c(r)ashed out!

An intelligent response to art is suspended somewhere between knowledge and intuition and both require a deep commitment and a genuine passion that can take years to develop. The language of money on the other hand is learned easily and everyone knows the mathematical equation of turning a profit. It is not uncommon therefore that many a conversation about art revolves around the economic status of works rather than its aesthetic sensibility. People are more confident talking about the prices of the art they own than they are about the joys that come with living with works of art. Expressing feelings in art does not come naturally and there are good reasons why.

Bankers, stock traders, hedge fund manages and the like. Alpha males in their later 30’s mid 40’s and early 50’s; All successful, and all trained to make perfectly rational decisions based on rigorous analysis and backed by sound theory. Emotion is the enemy of the boardroom where many of the art buyers are born. New prices benchmarks and world records at auctions make for headline grabbing news. The auction houses use it to attract more consignees and the media flashes it to grab more eyeballs and sell more newspapers. Art funds are constantly playing up the investment angle to draw potential clients and dealers often position their artists as the next big thing.

This is how the speculative brew gets formulated and fermented. Against this backdrop, Mr Shah’s of the world are not entirely to blame for equating art to an asset class. Investing in art leads to intoxicating highs that come with betting large sums of money on few fashionable names and nauseating lows when the winds of fashion change. 2008 was one such year that will be forever remembered as the speculative pinnacle of the last century. It was a year in art where the million dollar mark was breached more than a thousand times at public auctions with our very own Subodh Gupta oil on canvas work selling for $1.4 million dollars in the month of May and then another canvas crashing unsold in October *

So what exactly is the current crisis all about? It is not like there is aesthetic bankruptcy that has gripped the world. I do not see artists updating their resume to find an alternative occupation. As a matter of fact in the seven months between October 2008 when the ‘crisis’ reached its peak and now, we have seen some remarkable art exhibitions in the city of Mumbai. Shows such as ‘Mint Condition’ by the collective known as 'Suspect', Kiran Subbaiah solo at C&L, Aji VN, Eva and Franco Mattes at Mirchandani and Steinruecke, LN Tallur solo at Chemould Prescott Road, Rohini Devasher at Project 88, ‘Chance Encounters’ at Sakshi Gallery and solo shows by T Venkanna and Narendra Yadav and most recently ‘Moonwalk’ at Gallery Maskara. All these shows have in some way stretched our imagination and enriched our lives.

So who is complaining and what exactly are they complaining about? Yes prices have been severely impacted and taken a downward beating to the tune of 35~40% across categories. The good news is that we have shaved off two years of speculation and are back to 2006 levels. This is the first and most visible trend. Considering the level of speculation that drove prices up to dizzying heights, this is hardly surprising. What is unsettling however is the sudden lack of interest in art as a direct result of prices going south. Rather than rejoicing, buyers have retreated! This can be detrimental to the long term health of the market if this trend is not reversed soon as we learnt following the last slump in 1991-1992 when the markets shrank, interest in art tapered and prices continued to stay depressed for six to eight years until the year 2000.

The market for art has expanded considerably in the last decade with many more participants across all levels. There are more buyers, more galleries, more artists, more auctions, more fairs, more collecting categories. This overall market expansion is the second trend. The decade of the 80’s and 90’s witnessed a concentrated art market with much of the activity centered around the developed nations, specifically the triad of America, Western Europe and Japan. The last decade has seen newer centers emerge. China and India amongst other Asian countries have taken a prominent position, Russia and the UAE have been flexing their financial muscle and making massive investments to build, own and preserve cultural assets. This trend is likely to continue as we see new voices emerging from Latin America, Syria, Egypt, Iran and other quarters outside the triad nations

The third major trend is the change in taste from Impressionist and Modern Art to Post-War and Contemporary Art. More and more people want to buy art that defines the times they live in. People want to participate in the current cultural dialogue by owning newer works of art - works that are in some ways closer to their own way of living and thinking. This is an irreversible trend that will continue through periods of economic recession and economic boom.

These are some of the trends we seeing now. However, my own view is that art defies trends, after all it is not escalating prices or market validation that makes art appealing but our individual response to the work that makes art such a privilege to own and live with.

* For a more detailed account of the perils and promised of art as an investment please see blog archives of June 2007