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. 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.” 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. 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. 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. 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.