The Art World Tells Us Much About the Value of Wealth
What if I told you that $63 billion was in the hands of just 50 to 100 people?
Shock! Horror! Income inequality!
No, it's just the state of play of the art world. And it is a good sign for global wealth.
For all the banter over income inequality, one of the most unequal distributions lives in art market, where an army of MFA grads who aren't taking babysitting jobs compete for the attention of roughly 600,000 of the world's mega-rich to sell their work.
It turns out that, in the art world, there are very few people buying a lot of work from a precious few artists. According to a report from the European Fine Art Foundation , cited by the Los Angeles Times, a whopping 82 percent of the $63 billion spent on art last year was from just 8 percent of the art sold. Stateside, that disparity was even greater, with 7.5 percent of auctions accounting for 91.2 percent of total sales.
Why? Well, it is simple math. There are only so many people out there willing to pay top coin for art, and only a handful of artists deserving of that scratch.
What is interesting is that there isn't a hue and cry about how “unfair” this is. Art, after all, is an egalitarian pursuit. There is no barrier to entry for an artist. Sure, some spend a load of money on tuition to go to art school, but many of the best artists are self-taught. Anyone who applies his creativity to the craft can be an artist, whether painting Dogs Playing Poker or welding together steel beams in a way no one has thought of before.
But not every artist is successful. Some just aren't good enough, and should probably go find another job (perhaps teaching art somewhere). Mostly, though, they are in the wrong place at the wrong time. Art, you see, goes in phases. What is popular today on the auction market will likely not be at another place in time. And vice versa. Smart buyers purchase low to try to catch a trend in its infancy. As with all things, it never pays to buy artwork at the top.
That means very few artists – say, 50 to 100 now – command big money for their work. Though one would think $63 billion is a lot to go around, it ends up in the pocket of the very few. Let's call them the 1 percent.
But is that fair? Shouldn't everyone get the same amount if they put in the same amount of work?
Hardly. In art, no one would expect that. So why is it so easy to expect equal outcomes in the rest of our daily work? Why should there be demands that one person who built a business and made millions throw in more to support the work of someone who built something similar, but failed? At the heart of the debate over income inequality is a feeling that everyone should get the same, regardless of experience or effort.
Entrepreneurs know differently. In fact, the art world is analogous to their own business environments. Some companies succeed. Most don't. One social-media company can get billions of dollars in funding from the private and public markets, while hundreds of others don't ever get beyond renting a shared space from Regus. Success comes from making a product people want to buy. It takes creativity, skill, determination and a bit of luck to sell a widget or a sculpture. Some will win. Most will lose.
That's the way it should be in all worlds, but the move to level the playing field for all, or guarantee some measure of success for everyone – almost always at the expense of those who built wealth – continues.
And, yet, the flip side of the art market can be instructive as well. Art is supported by the world's wealthiest people. We often hear how they hoard their money, or deny entry into this elite club by keeping down the little guy. Except the trends in the art market show how silly that thinking is. Rich people are making creative people rich, as well. They are, in the current parlance, redistributing their wealth, based on the subtleties of their palates rather than the demands of the state. That's how commerce works. That is capitalism.
And many of these same wealthy buyers won't hoard their art, but rather share it. Stroll through any museum and you will see hundreds of works on loan from private collections. Responsibly, these collectors see art as benefiting the public at large.
So celebrate this wealth next time you see a painting you enjoy. Remember, in addition to oil and canvas, it took capitalism to put that picture on the wall.
Related: Preaching the Morality of Capitalism