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The rise and fall and rise again of the contemporary art market

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Abstract

This essay demonstrates how market prices for contemporary art flourished in the late nineteenth century, fell after 1900, and rose again in the 1960s. This discovery stands in contrast to previous twentieth-century art market studies, which have depended on the sales prices achieved by modernist and avant-garde artists. The artists who were financially successful before 1900 have been dismissed as commercial or academic. Arguing for the importance of high-end sales, the paper mostly relies on the primary and secondary premium sales data belonging to the Paris gallery founded by Adolphe Goupil and the New York gallery founded by Michael Knoedler. Using CPI to convert prices over time, premium sales prices for Old Master, Near Contemporary, and Contemporary Art are compared over a ninety-year period, from the 1860s to the end of the 1950s. Among the discoveries yielded by these data is how close prices for contemporary art matched prices for Old Master painting until the very end of the nineteenth century. The data also indicates that many more contemporary artists benefited from high prices during the nineteenth century than later living artists achieved until late in the twentieth century. What appears to have contributed to the rise and fall and rise again of contemporary art prices is the corresponding rise and fall and rise again of interest in contemporary art by superrich collectors. An international market fueled by such collectors appears have been essential in creating high prices for contemporary art.

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Notes

  1. For an important exception see Baetens (2010).

  2. See, for example, Watson (1992). Watson narrative account, which covers much of the material presented in this essay, often obscures the relative successes of living artists in the art market of the late nineteenth and twentieth centuries.

  3. There are striking consistencies between the artists represented in certain British collections and those of their American counterparts. For example, the artists whose paintings are represented in the collection of the American-born, but British citizen Chester Beatty, donated to the National Gallery of Ireland, are also those found in the collection of the New York banker George Seney: Breton, Corot, Couture, Daubigny, Dupré, Fromentin, Gérôme, Mauve, Meissonier, Millet, Troyon, among numerous others. Seney’s collection was auctioned off in 1885 and 1891.

  4. Some have argued that only a top thirty or so living artists benefit from today’s market, but I have seen no statistical evidence to support this claim. The global nature of the contemporary art market ensures that more artists should be benefiting from significant sales than fifty years ago. It is just difficult to establish how many.

  5. Currency exchange rates, indexed against the gold standard, remained remarkably stable until the First World War. After 1914 this paper uses Edvinsson (2016). Edvinnson’s website calculates exchange rates on annual averages instead of day-to-day or monthly variations using as comparative metrics the price of gold, the price of silver, and the cost of labor.

  6. The motivations for art market secrecy are extensively discussed by Velthuis (2005). Many contemporary dealer practices Velthuis describes have a long history. See Baetens (2010).

  7. See https://www.getty.edu/research/tools/provenance/search.html. The online data is available via GitHub: https://github.com/thegetty/provenance-index-csv. The Goupil data set has over 44,000 entries and Knoedler set has over 33,000 entries. Inevitably, the GRI data sets contain numerous duplicates, transcription errors, and errors of interpretation. The edited data that inform the paper’s tables have been posted to the Harvard Dataverse, V1. Jensen, R., 2022, “Goupil Premium Sales,” https://doi.org/10.7910/DVN/JUCOKE and “Knoedler Premium Sales,” https://doi.org/10.7910/DVN/Y9BAZA.

  8. In the economic literature on stardom (Adler 1985; Champarnaud 2014; Rosen, 1981), there appears an implicit assumption that stardom is of modern currency. As this paper demonstrates, art stars were as evident in the mid-nineteenth century as they are today.

  9. Gilded Age American collectors, according to Ott (2008), were motivated to enter the art market “at its highest level of value” to differentiate “themselves from the merely well-off, who had to content themselves with second-tier commodities, like prints, drawings, or domestic paintings, and in less prestigious venues (137).”

  10. Bulletin of the United States Bureau of Labor, 1898, 668 and 673.

  11. The value of the franc declined, however, during this same period against the dollar.

  12. See Carter (1892), who first establishes the fourteen hundred guinea metric to calculate the number of such sales at this price or above since 1885. The Art Journal subsequently used this standard annually to list by artist, painting title, and sales price, the pictures that passed this limit.

  13. On nineteenth-century dealer contracts with artists see Baetens (2020) and Serafini (2016).

  14. Rosen and Zerner (1976) described the function of the highly finished surface [fini] this way: “The function of the fini is ambiguous: it guarantees both the amount of work done and the quality of execution that ought not to show itself: it gives value to an object who physical properties it camouflages (33).”

  15. The benchmarks for each decade are adjusted according to the CPI index using the middle year for each decade for comparison. Similarly, to simplify currency comparisons, in these tables the middle year of each decade is used when translating French francs and English pounds into dollars. However, the First World War de-stabilized the three economies in relation to each other, so post-1914 foreign currencies exchange rates into dollars are calculated annually.

  16. Table 2 was constructed by listing only the artists for whom the dealer records suggest twenty or more direct purchases from the artist or by known intermediaries (gallery agents in other cities, especially the Hague). Thus, the gallery eventually acquired many more paintings by Camille Corot than are reflected in Table 2, because these purchases came on the secondary market.

  17. Durand-Ruel’s orientation toward the auction houses is illustrated by his account of his extremely aggressive purchases at the Khalil-Bey auction in 1868. According to Durand-Ruel (2014), “We bid up, or had our friends bid up, all the paintings and in particular those we had sold, in order to demonstrate at [this] sensational sale that our wonderful school was climbing significantly in value and would soon rise more steeply (57–58).”

  18. See, for example, the way that Durand-Ruel’s business practices are discussed in Patry et al. (2015).

  19. An interesting biography of A.T. Stewart, which includes these price figures, was included in Brockett (1872).

  20. William Clark’s collection was donated to the Corcoran Gallery, which in recent years has been absorbed by the National Gallery of Art. Frick created his own museum, while many of Mellon’s paintings are also now in the National Gallery. Though they were not regular customers of Knoedler’s, Collis and Arabella Huntington were also significant collectors of both Goupil artists and Old Masters.

  21. Quinn to P. Rosenberg dated March 5, 1922, from Quinn’s letterbook, Manuscripts and Archives Division, The New York Public Library. (1921–1922). 1921 August 29-1922 July 26. Retrieved from https://digitalcollections.nypl.org/items/a2465760-d80e-0133-8daa-00505686a51c.

  22. According to an annotated auction catalogue, the Munich dealer Heinrich Tannhäuser bought Les Saltimbanques (National Gallery of Art, Washington, D.C.) for 11,500 fr. ($2,221). The catalogue with hand-written notations listing the sales prices for each work in the auction can be found at https://bibliotheque-numerique.inha.fr/collection/item/21253-collection-de-la-peau-de-l-ours-vente-du-2-mars-1914.

  23. The age of the artist of course also matters, Breton was in his late 40s, early 50s during the decade of the Seventies, while Picasso was in his early thirties at the time of the Peau de l’Ours auction.

  24. Information about the auction’s participants and prices paid were widely followed in contemporary press reports. See “Prince Demidoff and the San Donato Sale,” The Art Amateur, 2 (April 1, 1880): 98–99.

  25. A private sale from another member of the Demidov family to the Art Institute of Chicago created the museum’s formative collection of Old Master painting.

  26. Catalogue deluxe of ancient and modern paintings belonging to the estate of the late Charles T. Yerkes (New York: American Art Association, 1910), in the holdings of the Frick Art Reference Library. The catalogue mysteriously placed Edwin Landseer with the Old Masters and I have counted Thomas Lawrence among nineteenth-century artists since the largest share of his career occurred during the first three decades of the nineteenth century.

  27. Spaenjeers et al. (2015) lists the three top auction sales between the Murillo auction and 1914: £28,250 (Hals, 191); £29,500 (Mantegna, 1912) and £44,000 (Rembrandt, 1913). However, American collectors, buying directly from an owner or through dealer intermediaries, often paid higher than the very highest auction prices for their pictures. Benjamin Altman, for whom the Duveen Brothers purchased his Rembrandt in 1913, paid more than £44,000 in non-auction transactions for Old Master paintings at least nine other times. Henry Frick paid more for some of his pictures at least seven times prior to 1914.

  28. According to Haskell Altman began his collecting career buying American paintings (presumably by living artists) but sold them. He also donated his Barbizon and Barbizon-style paintings to the Metropolitan. These ten paintings he had purchased during the 1890s for about $80,000 in total.

  29. The Metropolitan Museum was able to document the purchase price for 44 of the 60 paintings Altman donated to the museum. This data may be found in the provenances provided by the Met at https://www.metmuseum.org/art/collection. It is likely that Altman purchased the other sixteen paintings near or above the average price he paid for his other Old Master pictures.

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  1. School of Art and Visual Studies, University of Kentucky, Lexington, KY, USA

    Robert Jensen

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Jensen, R. The rise and fall and rise again of the contemporary art market. J Cult Econ 47, 461–488 (2023). https://doi.org/10.1007/s10824-022-09458-3

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