjective, too volatile, and too dependent on the pricing policy of the gallery and something Adam Smith called “the Invisible Hand” (Don Thompson elaborates on this point in his book,  The $12 Million Stuffed Shark).  Assuming that talent is a material part of this equation, then talent should be guarantee enough.  Sure, but in the unpredictable world of creativity what does talent mean and what does talent guarantee?

I remember watching Wicked on Broadway and thinking how absolutely brilliant every actor’s performance was.  Now ponder this:  For every actor on stage, there are at least a few thousand (and I’m being conservative) equally talented, equally brilliant actors who are barely making ends meet by waiting on tables.  Same thing for artists – it’s enough to make you push your artistically-inclined kid into medicine or law.

Ultimately, how much a work will be worth is unpredictable.   So perhaps the question to ask when considering a work of art is this:   Will I still love it and will it still speak to me if it is only worth the value of paint and canvas?