A Postscript to the "Barbarians"

Two days after I first posted about it, “Barbarians at the Auction Gates? Not to Worry”–the procedurally flawed New York Times piece on art flipping–is still lodged in my brain like a piece of shrapnel the doctors haven’t figured out how to safely remove. And after some thought, I realized that it’s because, as critical as I may have been in my initial analysis, the blind spot in the story’s framing of the phenomenon is actually even broader than the one provoked by its methodological mysteries alone. 

As I’ve written before, auction results tend to be drastically overvalued in art world analysis strictly because they comprise the most reliable and most easily accessible market data most people ever see. It’s the beer goggles view of contemporary art sales–no more representative of reality than someone’s opinion on a possible one night stand partner after a hard night on the bar stool.

Why? For all the activity in Christie’s, Sotheby’s, and the rest of the sector, auction sales are still only a fraction of total sales in the art market. To cite one of the few other semi-trustworthy data sets available, this year's TEFAF Art Market report estimated that the houses accounted for about $31.3B, or less than half, of the industry’s roughly $64B in 2013 sales revenue.

The other $33B or so–which I still believe is likely an underestimate–took place in the private market, where gallerists and dealers keep the information locked in a coffin for their own purposes like the gimp in Pulp Fiction. So at best, even the most rigorous auction analysis will only ever give us about half of the commercial picture. 

But I think my token skepticism of auction data is even more well-founded in the case of art flippers–or COINs (Collectors Only In Name), as I like to call them. Because not only do the studies commissioned by The Times necessarily exclude the traditional private market, they also exclude the DIY private market. 

What do I mean by “the DIY private market”? In reading and talking to people in the industry about COINs, I’ve come away with the impression that these operators aren’t just reselling through auction houses, galleries, or established dealers. They’re also often reselling on their own and to one another. 

Although I’d generally advise that anything Stefan Simchowitz says be run through the world’s most advanced sewage filtration system before consumption, I couldn’t help but think of a quote from his infamous interview with Artspace earlier this year: 

You can walk up and down Chelsea and see overpriced art every day by young artists to mid-career artists. What are these galleries trying to do? Extract the maximum margin possible. I believe in the trading infrastructure of the market, and I believe in inexpensive channels for art that allow it to get redistributed and redistributed and redistributed with great virality. If I sell you something for a dollar and you sell it to your mate for two dollars and he sells it to his mate for four dollars, and he sells it to his mate for eight dollars, and he sells it to his mate for 10—well, that’s five collectors who bought the work, discussed the work, studied the work, and made a profit from it. 

In other words, COINs don’t just behave as collectors. They also tend to behave as novice dealers in their own self-sustaining fraternity.

Simchowitz reiterates the same idea later on in the interview, when he discounts the value of placing emerging artists’ works in what are traditionally regarded as ‘prominent private collections,’ or those amassed by old money clients who will buy and hold rather than flip at the first opportune moment: “At least these other people I work with [i.e. COINs] are posting pictures on Instagram, hash-tagging them, communicating the work to their friends, and trying to sell it to their other buddies.”

I’ve heard and read too many similar nuggets from other sources to dismiss the impact of the DIY private market on art flipping. For example, while not normally the heir to Bob Woodward and Carl Bernstein’s investigative legacy, Vogue ran a legitimate piece back in May about the rise of Instagram as a direct art sales platform. There, artists and collectors are regularly spin-moving around the usual commercial power-brokers to take control of their own sales destinies.

And sparked by the same Times story, just a few days ago the East Hampton gallery/rare bookshop Harper’s Books tweeted two thoughts–subsequently retweeted by appropriation art overlord Richard Prince–which spoke to the same growing disruption of the status quo: 

In that sense, to rely strictly on auction data when seeking a clear view of the flipping phenomenon is to willfully ignore a cataract in each eye–the traditional private market on one side, and the DIY private market on the other. Even if their data mining methods had been beyond reproach, the studies at the nucleus of “Barbarians” could only ever offer a clipped glimpse of their target. 

Obviously, identifying the general malady doesn’t give me any answers about the true scale of the activity. But whether flipping has slowed, cruised, or accelerated since the crash, I think we’d need a much more broad-based data set before we could say with any confidence. And since that data set isn’t likely to be extracted from the haze anytime soon, perception on the issue may, counterintuitively, be a better judge of reality than the numbers we have.