During my long - but nevertheless enthralling - summer internship at Sotheby’s, I came across Lord Harry Dalmeny, the Deputy Chairman of the Auction House. I managed to persuade him to give me an interview, which eventually turned into a hugely interesting debate: we talked about the state of the current art market, the place of artists within it, as well as the future of the art world. 

Initially, I wondered who was it that regulates the current art market: was it auction houses, collectors, art dealers or galleries which had this role. Dalmeny explained that the art world varies across the main categories within it. On one hand, there are the decorative and traditional arts where expertise is necessary, and based on reputation: quite often items are bought or sold based on the perceived level of quality of them. Within these markets, there is a uniform agreement on whether something is worth more than another thing. On the other hand, within the world of painting - in particular the region of Old Master and Impressionist paintings - each artist tends to have a specific expert (this expert would be in charge of writing the monograph for their specific artist, and curating exhibitions on them) However, unless the painting had just appeared in exhibition it is unlikely that the auction house or dealers would merely support the attribution to the artist; “we need to make sure that we are comfortable with the provenance so we can tell our clients we are fairly the certain the authenticity is there.” To do this, the owner must send the painting to the heirs of the artist, or the foundation. However, Dalmeny tells me that nowadays, the authentication process itself is an issue. The difference in value between a painting that is by an artist and one that is not, is huge, despite the fact the object stays the same. One often finds that many of the institutes which are in charge of protecting the reputation of the most valuable artists face a lot of legal challenges from owners whose paintings have been proved as not real. As a result, some of these institutes, such as the Warhol Institute, have decided stop issuing authentications; they don’t want to face the legal consequences - they just can’t afford the law suits. Within the auction business, Sotheby’s effectively self-regulates, and does not depend upon any financial services authority .

One of the main reasons for this self regulation is that the art market is not leveraged. He explains that the auction market isn’t like the housing market, for instance: you do not pay extra for paintings, in anticipation of their value going up. Because of that, quite often, art represents real money that people really have. People are buying with cash and selling for cash. Expertise changes everything, especially with emergence of new technologies. In 1968 the RPP, Rembrandt Research Project, led by Professor Ernst van de Wetering and a group of very eminent Dutch scholars, analysed exhaustively all of the Rembrandts, proto-Rembrandts and School of Rembrandts. Using new technology, they looked at the panels which the artist used, and compared the wood to see whether it was of the age of Rembrandt or later. Because of this study, some paintings which had been thought to be later actually turned out to be Rembrandts which had been badly restored in the 19th century.

After explaining how the selling and buying of art works nowadays, I wonder who are the buyers? Who are the people who have the money within this current economic climate? Dalmeny explains, “the art business is our business, but other people’s leisure time” - in general, its people buying because they’re passionate about, or attracted to, something which they would like to own and hang on their wall. Despite this, I cannot but wonder what percentage of buyers actually buy for the geniune artistic love - and who buy for investment purposes. Dalemy says its around 85%: “art does not give you any investment return, it doesn’t give you any income, you don’t get a dividend from the painting. If you buy a million pound painting, you’ve got it, you can put it on your wall, you might have to insure it or store it…”

However, I thought that buyers could re-sell, and gain profit - but Dalmey tells me this is not a certainty: you can’t guarantee profit. You cannot hope to earn a living simply by earning a work of art. Despite this, art provides a good guard against inflation; Dalemy explains, “say the American economy does quite badly and the American dollar goes down, and you own a Picasso. Maybe to the Americans, it will become more expensive because their currency is weak. However, there will be Europeans, Japanese, Chinese, British people who will want the Picasso. So it is not like buying a factory in America. It is there.”

I read in an article in the New York Times last year that, “now the artists’ names are enough to define them as desirable tokens”. In the past twenty years, have we seen the raise of a ‘branded era’ in art? According to Harry Dalmeny, the great difference between an Old Master painting and a contemporary painting is that the former tends not to be signed. Now art is seen as a commodity and brand by many artists; sculptors or photographers quite often take a lot more control over the reproduction and the control of their images. Indeed, many artists earn as much money from reproduction of their paintings as from the sale of the items themselves. Dalemy compares the art market to polo, “I sometimes think that contemporary art collecting is a bit like a sport, like polo. If you are a rich man, and you enjoy polo, you might have a team full of muscly Argentinians who play polo beautifully. And there you are, the rich man, galloping along at the back, playing in the team, and you are part of it, but you have to be able to ride. If you can’t ride, it’s really pointless. If you are a rich art collector, you could be part of that team, part of the herd (la horde en gros), you don’t even need to be able to ride, you just need to be able to sign cheques! And then you can make it quite a big name.”