The art market is more moral than the stock market

Introduction by Jason Edward Kaufman: With Wall Street in self-inflicted ruin it might seem ridiculous to argue that the art market is less ethical than the stock market. Yet that was the position taken last month by art dealers Richard Feigen, Michael Hue-Williams and collector Adam Lindemann in a debate sponsored by the Rosenkranz Foundation at Rockefeller University, New York. They faced artist Chuck Close, critic Jerry Saltz, and auctioneer Amy Cappellazzo, who defended the integrity of the salesroom and the art world in general. This pro-art market team was trounced. A before-and-after poll of the audience found that tales of chandelier bidding, bidding rings, the lack of regulation and so on resulted in 55% agreeing that the art market is less ethical than the stock market (only 33% opposed, 12% undecided). Amid the worst economic meltdown in half a century, caused by the unregulated greed of bankers and securities traders, the art market lost the debate. Here is one losing debater’s perspective on the defeat.

In the green room, minutes before going on stage to debate the proposition, a man who helped found the organisation behind the event, frame the debate and assemble the teams told me that he became involved with Intelligence Squared after working in “conservative think-tanks for years”. I said: “I’m just curious, did you vote for Bush twice?” He replied: “As a matter of fact, I did.” I then asked: “Does that mean you also voted for McCain?” He replied: “Yes.” Then I said: “Don’t you think that may mean you have no sense of judgement about these things?” He stared at me and led our team to the debating floor. As we entered the auditorium I noticed that I barely recognised anyone in the packed audience, and that the crowd looked fairly conservative. We were on stage by the time I put two and two together and understood why Karl Rove and Dick Cheney had participated in other debates sponsored by Intelligence Squared. By then, I knew our goose was cooked. I don’t blame losing the debate on the crowd being conservative. Rather, I blame myself and my team for having no idea how to debate, and for existing happily in what I consider a parallel art world.

Intelligence Squared framed the question (which seemed subtly slanted against my team’s position and laced with Schadenfreude), and assembled the teams. Our team—Chuck Close, Amy Cappellazzo, deputy chairman of Christie’s, and I—defended the position that the art world was not “less ethical” than the stock market. Their team was art dealer Richard Feigen, who the day before sold a Turner at auction for more than $12m, Michael Hue-Williams, owner and chief executive of London’s Albion gallery, and super-collector and nice guy, Adam Lindemann (who during the debate said: “I wish I was on your side”).

To me, their side was making a logical-sounding but smug, monstrously cynical argument. Their position essentially broke faith with art, believed in the hype of the past few years, was nihilistic and hollowed out. They said that even with all the abuses on Wall Street, the fall of Enron, insider trading, Bernie Madoff, the collapse of the stock market, widespread job losses, rampant suffering, and the world economy in a shambles, the art market was still less ethical than the stock market! Ironically, all those on the other team were likely involved in most of the unethical behaviour they railed against. To me, this seemed infinitely hypocritical and self-hating. But evidently not to the audience, who seemed to agree with every stone they lobbed at the art world, and sneered at every mention of bad behaviour by the art world.

Our argument was simple and straightforward, even if we utterly failed to make it properly. The art world, we said—like all worlds—has unethical practices.

“Chandelier bidding” happens and is disgusting; art dealers can be sharks; art fairs are like tent-city casinos; the market revved up the bullshit machine. Yet even considering all this, we said the art world is not more corrupt and less ethical than Wall Street. We acknowledged that the system may be damaged, but added that in our studios and in front of works of art when we experience moments of genuine stillness, intensity and meaningfulness, places on the edge of language, the market cannot strip away these things. In this imperfect realm, we sometimes experience the elemental otherness of art. That cannot happen in the stock market, ethics or not.

Mr Hue-Williams talked about how the art world has no regulations and that anyone can get into it. I said that other than basic guidelines already in place (especially in the auction sector), the art world is a “world” and not an industry. I’m lucky that “anyone can be in the art world”. I have no degrees and no qualifications, other than the fact that I want to do it. If there were guidelines about who could be in the art world, most of us wouldn’t be allowed to be here at all. Basically, they were arguing for a form of cultural-ethical cleansing. They claimed that with no regulations the only thing an art dealer needed was “to have two eyes”.

Once our side admitted to “chandelier bidding” and the rest, however, the day was lost. To the audience, the argument turned on the concept, “the art world is unethical”. To us, it turned only on the word “less”. Either way, these are semantic points that we clearly lost. As one blogger later noted: “I found that the ‘against the motion’ side made many errors of strategy and fact.”

Debate strategies and rules aside, I think it’s utterly ridiculous to claim that the art world is “less ethical than the stock market”. The stock market made more people richer, made more people lose money, and brought the US to its knees. By comparison, the art world is relatively benign, and the unethical parts are relatively limited. No one in the art world jumped out of a window because a painting’s price decreased. No one was put out of their home because of the art market. Even at its height, 1% of 1% of 1% of all artists made money. You can rail against the business practices of the art world, but even in flush times reputations are built on credibility, not on money or the market. The public is suspicious of the art world because the art market, and not art, is what they saw first when they saw art. Regardless, just because a dealer makes a lot of money doesn’t mean that they have the respect of the art world. Money doesn’t earn respect. Respect exists outside of the market. If you are in art for the money, you’re not really in art at all. As Brice Marden said: “It’s not the art that’s suffering; it’s the market that’s suffering. They don’t have anything to do with each other.”

An audience member identified himself as a lawyer and said he agreed with the other side because we can never be certain about the true value of art. I agree—the art world, especially now, is not about “certainty”. The art world is a space where uncertainty, doubt and paradox exist, and can transform the world. Art is not a decorative ornament on the edifice of philosophy, religion or economics. Art is not optional. Art is a universal force that helps make things happen, even if some of those things are tainted. The debate made me understand several things: cynicism about the art world runs deep; I have no clue how to debate; the art world exists in a realm that can be described by, but is nevertheless beyond, words. The following day, an old Beatles lyric drifted through my mind: “Although they thought I knew the answer; I knew but I could not say.”

The writer is the senior art critic at New York magazine

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20 Sep 09
14:14 CET


During these difficult economic times, we artist should really reasess our marketing/selling capabilities. We should have a common market location where collectors along with their appraisers could come to purchase quality art. The written agreement should bethat if the art is "flipped" on the secondary market, the artist will receive a percentage of that sale. If a secondary sale is made without the artist knowledge, a heavy fine along with the agreed percentage would be paid. This would be regulated by state and/or federal goverments. In light of whats happeningin the financial and housing markets, this would be thesafest course of action. Please, let's have some responses.

20 Sep 09
14:14 CET


Mr. Salz, I enjoyed reading your defense but you miss the point about the debate which is not about art as an intellectual pursuit but as an industry with a financial underpinning. How that financial aspect of the art market works when compared to the stock market is where there is a troubling disconnect. As I see it, the financial market is made up entirely of dealer/brokers who may or may not be ethical in their advice and knowledge. The art world has that too, but also incorporates the larger influence of a auction process that is built specifically on deception (chandelier bidding, etc) and conflicts of interest (buyer's premium, ownership interest in auction lots, etc). The component of an unregulated duopoly (Christie's/Sotheby's) in this market is responsible for tilting the public dissatisfaction that you experienced at the debate. Lewis Baer Newel LLC

20 Sep 09
14:14 CET


I only listened to the debate on YouTube, and Michael is my partner (so I am a bit biased), but Jerry once again loses the debate by defending art, not the practices of the art business (which was the topic for debate). Everyone on both sides of the debate love art and artists, but the issue was not about the intrinsic importance of art or the inherent goodness of what artists do --but rather that certain practices of the art business are morally suspect and are in fact hurting the world of art. And by barriers of entry, I'm sure Michael did not mean that art critics or artists needed to be regulated, but that a healthier climate for the buying selling and trading of art would be the result of more transparency in the art industry. It is easy to fall back on being just "for art," and to impugn the politics of those who disagree with your position, but it seems that Jerry's side lost the debate because they didn't debate the issue at hand --choosing instead to make believe that the goodness of art trumps anything bad done by those who trade in art. I'm not in favor of government regulation, by the way, but as the art market is the second largest unregulated (legal) market in the world (currency is number one), it would be smart if those in the gallery business and in the auction business could find ways of self-regulating their practices. This would help re-establish collector/consumer confidence, and if done properly, should have no impact at all on what really matters -- the ability of artists to make art and a decent living.

20 Sep 09
14:14 CET


What long-winded, self-pitying tripe Jerry saltz offers. The truth is, the pro-art market-ers lost because their position is untenable; flies in the face of reality. The knee-jerk appeal to anti-Bush, anti-MacCain sentiment testifies to a smug and infantile cultural leftism. Whatever the deficiencies of regulation within the wider capitalist system, the fact remains that there are rules against - and penalties for - insider-trading and peddling shit. When, a couple of years back, a BBC Radio 4 programme debated the proposition that contemporary art was more about money than art, the invited audience (artworld "Friends" of two Oxford museums) defeated the motion, narrowly. However, when the wider, uninvited radio audience voted by phone-in, the motion was carried by 89% to 11%. When the Guardian's (arty, left/liberal) readers were recently asked whether Damian Hirst (who once sold a single sheet of soiled lavatory paper as a self-portrait and therefore as "art") was over-rated, over 60% of readers answered in the affirmative. The strongest critics of the workings of the art market are certainly not art critics who enjoy a symbiotic, technically parasitical relationship with it, but members of the great majority of working or would-be working artists.

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