Lee Caplin - The Business of Art: 30th Anniversary Edition

30th Anniversary Edition

by
Lee Caplin

Copyright 2011 Lee Caplin, Evening Sun Press
Smashwords Edition

Smashwords Edition License Notes:
This ebook is licensed for your personal enjoyment only. This ebookmay not be re-sold or given away to other people. If you would liketo share this book with another person, please purchase anadditional copy for each recipient. If youre reading this book anddid not purchase it, or it was not purchased for your use only,then please return to Smashwords.com and purchase your own copy.Thank you for respecting the hard work of this author.

Its About Time (c) Copyright 2012 Ed Ruscha,All rights reserved.
Image used with permission,

Library of Congress Cataloging-in-PublicationData
The business of art / [edited by] Lee Caplin.3rded. p. cm.
Published in cooperation with the National Endowment for theArts. Includes index.
ISBN 0-13-597998-6 (ppc). ISBN 0-7352-0013-0 (p)
1. ArtEconomic aspects. 2. ArtMarketing. I. Caplin, LeeEvan
II. National Endowment for the Arts.
N8600.B875 1998
98-8034 CIP
706. 8dc21

All rights reserved. No part of this book may bereproduced in any form or by any means, without permission inwriting from the author.

This publication is designed to provide accurate andauthoritative information in regard to the subject matter covered.It is sold with the understanding that the publisher is not engagedin rendering legal, accounting, or other professional service. Iflegal advice or other expert assistance is required, the servicesof a competent professional person should be sought.

From the Declaration of Principles jointlyadopted by a Committee of the American Bar Association and aCommittee of Publishers and Associations.

PREFACE TOTHE
THIRD EDITION

In the two decades since The Business of Artwas first conceived, the art world has undergone upheaval andchange. Art, in all its forms, has generally been considered partof the so-called nonprofit world. Ironically, in the aggregate, thearts comprise an almost $40 billion industry, giving rise toapproximately 1.5 million jobs. According to some estimates, themore than 30,000 arts organizations in the United States contributeover $3.5 billion to the federal government in taxes. In terms ofunderwriting the arts, the government actually funds less than 1percentprimarily targeted for administrative and operationalactivities.

Individual visual artists receive virtuallynothing from the charitable activities that characterize thenonprofit world. Perhaps in todays society that does not seemsurprising. The 1980s saw a veritable art boom. By 1989, theinflated Japanese yen had created a bull art market, where evenmediocre artists became millionaires. Art speculators were out infull force. However, by 1991, the public witnessed a true artsrecession: Artworks failed to reach their reserves at auction.Collectors began to feel that they had overpaid for white elephantart pieces that would never again achieve their original value.Dealers became more cautious in adding new artists to theirrosters. Galleries refused to honor their promises to take backartworks if clients became dissatisfied, or wished to upgradetheir collections. Some galleries even demurred in giving their ownartists shows of new work, fearing that the new work would fail tofind the same surefire audience that had made them all wealthy.

Artists who rode the crest of the 1980s, butfearing the worst in the art market, boldly struck forth in theentertainment business, trying to make their way. One wealthy 1980sartist underwrote his own lowbudget movie, hoping for the chance tobecome a Hollywood director. Another made a short-lived appearanceas a Country Western singer on a self-produced album. Still otherslooked to expand their market shares to other mediums such asdance, theater, and even MTV, where they could enhance theircareers by painting sets and costumes, or making minimovies. Aswith all businesses, however, financial results were, and are, adirect reflection of the marketplace. In the case of the super-starartists of the 1980s, the new marketplaces were far from those inwhich they made their reputations. Trying to sell the public on amovie or album made by a famous artist simply made no financialsense. Ultimately the end product had to rise or fall as a resultof a public uninterested in new arrivals whose calling card wasfame in the world of visual arts. Those particular artists wereback to ground zero in their new careers.

In 1996, the art business began to turnaround. Auctions at Christies and Sothebys started attractingcrowds again. There was the sense of theater that characterized theboom market years earliernews cameras awaited the arrival and exitof the glitterati. Outside, street performers regaled the crowds,while inside, black-tie audiences applauded multimillion dollarsales prices for modern masters such as Willem de Kooning, RoyLichtenstein, and Andy Warhol. But people were definitely hedgingtheir bets.

Banks, for their part, were wary ofextending financing to even their good art-business customers.Thus, money some dealers had advanced to artists to help with cashflow or to create new bodies of work was in short supply. Dealersand auction houses were forced to put their heads together to formpublic alliances that hitherto had been implied or covert. BothChristies and Sothebys diversified by purchasing large holdingsin private gallery operations, breathing new life into strugglingart boutiques. Some disparate dealers openly shared representationsof large collections or artists estates, thereby redefining theirown marketplaces and, by sharing customer bases as well asmarketing costs, expanding the number of potential buyers.

At the same time, potential conflicts ofinterest threatened the art buying public with the aestheticequivalent of price fixing. After all, what is art worth? Inbusiness, fair prices are those numbers upon which willing buyersand sellers agree. But in art, value often is that which a trustedart advisor or consultant supports. Even among regulated governmentactivities auction and gallery prices set important insurance andIRS standards for valuation. One piece of art seen in the contextof another, perhaps superior, piece may fetch a price far higherthan the same piece of art seen out of that context. By developingexhibitions, catalogues raisonne, and carefully choreographedreviews, those who sell art in galleries or at auction can positionartwork for sale at higher prices. These issues are discussed inthe chapters devoted to art at auction and the politics of art,among others.

But for those artists who are driven totheir studios by the passion of producing art, regardless of whathappens, the goings and comings of the New York or world art marketmean very little. It is to these individuals that this volume isdedicated.

Surveys in recent years estimate that over300,000 people in the United States consider themselves artists.The figures go startlingly higher worldwide. These artists rangefrom students and housewives/husbands to weekend painters todedicated practitioners who grapple with outside jobs to supporttheir passion for making art. Picasso once opined that everyone isborn an artist; what is it about life, he asked, that allows someto stay artists and forces others to forget the joy they once knewas creators. Part of what happens, we might answer, is that peopleage and begin to face the realities of social and financialresponsibility. Sylvia Stone, the sculptor, once remarked that lifefor an artist is a long time: Even if you draw or paint or sculptfor a quarter of a century, what are you going to do with all therest of your years?