TIME: Almanac 1993/TIME Almanac 1993.iso/time/120390/1203400.000

Text File | 1992-08-28 | 8.7 KB | 189 lines

                ñY                                                          ART, Page 124

The Great Massacre of 1990


As auction prices plunge, overhyped contemporary works are hit
the hardest

By ROBERT HUGHES


    The Great Auction Wave in contemporary art, which rose amid
the financial euphoria of 1982 and crested in late 1989, is now
over, vanished into the sand. Just as one of its signs was the
auction-room applause that greeted some new price level -- $17
million for a Jasper Johns, $20.7 million for a De Kooning -- so
its end was marked by another kind of applause.

    It came on the evening of Tuesday, Nov. 6, at a sale at
Sotheby's in New York City. Anh in a Spanish Landscape, a large
1988 image done in broken plates by the Meatball Hero of the
epoch, Julian Schnabel, was hoisted onto the auction block. It
had been bought in London for $225,000 in 1989 by a Canadian
speculator with Hong Kong money. Then the owner consigned it for
sale to a New York gallery, where it hung for some weeks with
a price tag of $650,000 on it. No takers. Feeling the pinch, the
owner sent it to Sotheby's, which put what it took to be a
conservative estimate on it: $350,000 to $450,000. But now, not
a paddle moved. After some moments of embarrassment, John
Marion, chairman of Sotheby's North America, who had been
working the room all evening like a paramedic trying to revive
an Egyptian mummy, hammered the work down, unsold, at $210,000.
At which point a couple of ironists in the room had the
indelicacy to clap.

    Some 56% of the art in the Sotheby's auction failed to find a
buyer, despite the house's pre-sale efforts to get sellers to
lower their reserves. The "star" offering, Robert Rauschenberg's
Third Time Painting, 1961, sold for $3.08 million after its low
estimate had been reduced by $1 million on the eve of the sale,
to a range of $3 million to $4 million.


    Few pictures except a Sean Scully, a Brice Marden, two
Dubuffets and the Rauschenberg reached or exceeded their low
estimates, and most were well below them. A Rothko work
estimated at $1.8 million to $2.2 million was unsold at $1.25
million. Nothing by Andy Warhol sold that night. Younger artists
whose star had risen in the '80s did no better. An Eric Fischl,
Northern Girl, estimated at $450,000 to $600,000, went begging
at $300,000.

    The following night at Christie's was a slight improvement,
because the estimates were more realistic and the works
themselves somewhat better. Nevertheless, 48% of the works
failed to sell. The auction had one very fine De Kooning, July,
1956, which sold for $8.8 million against the estimates of $5
million to $7 million. It might have been a $15 million painting
a year ago, but at least its price offset the fact that none of
the other De Koonings in the sale -- all later or inferior works
-- found buyers. Philip Guston's Summer, 1954, joined the De
Kooning as one of the few paintings to exceed its high estimate
-- $1.1 million, against estimates of $500,000 to $700,000.  But
again, nothing by Warhol sold, and Minimal art did badly across
the board.

    For the contemporary art market, then, the fall 1990 sales
were a massacre. Scared by the descent of the Nikkei stock
index, the Japanese -- who in 1988 accounted for more than half
the total recorded sales volume of all art bought at auction
worldwide -- bid sluggishly or sat on their hands. The Japanese
buyers did not even come out for a Van Gogh still life that was
expected to make $12 million to $16 million at Christie's
Impressionist and modern sale two weeks ago. It too was bought
in, at $9.5 million. However, a fine Van Gogh ink sketch was
bought by a New York dealer for $8.4 million, the highest price
ever paid at auction for a drawing.

    Overall, the sales cast further doubt on auction-house
techniques. Sotheby's all but ceased lending money to buyers
after it was so badly burned by Alan Bond's default on Van
Gogh's Irises, bought but not paid for in 1987 for $53.9 million
with the help of a $27 million loan from the auction house. But
this fall's victim has been the equally controversial system of
guarantees, a product of the fierce competition between
Sotheby's and Christie's, whereby the auction house contracts
to pay the seller a given price for artworks -- whatever the
outcome of the sale -- in order to win the right to sell them.
Sotheby's became the unwilling owner of 13 of 35 guaranteed
paintings from the estate of Henry Ford II that failed to find
buyers at a collective estimate of $23 million to $30 million.
Wall Street has reflected the art market jitters: for some
months now, Sotheby's stock, which was trading at about $35 in
October 1989, has hovered around $10.

    Auction spokesmen put what spin they could on it all,
speaking of increased selectivity, a healthy trimming of the
market, and how first-rate things would continue to get
first-rate prices. (That an exceptional painting could still
make an exceptional price was in fact confirmed earlier this
month at Sotheby's in London when a great Constable landscape,
The Lock, 1824, was bought by Baron Thyssen for $21.1 million.)
Michael Findlay, head of Christie's Impressionist and modern art
sales, called the market a "roller coaster" -- inexactly, since
roller coasters go up and down but always finish at the level
where they started. The next big sales, in the spring, may or
may not bring a second dramatic plunge. But they will almost
certainly see more deflation in the contemporary market, which
even the most purblind bulls now perceive as overrated and
overpriced.

    What happened? Luxury spending is the first thing to fail
when the oxygen goes out of the economy; art is the canary in
the mine shaft. But behind that lies something more basic. The
art market is inherently volatile because, unlike other markets,
it is tied to no intrinsic value. The price of art is determined
purely and solely by desire. The art prices of the '80s -- from
$231,000 for a work by graffitist Keith Haring a year ago to the
$82.5 million a Japanese businessman splurged on Van Gogh's
Portrait of Dr. Gachet last spring -- struck many people as
crazy because they were fetishism, the greed of punters and the
vanity of competing buyers run amuck. One jump in price was
supposed, by some magnetic impulse, to guarantee the next. The
art market in the '80s parodied the belief rampant in the wider
economy that a speculative binge could last forever. It was a
bubble, sustained by dealers' pressure, ratified and manipulated
by public bidding. Auctions supplied the "objective" basis for
hype.

    Not anymore. Contemporary art will keep coming to auction;
that is guaranteed, if only because more art speculators will be
forced to sell as the larger economic gloom deepens and the
banks close in. But the vista of unsold pictures with lower
prices will crimp the flow of top-quality work. The boom shook a
lot of first-class art back into circulation, along with masses
of lesser stuff, all of which was snapped up. When buyers get
more cautious, so do sellers, and circulation grinds down. This
affects private dealers as well as auction houses: the same
tidal flow that lifted all boats in the '80s is now dropping
them in the '90s. In particular, it will be more difficult for
dealers to "defend" the prices of their living artists by
bidding them up. The latest auction results suggest that some
of them have already stopped doing so.

    Still, the signs suggest that the misfortunes of the
auction houses must inevitably benefit private dealers. No
seller wants to see his picture do badly in public. Private
dealing is discreet, and prices can be quietly negotiated.
Hence, in times of recession, works of art go to the private
trade that would automatically have been consigned to auction
when the boom was on.

    Because contemporary art was the most inflated area of
speculation, one may assume that for certain artists of the
'80s, no bottom is yet in sight. But anyone who thinks the
market decline will instantly produce saner relations between
art and the public ought to think again. In the short run, the
more likely result will be that works of art, their meanings
already distorted by the strain of acting as big-ticket
investment commodities, must now suffer the further ignominy of
being viewed as failed bullion. In the long run, in art as in
nature, the fittest will survive. Meanwhile, one can only hold
on to one's hat and remember the Dutch tulip mania of the 17th
century, when men bet their farms and fortunes on a single bulb.
That market blew up; yet, curiously enough, the tulips
themselves continued to be as beautiful at a few stivers as they
had been at a hundred guilders.