A SUITCASE FULL OF CASH

Oct 11, 2022

Welcome to Business School!

I am very excited to get this project started! In today’s newsletter, I am going to take a moment to define a few terms that will be important going forward. Also, I am putting the completely-optional-but-would-be-cool-if-it-happened business school assignment at the top so it doesn’t get buried.

YOUR ASSIGNMENT (SHOULD YOU CHOOSE TO ACCEPT IT): The underlying structure that makes the art world function is the network, and sharing information about artists and events is the core of making any scene happen. We too are a network, and as a way to get to know each other a little bit, I think it would be great if you went to the comments section or to my Instagram and posted a link to someone in your personal circle who is doing something cool. Most of the art we interact with isn’t made by famous people, it’s by people in our communities. (You don’t have to actually know the person. Loose community associations are very important when networking.)

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THE ART WORLD: The art world is made up of all the people who get together to look at, talk about, make, buy, or sell art. If you tell someone about that cool comic your read or buy a print at a craft fair for your mom, you’re in the art world, baby. But there is not just one art world; it’s a big network made up of a bunch of smaller ones. My smallest and most important circle is my family. When I make a new thing or embark on a project, I show it to them first. Radiating out are other groups: my friends, the folks I’ve met taking classes at Pratt in Seattle, Seattle Print Arts, social media, people I’ve met through online classes, my grad school, the larger Seattle art scene, and the contemporary art world. (And you!)

THE CONTEMPORARY ART WORLD: Let’s talk about what the word contemporary means in this context. It kinda means right now, but with right now extending back in time for a bit, probably somewhere around the mid-1970s. Maybe a little earlier? Whenever you consider modernism to have ended as an art movement, that’s when contemporary begins. (The terms modern and contemporary seem like they should mean the same thing, but they don’t. I was very confused by this way back before I took art history classes, and will let Mr. Wikipedia fill in the details for you: https://en.wikipedia.org/wiki/Modernism .) So, the contemporary art world is all the people who get together to look at, talk about, make, buy, or sell contemporary art. BUUUUUUT, this does not mean that all art made after modernism is always considered “contemporary” art. That’s because there are two contemporary art worlds. The first really is centered on people who are making art right now. But within that general term is a very specific kind of art that is concerned with the discourse, and that is often what I mean when I say contemporary art. What is the discourse (outside of being an annoying piece of jargon)? It’s all the inside baseball talk that goes on in art schools, galleries, art fairs, museums, magazines, books, podcasts, etc. It’s the theories written to analyze what it all means, critique the power structures that affect how work is read or received, and place a work within a historical context or remove it in order to look at it anew. I participate in this world as a Master of Fine Arts student and as someone who likes to read theory. (Not all theory. Theodore Adorno can suck it. Why write something if you don’t want people to understand it?) Some of the things I make fit within this definition (like this project) but other works (like some of the prints I make that mostly just look cool) do not.

THE CONTEMPORARY ART MARKET: You might remember from the last newsletter that a market is a group of people who get together to buy and sell art. The specific market I am referring to here is not made up of all the people selling contemporary art. It is a particular global market where the resale of previously owned works is where a lot of the action is. These high-priced transactions make up a small (less than 5%) percentage of the number of sales but are over 50% of the money generated. An example: In 2014, Njideka Akunyili Crosby’s painting “The Beautyful Ones” was priced by her gallery at $30,000. In 2017, it sold at auction for $3,000,000. There is something happening in that $2,970,000 price difference that has nothing to do with Crosby’s skills or reputation or control over her inventory which might lead to steady increases in her prices. That is the thing I am trying to get at in my research.

It makes sense that older art would command high prices because Leonardo da Vinci isn’t going to make another painting. (Well, he’s not going to make one, but that doesn’t stop anyone else from doing so. We’ll get to that in a later newsletter.) Because there isn’t enough older stuff to go around, the market latches on to the one resource of which there is a steady supply - contemporary art. There is A LOT of art being made right now. Too much if you are trying to create a scarce resource that people will pay a lot of money for. So the market needs to figure out what is good (valuable), and since we are in a period in which there is no clear-cut definition of what that is, the market substitutes pedigree for quality (although one does not exclude the other.) If you get your degree from a school like Yale and/or get an early show at one of a very few select galleries or museums like Gagosian or the Guggenheim, you are not guaranteed anything, but you have a much greater chance of success in this market than someone coming from the outside. There is a new term for early career artists able to command stratospheric prices, and that is red-chip (as opposed to blue-chip which are the more established artists who are consistently good investments from a financial standpoint.) And when people start using financial terminology to describe art, they add a new layer of meaning to how we already think about what it is and what purpose it should serve. It’s not just a (insert whatever you think art is), it’s a suitcase you can keep shoving handfuls of cash into. You can trade it, put more cash in it, borrow against it, put it in storage, or sell it with no one else being any the wiser.

So why is this happening? Well, the super-rich are getting richer, and they need somewhere to park their money that is portable, not subject to the fluctuations of the stock market, and has the ability to be anonymous. No one has to know what they bought and how much they spent. (A lot of these transactions are being done privately and not through public auction, and even then people can bid through an intermediary. This can make talking about numbers in the art market difficult.) One can buy a painting, store it in a freeport (a warehouse not subject to the tax laws of the country it resides in) without having to pay taxes, let it appreciate, and then sell or trade it like a baseball card. I have been thinking a lot about this, and part of the purpose behind this project is for me to figure out how bad this is for everyone outside of this world. If you aren’t paying taxes, you aren’t supporting the country you reside in. Cultural resources that just sit in a warehouse aren’t enriching anyone. Stratospherically high prices mean that museums are priced out and have to rely on gifts by philanthropists who determine what we see based on what is good for their art (financial) portfolios. But going deeper, can art still hold its meaning and also serve as a suitcase full of cash? Most art isn’t seen in real life by a ton of people outside of a museum. You can go to someone’s house and see an awesome painting of a horse, but it is not available for general public consumption. Does it really matter that in order for some art to realize its full financial value, it needs to go unseen in a warehouse? Museums keep much, if not most, of their collections in storage. How is this any different? Art already contains multiple layers of meaning: there is what happens between the art and the artist, the art and the viewer, art as a symbol of status, a representative of culture, and a vehicle for entertainment. Does adding one more layer - financial asset - have any effect on these others?

Going forward, I will be doing research about the financial impacts of this behavior and sharing the results with you in what I hope is a fun and interesting way. Together, in the Substack and Instagram comments (and with the simulations and case studies,) we can have conversations about what this means for our ideas about art. The business school framework is a way to structure this project and give me a lens through which I can visualize and present information.

The PNW Conceptual Art Center (a conceptual art project)

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