TIME: Almanac 1990/1990 Time Magazine Compact Almanac, The (1991)(Time).iso/time/112789/11278900.015

Text File | 1990-09-19 | 32KB | 567 lines

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