Tag Archives: Money

The Value of Art In the Age of Financial Crisis

Yellow, Red, Blue Oil Painting by Rothko

The economic crisis of 2008 changed the way that many markets operate, their pace, size and reach. However one market that has not slowed is the art market. In November, Sotheby’s enjoyed the most successful night in its storied history, selling almost $375 million worth of Abstract Expressionist and Pop Art.[1] Like many markets, the art market is based in word of mouth and on the knowledge and history of previous sales. There is an aura created around an artist and their works based on these prices as well as in relation to supply or, uniqueness of the works of art based around ‘security.’ As Adam Davidson argues, “art isn’t gold, or any other commodity in which units can be evaluated objectively.”[2] Yet, is the way that the art market functions really that different from other markets? What is it about the art market that has allowed it to remain relatively insulated from other markets and experience growth during this downturn?

In order to examine the way the art market functions I want to look at two examples, and in particular to explore how key determining factors (such as uniqueness and ‘security’ of investment) alter the works of art and how they are sold (or not) within the current art market.  I want to firstly focus on the works of Mark Rothko. In 1967, a red Rothko sold to the National Gallery of Berlin for $22,000.[3] Over the last few years, Rothko’s work has sold at auction at extremely high prices. For example in May 2012 Rothko’s Orange, Red, Yellow sold for nearly $87 million.[4] There are many explanations for Rothko’s increasingly high sales. One is the suggestion that Rothko was born in Russia and that is works are being bought by new wealth in Russia.[5] Another notion is that the large size and blocks of bright colors appeal to people as objects to hang in their homes and, as such, his work is easily recognizable. The high prices of Rothko’s works have fuelled even higher prices in later auctions and have been supported by the inclusion of much of his work in permanent museum collections (Tate Modern, National Gallery of Art and the Museum of Modern Art). His works are now deemed ‘safe’ for investment at a moment in time when many investments are not.

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Are we informing ourselves into inaction? How much information is too much?

What does an overload of information do to our decision-making process? This question becomes, at least in part, an issue of simplicity v. complexity, so I am reminded of Durkheim’s classic argument about social integration and regulation. Too much or too little of each causes problems – for him, various types of suicide emerge because of an overbearing or under-restricting/engaging society.  Simmel’s conflict over the freedom, yet overwhelming choices of the metropolis also comes to mind. In each of these cases, it is a balance that creates a healthy/functioning individual. Perhaps this is the same with access to information. Too many choices makes it difficult for us to assimilate all the information, but too few choices would presumably not provide us with as much intellectual stimulation as we might desire. In our world, is there a balance? Or, are we so inundated with information that we’ve just become accustomed to being overwhelmed. Perhaps we’ve learned to filter what’s important to us – or, might we just miss things all the time because we can’t possibly take it all in? I’m sitting here, right now, with the news on TV and several windows open on my computer screen. I’m in the midst of working on several articles at the same time. That is arguably my personal style – perhaps one of chaos – but it is fairly representative of the general environment in which we all exist these days. There is a steady flow of information abounding at all times – everywhere we turn.

In the PBS piece below (a quite excellent video clip) , the story is about the economy and decision-making about investing, but this is a theme that carries over into much of our world today. Another issue with access to information is that it forces us to make more decisions than we might otherwise have to (see the “jam” experiment in the video). With more choices, people often opt not to make a final decision because it’s hard to feel like you’re making the right choice when there are so many options in front of you. This is a basic tenet of classic social psychological studies of cognitive dissonance. In choosing, we inevitably have to live with the downside of the choice we make and with the absence of the good qualities of the option we overlooked. If we’re presented with myriad choices, what happens then? Do we just become incapable of making any real decision at all – overwhelmed by the prospect of choosing, the notion that we might be missing out on something better or be stuck with something that’s not the best possible option? Especially if there are many other options, making a final decision means high odds of regret. Or, is this precisely why we rely on online stock tips, recommendations from other shoppers on Amazon and other online shopping outlets – we never really make decisions. We rely on these infinite sources of information to help make the choices for us. Social psychological studies also allow us insight into how we make ourselves feel better if we make the “wrong” choice; we externalize the blame. If that’s the case, I can write off the novel I didn’t like because I bought it on a recommendation from another reader or the computer I bought because someone online reported that it had a nice keyboard, etc. It’s not my fault – they recommended it to me! Perhaps the wealth of information makes it harder to make a choice, but easier to deflect the blame for problematic decisions.

Your Mind and Your Money

Information Society, In Blackwell Reference Online

Liquid Charity

Sea of Phonesby pj.rey

In the ten days following the earthquake that devastated Haiti’s capital, Americans used text messaging to donate over $30 million.  Text messaging has been prominent in the news as of late.  Candidate Obama shocked supporters by announcing his vice presidential pick using this new medium.  In 2008, Nielson reported that the average teen sends a whopping 2,272 messages a month.  A new term, “sexting,” entered popular usage following several high profile cases of teens being expelled or even charged with distribution of child pornography.  The Pew Internet and American Life Center reported in 2009 that 15% of teens ages 12-17 received sexually explicit images of people they know.  Texting has proven the most dangerous common distraction to drivers.  The first images of the plane that crash-landed in the Hudson were uploaded to the Web from the cell phone of a passenger on a nearby boat.  The incident was also Twittered by a survivor.  Then, of course, there were the protests to the recent Iranian elections, which used personal mobile communication devices to subvert state-run media.

Each of these incidences share a common theme: traditional practices were supplanted in favor of a new set of behaviors associated with mobile communications.  That’s the what, but as a social theorist, I suggest we also ought to consider the why.  I think Zymgunt Bauman, a remarkably prolific octogenarian sociologist, has a lot to offer us here.  Bauman famously speaks of “liquid modernity” where traditional social structures are melting away and fading ambiguously into one another.  He argues that things which are liquid, flowing, and mobile tend to undo things which are rigid, solid, and stable.

Mobile communication networks increasingly provide concrete examples supporting Bauman’s theory and Haiti is only the latest instance.  The cell phone has made transferring money more immediate, more flexible, and simpler than even the credit card.  People need only reach into their pockets for a device which is already profoundly integrated into their lives and dial a few numbers.  Within seconds, the transaction is complete and money has flowed from one node in the network to another.  The power of such fluid networks is that, with minimal cost in time and money (most were $10 contributions) to individuals, enormous resources can be mobilized.  The political implications of this new fluid and hyper-networked reality should not be lost on us.

Square-eye “Mobile giving to help Haiti exceeds $30 million” by Suzanne Choney

Square-eye “Teaching and Learning Guide for: Social Implications of Mobile Telephony: The Rise of Personal Communication Society” by Scott W. Campbell and Yong Jin Park

Smuggling Tunnels in Gaza Strip

Gaza Strip

Map of Gaza Strip

by smteixeirapoit

Palestinians have created hundreds of tunnels under the Gaza Strip-Egypt border to circumvent the Israeli blockade. In the border town of Rafah, Palestinians secure employment in these tunnels, smuggling goods such as food, livestock, appliances, and electronics. The work in the tunnels is not only dirty, but also dangerous. Sometimes, Israel bombs the tunnels or the tunnels collapse. Oftentimes, workers are buried alive.

One might question: Why would Palestinians choose to work in these conditions? In the Gaza Strip, the unemployment rate is around 80 percent. Palestinians with few employment opportunities – even young children – decide to work in the tunnels because of the financial appeal. For instance, some children earn up to $100 per day working in the tunnels.

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