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Discuss the extent to which the international art market is a regulator in the post academy art world. To what extent does the market limit the supply of art and antiques and separate good art from junk art?

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Marta Queiroga de Sousa Cabral MA Museum & Gallery Management; 2002, full-time Art Markets Module Professor Dr. Iain Robertson 5th June 2003 Discuss the extent to which the international art market is a regulator in the post academy art world. To what extent does the market limit the supply of art and antiques and separate good art from junk art? CONTENTS Introduction 3 Analysis of the art market 5 Conclusion 13 Bibliography 15 INTRODUCTION The present assignment has the purpose of showing elements, which can contribute, in a general view, to the development of the art market and also falling on responsibilities with all those participants of the art market. It will be the result of critical reflection that it will turn into a training moment. The main aims of this review are to acquire an understanding of the conditions of the art market and to develop a critical knowledge of the commercial art world and the relevant international market. The idea that the international art market is a regulator in the post academy art world has implications on the formation of prices and values in the art market, due to the macroeconomic reality, political and cultural changes of this period. Throughout the nineteenth century, the Acad�mie des Beaux-Arts continued to produce many important artists. It lost its power only at the turn of the century when it failed to acknowledge radical styles such as Impressionism and Post-Impressionism. The downfall of academic art also was hastened by economic changes in the art market, which included the growth of independent exhibitions and the development of private sales galleries. Over these years, the unsettled system of financial market which the art market became part of has evolved into a greater conscience of the complex behaviour of the individual in his The commercial market economy has been favourable for the development of the arts. Therefore, the market limits the supply of art and antiques studying the consumer economic preference. ...read more.


In conformity with an alternative interpretation of these results, art returns come from two different sources, the financial return (change in monetary value) on the one hand and the psychic return (or consumption benefit). The approach then purposes that if there is at least some consumption benefit, the financial rate of return of art objects should in equilibrium be lower than that in other markets with similar risks. Baumol's pessimistic assertion that since the single determinant behind the value of a work of art is personal taste, and since tastes change unpredictably over time, there is no possibility for significant long-term real growth in the market. Hence, Baumol's methodology is far from perfect. Clearly, "it systematically selects only a small portion of the market"6. For instance, "paintings of the highest quality may be purchased by museums and thus never reenter the market at all"7. Moreover, recognise that "Baumol's low rate of return in art investments cannot be entirely representative of the market since some cases of significant profits are observed"8. The conclusion, then, is that diverse characteristics of art must be considered within shorter time periods to achieve a full understanding of rates of return. For example, Impressionists yielded a 28.4% return from 1950 to 1961, while English Painters lost 6.9% from 1914 to 1949. An ideal market model is normally one that involves large numbers of players, buyers and sellers, as well as price transparency and easily accessible information. The art market, however, has not always able to pride itself on its economic model. The art market may be on its way to becoming an economic ideal after all. At the same time that the market limits the supply of art, it also divides good art from junk art. Whereas the works traded in the junk art market do not have pratically risk, because there is no expectation of gain, the works in the primary market have a considerable element of risk, because the buyers undertake a calculated risk. ...read more.


The art market has to be limited and controlled to avoid inflation and to keep up the economic value of works of art as the currency market. In order to do, the art market participants have to set up criteria for selection. Globalisation is a reality that affects the value of works of art. Therefore, the international art market has influence by the internal forces - public sector art world and the art market and by external forces - macro-economic, political factors and historical issues. Thus, it is also understood that risk is an essencial element of globalisation. In this way, art can be viewed as the expression of culture, and art investing as an "investing in meaning". Although, historical data shows that prices of works of art have increased over the years. This proves that true artistic relevance prevails in the long run and ultimately also finds an appropriate market value. Furthermore, art market has always been about taste, influence and commerce. The art market is, certainly, a restrictive market. For that reason, limiting the supply of art, the art market will assume profit and, at the same time, it will improve the role played by market's participants. Consequently, art will be priced higher. It is also important to prevent monopolistic positions (private and public) and develop a system which encourages diversity. However, this system should have the magnitude to separate good art from junk art, to become an effective system in the market. Therefore, we could see that the economic progress in the international market depends on the stability and coherence of political institutions, the way that these institutions manage the development of their policies. The need for an international regulator in the art market it is important too. Although, the art market has an active role into the economics, controlling the demand and supply, it should focuse its attention especially at the work of art. In conclusion, the market must restrict the supply of art and antiques selecting the talented artists - good art, to raise the value of work of art. ...read more.

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