While conducting research into investment grade art, I’ve noticed an interesting, albeit disturbing, trend in contemporary art. Really good contemporary art is just as rare as high quality antiques. Fine art in any era requires both a creative spark and a master’s touch. And becoming a master takes many years – if not decades – of hard work and relentless study. And it is because of this fact that an art crisis is inevitable.
Allow me to explain. Good contemporary artists are out there, diligently toiling away to create works that will be recognized as future masterpieces. Many of these master indie artists – woodworkers, jewelry makers, sculptures and print makers among others – are now getting older. They are usually in their 50s or 60s and retirement is looming large on their horizon.
They have made good in their artistic careers. They own and run their own studios or shops and have painstakingly built robust and loyal clienteles over the years. These independent artists make a good middle class living (and occasionally better). They have been fortunate enough to buy their own homes and raise families – all while saving for retirement.
However, many of these successful indie artists began their young adult lives as hippies, bohemians or other paragons of wanderlust. They often traveled widely in their youth, eventually settling in socially vibrant, but inexpensive neighborhoods of large cities. For example, the neighborhoods of SoHo and Tribeca in New York City were once renowned for their vibrant artistic communities as was the Haight-Ashbury neighborhood in San Francisco.
In the 1940s through the 1980s these neighborhoods and others like them were important destinations for young artists-in-training. These future trend setters absorbed the avant-garde culture and edgy scene in these city neighborhoods, using them as inspiration for their formative artistic endeavors.
And a big part of the reason why it worked was because the cost of living was low. The rent was cheap in these run-down neighborhoods, if only because the “rustic” lofts were often converted from abandoned factories. These hip urban districts might have been full of unconventional thinkers and dreamers, but they weren’t nice neighborhoods. Still, they worked for their purpose: nurturing and training young artists cheaply.
Then the world’s central bankers went insane. For the last 25 years global central banks have surreptitiously stoked the fires of inflation – especially asset inflation – whenever they could. Sure, televisions, laptops and other consumer electronics may have become dramatically cheaper over time, but that has been outweighed by the steadily escalating price of food, gasoline and rent. It is that most despised of economic memes: deflation in the things you want, but inflation in the things you need.
All of us hate rising prices for basic needs, but they are especially devastating to young artists. A crisis of urban affordability will ultimately evolve into an art crisis. Rent inflation, in particular, prices budding artists out of gentrifying, formerly artist-friendly neighborhoods.
Once real estate prices and rents have risen far enough, poor aspiring artists can’t even afford the cheapest, nastiest part of town. Those that stay are forced to work multiple jobs in an attempt to keep food on the table and gas in the car. And they hope against hope that they can still successfully pursue their artistic dreams.
None of this is conducive to creative accomplishment, eventually leading to an art crisis. That critical mass of creative people living in close proximity to each other is lost as urban housing prices shoot into the stratosphere. Those who do manage to eke out a living in the city have little time to observe their surroundings, philosophize with friends or contemplate aesthetics – all necessary components of artistic development. All too often they can’t even scrape together the discretionary funds needed to buy expensive art supplies or equipment.
Because of these widespread financial pressures, I suspect that many potential artists since the early 1990s have never evolved into full-fledged artists. And this is the crux of my concern about a future contemporary art crisis. The current generation of successful independent artists is rapidly aging. Even if they don’t want to officially retire, their productivity and output will decline drastically as they age into their 70s and 80s. So who will replace them, making the fine contemporary art of the future? I sadly suspect the answer is “no one” or at a minimum “too few”.
Some aspects of the luxury goods market will not be impacted by the coming art crisis. The established luxury brands like Tiffany & Co., Louis Vuitton, Cartier and Gucci will continue to employ artists in substantial numbers to design and create luxury goods. Due to their size, these corporate behemoths have direct access to the capital markets. Central bank policies that have been destructive to indie artists are advantageous to these major luxury houses. They will experience no shortage of hired help.
But it will be a long march through the wilderness for small art studios and those who love their work. This dearth of indie art isn’t upon us quite yet. But the art crisis is coming. I believe that over the next 10 to 15 years we will see the widespread retirement or closure of many successful small art and craft shops. I wish it were otherwise, but this will negatively impact the supply of indie fine art for many decades to come. Make your art investment plans accordingly.
