When the art world became the art market

Michael Shnayerson’s “Boom: Mad Money, Mega Dealers, and the Rise of Contemporary Art” leaves me less impressed by the state of the art and more concerned for the fate of art. Shnayerson, a contributing editor for Vanity Fair, sums up the book’s message: “Sometime in the late 1990s, a fundamental change occurred.” One word replaced another: “The art world, in all its manifestations, became an art market.”

In a well-researched narrative, drawing on scores of interviews with dealers, curators, artists, and critics, Shnayerson details this transformation. He begins in the 1940s, when heiress Peggy Guggenheim showed paintings by Jackson Pollock and artists who became known as abstract expressionists. In the 1950s, as the center of the avant-garde shifted from Paris to New York, Betty Parsons and Sidney Janis represented giants like Willem de Kooning, Barnett Newman, and Mark Rothko. The story takes off when the suave Leo Castelli (aided by the keen eye of his wife Ileana) established his gallery in 1957 and nurtured artists he discovered like Robert Rauschenberg and Jasper Johns, pop artists like Andy Warhol, minimalists and conceptual artists.

In contrast to the current “monetization” of art, Castelli – the foremost contemporary art dealer for five decades – gave generous stipends to unknown artists until they were recognized by collectors and museums. (He supported the minimalist sculptor Donald Judd for years before his work became popular.) As pop artist Roy Lichtenstein told me in 1991 when I wrote a profile of Castelli, “He’s less interested in money than he is in art. He’s very much for the artists.”

Shnayerson pinpoints 1999, the year of Castelli’s death at age 91 as a turning point. After that, he recounts how four “mega” galleries, helmed by bottom-line-oriented dealers like Larry Gagosian, David Zwirner, Iwan Wirth of Hauser & Wirth, and Arne and Marc Glimcher of Pace Gallery, came to dominate the art market. With U.S. art sales at almost $30 billion in 2018, the bigger galleries now account for more than 50% of sales, while works by the top 20 living artists command 64% of the market.

Most buyers, such as hedge-fund billionaires, oligarchs, and Middle East potentates, are among the top .01% in wealth. This “happy, swaggering group of high-net-worth, high testosterone captains of finance” patronize the Big Four galleries. They scoop up works by the same name-brand artists like Damien Hirst, Richard Prince, Jean-Michel Basquiat, Gerhard Richter, and Jeff Koons (whose 1986 stainless-steel “Rabbit” set a record earlier this spring at auction of $91 million). Often – although the trophy works lend social cachet – the purchase is motivated by a strategy to diversify a portfolio or flip the art as its price increases. Contemporary art has become an asset class.

Even artists who’ve seen their prices at auction rise stratospherically protest the insanity of the market. “It’s just as absurd as the banking crisis,” Richter told Reuters in 2011, adding, “It’s impossible to understand and it’s daft.” The book quotes Peter Doig (whose hallucinatory paintings, touted as masterpieces by auction houses, sell for tens of millions) admitting, “There’s no such thing as a contemporary masterpiece. It can’t be decided in your own time, really. So, it’s all marketing.”

This guided tour of the art world allows the reader to hobnob vicariously with the super-rich and art stars. Who knew that rubber-soled Loro Piana moccasins are “the ne plus ultra of slip-ons”? Or that Madonna, as a young, aspiring singer was girlfriend and driver for Basquiat before his brief life ended from an overdose? But besides throwaway anecdotes and insider tidbits, the book’s serious clout derives not from buzzy glitz but from valid biz insights.

We learn that art is now a hyper-inflated commodity and status symbol, abetted by forces like globalization and rampant income inequality. (Gagosian has 16 galleries across the world selling to the ultra-rich.) The celebrity-fication of individual artists and dealers has led to a skewed notion of value; the artist’s and dealer’s “brands” are what persuade buyers to invest; their merit is equated with sale price. Social media also hypes artists’ reputations, like the Instagrammable “Infinity Mirror Rooms” that brought overdue acclaim to Yayoi Kusama.

The book offers more than a tour of a dazzling world of privilege. The reader gets a succinct overview of recent art through capsule summaries of major artists and movements. For instance, the author summarizes Kara Walker’s work by describing her “cutpaper silhouettes of black figures against white walls” enacting tragic antebellum scenes. “The gentility of the form of cutouts was contradicted by the fierceness of what she was talking about,” New Yorker critic Hilton Als told Shnayerson.

The author also credits pioneering female gallerists, often less risk-averse and more steeped in art history than their male counterparts, for playing more significant roles in the art business than in any other high-finance niche.

One warning the book delivers is that, with the mega galleries’ consolidation of power, small and mid-size galleries are going belly-up. Soaring rents and the cost of art fairs across the globe take a toll, but the biggest threat comes from profit-hungry artists and dealers. All too often, when artists whom small galleries support gain attention, the Big Four poach them. Without their sales, minor galleries’ business is unsustainable. The pipeline of emerging artists constricts, leaving the future in jeopardy.

Beneath the spectacle and speculation that characterize our culture in general and “Boom” in particular is a disconcerting subtext. Will the mania for contemporary art, like the 17th-century lust for tulips, be followed by a spectacular bust?