Art is sometimes called “emotional assets” by economists as it is not typically linked to the economic cycles. This year Christie’s and Sotheby’s counted notable slumps in their November sales. Not-for-profit art institutions are also members of the markets. Some of the art rich but cash poor among them have sold valuable works in 2008 against deflated global currencies to cover operational expenses.
In 2008, the National Museum in New York sold two Hudson River School paintings for around $15 million and gripped itself for the immediate punitive response from its membership. This included a carefully drafted letter from its members calling for the withdrawal of “loans of works of art to and any collaboration on exhibitions with the academy.” Ironically, membership donations never were an alternative funding option for the academy to cover needed operational costs. Not-for-profit art organizations felt the financial crunch as investors gave pause to cash donations to art organizations.
On an up beat, in 2008 a sculpture depicting a 1375 B.C. pharaoh that was smuggled into Britain out of Egypt was returned. Removed in 1990 in violation of Egyptian laws banning the export of antiques more than 100 years old, Britain officials recovered the national treasure and returned it to Egyptian authorities in 2008.
One will not be hard pressed to point to both ups and downs in the art markets. We can look at the “soft” art securities-like market that has grown out of much of Christie’s and Sotheby’s (and its global counterparts) trade in art. We can also look at Britain and Egypt’s transaction that involved a return of a priceless Egyptian national art treasure under the operation of the rule of international law. The so-called emotional asset of the art market provides an anecdotal lesson in 2008. In any given year there will be ups and downs. In some years there will be more ups than downs, while in others there will be more downs than ups. On the eve of 2009, here is a wish for more upswings ahead.
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