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Five Theories On Why the Art Market Can't Crash

Damien Hirst is a tricky call. On the one hand, he’s flooded the market with work, most of it churned out by his assistants, and the prices are astronomical. Also, you’d be hard-pressed to find a critic willing to publicly praise his recent work. On the other hand, as the spearhead of the Young British Artists and clear successor to Warhol as an art-world icon, he’s impossible to discount. Likewise, Murakami seems solid, if less for the art itself than for his role in pulling Japan into the contemporary-art world and for his global approach to production. “To me Murakami’s more significant than Hirst,” Valentine says. “Because just as Koons took Warhol’s ideas and changed how we look at art, Murakami took Koons’s ideas and pushed them further. And the objects themselves are compelling.”

Schachter, who charts certain artists’ careers obsessively, leans toward Richard Artschwager and John Baldessari. “You can still get a major piece for $100,000 to $200,000,” he says. “Which by comparison makes them underpriced.”

By contrast, he’s wary of artists whose markets have risen very quickly at auction, such as John Currin and Elizabeth Peyton. “I wonder if those prices would hold up even now,” he says. “Or look at Cecily Brown, who is talented and a nice person, but to me her work looks like derivative de Kooning.” Granted, Schachter’s known as an art-world provocateur, both loved and loathed for making such pronouncements. But after requesting anonymity, one high-end dealer walks me through the market favorites, downgrading many of the same artists: “Marlene Dumas? No. Currin? No. Chris Ofili? No. Elizabeth Peyton? She’s interesting, but not at those prices. Peter Doig? No. Gursky? Never.”

Of course, opinions vary. “You can make a compelling case for Currin’s position among American painters,” counters Valentine. “To me, he’s at least as profound as some of today’s Conceptual artists. But I’m profoundly skeptical of the Leipzig School. Most museum curators aren’t taking them that seriously.” Count Schachter among the Leipzig-skeptical, too: “I just don’t see how those painters can meet the expectations created by those astronomical prices.”

“I’m sitting on a stack of great work, and I have plenty of cash. I can’t wait for these idiots to get out of this market.”

Even the Leipzig School’s main dealer, Gerd Harry Lybke, acknowledges the issue. “We saw what happened before with people like Schnabel, so we’re not raising prices at the gallery too much,” he explains. But the resale market’s another matter; once demand gets too high, even a dealer as cunning as Lybke has a hard time keeping some of his collectors in line.

For all the suffering a slowdown will unleash, only a real-world apocalypse would stop sales altogether. During the early nineties, some artists continued to set auction records. Music mogul David Geffen built much of his collection—considered among the best for American art—during that period. “I’m sitting on a stack of great work, and I have plenty of cash,” says another world-class collector. “I can’t wait for these idiots to get out of this market.” Many art-world veterans say they’ve had enough of the seller’s market. “It’s become extraordinarily unpleasant to compete for work in this market with people buying for social-status reasons or financial speculation,” Valentine explains. “It would be better for things to come into alignment. Why should a Matthias Weischer sell for the same price as Richter?”

Even Glimcher, a seller in this seller’s market, is a little tired of it. “In the VIP room at Art Basel last summer, I overheard these young dealers, people who had booths in the fair, talking about what they’d do when the market crashed—Hollywood producer, agent, etc.,” Glimcher recalls, his voice a mix of outrage and amusement. “I turned around and said, ‘Good riddance. Get out now!’ ”

Yes, the art world will shrink, but never to its early-nineties size or even its late-eighties boom size. Because if the art market is an expanding bubble, inside it there’s a harder-density core, also expanding, composed of lifetime collectors and institutions with impregnable funding. Until the bubble bursts, however, it’s hard to judge the core’s size.

But at a moment when beating up on the Whitney Biennial’s and the Armory Show’s same-samey-ness has become an art-world parlor sport in New York, here’s a cheering thought: Historically, bad markets tend to produce better art—there’s less pressure on artists to produce and fewer temptations to sell out, and they’re dealing only with collectors and galleries willing to ride out the hard times. “I learned to do a gallery on no money when I started in 1999,” Feuer points out. “It totally sucks, but it’s doable. At the worst, I could sell art out of a studio apartment.”