8 About Art: Marion Maneker
Marion Maneker is the mind behind Art Market Monitor (artmarketmonitor), a website and consulting firm dedicated to covering art market related enterprises. With an extensive career spent as an authority on the art market, Marion previously wrote for New York Magazine, The New York Sun, Slate Magazine, and regularly contributes to media outlets like CNBC and NPR.Â
Despite the crisis that hit the global market in 2008, the art market has been seen as a safer haven for investment and much of your writing on Art Market Monitor has been discussing the speculation around a market âbubbleâ versus a long term bull market. Now with the recent sale of Pablo Picasso's Les Femmes d'Alger, some like Ben Davis are remarking that the last time the market was this high, it preceded a global crash. Do you have personal views that you would like to share on the stability of the market?
Your question conflates a few topics. Let me try to unpack them.Â
I looked up Ben Davisâs piece but I canât put much stock in it. The thesis seems to be that because the previous inflation-adjusted record price preceded a collapse of the Impressionist market, therefore this current record price must also be harbinger of doom. Post hoc propter hoc arguments are always tempting but rarely hold together.
I donât think I would agree with your premise that art is, or has been seen to be, a safer haven for investment. And Iâm pretty sure I donât write much about the issue of a bubble versus a bull market. Art is always in a bubble. It has no economic value in and of itself. Itâs value depends entirely upon the subsequent demand for art among later buyers.
To that point, it would seem that more and more of the rich around the world have become interested in owning art. I donât think they buy art as investments per se. They buy art like they buy houses or boats. They get something out of owning the art (or house or boat) and believe thereâs a good chance they will be able to get their money out eventually. (Thereâs a big aftermarket for private jets and huge yachts. The aftermarket supports the primary market.)
These buyers may be no more art collectors than someone who owns a private jet is a pilot. But theyâre buying aggressively.
One key factor has been the role of the art market in class formation among the global rich. The regular circuit of art fairs, auctions and biennials provides a context for the wealthiest from all corners of the earth to meet and interact. Even if theyâre not on that circuit members of this global class gain real benefits from owning recognizable art from Hirst, Koons, Richter, and, most of all, Warhol.
To continue that theme, art is being used a signifier for membership in this global âeliteâ by real estate developers catering to this class. Underneath all of this has been an explosion of museum attendance.Â
How far this will go and how long it can last is anybodyâs guess but I try to outline some sort of an answer to the next question.
To get back to you point, as I understand it, I donât believe the art market has been a financial haven. There are markets for artists and markets for individual works of art. To use access those markets for financial purposes requires a great deal of skill and knowledge.
But there is no composite art market. You cannot buy into an index fund for art or some other vehicle for passively investing in art. So I think the spectacular returns that draw everyoneâs attention are confined to a few isolated buyers who were often in the market long before this boom. You donât buy Warholâs Lemon Marilyn for $250 in 1962 thinking youâll hold it for 25 years and sell it for $28m. It just happens.
The past 10 years have seen the evolution of art as an asset class, with it now being seen as having an inherent liquidity. Do you have any predictions for the next decade and how art as an asset may evolve?
I am not sure I understand what you mean by âinherent liquidity.â Assets are always things that may or may not turn out to be valuable when they are sold. Thatâs as true of manufacturing equipment and real estate as it is of art.Â
The financial world is adept at creating structures around assets that free up cash while still providing the benefits of ownership. Liquidity is still in its infancy in the art market. Itâs like like jet leasing or even the luxury car market. You used to have to actually buy a fancy car. Now you can lease it for a few years.
With a lot more art being considered worth trading for cash, there will be more facilities available to own art without tying up all of oneâs cash. Only obsessive collectors would trade valuable cash for art in the past.Â
I think youâll see over the next ten years the growth of an infrastructure around art that will make it easier to buy art. That will feed more money into art, though probably at lower levels than the very top weâre seeing right now.
Iâd also expect art to grow in important non-financial ways. There are numerous, very popular art events that are not recognized by the art gallery-museum valorization process. Iâd expect the lines between what is âhighâ and what is âpopularâ art to blur or become more contested.
I have said a number of times before that art is in relation to our current culture where food was 30 years ago. By that I mean, we had lots of nice restaurants but food wasnât an obsession. I think weâre in beginning, or at the end of the beginning, of a similar process whereby art becomes much more ubiquitous to a broader portion of the population.
That may mean the notion of an âart worldââwith its peculiar rights and hazing rituals for prospective membersâwill fall away. To continue the restaurant metaphor, not so long ago a certain type of sophisticated New Yorker could tell you each of the handful of restaurants that had received four stars from the New York Times restaurant reviewers. I am sure that same person would get it wrong today.
To the previous question, in 2014 NPR covered museums de-accessioning pieces and you were quoted as saying that this was a way for museums to have a more organic circulation process. Are there any instances where you think that art should not be de-accessioned from a collection?
No. Museums are not sacred temples of art. Theyâre human institutions. Like all human institutions, they change and need to change to serve their constituents. The exchange of art for money does no damage to the artâand it doesnât incinerate the money either. Itâs an exchange. Nothing more. And earmarking the proceeds for acquisitions is spurious and self-defeating. Money is fungible. So all that youâve done is limit (or reduce the incentive to support) the acquisitions budget by adopting the rule.
Guarantees have been a hot button topic in the art market, especially as many auction houses had abandoned guarantees after 2008. Previously the guarantees were provided by a third party, but now auction houses have assumed direct guarantees. Do you feel that this creates an environment in which the auction is no longer a level playing field?
Auction houses were directly guaranteeing works and collections for decades before the credit crisis. Those guarantees were instrumental in generating profits prior to the credit crisis. The auction houses were well aware the practice was risky. After the November 2007 Impressionist and Modern sale at Sothebyâs did poorly against expectations and guarantees, the auction house pulled in its horns. Unfortunately, the market boom continued for another seven months.
The extensive use of third-party guarantees has been the recent innovation. Those guarantees kept works circulating through the system but did little for profitability at the auction houses. Weâre now seeing a more sophisticated use of guarantees in Contemporary art. Or it might simply be more aggressive. Itâs not entirely clear.Â
Auctions are not conducted for the benefit of buyers. So the question about a âlevel playing field is a non sequitur.â An auction house is an agent for the seller. It has a responsibility to achieve the highest price for that seller.Â
But when you really think about whatâs going on here. You have to accept the possibility that the guarantees are working in the buyersâ favor. A guarantee transfers risk from the seller to the auction house or a third party. In that sense, it levels the playing field more than a private transaction would where the decision to not sell remains a viable option. With a guarantee the work is already sold. Now another bidder has the opportunity to âbuyâ it away from the guarantor.Â
But Iâm pretty sure thatâs not what you meant.Â
What are your views on âflippingâ works and how it may or may not contribute to the escalation to prices.
Dealers fear flipping not because it escalates prices but because it has the potentialâand the greater potentialâto de-escalate prices (if thatâs the right word.) Dealers serve their artists. Their goal is to establish the artist in museums and influential collections and manage the artists market and earnings. A dealerâs job is to maintain steady prices. Flipping creates volatility in prices.Â
Are there any artists whose works have lost significant value in recent years that youâve been surprised by?
I donât know how to measure the value of art. Price doesnât equal value. That cannot be said enough. Are there artists whose prices have dropped that have surprised me? Sure. But in economic realms outside of art, lower prices can a sign of greater economic opportunity.Â
Some artists have seen their prices drop because their work fell out of favor. Others have overproduced. The art market needs to get used to the idea that falling prices can create opportunities. A collector should be excited to finally get that work for a price theyâre willing to pay. Obviously, buyers worry that falling prices beget lower prices. But many great collections have been built on buying works that were out of favor.Â
You recently wrote about the sale of three Barbara Hepworth sculptures, and how the market for her work has been on the rise. What are some other modernist women artists that youâve noticed a recently growing market for?
I havenât specifically been looking for Modernist Women artists, to be honest. Hepworth has a strong museum behind her and the work is very good. Thereâs a major museum show coming up in London at the end of the month. Thereâs no guarantee the show will further advance her market. But if it does, it will be because sheâs a great artist whose work is attractively valued. Iâd hesitate to make predictions about other artists. But something similar has been happening with Arp. (Sorry. I know you were looking for a woman.)
In 2013 you had featured an article from the Economist, where the relationship between the Art Market and online art efforts were discussed with the prediction that the higher end of the market would never be conducted without the personal relationships that the internet, largely, does not allow. Two years later have you seen that change or evolve at all?
In a world dominated by mobile computing, I donât know what online means anymore. Are we âonlineâ when weâre posting to Instagram in the middle of an art fair? Are we online when we text an image to a potential buyer or they text back with an offer? I think these tools will enable some businesses to expand their reach. Other businesses will have to reconfigure the way they do business. I donât think it is online versus bricks and mortar.
Money notwithstanding, what would be on your art wish list?
I honestly donât have an art wish list. I find that the works that stay with you the most are often not the ones you think you will like or would want. Having said that, I tend to admire smaller works and like seeing tightly packed displays of a wide variety of art. My personal preference is for things like a small Wesselmann nude; a Barkley Hendricks portrait (though not small) would be great to live with; Bunny Mellon had a Nicolas de Stael beach scene that I thought was superb; Georges Braquesâs still lives from the 30s and 40s; almost anything from Wayne Thiebaud; a great aboriginal work; maybe some color field works.
