Shane Ferro
Art market news and commentary by the staff of Art+Auction

MARKET WATCH: Art market news and commentary by the staff of Art+Auction

Columbia Professor Warns There Is No Stopping Fine Art’s Collision With High Finance

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Are we on a doomed path toward the total securitization of the art market? Columbia University religion professor Mark Taylor suggests that might be the case. He has been slowly unfolding his treatise on art and finance in Bloomberg’s opinion section. So far only two of five are available (one and two) but the super short gist so far is this:

When the overall economy moves from industrial and consumer capitalism to finance capitalism, art undergoes parallel changes. There are three stages in this process: the commodification of art, the corporatization of art, and the financialization of art.

Since the first two stages are arguably complete, the art world is barreling toward total financialization. The one thing standing in the way of its final ascendency into the realm of high finance is the difficulty of buying insurance on the value of an art investment (you can buy insurance on the physical aspect of the art, but that only pays if it gets stolen or damaged, not if you lose money on resale). But with the rise of third-party guarantees at auction, that’s slowly changing. Just today I received a press release about a new company called Art Auction Guarantee, which offers insurance on art investments, guaranteeing the seller a certain price at auction.

Could this mean the rise of art-based hedge funds, as Taylor implies? It doesn’t yet seem inevitable, but perhaps I just haven’t read far enough. I eagerly await the next three installments of his piece.

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