You may have noticed a few ludicrous art sales happening lately, what with this Andy Warhol painting going for a billion rand, and this Francis Bacon piece which was sold for a billion and a half. But how is this value created? Where does it come from and how does it rise so exponentially? Perhaps the criminal underworld is to blame.
The world of art has never been too far removed from the world of crime. Just last week a wealthy art-family heir, Helly Nahmad, pleaded guilty on charges of racketeering, money laundering, extortion and gambling in concert with a mob of Russian gangsters.
It is quite conceivable that art, second only to drug trafficking, is the world’s most lucrative dubious business. Sometimes, one can’t help but draw links between these two cash-rich enterprises.
Art is not always about art, but about finance.
Many of the big-dogs who hide behind the telephone at auctions are men whose main interest is not art, or the art market, but financial markets. This includes the likes of Dan Loeb, the billionaire who buys stakes in companies and, using his arsenal of sneaky business strategies, ups the price and then sells his share.
Which is what investors are doing with art, essentially.
One of the world’s biggest art dealers, Steven Cohen, also pleaded guilty last week in the largest insider-trading case of all time. Cohen had to personally pay a fine of R18 billion – which was why he sold a lot of his stuff at a recent auction, where R880 million worth of his art was sold.
See? Right there. We have a case where the sale and/or price of art was determined not by the beauty of the piece, not by the the vision of the artist, but by a crime.
[Source : USA Today]
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