Increasingly, art has become a popular investment among the rich. Historically, this has been the case too, as the exceptionally wealthy have plenty of cash to buy what they want.
"Last
year, worldwide auction sales of postwar and contemporary art climbed
to a historic peak of 4.9 billion euros, or $6.8 billion, a massive
increase over the €1.42 billion in auction sales in 2009, according to
the 2014 Art Market Report published by the European Fine Art Foundation
in March."
"So
was the art market then, and is it now, a potent signifier of income
inequality? Attempts to question how the eight- and nine-figure prices
now being paid by billionaires for rectangles of painted canvas might
relate to a wider economic and social context tend to be dismissed by
many working in the art world as the “politics of envy.”
"As
Mr. Piketty points out in his conclusion to “Capital in the
Twenty-First Century,” those who have a lot of money “never fail to
defend their interests.” Those interests are also staunchly defended by
those hoping to make money."
Do you think art is worth as much as it is selling for now? Or do you think it is just being used as a tool that furthers the interests of the wealthy and magnifies income inequality?
Hopefully these articles about Capital are getting you excited about (or less apprehensive) the large book that awaits us at the end of class.
http://www.nytimes.com/2014/04/21/arts/international/Can-an-Economists-Theory-Apply-to-Art.html?_r=0
Here is WSJ's review of the book: http://online.wsj.com/news/articles/SB10001424052702303825604579515452952131592?mod=trending_now_4
ReplyDeleteI'm less enthusiastic about his book after reading WSJ's review.
One of my supervisor, who used to work at one of the most well-known gallery in NYC told me that sometimes rich people buy art pieces as an investment. They will purchase pieces of a new young artist to see if he/she grow famous in the future with that 'help.' The 1% seem to use arts as a way to define/distinguish their class.
ReplyDeleteIt's interesting that some people do not feel the effects of any economic hardship, it seems. Spending such grand amounts on valuable collectibles like art shows the comfortable luxuries these upper class individuals can afford to spend money on. It may actually be a smart investment in some cases. By looking at extremely high priced goods' sales and cheaper, value brands' sales, we can gain insight into what's going on at different levels of our economy.
ReplyDeleteI'm looking forward to this book, however, I remain skeptical about it. Some people, academic and lay, are saying it's the most important economic text since Keynes, and it's as canonical as Smith and Marx. That sort of buzz doesn't come unwarranted, but it doesn't always have staying power either.
ReplyDeleteAs for the actual article. Art can be like any asset: overvalued by a bullish market.
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ReplyDeleteI think art is like any other good, the prices are determined by supply and demand. Personally, if I had billions of dollars, I would be willing to buy Evard Munch's "The Scream" for $120 Million (see link below).
ReplyDeletehttp://www.guinnessworldrecords.com/news/2012/5/edvard-munchs-the-scream-fetches-world-record-price-at-auction-41487/
I agree with Hikaru, its just like any other asset. The price is determined by the market, its demand and supply. On another note, I do think that it is being used as a tool that furthers the interest of the wealthy and does magnify the income inequality. The price wealthy people are paying is rather to symbolize their spending power than anything else. I don't believe that these people are paying to appreciate the art unlike the dentists, doctors and lawyers. Furthermore, doctors and lawyers do make more money than average American. The market was already skewed towards wealthy. But, now the willingness of the rich people to reflect their wealth has crowded out even those who have some sort of power to spend on luxury goods. Therefore, I do believe the price is higher than what it should be. Not to say that all paintings are overpriced but most of them are.
ReplyDelete