As an art consultant, I’ve seen “Meme Art” destroy all logic in the art market. Here’s what we can do about it

During the pandemic, we’ve all watched in fascination as the Reddit WallStreetBets chat room wreaks havoc on the stock market. While these day-traders were making big profits, philosophically, they were also giving the financial establishment the middle finger in an effort to prove that the stock market often has no basis in reality.

A similar dynamic is currently playing out in the art market as seeming coalitions of trend-setters rally behind “meme art”: the often figurative painting of young artists with little background in history. And this has the potential to cause a massive crisis in the creation of value around art.

Let’s describe the 20th century as having, for lack of a better term, a “traditional mode of value creation,” a mode in which critical and aesthetic value is inextricable from financial and investment value.

Understanding how value is generated in the art world is complicated, abstract and can arouse suspicion. With aesthetics, there is sometimes confusion about the merits of a formal innovation that seems like “something a child could do”. Aesthetic value, on the other hand, functions differently from use value, making art an unusual commodity that does not lend itself to clarifying statistical analyses.

Nevertheless, in the traditional mode, the monetary value attributed to a work of art stems from a long process of qualification – a journey of consensus between curators, artists, collectors, critics, art historians, museum directors, associations , etc. agree to disagree with the consensus, but regardless, there are critical benchmarks around which to organize value.

Of course, this system has its flaws: namely, the trained individuals occupying this space were almost entirely, until very recently, white males. There are also entities that monopolize the works of certain artists, exercising control over their markets. And there are valid corrections to be made. But despite these flaws, it’s always been important to understand that you can’t separate aesthetic value from financial value.

Step into the 21st century and the post-pandemic acceleration of information flow, and we are witnessing a dangerous erosion of this symbiotic relationship. This break stems from an emerging and insidious price dynamic: the “new mode of value creation”.

Auctioneer Henry Strong at Phillips’s 20th Century and Contemporary Art sale in London on March 3. Image courtesy Phillips.

In this new paradigm, aesthetics and criticality are supplanted by the aggregation of information used to identify market trends before others for the sole purpose of financial gain. Once the creation of value in art comes solely from a place of profit, we are heading into piecemeal territory. Judgment is no longer in the hands of history or experts but made immediately by the so-called art world influencers whose powers of persuasion are not rooted in training or decades of experience. , but rather in the number of their followers.

In this fan-based economy, art no longer needs to be physically experienced or historically contextualized. In fact, the object itself no longer matters, leaving only an image that signifies potential profit, nothing more. This should be an urgent call for debate. The potential deathblow to a traditional mode of creating value should be of serious concern to anyone who wants to defend the true essence, power and ability of art to inspire, educate, inspire action and remind us that we are human.

Four factors are emboldening this crisis: the primacy of auctions, the collapse of the evening sale, the expansion of art lending and the emergence of a new form of expertise.

When it comes to auctions, the art market suddenly only refers to this week’s auction results, ignoring primary and secondary sales, let alone looking at the indirect factors that led to the numbers. reported auctions.

Then there is the evening sale breakdown. What was once a curated selection of historically significant works of art has disintegrated into an evening-sale-for-the-crap-we-know-we-can-enjoy-on-this-week – a mish- hodgepodge of collectibles, NFT, a T-Rex, and a few sneakers mixed in with a large amount of recently made, unqualified artwork and maybe a few masterpieces that deserve sale status of the evening.

Meanwhile, art lending has exploded with the growth of the art bank, which claims to make the art market transparent for the bank’s wealthy clients. Of course, transparency here does not mean revealing the actual machinations behind an art sale or justifying the qualitative assessment of a particular work – rather it is a banking code for a calculable value based on history. of the market (i.e. auctions) as introduced and spat out. grids, graphs and forecasts. (The idea of ​​a market forecast for an artist is hilarious if you truly understand the incredible nuances not just in their oeuvre, but in the lifespan of specific works.)

A member of the audit committee at work at TEFAF Maastricht 2019. Photo by Loraine Bodewes courtesy of TEFAF Maastricht.

A member of the audit committee at work at TEFAF Maastricht 2019. Photo by Loraine Bodewes courtesy of TEFAF Maastricht.

Finally, this brings us to my favorite subject: the necessary appraisals for loans. The fair market value (FMV) of a work is no longer occasionally assessed in order to properly ensure its collection. Instead, there’s a new “real-time” rating that only takes into account recent auction history.

This, unbeknownst to most collectors, leaves most of what they own much less valuable than what a typical FMV appraisal would list. I’ve seen appraisals done for a bank that would take a new primary market work by a top notch artist with more critical cataloging than most and cut the purchase price in half simply because their work isn’t currently sold at auction (even though it sells to major non-speculative collectors in the primary market).

The idea of ​​real-time assessments is worthy of an orange alert. This suggests that after each auction, your artwork must be re-quantified, leaving many actual artworks unable to generate a loan. And while true collectors usually buy for love, they certainly care whether their million-dollar piece of art is suddenly worth $500,000. All of this is reinforced by the many tech start-ups developing apps that encourage you to constantly check the investment value of your collection. I sat on the advisory board of a fintech startup that insisted on being able to infer this algorithmically in real time – that’s when I quickly backed out of the conversation.

If this erosion of traditional value creation persists, we have big problems on our way. Collectors will no longer feel safe buying real art. Speculation will prevail. The art collection will turn into day trading and gambling. Emerging artists with few critical qualifications, or artists who have potential but are simply too emerging for auction brilliance, will experience price increases that will cause sellouts as well as hyper-exaggerated demand in the primary market. . And price drops, not adjustments, will follow.

Value based on social information doesn’t care about longevity – it only cares about the present moment. And what happens to those who speculate on such works? Is there resale potential for early works by an artist-in-training whose painting costs $25,000 on the primary market and just traded at auction for $3 million? Highly unlikely. It’s reminiscent of the recent debacle in which Jack Dorsey’s first tweet sold for $2.9 million as an NFT in March 2021, then failed to resell even for $1,000 the following year. The only thing that sustained the original sale was noise, and noise doesn’t last.

People walk past a Bored Ape Yacht Club NFT billboard in Times Square on January 25, 2022 in New York City.  (Photo by Noam Galai/Getty Images)

People walk past a Bored Ape Yacht Club NFT billboard in Times Square on January 25, 2022 in New York City. (Photo by Noam Galai/Getty Images)

And now ? Are there solutions? We urgently need to understand the difference between traditional and new modes of value creation and educate people about them. We could publish primary sales, private deals and exhibition histories in the same place where auction prices appear so that a search mechanism takes all the information into account. A Wiki site could exist where vetted individuals post sale prices, or perhaps artists upload price information to the blockchain. Auction houses should refuse to accept works by artists who have not met certain critical criteria, or mix collectibles with fine art. Newspapers and magazines should hire reporters to cover the art itself, not just the auction market. Finally, bank valuations should follow FMV rather than recalibrating after each auction.

Maybe none of these ideas are valid, but something has to give. Art is so much more than the market. We are lucky to work around him, but we better fight for his survival. Otherwise, our reality will start to look much more like the Wolf of Wall Street.

Lisa Schiff is a New York-based art consultant and specialist in contemporary and modern art. She is the founder and president of SFA Advisory, her permanent outpost in Tribeca which now features an ongoing series of exhibits. For more information, visit:

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Christopher S. Washington