I've always had an interest in understanding how different economic, business and social principles apply to different industries and markets, particularly with respect to historical development of markets over time. Lately I've been reading more about the economics of the Art market leading me to an article by Paco Barragan at ARTPULSE Magazine titled "The New Spirit of Collecting: From Macenas to Prescriptor to Speculator". The article focuses on the historic transition of collecting art from a system of patronage and philanthropic support of the arts through to those who Paco describes as while still maintaining some sense of "the rank of trophy predators" now have set a new trend as "aggressive and benefit-seeking sharks" who's only motivation is to drive up the value of their holdings whatever level of undue influence and market manipulation is required.
He goes on to state that this trend is now pushing it's way into the European collector's psyche:
"Furthermore, the traditional European collector, with an extensive knowledge of art history and a profound respect for artists and art professionals, has given way to a new breed of collector inspired by the "American Model," based upon aggressive price negotiation, quick access to board of trustees of museums n order to conveniently push his artists, and in the end, the attainment of significant economic results for his investment in art."
Barragan appears to be describing a bunch of Wall Street speculators gone wild referring to a the neo-capitalism model of art collecting. Next he'll be calling for government intervention and regulation of the Art Market and as much as implies he would be a supporter of such a concept:
"Obviously there's a "new spirit of collecting," which has come along with the "new spirit of capitalism" ... that, I am afraid, not even Obama will be able to regulate."
As with any free market the excess of a few collectors who perhaps cannot see the Art for the Trees will always push the envelop. In my view the mainstream art collector still acquires based upon personal sense of appreciation for the art and artist on their own merit, not based on some fanatical obsession with profit making. Let's not overreact to the actions of a few and in my view if Barragan thinks the art world has not seen likes of obsessive promoters with good connections to ultimate benefactors and collectors for hundreds of years then he's generally naive.
One of the blessings of all the new social media is it's facilitation of sharing and appreciation of art and interactions among artists, fans and collectors alike. It may not be the most profitable means of getting rich as an artist, bit these media are opening up new windows for artists and becoming more of the mainstream (truly neo-capitalist) means for art distribution over time. Perhaps there will be some commoditization effect that impact valuation, but ultimately a greater number of artists will benefit as a whole vs. those playing in the shark tank who rise and fall as most speculative markets do over time. I think we pencil collectors and other art fans on the web need not worry much about these "aggressive benefit seeking sharks" out there.