Art Plus Wealthy Egotists Equaled Chaos - artmarketblog.com

Art Plus Wealthy Egotists Equaled Chaos - artmarketblog.com

The last post I wrote dealt with the reasons for the beginning art
market crash in 1991 in which I said that I would continue with this
topic for a few posts. The reason that I have focused so much on the
events surrounding the collapse of the art market in 1991 is that many
of the events that caused the collapse are extremely unlikely to
re-occur. My aim is to show that the current art market is so different
to the art market in 1991 that the comparisons that people are making
between the art market then and the art market now are not relevant.

As I outlined in my last post, the main protagonists of the art
market crash were the Japanese who at the time were riding on the back
of a booming Japanese economy and had money to burn. A very limited
understanding of the art market and an extremely narrow experience with
western art combined with a hunger for acquiring goods that would
increase their social status and display their wealth to the world led
to a situation that would ultimately prove fatal for the art market
boom. What the Japanese buyers wanted from the art they purchased was
their photo in the newspaper and as much media attention as they could
attract. In order to get this attention the Japanese buyers basically
targeted works by the most famous western artists and were willing to
pay what ever it took to get hold of these works. As a consequence of
this narrow and irrational buying the Japanese buyers ended up paying
way more than the works were worth. The high prices being paid by the
Japanese gave created a false impression of the state art market which
in turn gave people a false sense of security.

Because the main motive of many of the Japanese art collectors was
to associate themselves with the famous western artists they were far
more likely to purchase a second or even third rate work by a famous
western artist than a high quality work by one of the many amazing
emerging young Japanese contemporary artists. One example was the
collector Yasumichi Morishita who in one month bought 100 impressionist
and post-impressionist paintings for a total of $100 million dollars
many of which were deemed to not have been worth the money he paid.
Coincidentally Mr. Morishita was involved with criminal activity (see
previous post “Crashing the Art Market, Japanese Style”), as were many
of the rich Japanese art buyers, and had been previously charged with
two criminal convictions for fraud and extortion.

The immature Japanese art market that was based on an extremely
limited variety of works and on values being artificially inflated was
never going to last long. The rich Japanese buyers had such an effect
on the art market that when they pulled out the art market virtually
had a panic attack and collapsed.

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com,
writes the art column for the magazine Antiques and Collectibles for
Pleasure and Profit and contributes to many other publications.