TIME: Almanac 1993/TIME Almanac 1993.iso/time/112789/11278900.015

Text File | 1992-09-23 | 31.5 KB | 604 lines

                }Y&                                                          ART, Page 60

SOLD!


It went crazy, it stays crazy, but don't ask what the art market
is doing to museums and the public

By Robert Hughes


    Up to last Wednesday night, Picasso's 1905 Au Lapin Agile
was widely expected to become the most expensive painting ever
sold at auction. It had been put on the block at Sotheby's in
New York City by heiress Linda de Roulet, whose brother John
Whitney Payson had sold Van Gogh's Irises for $53.9 million two
years before. It was a far better picture than the Picasso
self-portrait, Yo Picasso, that had made a freakish $47.85
million last May.

    There are, according to Sotheby's CEO Michael Ainslie,
about 500 people alive today who might fork out more than $25
million for a work of art. Au Lapin Agile could go, said rumor,
to $60 million. But in the end, publishing magnate Walter
Annenberg bought it for $40.7 million, and two or three people
clapped. It was the third most expensive work of art ever sold
at auction.

    Only $40.7 million. And was that less or more than the GNP
of a minor African state? On the other hand, wouldn't it buy
only the undercart of a B-2, and maybe the crew's potty? Or a
dozen parties for Malcolm Forbes? That a night's art sale could
make a total of $269.5 million and yet leave its observers
feeling slightly flat is perhaps a measure of the odd cultural
values of our fin de siecle. "Personally," said Ainslie a week
before the sale, "I would like to see more price stability --
at present levels, of course."

    But what is done is done. The hard lesson of the past
decade is that liquidity, to many people, may be all that art
means. The art market has become the faithful cultural
reflection of the wider economy in the '80s, inflated by
leveraged buyouts, massive junk-bond issues and vast infusions
of credit. What is a picture worth? One bid below what someone
will pay for it. And what will that person pay for it?
Basically, what he or she can borrow. And how much art can dance
for how long on this particular pinhead? Nobody has the
slightest idea.

    Every game has winners and losers. The winners of this one
are some collectors, some dealers and, in particular, the major
auctioneers -- Christie's and Sotheby's -- in whose salesrooms
the prices are set. The losers are museums and, through museums,
the public.

    From the point of view of American museums, the art-market
boom is an unmitigated disaster. These institutions voice a
litany of complaints, a wrenching sense of disfranchisement and
weakness, as their once adequate annual buying budgets of $2
million to $5 million are turned to chicken feed by art
inflation. "There are many areas where museums can no longer
buy," says James Wood, director of the Art Institute of Chicago.
"It's bad for the museums, but it goes beyond that. It's bad for
the country." The symbol of the Metropolitan Museum of Art's
plight is an annual booklet that used to be titled Notable
Acquisitions. In 1986 it was renamed Recent Acquisitions
because, as the museum's director Philippe de Montebello wrote,
the rise in art prices "has limited the quantity and quality of
acquisitions to the point where we can no longer expect to match
the standards of just a few years ago." To Paul Mellon, long the
Maecenas of Washington's National Gallery of Art, "everything
important is ridiculously expensive . . . I just refuse to pay
these absurd prices." And as the museum's buying power fades,
public experience of art is impoverished, and the brain drain
of gifted young people from curatorship into art dealing
accelerates.

    American museums have in fact been hit with a double
whammy: art inflation and a punitive rewriting, in 1986, of the
U.S. tax laws, which destroyed most incentives for the rich to
give art away. Tax exemption through donations was the basis on
which American museums grew, and now it is all but gone, with
predictably catastrophic results for the future. Nor can living
artists afford to give their work to U.S. museums, since all the
tax relief they get from such generosity is the cost of their
materials. Thus, in a historic fit of legislative folly, the
Government began to starve its museums just at the moment when
the art market began to paralyze them. It bales out incompetent
savings-and-loan businesses but leaves in the lurch one of the
real successes of American public life, its public art
collections.

    The inflated market is also eroding the other main function
of museums: the loan exhibition. Without a doubt, the past 15
years in America have been the golden age of the museum
retrospective, bringing a series of great and (for this
generation of museums and their public) definitive exhibitions,
done at the highest pitch of scholarship and curatorial skill:
late and early Cezanne, Picasso, Manet, Van Gogh, Monet, Degas,
Watteau, Velazquez, Poussin, up to MOMA's current show of
Picasso's and Braque's Cubist years and, perhaps, Seurat to come
in 1991.

    But who can now pay for the insurance? When the
Metropolitan Museum of Art's show "Van Gogh at Arles" was being
planned in the early '80s, it was assigned a global value for
insurance of about $1 billion. Today it would be $5 billion, and
the show could never be done. In the wake of Irises, every Van
Gogh owner wants to believe his painting is worth $50 million
and will not let it off the wall if insured for less. Even
there, the problem is compounded by the auction houses: when
consulted on insurance values or by the IRS, they tend to stick
the maximum imaginable price on a painting to maintain the image
of its market value and tempt the owner to sell.

    Auction has transformed the very nature of the art sale. In
1983 the old English firm of Sotheby's was taken over by A.
Alfred Taubman, American conglomerator, real estate giant and
collector. The deal had to be approved by Britain's Monopolies
and Mergers Commission. At the commission hearings, Taubman
declared that he would be "very concerned" if the public ever
got the idea that Sotheby's was centered anywhere but Britain,
and that the "traditional nature of the business and of the
services offered would be changed as little as possible."
Request approved.

    Taubman then recentered Sotheby's in New York and, over the
next few years, changed its business to such an extent that its
lending and other investment services generated $240 million in
1988 -- nearly a tenth of Sotheby's gross income of $2.3
billion. What Taubman saw (and staider Christie's was not slow
to pick up) was that an auction house could go directly to the
public, not only at low price levels but also at very high ones.
In the past, auction houses sold mainly to dealers, who put on
their markup and then sold to their clients. People were shy of
going to auctions; the whole apparatus of reserves,
attributions, codes and bids seemed mysterious and scary.
Scratch your nose at the wrong moment, the urban folktale went,
and -- yikes! -- you've bought a Rembrandt.

    By harping on the investment value of art, by hiring
personable young sales cadres to explain the significance of the
Meissen jug or the not-quite-Rubens, by creating user-friendly
expertise, the auctioneers defused this wariness. By the early
'80s dealers were getting cut out of the game by collectors
buying directly at auction. And by 1988, when the auction room
had been promoted into a Reagan-decade cathouse of febrile
extravagance, where people in black tie and jewels applauded
winning bids as though they were arias sung by heroic tenors,
private dealers (at least those dealing in the work of dead
artists) had less margin of resale to work with. Their market
share today is still enormous, but the auction houses are after
it, and it is shrinking.

    The idea that Taubman debased a saintly enterprise with the
values of the shopping mall is not true. All he did was shove
an already competitive business into the ruthless habitat of the
'80s. It is not true either, as anyone knows who has followed
the fortunes of the two houses, that Sotheby's is all hustle
and Christie's all starch. In fact, it was Christie's that got
into trouble with the law over falsifying an auction. In 1985
David Bathurst admitted that four years earlier, when he was
president of Christie's New York branch, he had reported selling
two paintings that had not, in fact, found buyers at auction in
New York: a Van Gogh at a supposed price of $2.1 million and a
Gauguin at $1.3 million. Bathurst said he had lied to protect
the art market from depression.

    The auction practice that has attracted the most criticism
lately -- and goes to the heart of the nature of auctions
themselves and the ethics of the trade -- is giving guarantees
to the seller of a work of art and loans to the buyer. If X has
a work of art that auctioneer Y wants to sell, Y can issue a
"guarantee" that X will get, say, $5 million from the sale. If
the work does not make $5 million, X still gets his check, but
the work remains with the auction house for later sale.
Guarantees are a strong inducement to sellers.

    Loans to the buyer are made before the auction, and
completed after it, at an interest rate that may go as high as
4% over prime. A common amount is 50% of the hammer price --
whatever the work reaches.

    Guarantees can backfire. Sotheby's guarantee on the recent
four-day sale of the collection of John T. Dorrance Jr., the
late Campbell's soup heir, nearly did so. According to
ARTnewsletter, a trade sheet, the dealer William Acquavella
offered the Dorrance estate a guarantee of $100 million, but
Sotheby's trumped him with $110 million. Though the sale
realized a total of $131.29 million, it did so only because
Sotheby's had persuaded the heirs to accept a "global reserve"
(the minimum price acceptable to the seller on the whole
collection), instead of placing a reserve, or minimum, on each
lot, as is more usual. This enabled Sotheby's to meet the bottom
line by selling 15 out of 44 impressionist and modern paintings
far under its low estimate, rather than not sell them at all --
and gamble on making up the slack over the next three days.

    Sotheby's says its guarantee system is "traditional": it
goes back 20 years. This is true, if only in the sense that the
firm tried it in the '70s but it flopped, because the market was
slow and pictures failed to sell. Loans, of course, have risks
too. Christie's gives neither guarantees nor loans. "The
practice of offering guarantees," argues a Christie's spokesman,
"means that in effect you've bought the picture yourself. And
loans by the auction house tend to create an inflationary
situation, a false market."

    The beauty of the loan system, from the point of view of
the auctioneer, is twofold. It inflates prices whether the
borrower wins the painting or not: like a gambler with chips on
house credit, he will bid it up. Prefinancing by the auction
house artificially creates a floor, whereas a dealer who states
a price sets a ceiling. And then, if the borrower defaults, the
lender gets back the painting, writes off the unpaid part of the
loan against tax, and can resell the work at its new inflated
price.

    Most top private dealers dislike the system of guarantees
and loans. "It creates an immediate conflict of interest," says
Julian Agnew, managing director of the London firm of Agnew's.
"If the auction house has a financial involvement with both
seller and buyer, its status as an agent is compromised. Lending
to the buyer is like margin trading on the stock market. It
creates inflation. It causes instability."

    Criticism of auction-house guarantees and loans has been
particularly widespread in the past few weeks, ever since it
was disclosed that Sotheby's had lent Australian entrepreneur
Alan Bond $27 million in 1987 to buy what became the most
expensive painting of all time, Van Gogh's Irises. But Sotheby's
defends its policy as right, proper and indeed inevitable.
Guarantees are given "very sparingly," CEO Ainslie said last
week. "It is unusual for more than one or two paintings in a
sale to be guaranteed." Ainslie rejects any comparison to margin
trading. "We do not make it a standard policy to loan 50%
against anything. We are not just lending against the object,
but to an individual. At the time we loaned to Mr. Bond, he was
viewed very differently from the way he is today."

    As for the propriety of Sotheby's practices, Ainslie says,
"Our procedures follow every regulation required of us. We
proudly market our financial services. There is a suggestion
that financing is immoral or wrong. That is an elitist view that
we frankly find ridiculous."

    Sotheby's feels it is being arraigned for the crime of high
success. David Nash, head of its Fine Arts division, told the
Washington Post that critics, far from being elitist, have "a
hostile proletarian attitude toward our business." (Let 'em eat
Braque.)  But auction-house pretensions to be self-regulating
have collided with the skepticism of Angelo Aponte, New York
City commissioner of consumer affairs.

    In 1985 Aponte decided to review the consumer affairs
guidelines on auctions. For more than a year his team pored
over Sotheby's and Christie's records, wrestling with such
exotic-sounding practices as "bidding off the chandelier"
(announcing fictitious bids to drive up the price) and "buying
in" (leaving a work unsold because it does not reach the
seller's reserve price). By Sotheby's account, the investigators
came up with nothing after sifting through thousands of
documents.

    Aponte's version is different. Consumer affairs found
"gross irregularities" in art auction houses, he says.
Chandelier bidding amounted to "an industry practice, both above
and below the reserve." (A chandelier bid above the reserve
violates present rules.) Aponte was also concerned about the
practices of not announcing buy-ins and of keeping reserves
secret. The auction houses held that if bidders knew what the
reserve on a lot was, it would chill the market. Art dealers,
lobbying the agency, maintained that the reserve should be
disclosed and that bidding should start at it.

    The result was a dragged-out battle between the auctioneers
and consumer affairs. The auctioneers won that round, but
Aponte is getting set for another. Stiffer rules are pending,
including those governing loans. The current consumer affairs
code says that "if an auctioneer makes loans or advances money
to consignors and/or prospective purchasers, this fact must be
conspicuously disclosed in the auctioneer's catalog." But did
this mean that Sotheby's put a note in the catalog of its
November 1987 sale saying it had given one Alan Bond a loan of
half the hammer price, repayment terms to be negotiated, on
Irises? Think again.

    Sotheby's has never said anything specific about its loans
in its catalogs, or given any information on its guarantees
except that they exist. To Sotheby's, a mere announcement in the
catalog that it offers such financial services is enough to
comply with the law. But its use to the buyer is nil -- and is
meant to be. Disclosure might be chilling to other bidders. Or
at least vulgarly explicit. Which auctioneers would rather die
than be. One is not, after all, selling rusty tin Mickey Mice
and kitchen chairs in a rented hall in Vermont.

    "I am not happy from a legal standpoint," says Aponte.
"O.K., Sotheby's says in its catalog that it offers financial
services, but I'd like to see disclosure of the entire
commitment. I would like to know if it is part owner of a
painting, and if it has a fiduciary interest, I want to know
what it is. If it lends Bond $27 million, I want that fact in
the catalog."

    Because the auction houses trade in volume and compete
intensively for material, they can sometimes be an unwitting
conduit for fakes, particularly in ill-documented but now
increasingly expensive areas of art. Few forgers would be dumb
enough to try to send a fake Manet, let alone a forgery of a
living artist like Jasper Johns, through Sotheby's or
Christie's. But where fakes abound, some will inevitably turn
up at auction; and where millions of dollars abound, fakes will
breed.

    The growth area for forgery today is the work of the
Russian avant-garde -- Rodchenko, Popova, Larionov, Lissitsky,
Malevich -- which, as a result of perestroika, is coming on the
market in some quantity after 60 years of Stalinist-Brezhnevian
repression. Prices are zooming, and authentication is thin.
Sotheby's held a Russian sale in London in April 1989. It
contained, according to some scholars, two outright fakes
ascribed to Liubov Popova and one dubious picture, badly
restored and signed on the front -- something Popova never did
with her oil paintings. Doubts about the authenticity of these
works were voiced to the auction house, but its staff disagreed
and the sale went ahead.

    Such events remind one that the art market in general,
including the auction business, is not a profession. It is a
trade, a worldwide industry whose gross turnover may be as high
as $50 billion a year. Like other trades, it contains a large
moral spectrum between dedicated, wholly honest people and
flat-out crooks. It has never earned the right to be considered
either self-policing or self-correcting. It needs regulation,
but consumer affairs -- overburdened with the million complaints
about small and large business violations that arise in New
York, which it was created to deal with -- may not be equal to
this task.

    So is there a case for setting up an independent regulator
-- an art-industry Securities and Exchange Commission? Not
before hell freezes over, say the auction houses (although
Christie's may be wavering a little on the point, since it has
no guarantee and loan system to defend). Probably not, say many
dealers. But others think the idea is worth serious thought,
though none believe it likely to happen while Washington still
clings to the conservative catchword of deregulation. Besides,
says Eugene Thaw, the doyen of U.S. private dealers, Sotheby's
in particular may have enough political clout in New York to
defeat a further tightening of the rules.

    Julian Agnew, the London dealer, believes that "outside
regulators could create as many problems as they solve -- they
may not know the market well enough. Ideally, self-regulation
is better. But if a dominant firm stretches the unwritten norms
of the past, (self-regulation) may not be enough."

    What drives the art market, some people say, is the desire
to invest. Of course, it is more than that; genuine love of art,
and even a curious yearning for transcendence, fuel it as well.
But does art-investment success have an upper limit? Is there
a limit to demand? Economists Bruno Frey and Angel Serna, in an
excellent inquiry in the October issue of Art & Antiques,
examine the case of Yo Picasso. Humana Inc. president Wendell
Cherry, who bought it in 1981 for $5.83 million and sold it in
1989 for $47.85 million, got a "real net rate of return" (after
commissions, insurance costs, inflation and so forth) of 19.6%
a year. Handsome, but what about the new owner? If he sells it
five years from now, the price must be $81 million before
deductions for him merely to break even. And five years from
then? Who gets left standing in this game of musical chairs?

    This may be why so much of the auction action has shifted
to contemporary art. It is a field that can still produce huge
unsettling leaps of price that shake a market to its core, as
publisher S.I. Newhouse's gesture of paying $17.7 million for
Jasper Johns' False Start in New York a year ago proved. (It
made sense, of a kind, for Newhouse to buy the Johns: he owns
quite a few others, whose book value has accordingly
multiplied.)

    One of the keys to the transformation of the contemporary
market is going to be the discreet dispersal of the huge
collection formed, mostly after 1980, by the advertising mogul
Charles Saatchi, whose London firm is now in difficulties.
Saatchi bought in bulk, sometimes whole exhibitions at a time.
He acquired, for instance, more than 20 Anselm Kiefers, whose
prices are now past the $1 million mark, and at least 15 Eric
Fischls, which are on or around it. Artists let him have the
cream of their work because it was understood -- though never
explicitly said -- that Saatchi would never sell; his collection
would become a museum in its own right, supplementing the
cash-strapped Tate Gallery.

    Now that he is pruning his collection, the bewilderment is
great. What artists fear is not so much that their prices will
falter -- though that happened to Italy's Sandro Chia when
Saatchi dumped him -- as that new traders can move in and, by
buying blocks from Saatchi, bypass the artists' dealers and
force prices up out of all proportion to those of their new
work. Robert Ryman, one of whose chaste minimalist paintings
made $1.8 million at auction recently (gallery prices: from
$50,000 to $300,000), now thinks it "unfortunate" that he ever
let Saatchi have twelve of his prime works.

    Sean Scully's prices through his regular dealer David McKee
have jumped from $90,000 to $140,000 in the past six months,
but Scullys are trading on the secondary market as high as
$350,000, and Saatchi recently unloaded a block of nine of them
on the Swedish dealer Bo Alveryd, who last month spent $70
million at three London galleries (Marlborough, Waddington and
Bernard Jacobson) before moving on to the New York fall
auctions. There he underbid the $20.68 million De Kooning and
bought, among other things, a Johns for $12.1 million. "I
thought Saatchi had good intentions," Scully says. "Now it turns
out that he's only a superdealer. These guys create price levels
for themselves. They put one painting in a sale and bid it up
to huge levels. And the artist loses control of his work, while
his relations with the dealer he has worked with so long go for
nothing, absolutely nothing. We are just pawns."

    The new kind of raider-dealer is exemplified by Larry
("Go-Go") Gagosian, who a few short years ago was selling
posters out of a shopfront in Los Angeles but recently, with
massive financing, tried (without success, according to dealing
sources) to take over the estate of the senile but still living
Willem de Kooning, 85.

    His detractors say, perhaps unfairly, that if you put
Gagosian and the rest of his ilk in a bag and shook it for a
week you wouldn't get an ounce of connoisseurship. But that is
not what counts. What does count is the instinct for when to
grab the chicken, the hot artist, and get a lock on his or her
work.

    Can one guess what kind of dealing structure will emerge
from this mud wrestling in the '90s? Pessimists think the world
contemporary art market, just like the communications industry,
could implode into six or seven megadealers, each with an
international corporate base formed by gobbling up aging or
lesser competitors. The middle rank of dealers will have been
squeezed out by the raids on their artists and stock, and at the
bottom of the heap a litter of small galleries, treated as
seedbeds by those on top, will be kept to service the impression
of healthy diversity.

    It could be that no more new dealers of the traditional
sort will actually come to power, so that the tradition that
stretched from Ambroise Vollard to Leo Castelli and Paula Cooper
will be lost. Big dealers will have their tame resident critics,
as princes their poetasters. There will no longer be much
distinction between collectors and dealers, and the
collector-as-amateur will be extinct. On the boards of many
museums, a new breed of broker, the collector-dealer-trustee,
will hold sway. And art will keep draining out of America toward
Japan and Europe. Welcome to the future: a full-management art
industry. Most of it is here already.

    Nothing is more objective than the new class of European
and Japanese investors. What the Japanese are doing has very
little relation to collecting as it was once understood. They
are, quite simply, investment-buying on a huge scale, with
limitless quantities of cheap credit: one zaibatsu offers
open-ended loans of any size at 7% (3.5 points below the U.S.
prime rate) to Japanese who want to buy Western art.

    Nor should one suppose that these are dreaming connoisseurs
who have just relinquished the ink block and the brush to
dabble in the art of the namban, or round-eyed barbarian.
Shigeki Kameyama, representing the Mountain Tortoise Gallery in
Tokyo, last week bought, among other things, Picasso's The
Mirror at $26.4 million. The week before, he had also purchased
De Kooning's Interchange at $20.68 million and a Brice Marden
drawing at $500,000 at Sotheby's. Kameyama is known to other
dealers as "Oddjob," after Goldfinger's hat-flinging chauffeur.

    Aska International, the Tokyo art gallery that spent $25
million at the Dorrance sale, is controlled by Aichi Corp., a
Tokyo firm that last September became one of the five largest
shareholders of Christie's stock, with 6.4%. Aichi, in turn, is
controlled by Yasumichi Morishita, a secretive businessman who
got a one-year suspended sentence in Tokyo in 1986 for
securities fraud. Morishita is reputedly worth a trillion yen
($7 billion), and may be planning a takeover of Christie's --
although it is unlikely that the Monopolies and Mergers
Commission would approve his bid.

    Japanese buyers may be aesthetically unsophisticated --
they buy names, not pictures -- but this will inevitably change.
(It did in America, after 1890, while Europe was laughing.) The
Tokyo market still has a weakness for yucky little Renoirs and
third-string Ecole de Paris painters like Moise Kisling, whom
nobody wanted a few years ago; one Japanese collector is the
proud owner of a thousand paintings by Bernard Buffet. But the
Japanese started going after bigger game about five years ago,
and already the outflow is immense. Contemporary art has become,
quite simply, currency. The market burns off all nuances of
meaning, and has begun to function like computer-driven
investment on Wall Street. Sotheby's and Christie's between them
sold $204 million worth of contemporary art the week before
last. Of this, American buying represented only a quarter;
Europeans bought 34.9% and the Japanese a whopping 39.8%.

    This indicates a radically transformed market structure. In
art as in other markets at the end of Reagan's economic
follies, America sinks and Japan rises. In this context it is
fatuous to utter bromides about art's being the Common Property
of Mankind. Americans now begin to view the outflow of their own
art with bemused alarm -- just as Italians and Englishmen, at
the turn of the century, watched the Titians, Sassettas and
Turners, pried loose from palazzo and stately home by the
teamwork of Bernard Berenson and Joseph Duveen, disappearing
into American museums. "The Japanese are awash in money," says
New York's leading dealer in old-master drawings, David Tunick.
"And when something really good goes to Japan, you feel it has
vanished into an abyss."

    Of course, this would have been exactly the feeling of a
cultivated Japanese in 1885, watching his cultural patrimony
being politely stripped by American collectors, led by Ernest
Fenollosa and the "Boston bonzes." The emerging lesson of the
late '80s, which is unlikely to change in the '90s, is that
America no longer controls the art market to any significant
degree. Mostly, it sells. Its buying power is fading fast.

    Some museums, however, have continued to make remarkable
purchases. The Kimbell Art Museum in Fort Worth, under the
direction of Edmund Pillsbury, is a leader here (as New Yorkers
can currently see from a loan show of its holdings at the Frick
Collection). At least one museum, the Getty in Malibu, Calif.,
with its $3.5 billion endowment and almost limitless spending
power, seems unaffected by the rise in price. In May it was able
to buy Pontormo's Portrait of a Halberdier at Christie's for $35
million and last week Manet's acridly ironic view of a
flag-bedecked Paris street with a war cripple hobbling along it
for $26.4 million.

    One recourse for some museums is to raise funds by selling
work from their permanent collections, as MOMA recently did. In
order to purchase an indubitable masterpiece, Van Gogh's
Portrait of the Postmaster Roulin, for an undisclosed price, the
museum sold and exchanged seven paintings. But this encourages
museum trustees to think of the permanent collection as an
impermanent one, a kind of stock portfolio that can be traded
at will: not a good omen.

    Kirk Varnedoe, MOMA's director of painting and sculpture,
confesses that he (like most of his colleagues) is haunted by
the image of the big collector looking at his Van Gogh over the
fireplace, the picture that, like thousands of others in
America, was promised to a museum -- as Irises had been. "At one
time," muses Varnedoe, "he might have looked at it and said,
`Well, there's the Porsche I didn't buy.' Now he says to
himself, `That's my children's education for three generations,
a villa in Monte Carlo, a duplex on Fifth Avenue and a fleet of
Rolls-Royces -- all sitting over my fireplace.' Then the
temptation to respond to a dealer who offers $50 million for it
is insurmountable. That's the real danger: the pressure on our
trustees and close friends. We will get squeezed out of the
package."

    Tom Armstrong, director of the Whitney Museum of American
Art in New York City, has a further worry: the growth of
private, or vanity, museums. Some American collectors of
contemporary art, he points out, think of themselves as
institutions, and this would make them reluctant to donate art
to a museum even if the tax laws had not been changed. They do
not crave the imprint of the established museum. They want the
Jerome and Mandy Rumpelstiltskin Foundation for Contemporary
Art.

    But the ultimate loss to art's hyperinflation may be wider
and less tangible than this. Quite rightly, MOMA's Varnedoe
rejects the idea that "there was some mythical period, now lost,
when art was seen only as the shining purity of aesthetic
experience. As long as there has been art to sell, art has been
something to buy." But he, like many others, is worried by "the
crazy sense of disproportion in the world that puts an extra
glow on the art object."

    For Chicago's James Wood the damage comes down to a
confusion between aesthetic and material value. "When a work of
art passes through our doors, it should leave the world of
economics," says Wood. "Walking through a great museum is not
going to give you a profile that reflects the auction market.
You have to educate people to grasp that the money paid for a
work of art is utterly secondary to its lasting value, its
ability to make them respond to it."

    The problem is that although art has always been a
commodity, it loses its inherent value when it is treated only
as such. To lock it into a market circus is to lock people out
of contemplating it. This inexorable process tends to collapse
the nuances of meaning and visual experience under the brute
weight of price. It is not a compliment to the work. If there
were only one copy of each book in the world, fought over by
multimillionaires and investment trusts, what would happen to
one's sense of literature -- the tissue of its meanings that
sustain a common discourse? What strip mining is to nature, the
art market has become to culture.


 -- Mary Cronin and Kathryn Jackson Fallon/New York