Bonfire of the Vanities
“If the system can no longer grow, or if the excess cannot be completely absorbed in its growth, it must necessarily be lost without profit: it must be spent, willingly or not, gloriously or catastrophically.” 
That’s Georges Bataille, writing in the opening to his eccentric work on economic theory, The Accursed Share. Whilst it doesn’t much function as an orthodox bit of economic analysis, its central theme of how the unproductive surplus of a system relates to ‘luxury’ hits a chord at a time when the art world is ever more preoccupied with the remarkable gains of the art market.
On February 7th, Sotheby’s held the most successful contemporary
art sale ever staged in
So inevitably, with the art market in such supercharged growth, there’s plenty of hand-wringing about whether, in some tragic repeat of the early nineties, the art market bubble is ‘going to burst’. In its regular survey of art market confidence, ArtTactic could report that the surge in confidence witnessed was flattening out, and that collectors feared that a global economic slowdown would be the art market's greatest risk.
There’s a kind of banality to this statement, akin to the assertion that a survey of turkeys reveals that most turkeys agree that the onset of Christmas would be a bad thing. Breathless excitement and premonitions of doom go hand-in-hand, and yet there is something unconvincing about current preoccupations with whether the art market’s growth is ‘sustainable’, and which currently postpones discussion of more substantial questions: what if the ‘boom’ doesn’t stop, what might that signify about the changing shape of the artworld, and what are the consequences of this for art making, for the role it plays in contemporary culture, and for the possibility of a critical art in a scene increasingly dominated by the gravitational pull of art’s commercial systems?
Tobias Meyer, Sotheby’s world head
of contemporary art, should have a slightly better grasp than most on
the art market’s current situation; quoted in Vanity Fair’s recent art
special issue, he suggests that “we have never operated in a post-Communist
economy vis-a-vis the art market in the 20th century. For the first
time in history since 1914 we are in a noncyclical market. But people
don't get it. People make predictions from a market that once existed
‘Meyer … talked about the return of the bourgeoisie – the rise of the bourgeoisie’s interest in contemporary art – as the main engine of success and art market expansion. This was at the crux of his argument as to why this is not a cyclical boom, in his opinion, but a sustained situation, and this is also a way of talking his way out of a potential economic collapse in the auction houses.’ 
Gillick’s pinpointing of the re-emergence of a ‘new bourgeoisie’ is important, but it is Meyer’s pragmatic and professionally anecdotal understanding of the ‘new bourgeoisie’ that has some partial truth. Meyer’s argument is based on the experience that the rich are turning to contemporary art, and that this quantitative transformation, with its implied broadening of the art market’s consumer base, will make it less prone to the ‘cyclical’ boom-bust that followed the misfortunes of the more traditionally narrow consumer base of past art markets. This is the view from inside the goldfish bowl, as it were: there just seem to be more and more buyers turning up, and for a professional auctioneer, it cannot slip your notice that the very wealthy are no longer buying old masters and Chippendale furniture, but looking turning towards the hip, youthful forms of contemporary art.
What Gillick is sensitive to, on the other hand, goes beyond the horizon of Meyer’s view of the art world. Meyer’s comments try to rationalize in cultural terms (the tastes of the new art collector) what is an economic phenomenon of the last decade, a phenomenon which – in the terms of ‘cyclical’ markets’ – seems to not to fit the boom-bust, expansion-recession business cycle model of traditional economics. And yet it acknowledges two emerging realities, without knowing it; first, the change in the character of capitalist dynamism in the west, and second, its consequences on the luxury-consumption sector of the economy of which the commercial art market is a part.
Two years ago, the economist Phil Mullan wrote a compelling, if overlooked, analysis of contemporary global economic trends, examining why recent economic patterns in the western economies no longer conform to what economists have learnt to expect from historical experience. As Mullan put it, ‘Many commentators are aware that there is something odd about the world economy today. This economic cycle has many unusual and perplexing features. It is even difficult to identify what stage we are at on the basis of using the normal four phases of [the recession-expansion] cycle.’ 
A key observation of Mullan’s analysis is that growth curve of the western economies is flattening; that’s to say that over the past two decades recessions have become less severe, whist post-recessionary booms have become equally unpronounced, so that the economic ‘peaks and troughs’ of the traditional business cycle have tended to become less pronounced, leading to historically low increases in GDP. As Mullan argues, ‘[this] shift is not the result of the supposed ‘revolutionary dynamism’ of the new Information Economy, which was said to have changed the rules of business and eliminated cyclical downturns. Rather it is symptom of the weakness of economic dynamism.’
is useful in a consideration of the art market because some of the phenomena
associated with this weak dynamism have a lot to do with the money that
the art market is based on. Of particular significance is the observation
that business investment (profits reinvested by business into the expansion
of productive activity) is peculiarly low, whilst corporate profits
are exceptionally high so soon after the most recent recessionary dip.
As the New York Times could report last August, US corporate profits as a
share of GDP are the highest since the 1960s, whilst wages are at their
lowest share on record.
Business profits are similarly high in the
That companies are ‘flush with cash’ is a situation that extends to the final beneficiaries of this profit-rich, cash-rich, low-growth corporate era. Citing a report on top incomes, the New York Times article revealed that ‘in 2004, the top 1 percent of earners — a group that includes many chief executives — received 11.2 percent of all wage income, up from 8.7 percent a decade earlier and less than 6 percent three decades ago.’ The relatively undynamic, underinvesteing contemporary economies of the west are nevertheless rich in profits and extremely ‘liquid’, and all that cash looks for somewhere to go. If it’s not property-buying or wild speculation on the hoped-for instant returns of internet stocks, art is one place for it, as one part of the larger luxury goods sector which, as Georgina Adams noted at the Tate’s conference, simply did not exist a generation ago on the scale that it does today.
So nervous headlines about city-boy bonuses distorting the property market and the artworld ‘new money’ of hedge-funds distorting the art market are the social and cultural outcomes of a significant change in how the profits of capital are used. Critically, if one agrees with Mullan’s account of the emergence of the ‘slow drift economy’, the sluggish but stable nature of economic growth no longer suggests the possibility of the kinds of cyclical recession witnessed at the beginning of the 90s, and which provided the basis for the art market crash at the time. So rather than the reorientation of the wealthy to contemporary art being an explanation for the current boom, it is no more than a reflection of the significant expansion of the group of high-income consumers who are not necessarily in the business of speculation for investment, but are effectively in the business of, as Bataille would put it ‘squandering the surplus’; or in everyday terms, spending the cash that comes to them on the things they like, and which, in the western capitalist economies, is not being put to better use.
There is in one sense nothing new about this; the history of modern art from the 19th century onward finds art defined, enabled and constrained by the artist’s relationship to the private collector, and the wealth that enables artists to make artworks, if it isn’t forthcoming from the state, comes in its greatest part from the surplus that the wealthy have to dispose of (not forgetting that the state, in capitalist countries, is another form of that wealth). By and large, forms of contemporary cultural production continue to be defined by their relationship with the market that sustains them, and the production of contemporary art is at present expanding to meet that growing demand. From within the culture of contemporary art it is difficult for commentators to express more than a sort of concerned anxiety about whether the way the art market is expanding is ‘unsustainable’. Such preoccupations with ‘bubbles bursting’ are invariably guilty displacements of the vague sentiment that something about such an expansion is morally questionable, but in which one feels complicit, and not inherently about the objective questions of what underpins the market’s expansion.
Meyer, on the other hand, doesn’t
have a problem with the rapprochement
between artists and the new bourgeoisie:
“In 1863 in
Meyer’s chirpy indifference, for all the absurdity of the idea that artists could ever ‘reform the bourgeoisie’, masks a more serious point about the position of artists in relation to the context they inhabit. For what is hidden in Meyer’s slick historical elision is that the separation from artists from their bourgeois patrons, and the emergence of the avant-garde, happens in the period in which, for the first time, society becomes culturally and social polarized by the active emergence of the working class as a social force. The tensions of patronage, class allegiance and the desire for autonomy are all active in the way artists produced and negotiated the terms of the avant-garde.
The modern age was defined by the polarization of society along the lines of class confrontation – up until, that is, the end of the cold war, and the defeat of the working class movement in the 1980s. The artworld of the twenty-first century, then, could be seen as the nineteenth century in reverse – the ‘new bourgeoisie’ and artists, minus the social and political agency of working people, and the door pushed open at the turn of twentieth century – political, social and cultural – has swung shut again with that century’s demise.
As Mullan observes, the absence of social conflict ‘has made it easier to withstand and work through economic challenges in a less destructive way than in the past’; capital has been freer to restructure and cost-cut that before, which is why wages and pensions have been continuously under pressure, even in the current period of ‘slow drift’ growth.
So the booming art market is only one, refracted view of the broader transformation of the relationship between capital, production and working people, a transformation which is distinct from the dynamic and destructive era of early capitalism. In the west at least, what we’re observing is the – strictly speaking – decadent character of an economy that prefers expending its surplus over putting to productive use, or to the benefit of working people.
But here, the relationship of working people to production and culture has also changed. In a footnote to The Accursed Share Bataille comments that: ‘It is assumed that if industry cannot have an indefinite development, the same is not true of the “services” constituting what is called the tertiary sector of the economy… which includes specialized insurance organizations as well as the work of artists.’  Writing sixty years ago, Bataille could not have foreseen how productive industry would be eclipsed by the rise of the service sector, by finance and culture. ‘The work of artists’ is part of that shift, an expansion that reveals something about ordinary life in the advanced economies. In Britain, the decline in industrial manufacturing has been matched by the expansion of employment in the service sector, a shift which, with the politicization of the ‘creative industries’ has encouraged a cultural outlook in which leisure and culture become the symbolic cornerstone of production as well consumption. Little wonder then that young people increasingly aspired more to careers in the creative industries; in the UK graduates of creative art and design courses have shot up in the last decade, whilst student numbers in ‘serious’ subjects have declined.
Who wouldn’t make such choices? Who wouldn’t forego a job in Starbucks or the local call centre for a more attractive, possibly lucrative job as a ‘creative’. And within that sector, who wouldn’t opt for the lifestyle career of artist - the new aristocrats of service sector employment? Capital’s ‘flight from production’ appears in the ‘glorious’ squandering of its excess through such channels as the art market, so expanding the production of art in the process. It is no surprise that so much recent commercial art embodies the individualized expenditure of labour; the return to skill-based techniques in painting, to high-craft investment in objects, narrates the tension between labour and luxury that lies behind the relationship of artist to collector.
Of course, there is no reason why artists cannot turn this situation to their advantage. For once, there is a substantial commercial base for their work, but for the moment, art’s market is fuelling the production of work that echo the broader conflation of production and luxury expenditure that lies behind it, and the sentiments of the ‘new bourgeiosie’. Abandoning the commercial artworld to its own devices might be a missed opportunity however. Instead, channeling the wealth of the art market to more unpredictable, critically independent ends, prising open once again the proximity between artists and their patrons, may be a culturally and politically worthwhile challenge. In any case, ‘hoping’ for the bubble to burst may prove to be a longer wait than anyone expects.
 Georges Bataille, The Accursed Share, vol. I, Zone Books, 1991, p21
 Tobias Meyer, quoted in ‘Money On the Wall’, Vanity Fair, December 2006
Liam Gillick, ‘Selected Transcription from Talk at UN Plaza,
 Phil Mullan, ‘It’s Capitalism, but not as we know it’ http://www.spiked-online.com/index.php?/site/printable/1554/, 5 January 2005
 ‘Real wages fail to match a rise in productivity’, New York Times, 28 August 2006
 ‘Money On the Wall’ op cit.
 The Accursed Share, op cit. p192
all material copyright JJ Charlesworth 2009 and original publishers where indicated