Introduction to the Economics of Art and the Art Market

Art and Commodity: Encountering the Marxian commodity theory of art

  • Classical Marxist distinction between use value and exchange value [full text of Marx on use/exchange value from Capital, 1.1].
  • In classical Marxian model, art becomes another species of alienated labor through its near reduction to commodity status.
  • The romantic view of artists as free, autonomous creators who own their works as direct expressions of their minds is overturned in materialist analysis of production, commodification, and property. Marx continues an artisanal model of artist production.
  • Art becomes part of commodity fetishism [full of Marx on commodity fetishism from Capital, 1.4].
  • This classical Marxist theory has some value for baseline analyses of commodities, but it is too easily used in reductive ways that fail to account for complexity of social and historical factors in the functions of the artworld.
  • Art objects are not exchangeable one for the other like other commodities.
  • For today, observing that art works are part of a market economy or that intangible values in art are made fungible in monetary terms provides only a description of the economics, not a political or moral point.
  • Benjamin's expansion of materialist philosophy of art goes beyond simplistic "commodity fetishism" theory to an analysis of the role of the art object--theory of aura, uniqueness and authenticity, disruption of photo-reproduction technologies, commodification of images and not simply objects [see The Work of Art in the Age of Mechanical Reproduction].
  • Utopian Marxism hoped that artists and intellectuals would provide a vanguard or avant garde of socially redemptive works that could lead the masses out of ideological false consciousness. Most of the utopian movement has collapsed in postmodernism.
  • Other Marxian philosophers like Adorno and Horkheimer see the modern capitalist "culture industry" as a purveyor of mass illusions [see the text of The Culture Industry: Enlightenment as Mass Deception (1944)].
  • The variety of neo-Marxian interpretations since the 1960s is legion. Most of the discourse is academic, maintaining ironic detachment from the world of actual economics and the business of the various arts sectors.

Can art be described with "commodity" model?

  • Art objects are not exchangeable one for the other like other commodities: art economics is based on scarcity of unique objects.
  • Missing the wider issue of symbolic value and cultural capital, which is more than Marxian "exchange value".
  • Is the use of the term "commodity" in art world critiques only a metaphor for rhetorical use?

Art and utility value (use value) vs. exchange value

  • Some argue that art does have a "Satisfaction" (utility) value (Grampp), and cannot be explained purely by exchange value models.
  • Is art analogous economically to most other consumer and capital goods? Why or why not?

Art and the mystification of value

  • Attitudes about "special category" for art outside commodity economy.
  • Romantic values, art as substitute for religion in secular world.
  • Economic variations in funding of art around the world--state sponsorships, grants, public spaces, free art school tuition and conditions of the commercial art market, business of galleries and museums.
  • Bourdieu's corrective to mystificatiopn of value: symbolic capital, cultural capital, fungible points of exchange.

Art and scarcity economics

  • Art works follow economics of scarcity: the rare, the unique; high demand, finite supply.
  • Where does the fungible value of unique, "priceless" commodities like art works and antiques come from?-- desire, symbolic wealth, and ownership of scarce good.
  • Context and perception is all.
  • Commodities show value, translate into cash value, only by circulation, exchange in the marketplace.
  • Prices:
    • "To ask if something is worth the price is to ask if it is worth the other things that could be had for the same price." -Grampp, p. 21

Art and symbolic or cultural capital (Bourdieu): social wealth symbolized in art and cultural acquisitions.

  • The dynamics of symbolic capital: mirror or wealth, prestige, social class ownership.
  • "Economics of disavowal" or "collective misrecognition" of economic base: Art business succeeds (like academe) by pretending not to be doing what it is doing.
  • Necessity of disavowal and negation of the economic, appearing disinterested to accumulate symbolic capital.
  • Logic of symbolic capital allows the development of art and the artworld as an autonomous field.

The Function of the Art Market: Intangibles, cultural capital, and fungible value

  • Art market exists to convert intangibles into fungible value
  • Cultural capital follows the ordinary law of capital, summed up in "Wriston's Law":
    • "Capital goes where it's wanted, and stays where it's well treated." (-Walter Wriston, former CEO of Citibank)
  • See the Artprice Art Market Insight site for quantitative analyses of art market indicators.

Artworld hierarchies of value and cash value

  • Scale from the legitimate but low value works in galleries from $500-1000 to the small fraction of works that hit the auction houses for huge amounts ($500,000 to millions).
  • Wealthy prestige collectors increase value and visibility. Prices of sales to and from private collectors are often well-known in the artworld.
  • Influence of museums, international shows, and the price of works: the Saatchi effect.

Art and fashion: two overlapping contexts, cross-referenced

  • Media circulates desirable images.
  • Desire for desirability and acquisition of desired art objects.

Martin Irvine
© 2004-2009
All educational uses permitted with attribution and link to this page.