01/29/2013 10:39 am ET Updated Mar 31, 2013

Regulating Art Markets Saves Billionaires Millions!

The 20th century's paper of record, The New York Times, recently published a long-winded piece imploring (or if you subscribe to the myth that the Grey Lady has clout, "nudging" might be a better word) the state legislature to more heavily regulate various aspects of the commercial art world.

If you click this link to read the story and find you have already read your 10 free articles for the month, meet me back here in the 21st century...

The article describes two areas of the commercial art market that appear ready for more regulation: galleries and auction houses. The suggested regulation for commercial art galleries concerns the absence of a set price listed for the artworks being sold. The second involves the intricacies of bidding for art at auction.

The Times got noted East Coast art world lifer Robert Storr to challenge the galleries, saying, "You can't deny someone the opportunity to buy something if the price is posted and the work is unsold."

In actuality, galleries can deny a purchase, and they do all the time for a variety of reasons. If a big collector has an appointment to visit my gallery on Saturday to look at an artist's work, I am not selling that work on Friday to someone who might try to flip it on eBay next month. Should the show sell out and get positive press, it is better to see if the work sells later on than to have a slimy art-flipper get their paws on it. But Storr and the Times are apparently on the side of the market's parasitic opportunists -- not the galleries and not the artists.

Did a powerful Times editor get cornered at some penthouse cocktail party by a fellow one-percenter furious that he or she paid twice what the Joneses did for a Warhol? (You can bet the pricing regulations would protect the monied from their own stupid social-climbing desperation.)

Notice there is no clamoring to regulate the board of directors at museums from the Times. When it comes to regulating art, there is no call in the article that museum board members recuse themselves of decisions that would benefit the value of their art collections. When you visit a museum, the curatorial choices have deep internal politics behind almost every choice and placement. If a collector owns works by a major artist and gets some of these put into a high-level museum show, those works gain in value and the artist's market -- which is controlled by collectors, not the artist -- generally sees a price increase. In other words, the people who have the most to gain from the regulation advocated by the Times are the people who would have the most to lose from the real regulation needed in the art world: institutional regulation.

But we know that is not going to happen; New York is nothing without status-seekers spending inherited money to jockey for better positions in the pecking order.

The second proposed art market regulation is aimed at making the bidding process more transparent. (But transparent to whom? The buyer of the art, of course.) Once again, the Times is spilling ink in favor of the person who can afford to spend millions of dollars on art. There is an old maxim concerning the cause of journalism from Finley Peter Dunne: reporting should "comfort the afflicted and afflict the comfortable." The Times twists it into a radical new model: portraying the comfortable as afflicted in order to pamphleteer on their behalf.

When a work of art sells at auction the price is recorded and published and used by thousands of people -- auction records are the de facto method for the art world to set prices. Here is the real power of auctions: Every time an artist's work sells for a new record, collectors at large have assurances that buying work by that artist will turn out to be a nice investment. For art buyers, auction results affirm the suppositions of art history.

If you want to talk about auction regulation, here is one regulation that would level the whole playing field, the super-wealthy be damned. Regulators should insist that the buyer's name at auction be revealed. This would do everyone a world of good, except the wealthy who game the system.

But don't hold your breath waiting for Robert Storr to get on a soapbox in Central Park with your cause on his tongue. You'll never have the New York Times fighting your good fight. The powerful are banding together to regulate the commerce of the art world in their favor, your viewing pleasure be damned.