Art – “The Most Unregulated field of financial operations”

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This was more or less the theme of Luiz Augusto Teixeira de Freitas’s keynote address on the third day of the CIMAM Conference.

A lawyer and an art collector since the last 20 years, I believe it was the lawyer in him, that led to this inquiry. The questions were justified and should be treated with seriousness, if not with a sense of urgency.

Who is keeping an eye on the Art Market? Who are the regulators or the gatekeepers? With an industry touching the ceiling of over 50 billion Euro (that’s a lot of zeros), there are serious implications and for sure a need for regulations. 

As Luiz very clearly pointed out ” Online gambling and pornography are more regulated, although poorly” than the world of Art. The situation at the moment puts us in the same category as “human trafficking, organ trafficking” but atleast “we are in good company”.

He shed light on the roles of Auctions Houses and Price fixing even – and from my limited experience with artists, I can attest to the fact that pricing in the art market is strictly a personal call. On what criteria are prices raised or dropped? There is no answer at the moment.

Who is deciding who to make the rising star and who not to? While you would be unable to enter the Financial Market or the Stock Market, these are not concerns for the Art World. Anyone can be an Art Consultant, be a Gallerist, Curator. Is that a road that we should be taking?

” Online gambling and pornography are more regulated, although poorly” than the world of Art.

And what about hype? Prices for sure go up for an artist as soon as he is about to do a major show, lets say in a Gallery or a Museum, or if he has been picked up by a Biennale, or even if he is dead. Such “leaking of information” in the financial world would not only be heavy devastating but has legal implications. But why not in the Art World?

As Luiz pointed out, these same concerns were the reason that security regulations were put in place 50 years ago. So maybe it is now turn for this market.

But here is what is bothering me? Art has an intangible value that can never be regularized. There is a subjectivity that exists – if one is buying for purely aesthetical and reasons that are personal and based on growing their collection, than from an Investment point of view! How do you regulate that intangible worth of a piece? Or maybe this is a naive question and I have yet to learn a lot!

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