Contrast that with a valuable painting. True, a copy of a painting, such as series of lithographs, can be made and sold, but the unique value of the work is in the "original painting". It is the market for the purchase and sale of "original paintings" that makes the art market special (not even the most treasured first edition of a book can command the price of a desired piece of "original" art). As such, the commercial market for fine art is a world unto itself, with its own economic rules. But these rules seem to be under increasing challenge.
These tribulations are well-described in an article that appeared in the November 24 issue of The Economist. Entitled "Collectors, artists and lawyers" here, the article recounts how concerns over litigation about the authenticity of paintings is putting a damper on the market for works of fine art. The article centered on the challenges facing so-called authentication boards, which serve to certify the authenticity of paintings created, or allegedly created, by the artist under their watch. The commercial value of such boards is clear, as stated in the article: "Authentication reassures buyers, which stimulate sales."
However, the future of authentication boards as a major cog in the fine art industry is under threat. The problem is that any alleged mis-step in the process of authentication is increasingly likely to met by a lawsuit from either a disgruntled collector or dealer. In response, the various bodies for whom the boards work have taken our larger and larger liability insurance policies. More drastically, some have decided to disband the authentication process entirely. As a result, there is no longer an authentication board for such famous modern painters as Roy Lichtenstein, Andy Wharhol and Jackson Pollack.
But the collector's victory, if he wins and collects (usually from the insurance company), may well have a deleterious result on the industry as a whole. Too many law suits filed, and the decision may then be made to disband the authentication board and, with it, the publishing of the catalogue. If that happens, it may well be easier for counterfeiters to hawk their wares (especially for modern art, classical art apparently being more difficult to counterfeit), which will have the effect of depressing prices across the industry.
Carried to an extreme, the result might be that only paintings by living artists, the authenticity of which the artist himself can vouch, will attract attract top dollar (or yuan). That is what is reportedly happening in China, where the view of so-called art experts is is frequently ignored, since such experts are perceived as being "in cahoots with a dealer or seller." An art market where artists themselves are the only reliable source of provenance for their works would be a far different market to that to which we are all accustomed.
That said, permit me to engage in a bit of musing. First, it seems spectacularly odd that the role of authentication can play such a potentially influential role on the pricing dynamics of the industry's product, especially since the downside to the authenticator's role is put into motion by the consumers for the product themselves. But if that is the current situation, maybe it is time to rethink the issue of allocation of risk. As anyone who engages in transactions between a buyer and seller knows, uncertainties about the transaction mean that the parties often need to reach agreement on the allocation of risk. Here, the risk centres on the genuineness of the painting at issue.
Since it is the consumer who puts the authentication process at legal risk, perhaps it is he who should bear the risk for the process. Due diligence by purchasers is a daily occurrence; why not put the ultimate burden for such on the purchaser of fine art? Or perhaps this suggestion is borne of equal amounts of naivety and outright ignorance about the workings of the fine art market. A unique, odd market indeed!
