ISSN: 2511-7602

Journal for Art Market Studies Vol 1, No 1 (2017)

Franz Schultheis
On the price of priceless goods. Sociological
observations on and around Art Basel

ABSTRACT unwritten rules for dealing with the pricing

of works of art became apparent. Pricing in
Today’s public discourse on art revolves around the field of art requires not just knowledge
the price of these priceless goods and numbers of the unwritten and often tabooed rules,
function as ciphers for the collective rep- but also an intuitive feeling for the game and
resentations of art and its status in late capital- the accompanying strategies. Our empirical
ist society. Highly contrary assessments as to findings confirm the existence of two differ-
how the prices for these goods can be found, ent paradigms. One the one hand there is the
depending on the perspective taken. While it image of pure market competition for singular
may seem that optimal transparency exists goods with high prestige value. In this view, the
with regard to the market and the setting of pricing of art commodities seems determined
prices, thanks to commercial databases readily in an ideal-typical manner by purely exoge-
available to everyone, ethnographic field work nous market-dynamic and competition-driven
presents quite a different view. A research forces. On the other hand, the idea of a purely
group took the question on pricing to a particu- endogenous, “art-immanent” reading and
larly prominent institution of the art market, appreciation of the intrinsic value of a concrete
Art Basel, using a variety of methodological work of art is maintained, independently of its
approaches such as qualitative interviews with real or potential market value​.
gallerists, artists, Art Basel staff, curators, art
advisors, art critics etc. In the interviews some

http://www.fokum-jams.org; DOI http://dx.doi.org/10.23690/jams.v1i1.7

Journal for Art Market Studies Vol 1 , No 1 (2017) Franz Schultheis
On the price of priceless goods. Sociological Observations on and around Art Basel

Introduction

When, as Bourdieu postulates, “The particular difficulty of sociology comes from the fact
that it teaches things that everybody knows in a way, but which they don’t want to know
or cannot know because the law of the system is to hide those things from them”,1 this
applies in a very particular degree to the world of art and its rules and practices, as we
are dealing here, as Bourdieu states elsewhere, with “A commerce in things which are
not commercial, the trade in »pure« art belongs to the class of practices where the logic
of pre-capitalist economy survives. The challenge that they offer to all kinds of econom-
ism resides precisely in the fact that they can be achieved in practice - and not merely in
representations - only at the price of a constant and collective repression of the properly
»economic« interest.”2

Paradoxically, or perhaps precisely not, public discourse on art revolves predominant-

ly and persistently around the price of these priceless goods and numbers function as
ciphers for the collective representations of art and its status in late capitalist society.

In answer to the question how the prices for these untradeable goods on the market
are arrived at, highly contrary assessments can be found, depending on the perspective
taken.3 Taking actually achieved art market prices as the empirical basis, one has the
impression today that a - supposedly - optimal transparency exists with regard to the
market and the setting of prices, thanks to the market observations of commercial data-
bases readily available to everyone. For example, the most important of these databases
worldwide - Artprice - offers its over two million users an almost exhaustive survey of
the movements on the secondary market of the art trade and a library with more than
100 million pictures of works of art with commentaries by art experts. This in turn is
based upon 27 million items of information on the results of the sales from the studios
of more than 500,000 artists in more than 4500 auction houses. The omnipresence of the
data produced here in the public narrations on art is being nurtured by way of, as well as
beyond, the internet by press agencies and more than 6000 print media that are regular-
ly kept up to date by Artprice.

1 Pierre Bourdieu, Kunst und Kultur. Kultur und kulturelle Praxis, Schriften zur Kultursoziologie 4, ed. Franz
Schultheis and Stephan Egger (Berlin: Suhrkamp, 2015), 583.

2 Pierre Bourdieu, The Rules of Art. Genesis and Structure of the Literary Field (Stanford: Stanford Universi-
ty Press 1996), 148.

3 This question is discussed in a wide range of research papers and publications, for example Joel M.
Podolny, A Status-Based Model of Market Competition, in The American Journal of Sociology 98/4, 829-
872.; Michel Callon, Cécile Méadel, and Vololona Rabeharisoa, The Economy of Qualitites, in Economy
and Society 31/2 (2002), 194-217; Olav Velthuis, Symbolic Meaning of Prices: Constructing the Value of
Contemporary Art in Amsterdam and New York Galleries, in Theory and Society 32/2 (2003), 181-215; Jens
Beckert and Jörg Rössel, Kunst und Preise. Reputation als Mechanismus der Reduktion von Ungewissheit
am Kunstmarkt, in Kölner Zeitschrift für Soziologie und Sozialpsychologie 56 (2004), 32-50.; Lucien Karpik,
Mehr Wert. Die Ökonomie des Einzigartigen (Frankfurt/New York: Campus, 2011) 14-28, 61-73, 121-132. ;
Jens Beckert, State of the Art. Where do prices come from? Sociological approaches to price formation, in
Socio-Economic Review 9/4 (2011), 757-786.
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On the price of priceless goods. Sociological Observations on and around Art Basel

In contrast to this panoptical instrument with its macroscopic view of “what comes out
at the end” of the art market’s food chain and the suggested notion of fully transparent
marketing with an overt logic in regard to the price development of artistic merchan-
dise, the question of the pricing of works of art becomes infinitely more intricate, even
mysterious, when one descends from the global heights of market analysis to the depths
of daily practice in the art field. Over three years of research, our research group in
St. Gallen conducted ethnographic field work, including participant observation and in
depth interviews with actors of all hues, asking how such an inestimable good is actually
and specifically assessed and given a price tag. They took this question to a particularly
prominent institution of the art market, Art Basel, also dubbed “the Olympics of the Art
World”, at its three locations in Basel, Miami and Hong Kong.4

But why Art Basel?

Nowadays art fairs play a central role in the art market, especially with regard to con-
temporary art. Since the turn of the century, a boom in fairs has grown into one of the
most important distribution and marketing channels for art dealers and gallerists. It is
no secret that today this side of the art trade already achieves more than a third of its
returns at art fairs. No other form of distribution offers better opportunities to its clien-
tele with an interest in art to see and buy a broad range of works of art with an efficient
expenditure of time and money. In view of the great attractive power and commercial
success of this segment of the market numerous media reports have already proclaimed
“the decade of the art fairs”.

Art Basel takes place annually in June in the third largest city in Switzerland. It is a fair
of the superlatives. In 2014 there
were 285 galleries from thirty-four
countries, who presented over
4,000 artists in an area of 30,000
square meters, and attracted
92,000 visitors, including impor-
tant collectors, the representatives
of 70 museums, and numerous
artists from all over the world. The
New York Times characterized the
fair as the “Olympics of the Art
World”.
Fig. 1. Dangerous Liaisons. Art Basel, 13 June 2012.
© Thomas Mazzurana

4 Franz Schultheis, Erwin Single, Stephan Egger, and Thomas Mazzurana, When Art meets Money. Encoun-
ters at the Art Basel (Cologne: Buchhandlung Walther König, 2015); Franz Schultheis, Erwin Single, Rapha-
ela Köfeler and Thomas Mazzurana, Art Unlimited? Dynamics and Paradoxes of a Globalizing Art World
(Bielefeld: Transcript, 2016).

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Because it strongly regulates access to its highly prestigious and highly visible “market
place”, Art Basel itself has become an authority of consecration in the global scuffle for
symbolic recognition in the field of art. Participation in the fair guarantees “quality” and
brings both symbolic and immediate economic profit. Art Basel determines the image of
the fair and its structure; it selects which galleries from which geographical and artistic
backgrounds can offer their goods. At the same time, the choice of galleries determines
which artistic goods are going to be on offer.

Accordingly, Art Basel represents a particularly suitable terrain for research on the
contemporary art world, and we applied a variety of methodological approaches such
as qualitative interviews with gallerists, artists, Art Basel staff, curators, art advisors,
art critics etc. Representative questionnaires were addressed to gallerists and visitors
attending the three Art Basel exhibitions, combined with topographical analyses of
the placing of the galleries in the exhibition halls and photographic documentation. In
summary, it was an attempt at sociological stock-taking of the social and economic rela-
tionships to be observed at this particularly “noble” location of the art world, its ways of
dealing with the ambivalent relationship between art and money, and the states of mind
of the actors in the art world. These field studies were supplemented by a large number
of interviews with highly diverse representatives of the art world within the framework
of several dozen dissertations and theses for master and bachelor degrees supervised by
the author.

While we did not set out to focus on the subject of price formation rules in our sociolog-
ical x-ray of an environment which we found somewhat exotic and quite peculiar, the
issue kept coming up during the interviews with the subjects of our ethnographic study.
Our contribution thus presented a kaleidoscopic synopsis of the relevant ethnographic
findings which we embedded from a social-theoretical standpoint in the specific research
tradition to which we are committed: the culture and art sociology of Pierre Bourdieu.5

Lost in Translation: rules of art in the quantification of the

immeasurable
From the perspective of classical microeconomics prices result solely out of the interplay
of supply and demand. From a sociological point of view, however, markets in general

5 Pierre Bourdieu’s research and publications have attached central importance to the world of art for
more than 40 years. He is the most quoted social scientist of the post-war period, and his works - from
The Love of Art. European Museums and Their Public (Cambridge: Polity Press, 1997) to Manet: Une révo-
lution symbolique (Paris: Seuil, 2013) have lastingly shaped sociological research on “the rules of art”.
Bourdieu’s sociology of art provides not only a convincing reconstruction of the historical emergence of
modern art and its claim to autonomy, “l’art pour l’art”, but also an empirically based theoretical and
methodological tool-box for the analysis of the structures, rules and functions of art. The author worked
closely with Bourdieu for almost twenty years and, together with Stephan Egger, published his “collected
writings” at the Suhrkamp publishing firm, including three volumes on art and culture (see bibliogra-
phy) in which the artistic field is illuminated with inspiring theoretical perspectives. My own empirical
research, from which the findings collected here derive, builds specifically on this work and attempts to
show its fruitfulness for the analysis of the contemporary metamorphoses of the art world.
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and the market for symbolic goods in particular prove to be institutions in which eco-
nomic activities are fundamentally embedded in networks and are shaped in each case
by specific cultural and organizational arrangements. These socio-historically engen-
dered arrangements with each of their specific written and unwritten sets of rules sub-
stantially co-determine the processes of value and price formation. This applies especial-
ly to the art market in which singular goods without a material value in use are traded,
as in this case the naturally manifested uncertainty of the pricing requires a social
construction of plausible consensuses based on trustworthy and apparently credible
references, even though the consensus is often enough only a fiction.6 The greater part of
the contemporary trade in art actually takes place beyond, or rather “beneath”, the price
wars staged by the global players and hyped up by the media, and it involves the great
mass of “modest” actors in the primary market and the lower segment of the secondary
market for works of art, which has little attention capital. In our interviews with the
actors some unwritten rules for dealing with the pricing of works of art were mentioned
in various ways, for example:

There are no price tags on the works. A gallerist from Zürich: “I don’t want my gallery
to look like a supermarket, where the focus is on the prices. I want to represent and
mediate the art.” This rule points to the fundamental ambivalence in regard to the
commercialization of untradeable goods and the conventions involved in their denial or
euphemization. It is not followed without exception, as for example demonstrated by a
statement by the director of Art Basel:

“This is dealt with in many different ways. In the case of the editions one often sees
prices and it says fifth of twenty [copies] or the like and then the price is often given.
In many contexts there is no price at all. Years ago we introduced these yellow dots
in order to encourage the gallerists to tag the things for under 5000 with yellow dots.
Simply to counter the accusation that there is nothing there that one can afford.
That didn’t work so badly for quite a while, but in the meantime the gallerists are no
longer so keen on doing it; they don’t want to emphasize it.”

Her press officer explained that this technique was meant to demonstrate that even
“dentists from the Canton of Basel” are totally welcome at the fair.

The works of one and the same artist have a price which is independent of supply and
demand and even of the quality of the works; it is determined by the size of the pictures.
A Swiss gallerist explains this as follows: “If the pictures are of the same size the price

6 Matthew J. Salganik, and Duncan J. Watts, Social Influence. The Puzzling Nature of Success in Cultural
Markets, in Peter Hedström and Peter Bearman, eds., The Oxford Handbook of Analytical Sociology, (Ox-
ford/New York: Oxford University Press, 2009), 315-341; Marc Keuschnigg, Konformität durch Herden-
verhalten. Theorie und Empirie zur Entstehung von Bestsellern, in Kölner Zeitschrift für Soziologie und
Sozialpsychologie 64/1 (2012), 1-36.

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should also be approximately the same. I control that so to speak. But it is actually the
case that there is a factor. One takes length x width, that gives a surface area that one can
multiply with a corresponding coefficient.” An exception is not even made for the “fa-
vourite works” of the artist.

The prices are fixed. There are no deductions or special offers. This norm is usually
tacitly observed by the market actors
with “savoir vivre”. If not sanctions of a
special kind are imposed, as is illustrated
here by a gallerist.

“There is a classical example in Austria,

a big collector with a museum of his own
who acts in exactly the same way when
he is buying art as he acts in the field in
which he earns his money. The entire
Fig. 2. Secure Values. Art Basel, 18 June 2014. collection only consists of third-rate and
© Thomas Mazzurana fourth-rate works, but he has a museum,
a huge thing, because the first question
when the guy comes is always about a discount, he wants 30% discount. It’s OK, so
he gets the slow-selling stock. That’s really true in his case, honestly, what he’s got
in his museum are shelf-warmers. No gallerist in the world sells to somebody who
says, I get 30% off the top quality because you can sell to somebody else anyway...”

Institutional collections are an exception to this rule, as they are usually granted special
terms. In this instance, gains accruing from the consecration are often more than offset
by substantial price reductions, as the interviewees have confirmed a number of times.

The prices of works of art do not fall. The director of a big German private museum, for
example, told us:

“During the peak in 2006/2007 the auction catalog we received was definitely three
times as thick. The people were all afraid that nothing would be sold at the auction.
As soon as a work can’t be sold at the auction it is done for... In principle you can
forget it for a while. It can be said for certain that the main dealer of an artist is
interested in supporting the price of his artist, and says: O.K if no-one buys it, then
I’ll buy it at an auction, take it into my stocks and sell it again in two or three years’
time as his main dealer. He may even sell it a week later and perhaps make a profit
of 100,000 dollars. That happens, I think, and theres nothing bad about it. Everyone
wants his market to be supported. That’s it.”

Other art market insiders note the defensive strategy of the sellers at auctions in such
cases – the work is bought at auction in order to avoid the risk that failure on the market
leads to a diminished reputation of the artist, or rubs off onto other artists whose works
they possess or represent. The prices of artworks only ever increase step by step with the

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increased visibility of the artist (awards, exhibitions, publications). All of those ques-
tioned emphasized that “consistency” is essential for the price level.

The return on sales is fairly divided between the artist and the gallerist on a 50:50 basis,
a rule of thumb often based only on an oral gentleman’s agreement. Our dialogue part-
ners regularly reported conflicts. Here, for example, is the experience of a Zurich galler-
ist: “If an artist moves from anonymity to prominence because he has been discovered,
it often goes to his head. Then he says: No. Why should I give a gallerist 50% of the price,
as I have been confirmed? I somehow began with pictures for 2000 francs, big ones, and
now I am getting 40,000 for the same picture.”

Gut feelings and experiential values: pricing on the primary

market
The predominantly high-price and highly visible art exhibited at Art Basel, FIAC or Frieze
is, after all, only a small part of the sum total of art works offered on the art markets of
the world. The average price in the sales of auctions and galleries amounts to less than
3000 euros, according to the owner of one of the biggest German auction houses. “The
social group which sustains the galleries worldwide is the classical educated middle
class. You and me. That’s who they live on.” While auction houses often set their esti-
mates with the help of databases or with pro forma recourse to a catalogue of criteria
from art history’s toolbox, they frequently depend on intuition, approximate values
derived from long experience, and gut feeling, as explained by an employee of one of the
two global auction houses when asked:

“But the criteria you have just mentioned, landscape etc., naturally apply much
more to quite traditional painting, but in the case of abstract contemporary art there
is no representationalism. How do you deal with that?”
“Yes, it’s somehow difficult to explain. I also think so, when works of art are being
assessed. I don’t look so exactly at these points. It’s just a feeling that one somehow
develops.”
“Okay. Do you have the feeling today, when you do that, that you are usually exactly
right?”
“I believe so. And if necessary one can... I mean there are databases like Artnet,
where one can enter the reputation of the artist, the year, and make comparisons.
What I mean is that when we have an artist on the auction market for the first time
we compare with gallery prices.”

Another member of an auction house in Munich defines the price estimate as follows:
“The estimated price results from the following factors: current price on the market in
general and of the artist, period of the artist, i.e. influence of trends, reputation, condi-
tion.” And where a work already has a prior record - a globally operating gallerist says:
“I want to know how it did on the market” - the pricing provides an orientation. If one
wishes to furnish a priceless good with a price on the primary market, an entire range
of possible benchmarks is available. Among the “hard data” to be taken into account we

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find first of all the material value and the time invested in the product. But it is not as
simple as that. What is inestimable in art lies concealed behind the usual calculations
for the world of commodities. Let us listen to the voice of one of the artists we inter-
viewed:

“How is the price for your, well, for the works made up? For the individual paintings?”

“Well I went along with the galleries, of course. When I was there. And I somehow
took advice. And now, when I make an exhibition without a gallery, I also have
these lists from earlier. And then I can make a rough estimate. Or I can say that
I’m now doing something that involves an incredible amount of work or something
like that. You can put it like that if you now compare the painting. For example, if I
have worked six to eight hours a day for 14 days on a painting. Then it is possible to
roughly work out the hourly rate. And that is laughable. And then comes the mate-
rial. And then my ideas. Nobody pays for them. I know that someone who puts the
question works it out. Ah, so long? Then he has an hourly wage of so and so much.
That’s the way they work it out isn’t it? That’s absolutely laughable.”

Like many of the artists we interviewed this one scarcely “gets his money’s worth” when
he offsets the time, material and effort invested against the return on the sale in rela-
tionship, and quite rightly to him this seems “laughable”. Before he was left to his own
devices in dealing with the question of pricing, he depended on the advice and judgment
of his gallerist, who in his view had better market experience. Later he took list prices
which were established earlier as a guide, following the principle of estimates already
tried and tested on the market. Putting a form of economic pragmatism in a nutshell, this
can be summed up as: “What proved right yesterday can’t be completely wrong today”.

In answer to our question “How is the price of a work of art made up, for example the
price of one of your sculptures?”, an artist colleague from Zurich answered:

“Well, it’s based on experience. That’s what most people would tell you. In the end
the pricing of a Picasso is also a value based on experience. One takes a look at the
phase of Picasso’s production the work comes from and where it has been exhibited.
The pricing certainly didn’t come out of the blue. It depends on whether it is a single
piece and what the production costs are. In the case of unknown artists like me the
production costs have often increased threefold. That would be a value. But that
doesn’t mean that as an artist one should drive the price of production as high as
possible; the prices must somehow remain reasonable. Normally in my case no-one
buys a work costing over 15,000 to 16,000 francs.”

In this case of an art genre involving high production costs the material expense for
the creation of the work seems to provide a basis for a rule of thumb and a benchmark,
whereby the inherent logic is scarcely devoid of arbitrariness and resembles a value
based on experience deriving from a traditional collective gut decision. The members of
a Swiss art foundry made a similar report. In the case of commissioned work the sum

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available was divided into three parts for the artist, the handicraft and the gallerist. But
this debatable rule of thumb is still better than no rule at all when seeking orientation in
a totally anomic decision situation. It does at least justify an arbitrary act through re-
course to a practice with a traditional basis in the artistic milieu of the actors.

This recurrent logic, manifested in a path dependency of pricing, is usually not expressed
as a soliloquy of the producer, but as a negotiating process in a dialogue with the gallerist
professionally involved in marketing works of art.

In answer to our question: “How does the price of a work of art come about? Does the
artist have a great influence on it?”, a Swiss gallerist replied:

“Yes, exactly, it is the decision of the artist. We only discuss together when two
paintings are competing with one another. But Swiss artists who feel they are great
artists but are by no means great partly have horrific prices. But that is another
story. These people overestimate themselves by far. But others who are really good
have quite normal prices.”

His colleague from Hamburg also relates from practical experience that he always leaves
the first word on the setting of the price to the artist, but then must apply the reality
principle on account of his greater experience and market knowledge.

“Ultimately the price is worked out together with the artist; it is the artist who
finally contributes to the decision. And all well and good, but of course if an artist
says 20,000 euros and I think that will only sell for 3000 euros and the artists insists
on his position, then I must of course say in doubtful cases that I find the work good
but I can’t imagine that he can sell it for that price. And then we have to separate.
That can happen. But ultimately one must arrive at a price level that is realistic and
has a chance of generating demand.”

The invisible hand of the art market

An even greater conundrum is the question of finding the right standard for pricing in
the age of globalization, in which newcomers from emerging (art) markets are confront-
ed with practices for the assessment of art unknown to them, as a gallerist from Mexico
eloquently points out:

“We were at the art fair, the FIAC, and I was absolutely astonished by the prices
they were asking for everything, like I go, I went back to Mexico and I say, I have to
triple my prices if I want to be like this, you know. It is, it is amazing, because there
is, there is this sense that you have to sort of higher your prices, I mean, an artist
starts at 5000 and within 3 years he can be up to 100,000. It is a bit absurd. They are
young, they have their whole life to produce, they are in the making, but if you are
not up to such, you know, to a certain level of prices, you are not considered, you are

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not considered. And for us that is very difficult, because artists live in Mexico and
we do have a local market, and I cannot just jump, you know, and say, you know,
now it is 100,000 dollars. It is not so costly to produce, it is not, the artists do not
actually need that amount of money, you know, it is not a question of, it is, it, it has
become sort of a competition for higher prices. And I find that a bit, it is dangerous
and, and it is also a bit absurd to my, my point of view. But it is the game. It is the
game. And, and it is difficult to keep up with that, if you are not one of the main
players.”

Pricing in the field of art presumes not just knowledge of the unwritten and often
tabooed rules, but also an intuitive feeling for the game and the accompanying strategies.
These are all the more effective when they are available spontaneously and as a mat-
ter-of-fact through an ingrained professional habitus founded on years of experience,
congealed into pre- or unconscious dispositions. Like many of the other actors from the
emergent art markets we interviewed, our young Mexican gallerist must find her bear-
ings in regard to some of the paradoxes of the art world such as the “upside down world”
of a booming art market which she emphasizes, in which the price itself is the guarantee
of quality and modesty is a virtue, but good progress is possible without it.

And how does the buyer see the works of art? Listen to the answer to our question by
one of the many collectors we interviewed: “How do prices come about? Is there any
logic behind it?”

“I’d like to know the answer to that

question myself (laughs). I really
don’t understand it. I always try
to find something which isn’t in
fashion at the moment. I bought an
X for 300,000 at the time. It’s now
worth 1.5 million euros. But I didn’t
buy it because it was expensive, but
Fig. 3. Exit through the gift shop. Art Basel, 18 June because nobody else wanted it. I also
2014. © Thomas Mazzurana bought a woodcut by Y. I believe it
was for 2000 euros. Then someone
made an exhibition in New York and now these woodcuts are worth 36.000 euros.
I’ve bought ten of them, so I can follow it quite precisely. I always do it differently. I
want to find the ones that are not so expensive. That’s what all real collectors do. I
like to follow young artists, quite particular ones. One can follow them over 5 to 10
years. Then one sees what becomes of them.”

Clearly, the buyer also makes gut decisions. In more decorous terms, in our interviews
with the collectors we kept encountering several aspects, such as the aesthetic gaze (‘the
“eye”’) and connoisseurship, resulting in successful personal practice as a collector on

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the basis of economic returns, and the expression of collectors’ pride in view of the in-
creased market value of one’s own inherently so inestimable values.

This pride in the possession of priceless goods measured by economic standards is will-
ingly expressed in terms of probability theory. The same argument is applied in the cer-
tainly more frequent case of the “losers” in a world of “the winner takes all” at the stock
exchange for symbolic capital. However, a Dutch art advisor tells us:

“Because you see, now after a period of ten years of buying young art, you see now
that a lot of people sell off their collection and it doesn’t make them big money. If
you buy art with your ears you will never get really rich, I think, unless you spend
enormous money and try to make a market yourself. But art and the young art
market is manipulated by people and by famous players. They know how to in-
tervene and place things; things you would never understand. I know there is an
artist, he is now collected by Pinault in France, and these Pinaults, I know, you have
to do a fact checking because one of them is also owner of Christie’s. Pinault buys
art from a young artist, he buys fifteen pieces and one of this fifteen he puts very
strategically in an important auction at Christie’s. He asks a friend to ... bid on it. He
says: I will give you the money back but make sure it will be a record. This young art
is from 10,000 Euro. It makes 200,000 Euro. Nobody understands in the art world.
Everybody who is in there and is a regular follower knows that it is a scam but other
people say: Hey, you see, the guy, this, I could have bought this last year for 10,000
and it is now 200,000 at the auction. They all go on this artist and then it is a self-ful-
filling prophecy because people want it and they start.”

One is tempted to attribute a certain plausibility to the frequently expressed view of our
interviewees, coming from all levels of the art world and all corners of the world, that
the question of prices is anything but transparent in the art market and is even influ-
enced by obscure manipulations, although it could of course simply be one of the many
myths and legends which are so numerous and circulate so colorfully in the field of art.

But if there is eloquent silence on the part of actors with bad investments, what moti-
vates them to play an active part in this risky game with so many unknown variables?
Are these not people who, as homo oeconomicus, have often acquired substantial for-
tunes on the free market, adopting purposeful and profit-oriented strategies? Let us hear
our art advisor again, who has often assisted us as an ethnographic informant from this
alien culture and attempts to explain this paradox in what could seem an equally para-
doxical fashion:

“A lot of people have tried to describe the art market but it is a bit like art itself:
They try to ... whatever – the art market likes a certain amount of mystique and
mystery. It is important. Especially, I mean, it is one of the main attractions for big
clients. I mean if you have people who made their own fortune that are able to buy
on this fair, if they are self-made men for example, they pretend to know a lot of the
world. They have made a fortune, so they have succeeded in something in life, and

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from a psychological point of view you often see that these people have got a kind
of impression that because they once succeeded in something, they have knowledge
about a lot, which is not true but it is a feeling they have. But in the art world, all
this feeling is immediately gone because they feel insecure. And insecurity is ... in
a way, it is part of the reason why they are there; they cannot grasp it. It is interest-
ing. It is also, for example, even somebody who is extremely rich. He comes here
and he wants a painting and it is for sale, because you can still buy it, you are at the
opening, you are in the first ten minutes, you go to the gallery, you see this painting
and it is under a 1.000 euro, then you want to buy it and they say: No. We are not
going to sell it to you because we don’t know you. For somebody who is very rich
and is surrounded by people who say “Yes” and only “Yes” to him, it is very, very
frustrating, strange, ungraspable.”

The social order of an atypical market

It is worth inspecting the mechanisms of the art market which operate in a very subtle
way virtually beneath or before the actual purchasing event. These are by no means
atypical marginal phenomena, but thoroughly typical practices of an atypical market
which continues to display striking remnants of earlier guild structures based on social
closure and exclusion:

“It is a fact that coveted art nowadays isn’t sold, it is allotted. You have to be a part of
the system to get your allocation. And that is how certain prices in auctions come about.
People then buy there who don’t get one. They then fight one another at the auction.”
This is said by a Swiss art collector who later in the interview justifies this exclusion
practice with the remark: “A person who wants to buy culture should also have culture”.
Art as a commodity that “money alone cannot buy”? From the point of view of the galler-
ist there are further good arguments for pursuing a selective strategy when entering into
a business relationship. The owner of a well-known London gallery made the following
statement on the practice of distinguishing between legitimate and illegitimate partici-
pants in art markets:

“Do you sometimes refuse selling to somebody who comes up to you?” “Sometimes,
yes. Because often primary market prices are much lower than secondary market
prices, and it’s quite clear that some collectors are buying purely for speculative
reasons. There’s no need to sell to those collectors.” “And you tell them that openly?
or you just say it’s already sold or...?” “There are ways of being polite, discreet about
it, and saying: unfortunately this work is only available to the museum, or what
have you; so it doesn’t have to...”

Whereas the typical market is “the most impersonal relationship of practical life into
which humans can enter with one another” and “its participants do not look towards

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the persons of each other but only to the commodity”,7 in the art market the reputation
of the buyer is of the greatest significance. It has a bearing on many aspects, starting with
the client’s solvency, creditworthiness and the gallerist’s expertise and trustworthiness,
as well as the client’s motives for buying art and his way of dealing with his acquisitions.
The gallerist has to gauge the risk of seeing a recently sold work on offer at auction for a
considerably higher price, or in the worst case even remain unsold, resulting in a tar-
nished reputation on the market. Many collectors proudly report a long-term relation-
ship of trust with their gallerist and emphasize that they only buy from him or her, even
though it may be more expensive. In view of the highly volatile ups and downs in the
contemporary art market it is easy to understand the importance attributed to a lasting
personal relationship between seller and buyer. Under the special conditions of trade
with singular goods, anonymity is a risk for both sides.

Two sides of the coin: buying art with eyes and ears

In our interviews with all the different groups of actors in the art world one recurrent
key concept could be identified. It appears to be a kind of irreducible core of the collec-
tive illusion of the field: “quality”. Interviewees kept affirming that “true art” always
wins through in the end, that “genuine artists” are recognized and acknowledged
and that the chaff is sifted from the wheat as if by an invisible hand. The relationship
between the chaff and the wheat is almost always described in a thoroughly restrictive
way. In answer to our question how far they shared the opinion of the widely and highly
esteemed grand master of art Ernst Beyeler (collector, dealer and museum founder all
in one) that at best three percent of the highly priced works at the “Olympics of Art”
would “survive” in the long term,8 there was general or even more restrictive agreement.
At the same time, all of the interviewees agreed that the contemporary art market had
gone haywire with regard to prices as a result of the growing presence and marketing
power of buyers motivated by considerations of strategic investment or prestige, a group
usually labeled as “new money”.

Our empirical findings confirm the existence of two different paradigms in an ideal and
typical way. We will now illustrate these in contrast through two professional points of
view.

An art advisor from Paris explains first of all his professional ethical attitude in regard to
the concrete work of art as such and to the “immanent” determination of its quality and
hence its price.

“We always take the work of art as our starting point. We find this object in a private
household, in a salesroom or a dealer’s shop. Our source is the object in itself. One
tries to be as close as possible to the work of art. And in a direct relationship with

7 Max Weber, Economy and Society. An Outline of Interpretive Sociology (Berkeley: University of California
Press, 1978), 636.

8 We owe this reference to the curator of the Beyeler Museum.

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the interested party. If one works for a buyer, one is covered by the buyer. If one
works for a seller one is covered by the seller. We are not commissioned by both
sides, as is the case in auction houses. This is the basis of our freedom. If we were
commisioned by both sides we would no longer be free. We fix our price according
to the criteria of the quality of the work, its rarity, and according to a price which
seems fair to us today. Buyers who do not have a well-informed knowledge of the
world of art will have great difficulty in understanding this approach to the setting
of the price. The price thus set in an endogenous manner, contrary to the exogenous
manner of auction sales, might lead some buyers who lack a certain knowledge to
have doubts about the trust in the value of the work. A speculator loves competi-
tion, that is to say to acquire a good in which five other buyers are interested. That
determines the value as much as the exclusivity of the acquired work. Whereas the
amateur, the collector who has a true desire to create a collection of art will react
in principle to the work as such, without any direct competition. People who go
to the sales search for trophies, for names with listed values. In this way they are
reassured. But they do not have the approach of a collector who wishes to build up
a collection of works which will stand the test of time, which will remain. These are
above all financial instruments. And the buyers are not interested in other advice.
Our analysis of the market does not interest them because it is an analysis which
starts from the work as an object in its own right and its place in the history of art.”

The dichotomy described here distinguishes on the one hand connoisseurship with a
trained eye, appreciation motivated by a genuine
love of art and a resultant pricing of works of art. On
the other hand, there is competitive and prestige-ori-
ented buying behaviour driven by the mechanisms
of the market with an accompanying exogenous
price orientation.

The latter is confirmed by the owner of one of the

biggest German auction houses who outlines the
social psychology of art auctions and their market
dynamics:

“To know that someone else bids - but I have won the
battle. It’s like a beautiful woman. If she is coveted by
many others you are sure you have made the right
choice. And this aspect is important for the people.
Fig. 4. Talking prices. Art Basel, 12 Take, for example, these day sales, and an item is put
June 2013. © Thomas Mazzurana up for sale and the limit is 18,000. Someone wins the
bid at 18,000 without any counter-offer. That is not
satisfying for many people. The absolute experts who
know what they want say: I was lucky; I got it cheaply; nobody else noticed. But for
an unsure buyer it is a satisfaction. He prefers to pay 20,000 and knows: Somebody

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bid against me. Often after the auctions private persons come and ask: Who was my
underbidder?”

Two different perspectives converge in these views and interpretations. Incidentally,

they are repeatedly confirmed by a large number of other voices captured from the art
world. Two coexisting stark and simplistic faces of the art market and its pricing mech-
anisms become apparent. On the one hand there is the image of pure market compe-
tition for singular goods with high prestige value which were regularly referred to as
“trophies” by our diverse dialogue partners. In this view, the pricing of art commodities
seems determined in an ideal-typical manner by purely exogenous market-dynamic and
competition-driven forces. On the other hand, and again in ideal-typical manner, the
idea of a purely endogenous, “art-immanent” reading and appreciation of the intrin-
sic value of a concrete work of art is maintained, independently of its real or potential
market value.

Art is an attitude!

TRANSLATION: JAMES FEARNS

FRANZ SCHULTHEIS HAS BEEN PROFESSOR OF SOCIOLOGY AT THE UNIVERSITY

OF ST. GALLEN SINCE 2007 WHERE HE HEADS THE SEMINAR OF SOCIOLOGY.

Fig. 5. Art Businesss. Art Basel, 12 June 2013. © Thomas

Mazzurana

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