How the artworld is killing its own market via the internet
A case study of what not to do when building value.
As a young artist, I asked the gallerist who represented me how the art market worked. When I queried the answer, I was dismissed with a phrase that became familiar, "You don't understand the artworld."
I repeated these conversations to my father and asked his opinion. He said, "Haze, this is not how business works. This is something else."
Some years ago I asked the owner of a private art collection that has been held in one family for generations and includes some of the world's greatest paintings for his opinion on a globally known contemporary artist. He gave a two-word reply.
"Con artist."
In February 2023 my non-fiction memoir essay, The future of art fraud, was published in Australian literary journal Griffith Review Issue 79, Counterfeit culture, edited by Carody Culver, and is now free to read at After Studio Hours. On page 112 I wrote, "Long ago I was pressured to accept a five-year contract to inflate the value of my work. It specified the amount of art I would have to create and the increasing prices at which the artworks would be sold and bought back through auction houses by a group (their names protected by privacy laws). At the end, a book about these artworks would be written by one of them. Both the book and public record of auction results would be used to justify the pumped-up value. Then artworks owned by the group would be dumped – sold to legitimate collectors.
In the artworld, this is known as price ramping.
I refused. On my father’s advice, I kept the handwritten contract anyway."
This anecdote is not new information. While my earlier online writings about price ramping in 2007 are now archived privately, an internet search using the keywords "art market manipulation" reveals an ever-increasing number of videos, books, blog entries and social media posts by artists, podcast episodes and investigative articles by journalists.
By the time I wrote The future of art fraud, I assumed everyone in the artworld already understood that the flow of information facilitated by the internet would impose transparency on the notoriously opaque art market. When the 2020 pandemic enforced mass migration online, I expected the artworld – including art auction houses and publicly funded art institutions – to weed out behaviours which, when properly understood by the mainstream, would cause irreparable damage.
That did not happen.
After my essay was published, I had a conversation via direct messaging on social media with a peer I've known for years, in person as well as online, who has decades of experience within the contemporary artworld. I was told that, "The price ramping thing happens here in New York all the time. It's kind of how the market functions... it is the nature of the beast until the next artist comes along. Everyone is aware of it too... I suppose it's what everyone here in the artworld has signed up for. Everyone knows what the game is, and all the artists I’ve ever met all want to be incredibly successful (and rich)."
Although not everyone in the artworld engages in market manipulation, enough do that it's normalised. While it may be what the majority of the artworld signed up for, it is not what the audience signed up for. The audience – which includes the legitimate market for art – reasonably expected meritocracy, expertise without undeclared vested interests, and professionalism.
As the internet forces transparency on the business of art, the artworld is in the process of killing its own market by failing to address its own flaws. Instead, the artworld is using the internet to promote itself and repeat already-disproven myths in art-specific magazines that are essentially ads-for-editorial and "insider" podcasts where empty, rote statements about how important the current system is and how well it works are also repeated – without explaining how it actually works.
Perhaps this approach is taken because market manipulation is so normalised within the artworld that, from the inside, no-one sees the problem. Maybe the majority of the artworld does not know how to create authentic value without it. Even if they did, perhaps there is no incentive to change for people in positions of power who benefit from the current system.
The internet has given the audience the ability to simultaneously view the artworld as it presents itself to the public and watch what happens behind the scenes. The notable discrepancy between presentation and reality corrodes basic trust essential for business transactions.
The tipping point in mainstream understanding of the machinations of the art market was the NFT craze and subsequent meme coin craze. Initially, many people were intrigued and hopeful about NFTs and crypto. Then, stuck inside and chronically online during the pandemic, we had a front row seat to the classic market manipulation strategies common in the contemporary artworld – including hype, artificial inflation of value, undeclared vested interests, pools (known in Australia as cartel activity) and pump and dump schemes. The difference was that these strategies were used blatantly, without the artworld's opacity, discretion or carefully cultivated air of sophistication and exclusivity.
The combination of mass media coverage and being able to watch the artificial rise and fall of NFTs and various crypto coins play out in real time online caused global ambient awareness of these strategies.
Last year, a thirteen-year-old boy livestreamed the creation of a meme coin, which is a form of crypto currency attached to imagery that’s popular online. Think lowbrow, conceptional art that skipped the academic blurbs about cultural value and performance art and went straight to being used as currency. The child deftly executed a rug-pull stunt – which is when developers of a project deceive investors and disappear with the money – then he openly gloated.
There's nothing quite like watching a plump, well-kept child gleefully conduct a Federal Felony via market manipulation in a live, unscripted, public online forum – then gesture fuck you with both middle fingers aimed at the cameras, and audience – to take away all the glamour and mystique and credibility of anyone using these strategies in the art market.
The single most important part of digital strategy is establishing trust. The artworld belatedly transitioned online and, in a remarkable display of hubris, lost the trust of the audience in a few short years. The online audience is not an abstract concept, separate to the real world. The online audience is everyone, everywhere, watching the artworld have an Emperor’s New Clothes moment.
While all this is bad news for the traditional artworld, the good news is that people still love art, people still buy art, and the world is becoming increasingly focussed on visual communication which is an ideal environment for artists.
Art has always been part of humanity. The art market, as we know it now, has existed for less than a hundred years. It is time to evolve: to correct course and embrace new, sustainable strategies that build value authentically while respecting the audience and the legitimate market for art.