The rich are getting richer and the poor are getting poorer. And the art market likes it that way, according to Federal Reserve Bank economist Benjamin Mandel.
Mandel recently spoke with German newspaper Die Ziet about the peculiar beast that is the art economy, existing almost fully removed from the reality most of us experience from day to day. While the ranks of America's poor are stuck at record levels, the prices for famed works of art have skyrocketed, breaking records left and right. From Edvard Munch's $120 million "Scream" to Mark Rothko's $86 million "Orange, Red, Yellow," the price limits of these physical objects has gone so high, tracking them has become a spectacle in itself. (Yes, we did live blog the scream auction.)
How is this possible?
While most economies fluctuate in proportion to the economy at large, the art economy fluctuates parallel to the pockets of the super rich -- aka the 0.1%. According to Mandel, the art market thrives "not when only the poor are getting poorer, it must also be the richest get even richer."
Since the majority of society's wealth rests in the hands of the upper ranks, the same goes for art. Extremely expensive paintings are among the few seen as a safe investment, with little money pouring into art at middle or lower price points. It could be a matter of purchasing "perceived quality", ensuring a good investment or simply being a showoff, but art consumption at this level has a lot to do with economic safety and little to do with that naive notion of loving art.
Of course there are forces fighting to keep art's middle class from fading into oblivion. The Affordable Art Fair has spread to fifteen locations worldwide over the past 12 years. We asked Cristina Salmastrelli, the director of Affordable Art Fair New York City about the importance of a strong mid-price art presence. In an e-mail to The Huffington Post, Salmastrelli wrote:
The art world isn’t a playground just for the rich, it is a place for all to explore no matter what their price point is and we strongly support that. The middle market is where emerging talents are displayed, and where the value of art is developed by those who begin buying artists work early in their career. Without the middle market laying down the groundwork, the next generation of masters (and multi-million dollar pieces) would not be created.
If this stratification continues, we will likely see canvases continuing to break enormous records on the chopping block. At least we can live blog the next preposterous sale, can't we?
Would you like to see a more equalized art market? Let us know your thoughts in the comments section below.
Here are some recent record breaking auctions:
May 2, Sotheby's; $119.9 million, the most expensive artwork ever sold at auction.
Tuesday, Christie's; $86.8 million, record for any contemporary artwork at auction.
Wednesday, Sotheby's; $44.8 million, record for the artist at auction.
Wednesday, Sotheby's; $44.8 million, the highest auction price for a single-panel painting by the artist.
Tuesday, Christie's; $36.4 million, record for the artist at auction.