Masters of Modern Art - Essay Example

Masters of Modern Art I. Introduction In the midst of the closing of the long bull market in equity, and currently with declining property values, several global investors are resorting to art, such as paintings, ceramics, sculpture, as well as coins, furniture, stamps, and antiques as a substitute investment. Despite the fact that memories remain well-built of the recession in the art market in the opening of the nineties, the fine art renaissance in the concluding stages of the last century, particularly of Old Masters and Modern arts, indicates that international art markets have evolved and become established, and at present provide more feasible investment opportunities. With a number of financial consultants proposing exposure to the art market increased to 15 per cent of individual assets, the episodic revitalization of interest in art by the business sector, and the extensive accessibility of market information, art become prominent as an appealing combination of entertainment and revenue in otherwise serious, electronic or paper-strewn collections (Miles, 2004, 92). In this paper, I will argue that research grounded on neoclassical analysis of the labour markets of art makers has generated interesting ideas, which at present can be applied as the foundation for further exploration. I personally believe that the progress in this discipline can be achieved through a greater appreciation of the property rights of an artist. Understanding the function of copyright and associated rights guides us to realize that artists confront a difficulty of increasing their incomes over time. Since it is stationary, neoclassical perspective and, generally, minor productivity theory, falls short to completely explain the supply decision of an artist. Undoubtedly, once we acknowledge that artists can profit from the economic value of their services that demands a reassessment of the concern of how to describe artistic services. Therefore, internal and external factors that determine the economic value or prices of arts can be analyzed through a neoclassical analysis and through looking at an actual art auction in London of Oriental art in order to determine the factors that influenced the bidding process. II. Arts Labour Markets Neoclassical perspective of arts labour markets has proved productive. Throughout the last decades, the primary concerns that have been dealt with are whether the arts labour markets function similarly to other labour markets, and whether artists behind an artistic creation earn as much as other employees of similar age and with similar investment in labour capital. In order to provide answers to these concerns, it initially proved essential to examine the operations of arts labour markets in significant detail, gathering data on incomes or earnings, hours of work, classification of work, preparation, working and advertising or marketing practices, and others, since in most societies such data could be not be collected from the official opinion poll or from labour force review sources (Mansfield, 2002). What surfaces from this investigation is that majority of artists provide labour either or both to the arts and/or the non-arts sectors, work longer than regular hours, and earn less in totality than other employees. They have usually embarked on longer schooling and training than other employees yet their income from arts work do not increase with duration of training, experience or even age; this indicates then that human capital theory is not applicable in arts labour markets. One justification for this is that what is required is talent, which is neither fruitfully created through the training procedure nor evaluated through formal paper requirements of the kind recommended by institutions of higher education. A further discovery is that artists’ incomes are very erratic and there is a considerable factor of risk connected to working in the arts (Mansfield, 2002, 107). Neoclassical perspective of arts labour markets has thus encouraged a huge body of research, which has demonstrated that they abide by the principles of other forms of labour markets but they as well have unique characteristics which bring in difficulties in standard labour economics. III. Intellectual Property Rights and Artists In order for a market economy to operate successfully, property rights should be established. Devoid of it there could be no starting point for analyzing price as a measure of value. Copyright law is the part of law most applicable to the intellectual property rights of artists, still other law, such as the resale rights of the producing artists and adjacent rights are also relevant (Chong, 2002). Economists writing on the resale rights of artists all concur that they cut down the price of paintings since the market reduce the prospective payments due to the artist and her inheritors. The examination of copyright is more intricate, though. Current reforms have been initiated in Europe by the EC Directives which standardize the length and coverage of copyright. Standardization is demonstrating far from harmonious in the United Kingdom, even if, because of conflicts between all the associations of artists and the government on how the decrees should be put into effect. The dilemma is how the principle of ‘equitable remuneration’ is to be put into effect and what means are to be established to collect artists’ shares of the recently constructed rights (Chong, 2002, 81). Transaction cost is also included in the factors that determine prices of arts since checking on use of intellectual property rights and collecting royalties is difficult and costly as well. The question then is who should pay for the cost? For instance, the CD; several organizations may be certified to use it such as movie, television, radio, and others, but as well clubs, cafes, telephone companies and others. Apparently, a market reaction is blanket licensing and buy-outs for the reason that if not the costs of monitoring and collection would consume the royalties. Record companies are frequently in the paramount status to carry out the monitoring but they do not possess the privilege to represent the artists nor the interests of artists. Undoubtedly, one would assume that they so change the market that prices are completely misrepresented. In reality, it is usually the collection societies who carry out the monitoring and so a sizeable portion of the cost is shouldered by the artists themselves (Chong, 2002, 81-82). Creative artists such as visual artists, writers, photographers, moviemakers, in general generate something concrete or tangible which is then sold. They should put in time and invest other resources into the production of this work well way beyond its completion, working roughly as entrepreneurs. IV. Artful Dealing of Orientalist Art Arts human capital or labour market and intellectual property rights of artists are merely surfaces of the entire picture of the determinants of price for an artistic creation. The exceptionally influential and deep-seated factors that dictate prices of art emerge in actual auction activities. In 1990 an Orientalist painting created by Jean-Leon Gerome portraying Bathsheba, the attractive wife of Uriah the Hittite, got a hold of $2m the an auction in New York hosted by Sotheby. This became a record price that was unmatched for nearly a decade; the opening of the 1990s being the peak for stunning price’s paid for all kinds of art, the culmination on a global movement which had mustered strength at some point in the 1980s. The acceleration in the art market came to a trembling stop just about that time, and merely started to pace up again at the final stages of the decade. In 1999, once more in New York, but this time Christie’s, View of the Wailing Wall by Gerome reached $2.3m (Highet, 2004, 56). This world record price was attained for a form of art of little prominence and recognized that its title, Orientalism, is interchanged with Oriental art. Then happened the 9/11, and for the United States at least, all ‘Arabian’ became totally outmoded. A tragically low sale of Orientalist art in New York immediately afterwards witnessed four paintings sell out of 20. Though finally the deluge appears to be receding, and at Sotheby’s London in 2003, “Interieur Grec,” once more by one of the masters of the kind, Gerome, attained $1.8m, almost to the world record (Chong, 2002, 114). So what is this forte area of the art world, and is it merely globe-exploring Arabs reminiscent for a lost past who are paying astounding prices? The phrase ‘Orientalist Art’ came from the ‘Salon des Orientalistes’ which took place in Paris in 1899, putting on display work by western, mainly Caucasian artists of their images of Arabia, paintings of North Africa and the Middle East, roughly out of the ordinary, roughly precise. Numerous if these artists from the 19th century developed a genuine esteem and admiration for the places in which they journeyed, for their people and way of life, structural design and sanctuary. A number, prominently the Italians, were real studio travellers, breaking away from the impoverished scorched unpleasantness their more daring and wandering fellow artists so diligently evaded painting (Chong, 2002, 115). The 19th and the 20th centuries witnessed an exceptionally bullish market for Orientalism, which kindled surplus production and a number of second-rate creations. The unavoidable response guaranteed that Orientalism, turned out to be out-of-date and neglected, that several museums and private proprietors put up for sale their collections and prices went down. In the recent decades, a reassessment has come about and fascination in the genre has been reawakened. According to Brian Macdermott of the Mathaf Gallery in London, “The majority of my sales are still to Arab clients.” Macdermott furthered, “Last year the Arab market started off very firm. Then it calmed down with Iraq War; now it’s picking up again. It’s a very seasonal affair, with Arab buyers coming into England for the summer” (Highet, 2004, 58). Even the Senior Director of Sotheby in London, Mark Poltimore has the same observation, “Arab feels very comfortable about coming to London, and often has agents and homes here. London is a better sales arena than anywhere else for this kind of art—there’s an old alliance between the UK and the Middle East. Saudi Arabian clients are still buying, though less since the war in Kuwait and usually through an agent, but Qatar and the Emirate are a much bigger market” (Highet, 2004, 58). Throughout the 1970s and 1980s, a succession of international expositions wherein Orientalism was re-evaluated in broader historical and cultural backdrops, guaranteed its significant review and returned it to public notice. However, it is not merely an Arab dominated field any more. In importance and value, rather than numbers, the expanding enterprise to the American and European markets in the recent decade has challenged that from the Arab region. Rather, astonishingly, there is still some American buying at the time of war in Iraq (Chong, 2002). According to Macdermott, the war did not really completely affect their business, nor has there been any evident hatred in their business on the side of Arabs against Americans and Britons. And following the war, there has actually been a revived interest and activity from Arabs and astonishingly from Americans alike. This phenomenon could be explained by the stabilizing of the stock market, which provided a sense of stability. Macdermott observed that there is a revival of US business at present, amongst private collectors (Highet, 2004). Sophie Money, the head of sales at Christie’s London, informed that the incident of 9/11 did not impact the art market. Everyone become nervous, and that definitely affected all markets. However, the art market has experienced no apparent impact from the war on Iraq. Paintings have been created as expected (Highet, 2004). In London, there is a belief that now is the time to purchase or bid for an Orientalist art. Even though every gallery dealer claims that people should buy an artistic work because they admire it and fancy living with it, they are not unaware of the reality that there is an investment consideration as well. Evaluated with stocks and shares, revenues from investment in Orientalist art have been exceptional in the recent decades (Miles, 2004). Still, art and antiques are one of the most rewarding and profitable investments against declining markets. It appears that the art movement of Orientalism is indeed not at all vanished. For the mainly Arab patrons who purchase this work, it is fascinating that evidence of their legacy which is so abruptly disappearing is celebrated in Orientalism. Perhaps, these greatly agreeable, technically created paintings, which so frequently reverberate with a supple exquisiteness and even rhythm, answer a more profound yearning in the consciousness amid the turbulent of change. V. Conclusions In a technical perspective, the economic value of an art and antique is actually determined on the auction block. If you have been to an auction, you may notice that similar items may be purchased for dissimilar prices at different auctions, yet on the regular, the prices have a tendency to be within a particular range. One should also take into consideration regional differences in the appraisal of arts and antiques, which is I think a more complicated subject matter to discuss at this point. Nevertheless, it is important to take note that one cannot use retail price, for the reason that dealers apply various mark-ups and have different operating costs. Moreover, not every dealer are informed of the value of their entire inventory, and various items are appraised on the basis of cost, either high or low, rather than on the market value of the item. On the other hand, these external factors determining prices of arts and antiques do not completely explain the economic appraisals of artistic creations. Internal factors as well such as the artists’ labour and intellectual property rights are strong determinants of arts and antiques’ prices. However, as argued by some art scholar, human capital does not actually affect arts appraisal if viewed under the standard economic labour market. An artist is unlike other workers or employees who are paid based on the number of work hours, quantity of produce, and so on. Moreover, artists’ earnings do not increase as their education, experience and age increase. Therefore, the neoclassical analysis of arts labour market provides an unconventional view of arts labour market. On the other hand, another internal factor that determines the prices of arts and antiques is intellectual property rights. Specifically, resale rights drastically determine the cutting down of price of paintings and other artistic creations because the market will consequently reduce the future payments to the artists and her successors. The value of artistic creations is directly related to the royalties given to the artist whereas the opposite is true between the value of artistic creations and age, which is some sort of a reversed depreciation concept. As artistic creations become older, as is the case for antiques, the higher the price will be. Moreover, there are other costs associated to the economic appraisal of arts and antiques, such as that explained by transaction cost; these components are the monitoring of intellectual property rights and collecting of royalties which are regarded as operating costs. Meanwhile, in the case of Orientalism, as discussed, these internal and external factors seem to be complicated by international conflicts, such as that of the 9/11 incident. Indeed, appraisal of artistic creations is not strictly confined to the immediate context of the arts market but as well takes into account global scenarios. International conflicts, such as that of US and Iraq, can make or break an arts market. But in the case of Oriental art in London, the trend is different. As attested by Macdermott, Money of Christie and Poltimore of Sotheby, their art business is thriving despite of the hostilities between some of the Western and Middle East nations. It seems that Oriental Art in London is unaffected by international conflicts. Well, this is quite a good indication that regional differences in arts remain detached from international economic and political interests. The business of arts indeed remains an independent sector of both the local and global economy. References Barr, A. H. (1954). Masters of Modern Art. New York: Simon and Schuster. Chong, D. (2002). Arts Management. New York: Routledge. Cohn, S. (2007). The Business of Art: Contracts and the Commissioning Process in Renaissance Italy. The Historian , 390+. DiMaggio, P. J. (1986). Nonprofit Enterprise in the Arts: Studies in Mission and Constraint. New York: Oxford University Press. Fairbanks, A. (1933). Greek Art, the Basis of Later European Art. New York: Longmans, Green and Co. Graefe, J. M. (1908). Modern Art: Being a Contribution to a New System of Aesthetics. New York: G.P. Putnam's Sons. Greene, T. M. (1940). The Arts and the Art of Criticism. 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