Thursday, 3 December 2020

Correlation Does Not Imply Causation

Today artists are said to be represented by a gallery that commonly receives a 50% commission on all sales made by the artist in the geographical area that the gallery operates. 
This practice has become the norm. 
However, like any established norm, this wasn't always the case. Between the 13th and late 18th century artists were most commonly organised through guilds that arranged their own membership to protect the quality of their work, as well as seeking out commissions for new work. Under influence of the industrial revolution and the rise of a bourgeoisie, the 19th century saw an increase in the presence of art dealers, who bought works from artists to sell them on to others, acting as intermediaries for the artist to reach an audience they otherwise might not have reached.
 
It nevertheless remained that case that artists were principally thought of as the primary salesmen of their own work. During the middle of the 19th century art dealers started to operate more often from gallery spaces as we know them today. By mounting exhibitions themselves they became more closely associated with the work of the artists they were showing. Yet even then it was generally the case that if a dealer wanted a large stake in the artist's career, he ought to buy paintings from the artist and might even acquire an exclusive right to do so in order to protect his own market. On occasion works were sold in consignment were dealers received commissions on sales, but this was mostly during temporary group exhibitions and these arrangements lasted only for the duration of those exhibitions.
This system of artists directly selling their own work, either to dealers or private collectors, remained the norm until the advent of the Second World War. Although dealers and brokers were a common sight in the art market before then, they acted more as retailers buying stock directly from a producer, namely the artist.

At some point I realised that the transition from selling pictures to representing artists happened during the same time span during which competition laws came into effect for many countries across the world. In 1889 Canada became the first country to implement some kind of competition law in modern times. The United States of America followed a year later with the introduction of the Sherman Act. In Europe there were some anti-trust laws in development during the 1920's, but they essentially disappeared after the Great Depression, before they were widely implemented shortly after the Second World War under the dominating influence of the United States at that time. 
While towards the end of the 19th century dealers strove towards acquiring an artist's entire output in order to exert a monopoly on single-artist markets, by the 1950's leading galleries in the United States like Sidney Janis, Leo Castelli and Betty Parsons didn't buy pictures outright, but represented artists and received a by then common 50% commission on any work the artists sold. The European market was slightly slower in implementing those systems, but they nevertheless followed suit not long after. This is a similar path that the implementation of competition laws followed on the two sides of the Atlantic.
 
Although competition laws have various aims and methods, many of these laws strictly forbid any single reseller claiming a monopoly on the market for a good they didn't themselves produce. Which is exactly what many art dealers strived towards during the second half of the 19th century. 
To quote the Harrison and Cynthia White in their 1965 study 'Canvases and Careers': 'The financial speculation in art found its cultural counterpart in the speculation in taste. [...] But speculation is doubly dangerous when the supply of objects is elastic. Monopoly of an artist's production was important in making speculation rational'. In other words, in order to make business sense of the sale of paintings and recoup their investments, dealers sought to claim monopolies on artists they helped to market. 
But this was not the only kind of anticompetitive actions the art dealers undertook. In the more recent publication 'The Rise of The Modern Art Market in London, 1850-1939', Mark Westgarth describes 'a group of dealers agreeing not to bid in competition with each other for an object or number of objects at a given auction sale.' This kind of cartel forming was explicitly outlawed in the United Kingdom with the Bidding Agreements Act from 1927. 
In the light of my previous claims it is perhaps unsurprising that the first explicit mention I have found of a gallery representing an artist in the contemporary sense of the word came from 1928, one year after this law passed. Ralph Keene had been appointed by Arthur Tooth & Sons to liaise with the newly formed stable of artists, where 'artists were given a solo show every two and a half years. Tooth's dealt with the entirety of their artists' output, taking a commission of 33 1/3 per cent on the selling price.
Further evidence that dealers attempted to claim a monopoly on the market of single artists can be found in an in-depth analysis of the contracts of Gustave Co├╗teaux by Jan Dirk Baetens. 
On the whole it can be said that during the 19th century dealers offered to buy up a number of paintings they expected the artists produce in the coming years. The benefit of this kind of arrangement to the artist being a guaranteed income, while the dealer ensured a lower price for himself by buying wholesale and simultaneously creating the opportunity to attain some control over the prices on the final market. 
 
While correlation does not imply causation, I find it telling that the explicit monopoly-seeking behaviour among art dealers before the implementation of those laws is nearly completely absent after they came into effect. At the same time consignment of artworks was a relatively rare occurrence before 1890 and then it quickly became the golden standard towards the beginning of the 1950's. During this 50-odd year timespan there were also few other changes to either the nature of the traded objects, nor the general business practices of dealers. Those practices had been firmly established a few decades earlier and hadn't changed substantially since. To quote Pamela Fletcher: 'the second half of the nineteenth century witnessed the development of much of the apparatus of the commercial gallery system as it still exists today: the idea of a named space hosting a changing series of exhibitions; the role of the dealer as consecrator; the symbiotic relationship with the press; exhibition catalogues with prefaces; and, towards the end of the period, a move toward consistent gallery specializations. The logic of the system also remains familiar, with its geography of centre and fringe, its cultivation of sub-publics and rhetoric of exclusivity. In other words, many of the commercial structures and practices that we identify as quintessentially modern were integral parts of the Victorian artistic field.'
Almost all common sensibilities of art dealing were thus discovered and established during the early decades of their incarnation. All except the representation of artists and the revenue model of commission on sales that is associated with it.
That the laws of many countries also allow a provision for monopolies to be formed within the case of direct representation of a principal by an agent is a salient fact that is simply too convenient to ignore.
 
As of yet I have found no direct evidence or even mere mention in any available literature about this possible dependency. However, a single record of a clear dispute in any court about the matter would make this suspicion concrete. In the absence of this, even some correspondence from the first half of the twentieth century could show that such concerns were on the minds of art dealers at the time. 
I do not posses the required expertise to efficiently research case law in various countries across the globe and the records kept by art dealers are notoriously insubstantial and secretive. That I was thus unable to unearth such evidence at the present time should not come as a surprise. However, I believe that with some time and resources it will be likely that such evidence could be found, thereby possibly dramatically changing the perception of how the relationship between artist and dealer ought to be looked upon.