Auction Season

We're into the thick of the art world's auction season, and on May 4th a painting by Pablo Picasso, "Nude, Green Leaves and Bust" went for more than $106 million, at Christie's.

What do you do after you (as a private person, not a museum) purchase a Picasso for that kind of price? Do you hang it above your mantle, or put it away in a climate-controlled and well-guarded storage facility? I suppose if you think of it as an investment, in the hope that somebody will pay even more at Sotheby's a year from now, you put it in storage. If you bought it for the aesthetic experience, it goes on the living room wall.

This raises further questions in my mind. Didn't I read at some point that there was an antitrust investigation underway involving Sotheby's and Christie's? Checking ....

Yes, I did. But that isn't exactly news. The reason my memory of it was so vague may be that it all happened nine years ago. An indictment charged A. Alfred Taubman, Chairman of the Board of Directors of Sotheby's from 1983 to 2000, and Anthony J. Tennant, a member of the Board of Directors of Christie's from 1993 to 1998 and Chairman of its Board of Directors from 1993 to 1996, with conspiring to fix auction commission rates.

Taubman was convicted in December of that year, fined $7.5 million and imprisoned for ten months.

Tennant was never tried. He is a citizen of the United Kingdom, and extradiction arrangements between our two countries don't provide for such cases.

That link will get you to an intriguing article in the Journal of Competition Law and Economics says that the Taubman trial "provided detailed evidence as to how the price fixing worked, and the economic conditions under which it was started and began to fall apart." Specifically, the price-fixing conspiracy came about as a result of a downturn in the art auction market, and began to fall apart during and as a result of the subsequent upturn.

Alternative theories of cartel formation appear to have different views as to whether things should happen that way. But that is the way they did happen in this matter, theory schmeary.

Happy Mother's Day.

Lucien Freud

We're into the art world's auction season, and Lucien Freud's "Bruce Bernard" (1992) will go "under the hammer" at Christie's auction house in London next month.

This is one of twenty-one major works from the so called "School of London" that are coming to auction for the first time. I've tried to find a decent on-line photo to which to link you here, but am having poor luck.

In September 2003 the London Times ran an appreciative essay on Lucien Freud's career by John Russell Taylor, which said in part: "He has continued to change and develop throughout his 80 years: it is perfectly permissible to prefer his early, hard-edged style to his later flourishes of heavy impasto, but that is a matter of taste rather than of general consent."

The painting on the block in June will presumably belong to the "later flourishes" category.

I read something recently about how the art market is a way in which "the rich try to get richer." But I suspect that's wrong, that speculation on possible price increases is a relatively small part of the motivation that will presumably fill the room at Christie's.

Aside from such speculation, and aside too from any genuine love of the art, there is I think a sense of status anxiety that drives the market.

But, of course, possessing a Lucien Freud only soothes your status anxiety if you put it on a wall somewhere. Having it in a carefully monitored, climate-controlled, warehouse might be just fine for a speculator, but improves one's status not at all. It has to be, "Oh, look at what a nice painting I've got in my foyer." THAT will relieve some anxieties.