With the recent opening of the annual art auction season, sales at major houses like Christie's and Sotheby's in New York made headlines with prices that shattered the records and shocked the art world. This unprecedented season comes on the heels of several high-profile sales, including the record $135 million that Ronald Lauder, part of the family of Lauder cosmetics, paid for a single Klimt portrait, the largest sum ever paid for a single painting.
To probe the reasons behind skyrocketing prices and how the buying power of a small group of elite buyers can impact the general public of museum-goers, The Daily caught up with Dr. Amy Ingrid Schlegel, Director of Galleries and Collections for Tufts University and an instructor in the department of Art and Art History.
The Tufts Daily: Looking at the record-breaking sale prices of art works at major auctions, what can we say about how we value art today? How has the monetary - and cultural - value that we place on works of art changed over time? Are these prices part of an "art bubble," or is this extreme valuation here to stay?
Dr. Amy Ingrid Schlegel: I think value is always in the eyes of the beholder, and it is a very subjective concept. It's based what so-called experts say. There is some scholarship in determining value of art, but the valuation of art is also very much tied to the state of the economy. The auction [price] trends have been increasing, but it's really an index of the strength of the economy, even internationally. That's not so surprising to me.
So how is value created? It's sort of magic. It's the concoction of expert opinion and what the economy can bear, with the disposable income of multi-millionaires and billionaires who are able and willing to spend [money on art] after all their other investments and expenses.
This is disposable income that has been generated in the high-tech industry, and the biomedical industry, among other industries that have emerged in the past two decades. The handful of billionaires that have come out of some of Eastern Europe and the former Soviet Union has also escalated and allowed this phenomenon to occur.
TD: Some of the people with the income to buy this art are the "self-made millionaires," people who did not necessarily grow up surrounded by fine art. Why would someone who may have no background in art put millions of dollars of disposable income into paintings? Does he even know about what he's buying?
AIS: Collectors nowadays are incredibly savvy. It is fair to say that these collectors are very well-informed, and it may be due to what they read, or they may have hired a consultant. It is fair to say that collectors are making these investment decisions in a very informed way, but many of them also have a passion for [art collecting]. Every collector is different, and the motivations are different. It's hard to generalize.
Furthermore, art is a liquid asset and it's probably a slightly more stable investment than real estate is right now. It's something you can live with, you can enjoy, and then you can also decide to either bequeath or to donate [the art] to a museum - with significant incentives for you, in terms of your taxes. There are opportunities for benevolence for these collectors to become donors. Museums are dependent on these kinds of collectors who have museum-quality works and who are amassing collections of museum-quality works. Very few museums can compete with the millionaire and billionaire collectors who are setting auction records. Museums, universities and other non-profits are to some extent beholden to these collectors who donate works.
TD: For the vast majority of the public, the only way to access art is at a museum. How does the bidding up of the value of some of these pieces among a very small group of elite impact the viewing capacity of the ordinary public, who can't afford to see these works otherwise?
AIS: The typical profile of a collector is changing. More and more collectors do see a public dimension to their collecting activity, a public responsibility. Where on the one hand it may be an investment that is liquid, on the other hand, more and more collectors make this activity essentially their job, traveling extensively to inform themselves, to attend auctions, to go to fairs and to buy works. It's almost an obsession.
They do give back. They give back in a number of ways that are unprecedented. They will lend works to museums for exhibitions, or they may give long-term loans. More and more collectors are amassing at such a scale that they need to house the work [elsewhere other than their home], so they will purchase a warehouse, rehab it and essentially create a museum-like setting in a warehouse, which is open to the public for visitation.
They've even started to launch educational and community outreach programs. They've effectively become like private museums. Therefore, the [art works] don't necessarily disappear from public view because they've been bought by private individuals. There are ways that collectors make the work available to the public who otherwise would not see the work.
