High-end art prices aren't "manipulated" in some kind of nefarious way, they're just highly illiquid and complicated. The article makes it sound like there's collusion or price-fixing between galleries, but there's no evidence of that.
The author makes the argument that more transparency would lead to lower prices... yet simultaneously implies prices are lower than they ought to be: "One of the worst things a dealer can do is over-price a work because they can’t lower the price when it doesn’t sell."
And anyways, I find myself sympathizing far more with artists than with the rich buyers here -- making a living as an artist is already hard enough! Why would we want to lower what they can make? And for buyers who want less expensive art, there's tons -- just don't shop at Gagosian!
Finally, the article seems to imply that art is subjectively bad now ("rape of dismembered corpses"), but that lowering prices would help fix that. That doesn't follow at all, and modern art on the vanguard is always considered "bad" by the majority at its time -- whether Monet or Pollock.
For anyone interested in details of how the art world really works and why, I highly recommend "Seven Days in the Art World" by Sarah Thornton.
I am usually quite slow to imply evil intent. However, having spent many years on the periphery of the high-end art and antiques market I can say without a doubt it is one of the most corrupt and opaque markets you can imagine. It is a chain of concealed influence from top to bottom.
Imagine, if you will, a kind of mega-rich suckers list being worked by a pyramid of scammers: auction houses, super-dealers, agents, professional intermediaries, "experts" with no credentials etc etc...The bait is always the same: high society connections. Usually you will find that the scammers are charming, well connected persons who exist in a kind of demi-monde - friends in high and low places.
> The article makes it sound like there's collusion or price-fixing between galleries, but there's no evidence of that.
I would say that a gallery bidding on an auction because they have an interest in increasing the transaction price of pieces being sold by an art dealer connected to them is a textbook example of collusion (as opposed to bidding because they want to own the piece).
As usual free market fundamentalists will disagree that this is wrong in any way.
Furthermore, restricting future sales to a buyer because you don't like that they sold the last one sounds pretty anti-competitive, especially when you consider that usually a gallery has a temporary monopoly on an artists works.
Not only that, but dealers themselves privately bid on pieces they're selling to run up the price, according to Art as an Investment? by Melanie Gerlis.
While I've read and enjoyed the book you recommend, it doesn't actually explain the economics of the art world, more likely the relationships that develop. For a much more informed look you should try "The 12 Million Stuffed Shark" which is written by an economist.
As for the rest, the market isn't exactly manipulated, as the article implies, but if you bother to ask any collector they'll complain that prices are high. And this happens for two reasons. One is that there is very low supply of available art of non-contemporary era since museums are popping everywhere and they buy pretty much everything available. The other is that art has become an investment which leads a lot of rich people buying art pieces at great volumes.
We live in an era where you pay $5k to buy a giclee Murakami painting printed in a high-end printer and that if you're lucky enough because a limited edition of 50 copies could sell out in a couple of days.
High-end art prices aren't "manipulated" in some kind of nefarious way, they're just highly illiquid and complicated. The article makes it sound like there's collusion or price-fixing between galleries, but there's no evidence of that.
The author makes the argument that more transparency would lead to lower prices... yet simultaneously implies prices are lower than they ought to be: "One of the worst things a dealer can do is over-price a work because they can’t lower the price when it doesn’t sell."
And anyways, I find myself sympathizing far more with artists than with the rich buyers here -- making a living as an artist is already hard enough! Why would we want to lower what they can make? And for buyers who want less expensive art, there's tons -- just don't shop at Gagosian!
Finally, the article seems to imply that art is subjectively bad now ("rape of dismembered corpses"), but that lowering prices would help fix that. That doesn't follow at all, and modern art on the vanguard is always considered "bad" by the majority at its time -- whether Monet or Pollock.
For anyone interested in details of how the art world really works and why, I highly recommend "Seven Days in the Art World" by Sarah Thornton.