One Class, One Day: Art in the Marketplace

Class by class, lecture by lecture, question asked by question answered, an education is built. This is one of a series of visits to one class, on one day, in search of those building blocks at BU.

“What we’re going to talk about tonight,” says Dan Ranalli, “is the art market.”

B-36, a small lecture hall with stadium seating in the College of Arts & Sciences basement is the Wednesday evening locus for 37 grad students, most of them art history majors, most of those hoping a master’s degree will help them land a job managing an arts council or some other nonprofit. Six laptops are open, but the rest take notes the old-fashioned way, pens poised, notebooks open, margins available for artistic doodles.

“Up and down, up and down, up and down, up and down,” intones the Metropolitan College associate professor and director of the arts administration program. “That’s the art market over the past 20, 30, 40 years.”

But top line — way up:

In 1961, the most expensive work of art sold for $2.3 million.

In 1989, the most expensive work of art sold for $53.9 million.

In 2006, the most expensive work of art sold for $135 million, and it wasn’t a Picasso or a Van Gogh. It was Portrait of Adele Bloch-Bauer I, by Gustav Klimt, an Austrian symbolist.

“Let’s put that in context,” says Ranalli. “The entire annual budget of the National Endowment for the Arts in 2006 was just about identical to the price of that one painting, a little over $135 million.”

These are fun facts, but they don’t reflect the deeper realities of the art market, which has taken a plunge in tandem with the broader economy. “When the stock market gets sick,” Ranalli says, “the art market gets pneumonia.”

But first, a quick question. “How many of you have ever collected anything?” he asks. “Come on, admit it.”

“Stickers,” one student calls.

“Baseball cards.”

“Rocks.”

“Seashells.”

“Postcards.”

“Hard Rock Café pins.”

“Soviet air stamps.”

“How about art?” Ranalli asks. “Anybody?”

Quiet reigns.

Ranalli uses PowerPoint to list the biggest art collectors in the world, tracing how their locations and occupations mimic the changing world economy — the newest arrivals on the list are coming from China and Russia (not India, interestingly enough). Then he steers toward the strange ways that art sells, starting with auction houses such as Sotheby’s. They move lots, sometimes fetching high prices for single pieces and always working on hefty, guaranteed commissions, which helps explain why Sotheby’s has been around since 1744. Within the past month, a painting by Jean-Michel Basquiat, an artist tied to street culture, graffiti, and Haitian influences, who died in his 20s, sold for $1.593 million at Sotheby’s in London.

“Here’s an important point of clarification,” says Ranalli. “The artist isn’t getting this money. This is resale.”

In other creative sectors, like songwriting and performing, the artist benefits at least a little every time work is resold. Royalties generate revenue streams. In the visual sector, “resale agreements” have been tried by a few powerful artists, but have yet to become standard.

“So the notion is, how do you create income streams for artists so they can make a living?” Ranalli asks. The big figures he’s thrown around so far, he says, are nothing but “a tiny little point on the top of this arts pyramid. It’s really hard for artists to make a middle-class living. Very few do.”

He moves to a discussion of art galleries, the historic backbone of the market. Galleries show the work of artists and usually take half of the sale price. Realtors take 6 percent for selling property, he says; even auction houses make less than 20 percent. “So why do art galleries take 50 percent?” he asks. “Can somebody explain that to me?”

There are explanations. Galleries have staff and brick and mortar, they advertise, they bring collectors to the table, they insure and ship. They also create credibility, act as filters, sift through and interpret the market. All that said, Ranalli continues, “90 percent of all galleries fail within five years. So why haven’t we come up with a better model?”

Is that new model the Internet? “On eBay, at any point in time, there are 3,000 works of art for sale,” he says. “Perhaps galleries will not exist as the primary art market in 5 to 10 years.”

Some students are skeptical. How will people buy art without actually seeing it, without the tactile sense of brush strokes and true size, without basking in the creative entity as the artist accomplished it?

“I agree,” says Ranalli, “nothing ever will replace the eyes-on experience. But suppose you already know my work? And remember, a gallery is taking 50 percent.

“I predict the time’s coming when virtual art will be sold and displayed on a 50-inch screen in your living room. Am I eager for that? No. But I say it’ll happen.”

“Ten years from now,” he says, “somebody will do something none of us have thought of. So as an arts administrator, you have to be ready to take that on. Somebody needs to replace a largely ineffectual system. I just don’t know what that replacement is.”

He points to another phenomenon in the art market, the growth of “fairs” like Art Basel, which gather and promote art from around the world in short-term venues. They’ve had a huge impact on the market, but in Ranalli’s opinion they have evolved into impersonal, expensive, and unsatisfying vehicles.

A student interrupts with a historical question: do we know where the first art galleries, as we think of them, emerged?

“An art supply store in New York City decided to put paintings in the windows of the shop in the late 1800s,” Ranalli answers. So this form of selling retail art is recent and by no means permanent.

He looks at his watch and sees the class is near its end. “I will say this,” he concludes. “In my opinion, the market, you know, the economic market, is never the best filter for quality.” Market forces are not rooted in quality — all kinds of factors play in and celebrate less deserving work of every kind, from art to cars to food. In the process, the best can be ignored or squashed, he argues. Perhaps there should be some kind of test, measure, criteria, for what enters the common space as art, he muses, for who can call themselves artists.

Some students agree, some bridle. Clearly Ranalli understands the inherent elitism in his musings, that he is being a provocateur.

“But what’s the alternative to the free market?” asks a student as they reach the final minute of class.

“I really don’t know,” Ranalli says. “Let’s make one. We’ve been talking about evolutions this evening, but in truth, I’m interested in a revolution.”

Some students laugh, some are bemused, as a lecture on the art market ends with a call for its wholesale uprooting.

Seth Rolbein can be reached at srolbein@bu.edu.

This Series

Nuclear Governance Class Offers Context to Current Headlines

Also in

One Class, One Day

• November 30, 2018

  Breaking Bad Director Gives CAS Class the Inside Dope

• October 31, 2018

  Trump and the Press: We’ve Been Here Before

• August 3, 2018

  A Scholarly Take on Superheroes

Series home