In October 2008 I spent a week in Hong Kong just as the financial crisis started turning into a global sized tsunami. Now Hong Kong is a town built on and for money - where brand names like Bulgari, Louis Vuitton, Armani are the key defining features of streetscape. This is a place where money is not a means to an end, it is the means that defines and defies the ends. So while in Europe the crisis was being observed in the manner of "well this is probably going to make things a bit complicated and what should we do together to make it better" in Hong Kong there were shrill undertones of a crisis of identity and consciousness.
After all if the most important reason one does anything in life is money, then the financial markets collapse, well so does your raison d'être, or at least that is the logical if not entirely sane conclusion. Not to engage in spoon-feeding however, but conversely if one does something because it is important and meaningful and income/money is an outcome and facilitator, then the financial crisis, any financial fluctuation merely affects how easy it is for you to carry on with your work/life but it does not change its purpose.
This kind of sanity is self-evident to any artist world over and perhaps it is this kind of vocational meaningfulness that makes will need to re-emerge elsewhere. It was certainly missing in HK, where people took pains to explain: " You simply don't understand how important money is to people here!"
Art and art market is the clearest manifestation of why making money the top priority is doomed to failure. It is not merely that greed is not good it is just that it is not a good basis for decision-making or for ascertaining value. Enter, stage left, the failures at the October Sotheby's auction in Hong Kong of slightly too fashionable Chinese art. Over the past couple of years, I have been watching from the sidelines, as numerous Chinese artists started producing stylized and trite work to please a new clientele of investment bankers with interests in the booming Chinese market and have been predicting this outcome for quite a while.
Australia similarly has not been immune from the phenomenon, where it led to a range of exploitative dealer jumping into the booming Aboriginal art market. Prices were driven up through acquisitions by people with little understanding (let's not be too hard on investment bankers but still) and on the basis of speculative interest rather than merit. Consequently the drop in the market was less of a shock or distress but rather a relief and with a sense of vindication in one's faith that merit and long-term vision do prevail in the end.
So what do art collectors need to consider in the current climate? As usual - don't believe the hype or buy into the panic. The upside of the downturn is that if one aims at merit and value one will find bargains in the current auctions, although we predict that proven quality works will not be significantly affected by the downturn. Sotheby's November 2008, auctions are proof. While the absence of hype has had a visible impact, with prices down to 2006 levels, works of exceptional quality still attracted top prices. In New York, paintings by Kazimir Malevich and Juan Gris fetched record $60 million and $20 million, while in Melbourne Brett Whiteley's iconic "Balmoral" was sold for $AU990,000 ($90,000 above the estimate of $700-$900,000). In the art world, this probably signifies shifts away from high-risk high fashion artists and towards a more rigorous approach to buying. This will also lead to greater accountability from art advisors and greater need for personal education. This could not make us happier (just ask us about our badly hidden secret guide for the art perplexed "Why Art? or How to become your own art expert"). So as always the word to the wise even when you are confident, it pays to get advice...
Valerie Kabov is a critic, a visionary and educational art consultant. This column is based on materials appearing in Why Art? Valerie's monthly email newsletter. To subscribe to the newsletter write to email@example.com or visit www.renaissanceaic.com.au