Art trade in times of crisis

One of the main worries of this historical period in which we are living is the purpose of capital investment and the benefits that they generate. It is for this reason that the commercialization of Art has been also included in this universe, but in a wider sense. What it is meant by the last statement is that Art is not only listed by its materiality, but since the end of the last century and especially in these first two decades of our century, many of the leading artistic productions intrinsically linked a philosophical and intellectual value that releases most of its materiality, becoming even a part of a completely Conceptual Art. However, art investors commit paying for this thought which makes us completely modern and contemporary in the world we are living.

Perhaps these words may be an offence for an expert, but it would be incorrect not to accept that the art world has been related to the trade practices almost from its inception. Therefore, considering this as a value linked to the history of art, we will look to how these productions are evaluated and how is surviving the art market in these difficult times that we living.

According to the academics, nowadays there is a remarkable difference between economic value for the old paintings -everything produced before the 20^th Century- and for contemporary productions. This is based on the high prices for Contemporary Art, which as we have said before is an art mostly paid for its conceptual and intellectual value. While art considered as “ancient” remains on stable prices and transactions, Contemporary Art gets to move about $ 60 million annually in the art market. Although these calculations include also the antiquities and decorative art's markets, anyway the thing is that the artistic world is about big numbers, or at least that's what the data show for now. Unfortunately the critical situation has also affected the world of buying and selling art. While before it was recognized that the bad economic situation had interfered the maintenance and management of the artistic heritage, nowadays, from a commercial or particular point of view, the situation has gone through a substantial decrease both on the artistic production and its commercialism worldwide, as London and New York still stand as cores of the artistic trade.

The two factions of Art mentioned respond and are governed by different laws and principles, according to the economic times in which they are. If until now the great economic bubble had opted for Contemporary Art as speculative goods, especially in the inverter collector profile, the new situation redirects the expectations in the fields of the art market. Currently, in accordance with the recessionary times we live in, the economic change projects its capital investment towards the solid markets of Ancient Art.

One of the clearest and more relevant examples showing this economical situation is the galleries and artists fair in Madrid, now on its 32th edition of ARCO, held last month in the Spanish capital. This edition also was affected by the bad economic situation affecting both the conditions of the exhibition and the works presented by the galleries and artists. Therefore, all the preparations to shape this event were performed in a more contained way, adapting art shows to the current and real world conditions. While it is reason enough to prepare the art fair for the current crisis, another fact is added as a border for the commercial development of contemporary art: the application of the 21% VAT in culture, which is presented by the galleries as the most negative point for its commercial development. This makes them confirm that Spanish galleries are not competitive against other states or countries, while there is also a weakness in the Spanish artists. Throughout this it is also very difficult to find and present the most controversial and ground-breaking artwork, as the productions adapt to the market conditions and the taste of general customer, regardless of all creative genius. However, other opinions do not completely condemn the situation and opt for a more optimistic adaptation to reality.

Finally, we will give an end to this little reflection on the current state of the art market, with Urroz's words, president of ARCO, who reflects on the art market that the business is important when it has been affected by the loss of purchasing power of public institutions, and therefore, must watch the market towards larger collectors and individuals. To put it simply, in difficult times we must opt for the less cost effective solution, so as not to reach the end of the trading of Contemporary Art, even if for a lot of people it is not seen as a very correct solution.

Antoni Obiols