The Value of Art
A dealer separating commercial, social and intrinsic value.
Summary
Michael Findlay has been a dealer for decades and was a director at Christie's, and this book examines what determines the value of art from someone who has priced it professionally.
His framework distinguishes three kinds of value. Commercial value is the market price, determined by provenance, condition, rarity, the artist's market and the specific circumstances of a sale. Social value is what ownership confers on the owner, including status, access and identity, which Findlay treats as a real and legitimate component of demand rather than as vanity. Essential value is what the work does for the person who looks at it, which cannot be priced and which he argues most participants in the market have stopped considering.
The practical material covers how the market actually works: the roles of dealers, auction houses and advisers and how each is compensated; the significance of provenance and exhibition history in establishing price; how an artist's market is built and maintained by dealers; the mechanics of auction including estimates, reserves and guarantees; and the difference between the price a work achieves at auction and what a private sale would produce. Findlay is critical of art bought as investment, arguing that the illiquidity, the transaction costs and the concentration of returns in a small number of artists make it a poor asset. The book is written with the authority of long practice and is less cynical than Thompson's treatment of the same market.
Key takeaways 7
- Commercial value in art is determined by provenance, condition, rarity and the state of the artist's market rather than by aesthetic quality.
- Social value, meaning what ownership confers on the owner, is a real and legitimate component of demand rather than mere vanity.
- Findlay argues that art bought as investment performs poorly because of illiquidity, transaction costs and the concentration of returns.
- Provenance and exhibition history establish price because they substitute for a quality judgement the buyer cannot make.
- An artist's market is built and maintained by dealers through controlled supply and placement with the right collectors.
- Auction prices differ systematically from private sale prices, and using one to value the other misleads.
- Findlay holds that the essential value of a work, what it does for the viewer, has been displaced by price as the market's subject.
Who should read it
Collectors and anyone considering art as an asset who want a professional dealer's account of what actually determines price.
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