As usual, the most recent Art Basel Miami Beach, in December, was a glittering, celebratory spectacle of wealth and creativity. Champagne flowed, well-heeled crowds mingled, and seven-figure sales made headlines. It was almost enough to belie a simple fact: The art market is already in a recession; it just doesn’t realize it yet—or won’t admit it.
As someone who has spent years immersed in the art world—as a collector, a teacher at Yale University, and an author—I’ve seen the data firsthand. In a 2018 Science paper I coauthored, which examined information on 500,000 artists across millions of transactions, my fellow researchers and I uncovered a striking truth: Financial success stories in the art world are reserved for an extremely small group. In fact, just 20 artists—names such as Jeff Koons, Andy Warhol, and Damien Hirst—dominate more than half of the contemporary-art market’s auction value. (The art world is notoriously opaque, with private deals nearly impossible to track, so for researchers like me, auction results offer the clearest window into the upper echelons of the market.) For the remaining 99.9 percent of artworks, monetary returns are the exception rather than the rule. Consider this: Of the roughly 80,000 enthusiasts who visit Art Basel Miami Beach annually, less than 3 percent actually makes a purchase. For all its glamour, the art world is a precarious ecosystem.
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The market has long relied on a shrinking pool of buyers to drive its top end, and these challenges are about to be compounded by an unprecedented generational-wealth transfer. Over the next 25 years, an estimated $73 trillion will pass from baby boomers to Gen X, millennials, and Gen Z. Some portion of that will be tied up in significant art collections, yet heirs often lack the emotional or financial commitment to these works, with roughly 50 percent of inherited collections being sold.
This glut of art entering the market, combined with evolving tastes, spells further trouble for second-tier works. (While Magritte’s L’Empire des lumières recently fetched nearly $121.2 million, for example, other surrealist pieces struggle to sell for less than a hundredth of that price.) It’s a pattern we’ve seen before: In the 1930s, 18th-century French furniture was prized above all else, while a Picasso still life went unsold at auction; today, the reverse is true. The same fate is likely to await a number of artists from boomer collections as the market is flooded with works that no longer align with contemporary tastes, deepening the recession while simultaneously neglecting the core issue of a declining pool of collectors.
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