The Art World's Spending Spree

Article excerpt

Byline: Blake Gopnik

The rich keep spending millionsand driving up prices. But what happens when the bubble bursts?

What sound does a bubble make just before it bursts? We heard it last week at the Art Basel fair in Miami, where the rich flock to stock up on art each December. A Richard Prince "nurse," hung amid Picassos and Miros, selling for $6.5 million; a Damien Hirst "medicine cabinet" priced at $4 million; Julie Mehretu squiggles, barely a decade old, for $2.6 million--all for sale at Art Basel, and all with prices so high they are bound to crash-land.

But there were surer, subtler signs of the bubble than those: paintings by Raymond Parker--that were nowhere in sight; carvings by Mary Frank, also not for sale anywhere; bronzes by David Slivka, unrepresented in any dealer's booth. Fifty years ago, in the pages of Art News magazine, these were billed as figures "of unusual promise and achievement." Today a huge Parker canvas sets his auction record at $60,000 (compared to $34 million for Jeff Koons), while works by Frank barely break $10,000, and a lone Slivka sculpture on the market goes for a 10th of that.

"Ernie Trova was the most famous artist in the world," says New York dealer Marc Glimcher, "and Ernie Trova was us"--"us" being the influential Pace Gallery founded by his parents, and Trova being an utterly forgotten 1960s sculptor whose sales were once so brisk they paid for Glimcher's education. "Those bubbles burst--they're bursting now," says the dealer. He points out that there's not a soul who'd say we're at a high point in artistic creation, even as the market for art does better than ever.

Maybe we should expect obscene price tags when it comes to the proven icons of art history: who can say if The Scream by Munch was overpriced or not when it sold for $120 million last May, or whether it made sense when The Card Players by Cezanne sold for twice that in 2011? But when prices go nuts for artists whose reputations are still in play, trouble is sure to be looming.

The reason I'm certain that today's contemporary market is due to deflate is because people like me will make it happen. We won't do it on purpose, tempting as that might be. We'll make the bubble pop in the normal course of things, as all of us--critics, curators, and art lovers of all kinds--decide that today's market darlings are tomorrow's a[umlaut]also-rans. We'll prick the market's bubble by deciding that a Richard Prince nurse is about as central to our culture as Ernie Trova's sculptures turned out to be. And when we burst reputations, we deflate prices, too. History proves that most judgments about art will be shown to be wrong, as the roster of noteworthy talents gets whittled down. (I'm utterly sure of the importance of the living artists I admire--including Koons and Hirst, as it happens. I'm equally sure that I'll turn out to be mistaken about many of them.)

The scholar Michael Moses, now retired from the NYU business school, has spent years building an index that tracks the prices of artworks sold at major auctions--of the art, that is, already on top of the heap. (Auction houses won't even accept lesser works, which include most art that gets made.) And Moses points out that, over the long run and on average, even this high-end art tends be a worse investment than equities, however well some of it has done over the past year or two. His index tracks single works that have come up for auction a second time, and of those "sale pairs," about one third actually represent a drop. In the long run, Moses says, the fancy, flashy treasures whose sales the auctioneers trumpet most loudly don't yield the best returns. a[umlaut]Moses points out that to match a normal 10-year stock-market return, today's $80 million Rothko would have to soar to an unlikely $160 million.

In New York this November, the auctions of deluxe modern and contemporary art set tons of artists' records, with about $800 million in total sales. …