Bubbling Away: the cynical world of contemporary art investment

Words by Michele Tufigno

While the Cold War raged on and America enjoyed the first chills of air-conditioned life, one commodity was noticeably exempt from capitalism’s ever-wider grasp. In the kingdom of stock exchanges and cold hard cash, art - sacred to Ancient Greeks and oil tycoons alike - was treated with puritanical kid gloves, preserved in public museums and coveted private collections, away from the machinations and manipulations of what we now casually call ‘the market’. New World millionaires saved European treasures from going to rot; they funded modern artists and reassembled French chateaus in New York and Charleston, saving their boiserie interiors from the furnaces of recovering post-war countries. In the world of these latter-day Medicis, art served as a the final bastion of purity in terms of method, drive, subject and intent, independent of supply and demand and the whims of consumerism. Not for long, though. As economies and property values rose and crashed in periodic-near catastrophe, art would soon become a substantial part of the serious investor’s arsenal of appreciating assets, sitting comfortably beside gold bars and diamonds of dubious origin in Swiss climate-controlled vaults. The art world as everyone knew it would never be the same again.

Commerce and art are, of course, old bedfellows. For centuries, patronage was intrinsic to the simple existence of art; determining subjects and dominant styles, turning painters and sculptors into superstars, or plunging them into poverty and obscurity, depending on their fortunes and after sales service. Kings and popes commissioned and competed for the most coveted of works, providing a livelihood to these purveyors of luxury goods and, in due course, immortality. Today’s contemporary art market, however, is not Papal Rome or Ottoman Istanbul: the rules of the game are less Louvre and more LVMH. Simply put, art has been presented as one of the most attractive forms of contemporary investment, buoyed by decades of an overoptimistic, and many argue, overinflated, market, grounded in the rules of speculation. Welcome to the Art Bubble.

Art dealers have learnt much from their real estate agent friends, and boy, can they sell. Unlike other forms of traditional investment, the contemporary art market is not based on past performance. Across major cities worldwide, agents and dealers are on a constant hunt for young, unknown talent, ready to pluck undiscovered 23 year olds from the obscurity of art academies and dingy studios before launching them into the Damien Hirst stratosphere. So far, so good. The past thirty years have provided a series of incredibly talented painters, sculptors and performance artists, bringing social and political commentary to the pages of fashion magazines, newspapers and late night TV shows. The commodification of contemporary art cannot be underestimated: it has exposed the masses to valid works, but also created an immense new market for accessible pieces, more product than art, lining the coffers of the artist, but also those of gallerists and dealers in the process.

Yet one problem remains: how does one quantify the value of art? Let’s be frank: art is often very little more than a smattering of paint on cheap canvas, effectively possessing no intrinsic value. Many buyers acquire art for the sheer pleasure or prestige of possessing it, focusing

on aesthetic beauty or its implied message and often ignoring market rules. For those seeking a return on their investment, however, it gets tricky. Unlike artists with impressive track records (Rubens’ Lots and His Daughters fetched close to £45 million at auction in 2016), the contemporary art buyer does not have the luxury of relying on centuries of proven worth and desirability when deciding on which works to invest in. Today’s artists do fetch astounding prices for their art, yet upon closer inspection, these sums often appear to be little more than the result of aggressive marketing and repeated, successive sales designed to inflate their value. One of my very own favourite Damien Hirst pieces, For the Love of God was sold for around £50 million to a varied consortium, which included Hirst himself amongst the portfolio of buyers. (Thousands of unsold pieces languished in his warehouse and his butterfly painting factories are now permanently shut). The most recent, absurdly cynical ploy is to peddle NFTs as a valid alternative to traditional art media: a collage by digital artist Mike Winkelmann, known as Beeple, sold for over $69 million at Christie’s, putting little old Rubens back into his dusty attic. It has, quite naturally, been touted as the ‘future’ for art, yet the most vocal proponents of NFTs are, yes, you’ve guessed it, those who directly profit from their skyrocketing sale prices. Like art world Elon Musks, but with better taste in clothes, they have hailed this historic sale as the way forward, erasing the Great Art Crash of 2008 from recent collective memory. What we are experiencing today is a repetition of the events which led to this great crash, creating an incestuous microcosm for artists, gallerists, galleries and museums in which to thrive financially but effectively limiting the creativity and freedom of the artist, now constrained by market rules and corporations along with his fashion designer and musician cousins. Recent calls for greater legal regulation of the art market have also brought to the fore the widespread problem of money laundering through art purchases, adding another sinister twist to an already sordid tale.

So is art a no-go zone for intelligent investment? Certainly not. The patronage of artists is an investment in our societies and cultures, of nurturing creativity, debate, commentary and beauty in our increasingly polarised world. Do it to satisfy your narcissism if you must. A world in which art is reduced to squalid product would be a very dull one, but buying with foresight remains possible and profitable. Whether it’s an old master painting or a bright young thing’s remarkably fresh vision, buying art outside the confines of the corporate world is thrilling. Buy that Tracy Emin neon if you love it, but don’t expect it to make you rich. Focus instead on the quality and intelligence of new content; educate your gaze or hire someone to do it for you. Steer clear of big galleries and invest in your native or adopted community of artists. Pay what’s fair and a little extra; commission your own work and have your dog or lover painted. It may not turn you into an art mogul, but you didn’t want to be one anyway.