Thursday, November 20, 2014

Economy: Lessons From New York´s Art Auctions

(Drivebycuriosity) - "The art market just had the biggest two weeks in its history", reports the Wall Street Journal (wsj ). "In two weeks, 23 works fetched more than $20 million apiece", the paper adds.  "Collectors buy $2.3 billion of art in two weeks in N.Y. ", writes Bloomberg (bloomberg). Both refer to last week`s November sales of impressionist, modern, postwar and contemporary art at Sotheby’s, Christie’s and Phillips, New York`s largest auction houses. According to Bloomberg, the tally surpassed the $2.2 billion at New York’s auctions in May, which was 22% higher than last November, when $1.8 billion of art was sold.

Being an economist I am impressed by the reported numbers. I think the results are a sign of the strength of the contemporary economy. People continue to invest in expensive subjects, ignoring the  doom and gloom in the media. The art investors show still faith into the future. The rising prices for a lot of art works also refute the chattter about a looming deflation. The rise in art sales and prices accompanies the rally on the stock market (S&P 500) and the climbing prices or real estate.

I think that the money flow into art is a good thing, it is an investment into culture. Evolution of humans and the rise of cuture has always been escorted by art work, from the early cave paintings, over the "Venus of Willendorf" (a female figure estimated to have been made between about 28,000 and 25,000 BCE wikipedia ) to the sculptures of Jeff Koons. Art has always inspired imagination and so encouraged inventions, innovations and progress.

Critics complain that art works got too expensive so that just the infamous 1% can enjoy it  (driveby). I disagree. There are so many newcomers and no-name artists who produce nice art for affordable prices. There is deluge of fresh contemporary art. Usually every day in New York City there are 2 or more gallery receptions for a new exhibition of contemporary art. It seems there is a flood of new and upcoming artists who are eager to sell their works. I often visit art galleries in New York´s Chelsea area and in the Lower East Side. The art brokers offer a huge variety of works and demand a broad spectrum of prices depending on the reputation of the artist. I see there a lot paintings which are often priced way below $100.000. I believe that the sucess of the recent auctions may help the whole profession to gain more attention and to continue their work.

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