Sunday, 19 July 2015

The Old Master Market: Dead, or merely resting?

Picture: Wikipedia
Bendor Grosvenor has rightly debunked a number of myths around the supposed collapse of the old master market. I think he's spot on about the hyped listings of 'top collectors', the difficulty interpreting auction results and the importance of assessing the quality of what happens to have come up for sale on that particular day. Clearly plenty of people are still buying old masters, some for very hefty prices. But I still think the truth lies somewhere in the middle; the market is not dead, but I don't think it's in particularly ruddy health either. There are £30m Turners and £20m Stubbs, but an awful lot of good pictures are selling poorly.

Even when growth is sluggish, economies reliably produce oodles of data. But the art market is still hard to see. Most transactions aren't just private, they're secret. The dealers open up for Old Master Week, but I was still rather unceremoniously turfed out of one gallery when they wanted to be alone with a client (thanks for the welcome, Ariadne Galleries ... and people wonder why new customers are put off old art ...). The one time when the market surfaces is the spectacular auctions when pictures dramatically sell for millions. They're the focus of art market comment, and unwarranted hasty conclusions are drawn from a tiny random sample of pictures offered in the big sales. A particularly weak sale at Christie's has caused a flurry of comment about the death of the old master market.

Some dealers continue to make a good living, but that is another piece of evidence that must be treated cautiously. The overall performance of an industry is weakly correlated with how much money people can make from it. There are probably blacksmiths still making a good living, whereas returns to manufacturers of computer hardware have been lackluster throughout the IT boom. We can't assess the health of the market on the basis of how much money some dealers are making. A more telling comparison is with the contemporary market, which I discuss in a separate post

But taking a step back from comparing different market segments or assessing performance over time, a simple measure of supply and demand is telling. Supply in the old master market is constrained; they're not making any more! Supply can increase as a result of new discoveries or museum deaccessions, and in the short term the amount coming up for sale can increase as a result of tax changes or as a result of increased demand pushing up prices and tempting people to sell. Supply can decrease as a result of museum acquisitions, damage and destruction, and re-attribution. None of these factors tell us a great deal about the health of the market, though. But another angle is to look at re-appraisals. In a booming market, more minor artists are rediscovered and re-evaluated. That's not happened much recently. Different schools wax and wane, but despite a long boom in Dutch art, Musscher and Sorgh remain under-appreciated. The best works rose sharply in price, pursued by a coterie of keen collectors, but bargains still abound in the lower end of the market. Unattributed works rarely make high prices, and unfashionable schools like the northern mannerists remain cheap. 

The demand side is even more stark. A long global economic boom has created an unprecedented number of millionaires and billionaires. The fruits of growth have disproportionately benefited the wealthy; even in the old world, the mass affluent are numerous and wealthy. The economy distributes rewards unequally, so even within professions like law and banking, those at the top have done disproportionately well. The results of these trends is evident everywhere except the old master market: the luxury goods industries have been growing strongly for decades, house prices in the world's most desirable enclaves have never been so high, and contemporary art is booming. For old masters merely to maintain their value in real terms in these circumstances is a sign of weakness; all things being equal, they too should be booming. 

It was not always so. In the 1970s and 1980s the impressionists were really taking off, but there were prominent public collectors vying for old masters: Getty, Thyssen, Norton Simon, Wrightsman. French eighteenth century art was eagerly pursued by the new rich. Rembrandt and Velazquez smashed records. Museums competed to buy great old masters. Earlier still, old masters were the epitome of fashionable taste. Not only were the very richest competing for fashionable Italian renaissance masterpieces, English portraits and the best Dutch masters, but there were layers of connoisseur-collectors focused on baroque art (Mahon, Seilern) or early Italian and early Netherlandish art (Lehman, Thyssen). Collectors wanted to show off their connoisseurship and discernment, seeking advice from scholars and experts. 

Today it seems that collectors seek to be curators rather than connoisseurs. They seek brands rather than beauty. Of course my examples are merely anecdotal, but I think the evidence of the market points to a real shift in elite taste. The old master market isn't dead, but its recent lethargy is more than a blip. 

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