Trust, but verify, as they say

January 22nd, 2015 § 0 comments § permalink

Relationships built on trust are crucial, but for the art market to grow, verifiable information about price and provenance is essential


The web can allow market transparency to complement deals made with a handshake. Photo: rain rabbit

The art world is riddled with tensions: between the rational and the emotional, commerce and culture, public and private, collectors and investors, amateurs and connoisseurs—and between trust and transparency in the art market. A group of leading academics and practitioners debated what this means for the art world at a conference in Goodenough College, London, sponsored by Skate’s Art Market Research and Sotheby’s Institute of Art, coinciding with a research project launched at the institute.

Trust and transparency are often assumed to be substitutes—one replaces and becomes superfluous when there is evidence of the other. But in the increasingly global and technologically determined marketplace, trust and transparency can, and should be, complementary.

Art-world participants are particularly adept of navigating the choppy waters of competing interests. Like the Roman god Janus, dealers and auction houses often face in two directions at once. Contemporary galleries, for example, promote and position their artists in a cultural discourse while meeting the commercial realities of a business. Auction houses broker deals between consignors and buyers with directly competing interests who want the best price for works.

What makes the art world special is that at the top end it is a truly global marketplace of rare and high-value objects, inhabited by a few big players whose whims can move the market. Even at the middle and lower ends, to survive the uncertainty of a market built on the fickleness of taste, successful businesses rely on something vaguely termed “trust”.

There is widespread belief that trust, in all its forms, is at the heart of the art world. Individuals rely on trust-based relationships for transactions where handshake deals are the norm. A purchase at major international art fairs is sealed not with a written and signed contract but with an understanding. International institutions such as Sotheby’s and Christie’s build their brands on the strength of the reputations of their experts and the personal relationships they forge with long-standing clients.

Trust can broadly be understood as the expectation that an exchange partner will not behave opportunistically—they will not take advantage of you even if it could benefit them.

At the heart of trust is the willingness to accept vulnerability within a relationship. By definition, if you trust someone, you do not check up on them. But if you don’t check, you will never know for sure. “Trust, but verify”, the old Russia proverb, was the title of the conference keynote address by Orley Ashenfelter, a professor of economics at Princeton.

For those in the art world, trust-based relationships have many benefits. They can reduce the costs of transacting and encourage exchange. At international art fairs, deals are done on a handshake and it is common practice for dealers to lend valuable objects to try out at home before you buy. Dealers assume the work will be returned properly and in due course.

But trust has a dark side. What makes cases like the recent closure of Knoedler & Company, following alleged fraud and the alleged selling of fakes, so detrimental is that they illustrate that no one is above suspicion in a system based on trust.

Historically, the trust-based art world has also been characterised by a lack of transparency. It is often described as the last unregulated market in the world. On the one hand, the private nature of transactions and a focus on client confidentiality and discretion are at the heart of a highly personalised service. On the other, opacity and a lack of verifiable information, particularly in terms of price and provenance, make it difficult to make good decisions and monitor risk.

Although consumers and emerging companies are increasingly calling for more transparency in some aspects of the market—for example, the asking price, size of commissions and number of agents—practice is far from uniform. When prices are not openly quoted, dealers can and do discriminate between clients, based on characteristics such as their age, nationality and visibility in the market.

Asymmetry of information naturally suits the person who knows more. This might suggest a need for regulation to ensure market transparency. But regulation should not be confused with transparency and is difficult to achieve in a global marketplace of many different cultures. Functional market transparency is based on accepted norms of behaviour that are willingly subscribed to by all participants, not imposed from above.

So how can trust and transparency be reconciled today? Communications technology is the answer. More information than ever is available about the art market from a growing range of sources. These include auction price databases such as ArtPrice, Artnet and Invaluable, and bespoke indexes such as Mei Moses and Art Market Research, as well as news and analysis from companies like ArtTactic and industry players such as Aris Title Insurance, Artemundi Global Fund and Skate’s Art Market Research.

But more data does not necessarily mean more knowledge. Experts with skills based on years of experience, training and intuition are still critical for making data make sense.

The proliferation of price indices is an example. These can be a good indication of market trends but the data and methodology used to construct indices is key. They are often neither entirely transparent nor systematic, leave out swathes of unreported transactions, while calculation methods are fiercely debated by both practitioners and academics.

A few organisations have harnessed technology to benefit from the information revolution. Founded in 1971, the Antiques Trade Gazettetransformed the trade by providing a centralised source for future auctions. Prior to that, dealers had to subscribe to slow postal cuttings services for information about local events. While some dealers grumbled this ruined hard-won opportunities, the auction world suddenly opened up to a wider audience.

The next radical steps were to go online as early as 1990 and then in 2006 to establish a live bidding portal for auctioneers, the-saleroom.com. This provided a centralised platform where buyers could access information, watch, listen and take part in smaller and regional auctions in real time. Hosting 116 sales in the first year, which generated £956,000, in 2012 the-saleroom.com hosted 2,415 sales with £52.6m in online revenue. Some sales attracted more than 1,000 bidders, a global audience only accessible through the web.

Dreweatts & Bloomsbury Auctions is another company that has benefited from such online opportunities. It uses three live bidding engines (liveauctioneers, artfact and the-saleroom.com) enabling its parent company, Noble Group, to sell £10m worth of work online in 2012. Using the-saleroom.com alone, the growth of the business has been staggering, from £286,558 in 2006 to £3.9m in 2012.

So, do we have to choose between trust and transparency? For the market it looks like technology allows the trade-off to blur. When carefully balanced, both trust and transparency can support existing players, provide opportunities for new ones, and ultimately benefit those who love art.

• The writer is associate professor in art business at Sotheby’s Institute of Art, London, and the academic director of the International Art Industry Forum on Trust and Transparency in 2013

Correction: This article was updated on 1 August to correct the name of the Artemundi Global Fund.

Political Correctness – The Awful Truth

December 23rd, 2014 § 0 comments § permalink

Merry Christmas and a Happy New Year!

Ooops sorry, what I should have said is…….. Happy Holidays!

Please accept with no obligation, implied or implicit, my best wishes for an environmentally conscious, socially responsible, low stress, non-addictive, gender neutral celebration of the winter solstice holiday, practiced within the most enjoyable traditions of the religious persuasion of your choice, or secular practices of your choice, with respect for the religious/secular persuasions and/or traditions of others, or their choice not to practice religious or secular traditions at all… and a fiscally successful, personally fulfilling, and medically uncomplicated recognition of the onset of the generally accepted calendar year 2015, but not without due respect for the calendars of choice of other cultures whose contributions to society have helped make our country great (not to imply that it is necessarily greater than any other country), and without regard to the race, creed, color, age, physical ability, religious faith, or sexual orientation of the wishee.

This wish is limited to the customary and usual good tidings for a period of one year, or until the issuance of a subsequent holiday greeting, whichever comes first.”Holiday” is not intended to, nor shall it be considered, limited to the usual Judeo-Christian celebrations or observances, or to such activities of any organized or ad hoc religious community, group, individual or belief (or lack thereof).

DISCLAIMER: By accepting this greeting, you are accepting the following terms: This greeting is subject to clarification or withdrawal, and is revocable at the sole discretion of the wisher at any time, for any reason or for no reason at all. This greeting is freely transferable with no alteration to the original greeting. This greeting implies no promise by the wisher to actually implement any of the wishes for the wishee, him/herself or others, or responsibility for the consequences which may arise from the implementation or non-implementation of same.

This greeting is void where prohibited by law.

Not valid in KY, CA, or District of Columbia

Open Letter Bienal of Sao Paulo

October 23rd, 2014 § 0 comments § permalink

From: ARTE AL DIA International

Subject: Open Letter Bienal of Sao Paulo

Date: 22 October 2014 22:46:51 GMT-2

Open Letter Bienal of Sao Paulo

During the past few weeks, the world of contemporary art, especially in Latin America, has gone through a difficult tension. This is a direct result of the unfortunate and conflicting situation that clouded the opening of the 31st Bienal of Sao Paulo. Days before the inauguration, a cluster of participating artists requested for the organizers of the Bienal to remove the shield of Israel from the list of credited institutional sponsors. It is clear that the shield of Israel represents the presence of an entire nation.

The practice of art is historically inscribed in the cultural process with the highest capacity to critically review human conflict, and to generate new perspectives of approximation, while in many cases proposing alternate paths. For this reason, art has positioned itself as the modern antidote to abuses of power.

From the artists’ perspective, there can be many reasons to hold positions against the Palestinian-Israeli conflict, but the petition to remove the national identity and identification of the State of Israel contributes a negative image with deplorable connotations.

There are many countries participating as artist project sponsors which could be subject to the same inquiring as a consequence of their governmental action. Likewise, many of the companies that constantly support art fairs could be ethically questioned and confronted for their actions when using the ideology planted by this group of artists in the 31st Bienal.

The suppression of the shield of Israel has symbolical implications that assimilate with the will to suppress the Israeli nation far beyond confronting it’s government. Considering the historical precedents of intolerance, and the catastrophic effects they have had in the last century, it is necessary to call for solidarity against this new attempt to symbolically erase the presence of the nation of Israel.

We who sign this letter, independent of any position we hold on the politics of the Israeli government, want to raise attention on the deplorable implication of this gesture. We want to call for responsible solidarity and for the mutual respect that artistic projects should ensue regardless of the inherit symbolism in politically critical work.

Cordially,

Leon Amitai – Collector, Bogotá, Colombia
Plinio Apuleyo Mendoza – Writer/ Journalist, Bogotá, Colombia
Maria José Arjona – Artist, Bogotá, Colombia
Juan Araujo – Artist, Bogotá, Colombia
Luis Aristizabal – Gallery Director, Bogotá, Colombia
Felipe Arturo – Artist, Bogotá, Colombia
Gustavo Arroniz – Gallery Director, México DF, México
Emilia Azcárate – Artist, Madrid, Spain
Lydia Azout – Artist, Bogotá, Colombia
Katha Barón – Collector, Bogotá, Colombia
Alvaro Barrios – Artist, Barranquilla, Colombia
Sonia Becce – Curatora, Buenos Aires, Argentina
Jimmy Belility – Collector, Madrid Spain
Tanya Brillemborg- Collector, Miami, USA
Estrellita Brodsky – Curatora y Collector, NY, USA
Andrés Cabrera – Cultural Journalist, Bogotá Colombia
Johanna Calle – Artist, Bogotá, Colombia
Barbarita Cardoso – Artist, Bogotá, Colombia
Claudia Cisneros – Collector, NY, USA
Natalia Castañeda – Artist, Bogotá, Colombia
Alejandro Castaño – Collector, Bogotá, Colombia
Rafael Castoriano – Collector/ Gestor de Arte, NY, USA
Jaime Cerón – Curator, Bogotá Colombia
Alberto Chehebar – Collector, NY, USA
Simon Chehebar – Collector, Bogotá, Colombia
Jacky Cohen – Lima, Perú
Sady Cohen – Collector, Madrid, Spain
Pamela Crystal – Collector, London, UK
Robin Cymbalest, Cultural Journalist, NY, USA
Marisela de la Campa – Collector, Bogotá Colombia
Perla Douer – Collector, Bogotá, Colombia
Maria Fernanda Currea – MISOL Foundation Director, Bogotá Colombia
Diego Costa Peusar – Director Arte al Día, Miami, USA
Beatriz Esguerra – Gallery Director, Bogotá, Colombia
Luis Felipe Farias – Collector, Caracas, Venezuela
Carlos Ferreira – Collector, Bogotá, Colombia
Sergio Ferreira – Collector, Bogotá, Colombia
Fanny Finkelman – Artist, Bogotá Colombia
Aida Furmanski – Collector, Bogotá, Colombia
Maria Paz Gaviria – Collector, Bogotá, Colombia
Felipe Grimberg,Art Dealer,Miami,USA
Anilú Gómez – Collector, Caracas, Venezuela
Mauricio Gómez Jaramillo – Gallery Director y Collector, Bogotá Colombia
José Darío Gutierrez – Collector, Bogotá, Colombia
Judith Houett Benamou – Writer/Curator, Paris, France.
Carlos Hurtado – Gallery Director, Bogotá, Colombia
Susy Iglicky – Artist, Caracas Venezuela
Sofia Imber – Journalist / Cultural Promotor, Caracas, Venezuela
Estaban Jaramillo – Gallery Director, Bogotá, Colombia.
Leo Katz – Collector, Bogotá, Colombia
Cota Knobloch – Collector, Miami, USA
Uriel Ladino – Artist, Bogotá, Colombia
Rafael Londoño – Collector, Barcelona, Spain
Juanita Madriñan – Cultural Promotor, Bogotá, Colombia
Kevin Mancera – Artist, Bogotá Colombia
Alejandra Matiz – Cultural Promotor, Bogotá Colombia
Adriana Meneses – Gestora Cultural,Caracas,Venezuela
Rafael Miyar – Collector, MIAMI, USA
Solita Mishaan – Collector, Bogotá, Colombia
Edwin Monsalve – Artist, Medellín, Colombia
Alex Mor, Gallery Director ,Paris Francia
Sandra Mulliez – Collector, President SAM ART Projects
Rafael Nieto L. – Collector, Bogotá, Colombia
Estaban Peña – Artist, Bogotá, Colombia
José Perez – Collector, Bogotá, Colombia
Gabriel Pérez Barreiro – Curator, NY, USA
Luis Pérez Oramas – Curator/Art Critic, NY, USA
Erika Ordosgoitti,Artist,Caracas,
Venezuela
Esther Perez Seinjet – Collector, Bogotá, Colombia
Sagrario Perez Soto – Collector, San Juan, Costa Rica
Vivian Pfeiffer – Cultural Promotor, Miami, USA
Patricia Phelps de Cisneros – Collector, NY, USA
Julián Posada- Cultural Critic , Bogotá, Colombia
Luis Fernando Pradilla – Gallery Director, Bogotá, Colombia
Irene Pressner – Artist, Caracas Venezuela
Juliana Restrepo – Cultural Promotor, Medellín, Colombia
Silvana Roiter – Cultural Promotor, Bogotá Colombia
María Belén Sáez de Ibarra – Curator, Bogotá, Colombia
Saul Sanchez – Artist, Bogotá, Colombia
Manuel Santaren – Collector, Boston, USA
Alberto Simhon – Coleccionista, Bogotá, Colombia
Jaime Tarazona – Artist, Bogotá, Colombia
Patricia Tavera – Artist, Bogotá Colombia
Valentina Tintori – Collector, Miami, USA
Silvia Tcherassi – Fashion Designer, Barranquilla, Colombia
Mauricio Torres – Collector, Barcelona, Spain
Jenny Vila – Gallery Director, Cali, Colombia
Alejandra Von Hartz – Gallery Director, Miami, USA

Kunstkompass

October 6th, 2014 § 0 comments § permalink

Kunstkompass 2014

 

kunstkompass

Critics Power List

August 26th, 2013 § 0 comments § permalink


List of Famous Art Critics

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  • Introduction

    Passionate about both art and entrepreneurship, the art dealer João Correia founded two companies: Collezionista, an art advisory firm based in São Paulo, and, I Know What I Like, a contemporary art debate society based in London. He also writes regularly to the media and to this personal blog in English and Portuguese languages.
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