We need a more equal art market – it would be better for everyone

Disparity in the art world is increasing. At the end of 2017 auction sales data highlighted that for fine art the top 50 lots totalled over $2.5 billion (USD), which is approximately one twelfth of fine art auction sales worldwide. Just 50 artists represented 45 per cent of the market, and the top 100 now make up the majority of sales at auction with a 55 per cent share. By comparison, in 2016 the top 50 made up 38 per cent and the top 100 artists, 49 per cent. Survey data provides some evidence that the situation in the gallery and dealer market, which represents around two thirds of the world art market, is similar, with larger galleries also experiencing higher growth than their smaller and mid-sized counterparts.

It is not uncommon for a few firms to dominate an industry, with a high level of market concentration. The art market is no different. This does not mean that growing disparity in the art market, which reflects growing disparity in wealth globally, is not a serious cause for concern. When the top end of the market appears to be accelerating, leaving the rest of the market behind, this can lock out smaller or middle-market galleries who are critical to healthy competition and innovation. Ultimately the bigger players require the legwork of the smaller and mid-sized players, who provide much of the support that artists require in establishing their careers, as well as developing connoisseurship among burgeoning collectors.

The key question we should be asking is: How accepting can we be in the art world about these disparities? When is enough, enough, and when is it too much? In a striking development, a number of larger galleries and dealers are now publicly acknowledging the possibility that their success is at the expense of smaller and mid-sized galleries, without the means and economies of scale to benefit to the same extent. See, for example, the recent suggestion made by David Zwirner (and seconded at the New York Times art leaders network conference by Marc Glimcher, CEO of Pace Gallery) that larger galleries could subsidise the participation of smaller, emerging and new galleries in important market settings such as art fairs.

What is the role for the larger players in addressing and possibly redressing this imbalance? Is it the responsibility of art fairs to provide a platform for dealers to redistribute surplus wealth from larger galleries to smaller galleries, over and above a differentiated booth pricing model, which some art fairs offer? Only a small fraction of relatively healthy galleries are represented in global art fairs. Size alone is not a determinant of success, so it’s unclear how a redistribution system would be determined. And what about the suggestion of collector Alain Servais that transfer fees could be paid by larger galleries for successful artists (similar in style to those offered by the Premier League football clubs), which was picked up in the conference by Scott Reyburn on his panel with Art Basel’s Marc Spiegler and Elizabeth Dee, CEO of the Independent Art Fair? Such transfer fees, like in the football market, may exacerbate disparity for those attaining superstar status. The increased fees will ultimately be borne by the collector (consumer) through higher sales prices. Are there other mechanisms that smaller and mid-sized galleries can adopt to remain competitive?

Encouraging collaboration through innovative self-determining structures, where galleries can pair up and support like-minded organisations with a shared passion or ambition, creates an art ecosystem that supports the younger generation. Patronage is at the heart of how the arts have flourished historically. Encouraging fair practices, for example through paid internships, builds mutual respect. Societies that create a culture of sharing, collaboration and support, with less inequality, tend to have higher social wellbeing. Those able to show cultural leadership in this domain without the need for inefficient redistribution mechanisms and the involvement of the state are likely to flourish in future. (These and related topics in how the art world looks today and how can it be keep healthy, effective and efficient plays in the future is a key focus of the new Executive Master in Cultural Leadership programme, which I co-direct, offered by Maastricht University together with the Royal Academy of Arts in London.)

Market forces might prevail but the development of effective market structures that create opportunities for artists and other cultural producers – a system which stimulate ideas, innovation and exciting solutions – is a joint responsibility of market players today: something that can be critically reviewed, considered, taught and effected for the cultural producers and consumers of tomorrow.