The ARCA blog asked Dr. Tom Flynn, an ARCA Lecturer, about what trends in wealth could mean to the art market. According to “The 2014 Forbes Billionaires List” (March 3, 2014), prefaced by Kerry A. Dolan and Luisa Kroll, the 1,645 billionaires reside mostly in the United States (492), China (152) and Russia (111):
But wealth is spreading to new places. We found billionaires for the first time in Algeria, Lithuania, Tanzania and Uganda. Also for the first time, an African, Aliko Dangote of Nigeria, breaks into the top 25. Worth $25 billion, he moves up 20 spots. Roughly two-thirds of the billionaires built their own fortunes, 13% inherited them and 21% have been adding on to fortunes they received. … Still not all countries–or tycoons–had good years. Turkey lost 19 billionaires due to soaring inflation, a sagging stock market and a declining value in its currency. Indonesia, whose currency tumbled 20% against the dollar, now has 8 fewer ten-figure fortunes.
ARCA Blog: What does this mean for today’s art market?
Dr. Flynn: History has consistently shown that wherever wealth is generated, art markets flourish. The art market has always followed money and so the upper reaches of that market, which relies on the communicative power of high-ticket luxury goods, will continue to benefit from the presence of so-called UHNWIs — Ultra High Net Worth Individuals (those with investable liquid assets of $30 million or more). Billionaires can only display their wealth through their worldly goods and thus Thorstein Veblen’s formulation of “conspicuous consumption” remains as relevant today as it was in 1897. “In any community where an invidious comparison of persons is habitually made, visible success becomes an end sought for its own utility as a basis for self esteem.”
ARCA Blog: How have these changes already been incorporated into sales in the last few years? What trends can we expect to see?
Dr. Flynn: Prices at the very top of the art market continue to rise. Pictures realising in excess of $100 million are fast becoming a commonplace of the blue-chip market. These are price levels that bear little or no connection to the reality of most normal people’s lives. True masterpieces have always been expensive relative to mean average incomes, but they are now arguably on an altogether different scale. It is always worth reminding ourselves that an oil painting is, one level, merely a studious arrangement of pigment on a humble piece of canvas. The price of $250 million for Cézanne's Card Players is a consequence of the purchasing power of the Qatari royal family for whom money is, quite literally, no object. The evidence suggests that the owners of such wealth are proliferating across the developing world, from Nigeria to Sao Paolo, Uganda to Lithuania. How much of this new wealth in the so-called developing world has been illicitly appropriated through bribery and corruption at the expense of the common people — as was the case with the freewheeling Russian oligarchy — we may never know. One thing is for sure: much of it will gravitate towards the art market. As New York-based art dealer Richard Feigen recently predicted, it may not be long before the art market witnesses its first billion-dollar painting.
Dr Tom Flynn is Course Director at the Faculty of Art, Design & Architecture at Kingston University.