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There is no single, global art market

New book explores some of the myths of the international trade

If there is one aspect of the contemporary art market that, over the last decade, has come to be taken for granted, it is its global dimension. Sotheby’s and Christie’s cannot stop boasting of the scores of new collectors from emerging countries who try their luck at the auctions. At the latest round of record-breaking auctions in New York in May, Asian bidders and buyers were again adding fuel to the market’s fire. Powerhouse galleries such as Gagosian, Pace and White Cube have tested the markets in countries including Brazil, China and Hong Kong with the opening of new exhibition spaces. Many of their peers have invested in stands at recently established art fairs in Latin America, Asia and the Middle East to seduce the world’s new economic elites into buying contemporary art. In passing, these dealers also pick up promising artists from those regions and market them to their clients in Europe and the United States. Indeed, multi-million dollar prices for contemporary artists from India, Brazil or China are no longer exceptional. In the annual art market rankings from artprice.com, almost half of the world’s top 25 bestselling contemporary artists are Chinese.

Meanwhile, Africa has now appeared on the market’s radar. Auctions featuring contemporary art are regularly organised in, among other places, South Africa, Nigeria and Kenya. Since 2013, London has hosted an art fair, called 1:54, devoted to contemporary African art, which last month made its New York debut during Frieze Week.

In short, it is assumed that contemporary art is now traded in a globally integrated, flat market, where distance no longer matters. Hundreds of art dealers, artists, collectors and curators talk about the market in terms of a global village, in which the main fairs, events such as the Venice Biennale and the opening of prestigious museum shows, function as the village square where people keep running into each other. They enthusiastically tell anecdotes to illustrate how borderless the art market has become. So a Berlin dealer who represents a Japanese artist, transports his work to Art Basel Miami Beach, where it is bought by a collector from Puerto Rico, who then has it shipped to his holiday home in Paris.

But appearances are deceptive, as demonstrated in a new book of recent papers by social scientists, that I have co-edited with the academic Stefano Baia Curioni. Highlights of its findings follow.

Our obsession with the top end of the market distorts our view So if barriers to integration are so resilient, how come we think of the art market as deeply globalised? First of all, because we mistakenly equate the top segment, which has indeed become more globally integrated over the last decade, with the remainder of the market. Here we are misled by media coverage of the art market which invariably focuses on the celebrities and super-rich who fly around the art world in private jets; on the major auction houses and the powerhouse art dealers, who have enough resources to cement ties to clients and artists over long distances. But for the majority of people, the reality is different. Their world is inhabited by artists who, in spite of the current boom, barely have a market, let alone a global one; by art dealers whose reputation is not strong enough to attract internationally successful artists, and who frequently incur more costs than revenues when they try their luck at a distant art fair; and by collectors who, in spite of their passion for contemporary art, have never visited Art Basel or Frieze, simply because the price levels there are way above their budget.

Further, we think of the art market as globally integrated because a global market is a myth in the anthropological sense of the word: it is a narrative which people endorse in order to make sense of a world which is obviously in flux. “Global” has a range of positive connotations including glamour, success, adventure, recognition and open-mindedness, while local, on the contrary, mostly connotes failure. Indeed, art dealers or collectors who admit to focusing on local artists are looked down upon as parochial.

Finally, travelling to other parts of the world, we may be tricked into thinking that art markets are global because they look so similar across the world: galleries in emerging countries such as Mexico, China or Argentina tend to operate out of the same white cube spaces which we are so familiar with in New York, Berlin or London. Just like their European and American counterparts, they are frequently located in what used to be industrial zones of the city, which are being converted into lively art districts. Likewise, the format of the many fairs that have recently been established around the world, resembles the format of Art Basel and other established fairs.

But, as our book explains, in spite of the fact that markets for contemporary art have emerged across the globe, in spite of the fact that the very notion of “contemporary art” has been embraced in countries who were until 20 years ago oblivious of it, and in spite of the fact that these emerging art markets have adopted Western blueprints for organising the market, cross-border flows of contemporary art have remained comparatively insignificant. In other words, whereas blueprints (eg the white cube gallery space, the Basel-style art fair, the Sotheby’s and Christie’s style auction house) travel rather easily, this is not so much the case for the very art that is traded by means of these blueprints. As a result, a single, unified, integrated global market for contemporary art is not in sight.

Cosmopolitan Canvases: the Globalization of Markets for Contemporary Art, Olav Velthuis and Stefano Baia Curioni (eds.), Oxford: Oxford University Press £65 (hb)

What the research shows Three countries dominate

Apart from a tiny top segment, a globally integrated market is a myth as markets continue to operate on a local scale. Even the top of the art market is not as cosmopolitan as it seems: it is dominated by dealers, collectors and artists born and based in Europe and the United States. According to the latest annual Tefaf report, art sales are dominated only by three countries: the UK, the US and China, which account for 83% of the total market. Countries like India, Brazil, Russia, Turkey, Mexico and many others, tellingly grouped as the “rest of the world”, together account for 1% of total art sales. While art exports have increased by an impressive 500% over the past 25 years and now amount to over €1bn, two-thirds of these exports are accounted for by two countries: the US and the UK.

Artists and collectors come from only a few countries

The academics Alain Quemin and Femke van Hest look, among others, at the German website artfacts.net, which tracks the career data of contemporary artists, and at Kunstkompass, an annual ranking of contemporary artists, that has been published since the 1970s. Quemin and Van Hest find that the number of countries represented in these rankings has barely increased during this period and amounts to no more than 10% of all the countries in the world. Artists based in Germany and the United States dominate, representing the lion’s share of artists who appear in the rankings. A separate analysis conducted by the cultural economists Lasse Steiner, Bruno Frey and Magnus Resch, using data compiled by larryslist.com, finds a similar pattern among collectors: of the world’s 3,119 most prominent private art collections, 63% are located in North America or Europe, while Asia accounts for 24%. Latin America and the Middle East house 8% and 5% of private collections respectively, and a meagre 16 art collectors (0.1%) live in Africa.

Local bias at auction and galleries

Another persistent finding in our studies is what we call a home bias: what gets bought and sold tends to be locally produced. For instance, the academics Christophe Spaenjers and Luc Renneboog calculate that 80% of works by American or British artists that were auctioned between 1957 and 2007 were sold domestically. Over the same period, the French auction houses sold a total of 68,518 works by French artists, versus 544 by British artists. Spaenjers and Renneboog also find “little evidence of increasing integration over time”. In China, anecdotal evidence suggests that this home bias applies to the country’s most successful artists as well: these neither have a following, nor a career outside their home country. The home bias is not confined to auction sales. It is reflected in the exhibition programmes of galleries as well: many, if not most, of the artists represented by galleries are born or living in the countries, and frequently even in the cities, in which the galleries are located.

Two-thirds of Art Basel’s galleries are from four countries

The litmus test could be the art fair, widely seen as the market’s global engine. Again, however, there is a strong home bias: participating galleries are much more likely to come from the fair’s home country or its vicinity. At the India Art Fair, the country’s main fair, 60% of the galleries and another 60% of the artists whose work was exhibited were Indian. Even Art Basel is not as global as it may want to be. At the 2014 edition, over 90% of participating galleries came from Europe, the United States or Japan. Two-thirds were based in four countries: the US, Germany, the UK and Switzerland. Collectors tend to buy local art, as larryslist.com data reveals. Thus, 89% of South American art collections are composed of works made by South American artists. For Asian and North American collections the figures are respectively 82% and 76%. European collections are the exception: only 43% of the works in these collections were created by European artists.

Why is the world not flat? Barriers to entry

What explains the limits of globalisation? Apart from obvious economic reasons such as persistent differences in wealth (and therefore the ability to purchase expensive art), a number of factors apply. First of all, countries such as Brazil, China or India continue to impose high sales taxes, import tariffs and opaque customs practices. If a São Paulo dealer wants to sell a work created by an American artist to a local collector, import tariffs may as much as double the price fixed by the artist’s American gallery. Reducing these tariffs, which is seen as benefiting the rich, is not a high priority for the governments of these countries.

Taste is not global

Taste is far from globalised, so it makes sense for an art dealer or auction house to focus on local art. China’s sugar-coated oil paintings of nude or semi-nude young women are rarely palatable to Western audiences. Mainland art collectors, however, are willing to pay millions of dollars for them. Although Edward Hopper’s paintings are known across the globe, the people who like his work enough to pay millions for it are almost exclusively American. Only a handful of his works have even appeared at auctions outside the US. In our book,the academic Filip Vermeylen also finds that European and American art remains a hard sell in India.

The social network

The ways the art trade works hinders global integration: selling art depends heavily on face-to-face interaction. Buying contemporary art at a gallery often equals buying your way into a club: visiting the artist’s studio, organising dinner parties with fellow collectors, attending vernissages, and so on. Since not every collector has a private jet, distance matters when creating and maintaining these social networks. Moreover, dealers seek to build strong trust relationships with artists as it works better than the rule of law in preventing either party from taking advantage of the other. To create such relationships, repeated face-to-face contact is more productive than email exchanges or telephone conversations. But the home bias is the price you pay.

Flag by Jasper Johns (1983). Photo by Carl Court/Getty Images

Global isn’t for everyone

While the cross-border integration of art markets may be desirable to many, it is actively resisted by some. They do not want to be global, because they see globalisation as de facto Westernisation—the diffusion of Eurocentric ways of commercialising and commodifying art. Or because they stand to lose from globalisation. In his contribution to our book, the academic Adrian Favell shows for instance that international curators never managed to get a foothold in Japan. Japanese curators were concerned about giving up their powerful, monopolistic position to foreigners, and therefore collectively kept the doors shut.