The luxury art fraud
By Borja Bandrés
Along with the drug trade, the luxury art market is the largest and least regulated in the world, according to critic Robert Hughes. In this market, a couple of auction houses, in collusion with a small group of galleries and renowned curators, manipulate prices to maintain the colossal rise of an artificial system they created. They promote works by artists of their choosing, whether they are untrained and untalented newcomers or forgotten artists who suddenly rise to prominence, inflating their prices to insane levels and marginalizing everyone else.
To create a sense that justifies the price of a particular work and to give it credibility in the eyes of collectors or the multimillionaire investors and speculators for whom this gigantic "bet for the rich and ignorant" is designed, according to Hugues, a marketing machine has been created that invents a skillful rhetoric full of embellishments and quotes that create a historical and scientific veneer.
The aforementioned actors have accomplices such as art dealers, advisors, critics, researchers, art historians, media outlets, and artists— a network established by the CIA in the mid-20th century to promote abstract expressionism . According to critic Avelina Lésper, all of this allows them to endorse and sell as art any object or supposed work lacking economic or creative value.
The consequence of all this, according to Lebanese economist Saifedean Ammous, is an art world filled with works "created in a matter of minutes by lazy, talentless amateurs who don't need to work hard or exert themselves to the fullest, and who seek to obtain a quick check by scamming the nouveau riche with absurd tales that attempt to pontificate why the hideous, unintentional splashes of paint on a canvas are something more than hideous, unintentional splashes of paint."
In this legal fraud that is the luxury art market, collectors use their own appraisers to value works they will donate to museums or foundations in order to massively reduce their tax burden. While illegal, auction practices to inflate prices are no less common, such as collusive bidding, where several bidders represent the same buyer and compete against each other, or the chandelier auction, in which auctioneers begin a sale by pretending to detect nonexistent bids in the room, when in reality they are staring at the chandeliers or a point in the room difficult for the public to pinpoint.
Money laundering, proceeds of crime, works by emerging artists fetching one hundred million dollars immediately after creation , multimillion-dollar settlements awarded by the two major auction houses, whose directors ended up in jail for conspiring to fix the commissions they charged their clients... the history of scandals is replete. Greater regulation should be imposed, but as in any dark and opaque market, there are too many personalities involved and too many vested interests to simply put a stop to it.
On the other hand, and although the luxury art market is marginal, not in quantity but in volume, it must be emphasized that it does not represent the majority of the market - which barely comes to light and receives little publicity - where works by talented artists are bought, sold and promoted at sensible and affordable prices with competent and honest agents.
