While it appears that the recent art market crash paralleled that of the greater financial crisis these two markets interestingly seem to function by different forces. It has long been assumed that the art market and stock market are highly interconnected, but the readings present evidence that the truth may be more complicated. When the stock market crashed previously in the late 1980’s the art market continued to boom and this was not an anomaly. It is hard to believe that global financial conditions do not affect the art market at all, but there do seem to be other important and sometimes immeasurable factors like taste that have a greater impact on its health.
That the most recent art market crash happened at the same time as the global financial crash may only have been a coincidence. Olav Velthuis suggests in his article, “Accounting for Taste” that the 2008 art market crash was driven mostly by an excess of inflowing money which caused, “…the erosion of egalitarian values.” He presents disturbing statistics concerning the growth of the value of art as compared to growth in salaries to support his idea. Art value has grown so much faster than salaries that access to purchase art has been cut off to all but the wealthiest members of society. What is truly amazing is that the current art market makes that of the 1980’s, which at the time was considered a huge boom, look quite unimpressive.
Dealers also have an incredible amount of power and control in the art market. With the waiting lists for art they are able to control its prices and values to some extent although Velthuis points out that they actually may not have as much control as they think they do. What is certain is that the dealers’ careful strategies increase their symbolic capital greatly if not also their actual capital. Symbolic capital cannot be ignored as one of the major forces in the art market. The article about the auction of Lehmann Brothers art and “ephemera” also clearly demonstrates that there is a disconnect somewhere between the stock market and the art market. Though Lehman Brothers had gone bankrupt and the global financial crisis was well underway, the art market remained strong enough that it was able to attract large numbers of buyers to participate in a successful auction of Lehman’s belongings in which many items sold for far more than their estimated values.
While the evidence for a connection between the global financial market and the global art market has not been particularly strong or abundant, I still think there is an element of linkage. If stock market crashes affect wealthy investors who are also the primary purchasers of expensive art, then it seems inevitable that the art market would also be affected. I think whatever connection there may be, it is very complex and hard to collect evidence for, or perhaps the whole system has not yet been subjected to sufficient examination. It would be very hard to predict the movement of the art market in the future, but I’m sure it will continue to have ups and downs according to its unusual set of factors. As the saying goes, “there’s no accounting for taste”, and perhaps this can be applied to the art market in the sense that it seems there may be no accounting for its movements.
Here is an interesting recent article about the art market and the table shown in the article: http://www.theartnewspaper.com/articles/Is-art-still-a-safe-bet-for-investors/24508 