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Value Appropriation in the Art Market
BY LUKE BOWEN
Introduction
As a potential art consumer browses through the gallery space, mystery and incomprehension builds uncertainty in making a final purchasing decision. The buyer frequently contemplates what is ascetically appealing to them based on their personal background and interests. This background according to ArtFacts.Net relies on one’s “inherit social, political and historical capacities for perception.” (2) The buyer also considers by the price range if this purchase will be primarily the buying of a decoration, or the investing in a rare commodity? The most disconcerting aspect of the looming transaction is how does the outsider codify and understand this seemingly arbitrary value system within the art world? After all, there is no standardized measurement based upon size, brushwork, material, nor subject matter.
The answer derives from a plethora of circumstances, possibilities, and processes similar to formulas used for attributing value to a home or the way stock brokers and economists calculate the specific value of one’s stock note. To understand these circumstances, possibilities, and processes requires a level of ‘artistic competence’ according to Randal Johnson, editor of Pierre Bourdieu’s The Field of Cultural Production. Johnson states that this “comprehension involves a decoding operation, and the ability to decode works of art as they are meant to be decoded (that is according to the values established in the artistic field) is not a universally shared natural talent, since it involves much more than the direct and immediate apprehension of the work. Artistic competence is a form of knowledge that which permits the beholder to situate the work of art in relation to the universe of artistic possibilities in which it is part.” (22) Johnsons elaborates that “artistic competence…is the result of a long process of inculcation which begins in the family, often in conformity with its level of economic, academic, and cultural capital, and is reinforced by the education system. It also involves prolonged exposure to works of art. The understanding of a work of art thus depends fully on the possession of the code into which it has been encoded, and this is neither a natural nor a universally distributed capability.” (23)
Pricing Methodology
Here are two distinct works of art created by two different artists, Takashi Murakami[[1]] and Tommy Perman[[2]]. Both are art prints that exist amongst a limited number of total printings. The Murakami exists amongst a body of 300 identical prints and the Perman comes from a body of 20 identical prints. Both art pieces are close to being the same dimensions, printed at likely the same speed and to the same quality around the same year. Yet a more numerous print of Murakami’s cartoon cost 7 times what a print of Perman’s 'Trucks' cost. The reasoning behind this is due to a number of pricing factors that must be considered.
Market Dynamics
On a microeconomic level, the amount of money being spent on art pieces has a correlation with the average amount of disposable, or more appropriately termed, available income on hand by any individual or firm, which is monies that will knowingly not be spent toward necessities e.g. power, property, consumables, personal care, transportation and other crucial investments applied to the standard of living.
On a macroeconomic level, the art prices can be influenced by “capitalist or economic behavior [that’s] based on property, lending money, and charging interest” (9) according to ArtFacts.Net. Certain works will also rise and fall due to the monetary supply, inflation, the devaluing or bolstering of national currencies, economic stability or instability, the increasing or diminishing supply of other commodities and essentials, rising/falling wages, and other prevailing market trends like overall art market popularity. Location also plays a role in understanding what type of people are buying and selling what. According to ArtMarket.com [[3]], the region with the most activity in buying and selling art is the United States, specifically the New York city area. ArtMarket.com says "With turnover of $1,322 million for some 30,000 lots sold, the United States dominated the art market once again in 2004. US auction houses accounted for 46.5% of the global fine art market compared with 42% in 2003, and total turnover generated in the United States rose 45% in one year. A number of factors contributed to this substantial rise: an increase in sales volume (+15%), a dramatic cumulative rise in prices (+18.5% on the New York market) and the growing number of lots sold for over a million dollars (229 works in New York, compared with 132 in 2003). Intense competition among the leading auction houses enhanced further the quality of works that changed hands in 2004, with New York benefiting the most from this race for the finest pieces. The Big Apple is by far the best market for selling works in the seven-figure range. Underlying this dynamic increase is a combination of factors: the inevitable wider accessibility of the art market, resumed growth on the financial markets, the dollar’s depreciation and the search for alternative investments."
Historical Significance
If a particular piece or an artist’s work stands for something pinnacle, extraordinary, or profound in the history of art or somehow serves as a standard in art’s evolution toward the present or even depicts an important figure or event that no one else captures, its value appreciates exponentially through such historically significant circumstances. One of the first ‘rebel’ artists Gustave Courbet, whose is revered for making tremendous advancements in the art world, is historically significant for a handful of reasons. His piece, 'The Burial at Ornans', a canvas painting of an actual funeral held for his relative, is as close to a historical document as a painting can achieve for that time. Courbet deliberately used those in attendance at the funeral to be his models for the painting. The work was also extraordinarily massive, 10 by 22 feet to be exact, which was very unusual for commemorating someone of non-royalty and non-clergy. However, the most defining aspect of 'The Burial at Ornans' is that it is considered to be the first realist-styled masterpiece ever created, circa 1849. Courbet has been quoted in saying that 'The Burial of Ornan was in reality a burial of Romanticism.'[[4]] Courbet's skill and his foresight have placed his painting into a caliber of its own.
The Status of Capital
Pierre Bourdieu explains in his essay The Forms of Capital that "capital, in the sense of the means of appropriating the product of accumulated labor in the objectified state which is held by a given agent...the means of appropriating the accumulated and objectively available resources; and the relationships of appropriation between an agent and the resources objectively available, and hence the profits they produce, is mediated by the relationship of competition between himself and the other possessors of capital competing for the same goods, in which scarcity, and through its social value, is generated. The structure of the field i.e. the unequal distribution of capital, is the source of the specific effects of capital" (246).
Capital, simply put, is a resource that every human being takes advantage of in one or all of its forms. It is a concentrated form of labor power that is essential for productivity. This capital can be broken down and accessed in any of its valued forms to achieve a certain level of establishment and exchange. The forms of capital are namely placed into four categories of social, economic, cultural, and symbolic. By harnessing all four brands of capital, the lowest classed citizen can achieve limitless potential.
According to Svendsen's essay On the Wealth of Nations: Bourdieuconomics and Social Capital, "capital is inscribed in both objective and subjective structures and hereby becomes a guarantor for the regularity and stability of the social world. Indeed, at a given time, the various forms of capital can be said to be the very 'immanent structures' of the social world, understood as 'the set of constraints, inscribed in the very reality of that world, which governs its functioning in a durable way, determining the chances of success for practices." (609)
Social Capital
In On the Wealth of Nations: Bourdieuconomics and Social Capital it says "the ability to cooperate derives precisely from shared values and ultimately out of mutual trust in a society. It is because these shared values and trust facilitate cooperation that social capital can be counted upon as a factor of production on an equal footing with other capital." (619)
Reputation
The artist Edgar Degas (1834-1917) is arguably the most inspiring artist of all time for his immense collections of pre-drafted sketches and immaculate paintings, sculptures and print work. He was an overly dedicated and managed to fit in amongst numerous bodies of artists, beginning with studying classical Renaissance works and then becoming part of the Impressionism movement. Nearing the end of his life Degas vision slowly began to fade but he still managed to sculpt one of the most famous sculptures ever, The Little Dancer. His technique, networking, and dedication led other famous artists like Renoir to comment that he was the greatest sculptor of his epoch.[[5]] This validation has placed Degas as one of the top 50th artists of all time.[[6]]
Memberships, Relationships and Social Networks
Pierre Bourdieu in The Forms of Capitol elaborates that "the network of relationships is the product of investment strategies, individual or collective, consciously or unconsciously aimed at establishing or reproducing social relationships that are directly usable in the short or long term, i.e. at transforming contingent relations, such as those of neighborhood, the workplace, or even kinship, into relationships that are at once necessary and elective, institutionally guaranteed. This is done through alchemy of consecration, the symbolic constitution produced by social institutions and endlessly reproduced in and through the exchange (of gifts, words, women, etc.) which it encourages and which presupposes and produces mutual knowledge and recognition. Exchange transforms the things exchanged into signs and recognition and through the mutual recognition and the recognition of the group membership which it implies, reproduces the group." (250)
Pierre Bourdieu in The Field of Cultural Production says in simpler terms "the great dealers, the great publishers, are inspired talent-spotters who guided by their disinterested, unreasoning passion for a work of art have made the painter...or have helped him make himself by encouraging him in difficult moments." (77) In the editorial piece toThe Field of Cultural Production, it says that "art and their respective producers do not exist independently of a complex institutional framework which authorizes, enables, empowers, and legitimizes them." (10)
Before Yoko Ono became a household name for being the wife of the legendary John Lennon, she was an early member of a group called Fluxus, an international network of artists, composers and designers. She was a discovered artist through George Maciunas founder of Fluxus and an eventual love interest. Through the network of Fluxus, artists of all kind were able to exchange social capital to further each others work. It was at a gallery that Yoko managed to meet Lennon and through that connection, one thing leads to another, and she is now one of the 100 top selling artist according to ArtFacts[[7]], a extraordinary task even for when all the appropriate connections are made.
Economic Capital
Economic capital can be broken into two broad and intertwining categories. One of them is capital goods which is in reference to any item of ownership or commodity with legitimate or inherent value. Then there is the category of real capital which is the amount of wealth one is in control of, wealth being a little less finite. The dynamic of having some economic capital ownership is enabling to one's liberties in acquiring a piece of, or penetrating a portion of the art market. Pierre Bourdieu states in The Forms of Capital "that economic capital is at the root of all other types of capital and that these transformed, disguised forms of economic capital, never entirely reducible to that definition, produce their most specific effects only to the extent that they conceal (not least from their possessors) the fact that economic capital is at their root" (252).
Cultural Capital
In Johnson's introduction to Bourdieu's The Field of Cultural Production it defines "cultural capital as a form of knowledge, an internalized code or a cognitive acquisition which equips the social agent with empathy towards, appreciation for or competence in deciphering cultural relations and cultural artifacts. He suggests that 'a work of art has meaning and interest only for someone who possesses the cultural competence, that is, the code, into which it is encoded'. The possession of this code, or cultural capital, is accumulated through a long process of acquisition or inculcation which includes the pedagogical action of the family or group members (family education), educated members of the social formation (diffuse education), and social institutions (institutionalized education). (7)
Svendsen's essay On the Wealth of Nations: Bourdieuconomics and Social Capital says the non-material "cultural capital should be understood here as cultural products that are embedded in the human mind and body, as well as in objects. Cultural capital thus appears in three states. In its objectified state, cultural capital consists of humanly created objects...in its institutionalized state, cultural capital consists of educational qualifications...finally, in its embodied state, cultural capital consists of permanent dispositions in the individual person" (618).
Pierre Bourdieu in The Forms of Capitalsays "cultural capital can be acquired, to a varying extent, depending on the period, the society, and the social class, in the absence of any deliberate inculcation, and therefore quite unconsciously.It always remains marked by its earliest conditions of acquisition which, through the more or less visible marks they leave (such as the pronunciation characteristics of a class or region), help to determine its distinctive value. It cannot be accumulated beyond the appropriating capacities of an individual agent; it declines and dies with its bearer" (245).
Symbolic Capital
According to the essay On the Wealth of Nations: Bourdieuconomics and Social Capital "symbolic capital is a more hidden or camouflaged form of capital that is disavowed, mis-recognized and thereby recognized, hence legitimate, a 'credit' which under certain conditions, and always in the long run guarantees 'economic' profits." (618) In other words, if someone embodies a religious or authoritative position regardless of their present standing or amount of social capital accrued, they can utilize such symbolic capital to ascertain other capital resources.
Socio-Cultural Contexts
The cultural context affects how art work is seen, received, and consumed. There is a sculptor by the name of Daniel Edwards who has received attention not just for his subject matter but also for the overly interpreted irony, humor, and statements surrounding his artwork. He is known for sculpting pop-culture icons in evocative and unbecoming lights in similitude of occurrences and happenstances encompassing their image and lives. Some of his sculpted works worth mentioning are a death mask of the decaying head of baseball great Ted Williams whose head was removed and frozen upon his death, and a sculpture of the birthing Britney Spears. The social-cultural understanding of stardom along with the intended or suggested meaning provides a double impact concerning thee works that only draws out extra publicity for the works. In so doing, Edwards can ambitiously price his Ted William’s 'Death Mask' at $15,000 and expect it to sell.[[8]] Anticipating whether these works will have their value appreciate over time can depend a lot on the cultural status of the celebrity in years to come.
Socio-Political Significance
During the Second World War, several artworks were looted, destroyed, or turned up missing when the Third Reich took a hold of the region. By a few stokes of luck, several works manages to be recovered. Consequentially, the recovered works that survived through the regime and the war sustained a dramatic increase in value and often new interpretations. One such instance was Austrian expressionist Egon Scheile’s ‘Wilted Sunflowers’ circa 1914 that was recovered and would likely fetch close to 10 million at auctioning price. The piece is now considered to be a prophetic omen of Europe's pending doom. [[9]]
Provenance, Celebrity, and Age
Provenance has to do with the history of ownership of a certain piece. If a certain artwork has been exchanged between numerous well-knowns and well-to-dos and has found its way to formidable locations and museums worldwide then its value will consequentially rise based on the names that the piece can be associated with.
Likewise if the artist or artwork is reputable for being acquainted with famous and well known individuals, or the artwork or artist has existed beyond what most others have gives valid reason to appraise their artwork for more than one would otherwise.
Analysis of Comparables
By analyzing and tracking the auctions and prices of works from a certain period or from a certain artist, a standard can be set for all art pieces from that epoch or from that artist being sold to go for relatively similar amounts. Art collectors and curators can codify the history and reasoning for why art pieces from a certain time were sold and for what and will act accordingly on future buying opportunities.
Condition
This measurement is considered to be most crucial aspect in artwork assessment. Discerning how well maintained an artwork is removes or attributes certain risks to investing in the piece. Has there been any means of restoration or is there projected potential for requiring restoration? Is the work's integrity holding? Is there any superficial or structural damage? In the art market, an art piece on a canvas will often sell for much more than an artwork on paper. The poorer integrity of paper than canvas is usually part of the overarching reason for buying a painting on canvas over a rendering on paper.
Scarcity
Scarcity follows the basic concept of supply and demand. Something that is rare is going to be more attractive and desirable than something that is common or perceived as ordinary. This translates directly into the gallery or auction house. A work will become less and less in demand the longer it stays on the market. The shorter amounter of time a piece or a collection of pieces is available for sale before being bought will consequentially drive the future prices up. The reasoning behind this is explained by Pierre Bourdieu’s essay on The Market of Symbolic Goods. He says “works produced by the field of restricted production are ‘pure’, ‘abstract’, and ‘esoteric’. They are ‘pure’ because they demand of the receiver a specifically aesthetic disposition in accordance with the principles of their production. They are ‘abstract’ because they call for a multiplicity of specific approaches…they are ‘esoteric’ for all the above reasons and because their complex structure continually implies tacit reference to the entire history of previous structures and is accessible only to those who possess practical or theoretical mastery of a refined code.” (120)
A case in point would be the “Rose Period” of Picasso. After the turn of the twentieth century, Picasso painted naturalistically or figuratively for a period of about 6 years. He spent some time working with cool colors in greenish-blue hues with a somewhat Spanish influence called his “Blue period” then he commenced into a “Rose Period” with warmer colors and a more French influence. At the time, the works were not very well received and he had a difficult time finding buyers. Being able to step back and look at Picasso’s entire career now, his pieces from those two periods sell for more than all his other paintings due to the scarcity of works from such abbreviated periods. To date, Picasso's highest selling artwork is 'Boy with a Pipe' circa 1905, which in 2004 sold for 100 million.[[10]]
Conclusion
ArtFacts.Net explains "the art market is divided up into a professional world with its own terms of quality assignment and the world of the average art consumer, who is often left feeling confused. The way in which the professional world evaluates the quality of a work of art remains a mystery to potential consumers...This basically means that the professionals designed a kind of private code that art consumers can not decrypt. That makes the consumer feel uncertain. The other thing is that often people do not trust their own taste...Uncertainty and incomparability are fatal to market development because investment decisions are not based on objective terms. Investment decisions have to be based solely on the opinions of critics and marketers recommendations...the lack of certainty makes the art market a playground only for the super rich or for well-funded institutions." (7)
ArtFact.Net is one of the prevailing institutions that proposes through online space to provide:
1] Standards in classification
2] Reliable data storage and data transparency
3] Rules of market behavior
4] World wide jurisdiction
Measures and discourses such as this will hopefully bring the art outsider into the fold of knowledge, and into a general understanding of the art markets and its methodologies used in assessing value to an increasingly complicated and ever-changing field.
References
Links
1. http://www.picassomio.com/takashi-murakami/50697.html
2. http://www.20x200.com/art/2008/04/trucks-seattle.html
4. http://en.wikipedia.org/wiki/Gustave_Courbet
5. http://www.wsws.org/articles/2003/dec2003/dega-d19.shtml
6. http://www.artfacts.net/index.php/pageType/ranking/paragraph/4
7. http://www.artfacts.net/index.php/pageType/ranking/paragraph/4
8. http://www.nytimes.com/2005/09/05/arts/design/05ted.html?_r=1&8hpib&oref=slogin
9. http://www.msnbc.msn.com/id/12423661/
10.http://www.theartistpablopicasso.com/pablo-picasso-painting-boy-pipe.htm
Sources
Bourdieu, Pierre. "Economic Capital, Cultural Capital, Social Capital". Soziale Ungleichheiten. Goettingen: Otto Schartz & Co., 1983.
Bourdieu, Pierre. The Field of Cultural Production: Essays on Art and Literature. New York: Columbia University Press, 1993.
Claapben, Marek. "Operating System Art World". 24 May 2005. 29 May 2005. <http://www.artfacts.net/marketing/pdf/artmarket_pdf.en.pdf>
Svendsen, Gunnar Lind Haase, and Gert Tinggaard Svendsen. "On the Wealth of Nations: Bourdieuconomics and Social Capital." Theory and Society. Vol. 32, No. 5/6, Special Issue in memory of Pierre Bourdieu. New York: Springer, 2003
