The History of Art Markets Neil De Marchi and Hans J.

Van Miegroet Summary The aim of the thesis by de Marchi and van Miegroet is to give a periodical line, which encompasses and comments on the establishment of the art market. The authors deem the beginning of the art market to be coextensive to that of the pre-Renaissance Italy, hence initiate their discourse from 1450 onwards, focusing on the Western market for paintings. Early local art markets, primary and resale <Forms of exchange> Primarily, it is noted that the primary markets for paintings arose as a derivate of the commission market for one-off, mainly religious paintings in places such as Florence and Bruges. Hence, the religious influence for the foundation of the market is accounted for. This is further explored in the subsequent abstract, which accounts for early local markets, primary and resale. Here, the construction of the relationship between the buyer and seller is explored. The price an artist received for the work was completely dependent upon the finished work that was commissioned (usually for religious purposes). Thus, the final value of a work was determined by a committee, which went on to be a guild of sorts. Nonetheless, it was not unusual in the ascribed period to witness artists dealing their own works, as well as those of other artists at the inception of the art market. Consequently, release markets, temporarily followed primary markets with a lag of fifty years or more. This was particularly witnessed in 17th century Amsterdam 15th century London and Paris. The committee that appraised the value and set the price of works of art originally consisted of: specialist dealers, artist, agents and street dealers. The former were intermediaries and advisers to those who did not want to get personally involved in finding paintings or haggling over price. On the contrary, the latter were: stallholders at fairs andshopkeepers. Additionally, dealers in those times fell into two distinct categories, as dictated by their physical location. Thus they either belonged to the net-importer or net-exporter category. The net-importer dealers were intermediaries and arbitrages across the area, whilst net-exporter cities were forced to capture a nearby market in order to sustain profitability. <The primary market in 15th-century Florence> The financial situation of Florence at the time, as well as the political, is what allowed for the emergence of the popularity of art as it was. Florences official status as a republic, which was structured around a wealthy elite, (who could fiscally allow themselves the expense of commissions of painting), is the reason given for the establishment of the art market. However, that is not to say that the wealthy were the majority consumers. Rather, they initiated the interest, and the middle and lower-

middle classes followed: clientele ranged from barbers to patricians the largest segment (40 percent), however, were middling sorts of persons: artisans and politically successful members of the lesser guilds or members of the lower-status patrician families. The prominent art-dealer of that period was Neri di Bicci, who carefully outlined his sales and commissions, from which the authors base their analysis. The two problems which he, along with subsequent art dealers faced were: maintaining a workshop between sales andthe need to advertise. The way in which he overcame one of the was to sub-contract for bulk orders; a practise, which pertains to our current contemporary art market also. <Florentine estate sales: Early specialization among second-hand dealers> De Machi and van Miergroet explored the reasons as to how the art market evolved into the establishment of guilds, as well as specialization amongst second-hand dealers. The article maintains that this occurred as a reflection to the way in which the real estate market developed; thus aligning the two assets: real estate and art. Here, the real estate market witnessed meticulous records being kept of the public auctions of estates, along with the names of the bidders and the bids, which had an influence on the way in which the art market was structuring itself. Consequently, this type of organization needed to be introduced amongst the art world at the time. Essentially, this is exactly what happened in Antwerp in 1588. Here two men registered in the painters guild- officially required of those establishing to dealin trading paintings. This pattern was taken up by 15th century Bruges where foreign demand exacerbated the interest in art and part purchasing. The main strength of Bruges at the time was trade, and this meant that the local dealers had international access to those who are interested in art. Hence in Bruges, between 1466 and 1496 almost one third of new masters into the image makers guild to which painters belonged were immigrants. This along with foreign merchant demand ensured that they had greater buying power than the local population. Nevertheless, this international aspect to the rising prominence of Bruges, did have some potentially negative, albeit fundamental consequences: it bred competition amongst the specialist painters. Hence, painters saw themselves as belonging to three distinct types: painters on wood panels; watercolour (in actuality pigment mixed with rabbit skin glue on linen) and finally the libraries guild, which included illuminators or miniaturists. <The primary market in 15th-century Bruges: Scale; foreign demand; artistic emulation> The rise of Bruges as the focal point of the art market of the 15th century inevitably did lead to its inevitable decline however in the late part of the century. This was due to two reasons: apprentice painters which were part of cloth studios switched to panel painting instead. (Statistically: of the 242 new apprentice painters between 1456 an 1490, 134 or 5% changed form cloth to panel). The other reason is that the illuminators began to make and sell single-leaf miniature paintings. This ensured that the oil painters attempted to balance the art market back to its original functionality. This is witnessed by their taking the panel artists to governmental courts, demanding that they could not sell in the open. The magistrates at the time decided in favour of the cloth

painters and this ensured three consequences. Firstly, the cloth painters could engage foreign interest more freely. Secondly, that the city was dependent upon the revenue which the panel artists were bringing in. Finally, the panel works were fiscally justified in the prices that were set. i.e. The average valuation of the Medici cloth paintings was a mere 3.38 florins, whereas that of their four Flemish panels was 23.5 florins. This helped the authors note the differentiation in prices and structure of the art market in general, hence as based on products, supports, sized, subjects and technique: differences which still apply to the art market to date. <Wealth, and the ownership of paintings: Florence versus Amsterdam> De Marchi and van Miegroet then go on to discuss wealth and the ownership of paintings by comparing Florence and Amsterdam of the mid-15th till mid-17th century. As Amsterdams tax base was much narrower ownership was stronger there than Florence and more wealthy individuals were registered during that period: 2128 in Amsterdam versus Florences 1649. Distributing paintings across markets <The panden in 15-th and 16-th century Antwerp> Now that the authors have established the initiation of the market and how the works were categorized, they go on to describe the distribution of the works across the markets. They focused on Antwerp during the 15th and 16th centuries. Dealers were officially registered under guilds and there was even deployment of cloister-like structures known as pandens, which sold paintings on a year-round basis. What distinguished the Antwerp guilds was the transparency of their functionality, civic encouragement, widespread dealing, as well as specialization ad division of labour. <Dealer-led incursions into Paris, and to Dutch cities> Antwerp also focused on dealing in Paris as well as other Dutch cities, due to their periodical political occurrences. Their unique traits consequently impacted the art market internationally in the West, with other localities copying the Antwerp model. <The market in Holland as a network> The domination of art flowing from Antwerp was subsequently replaced by Amsterdam, where between 1620 and 1679 foreign artists were also widely represented in the local art market- 65 to be precise (hence 35 were solely from Amsterdam). This most likely arose due to the establishment of the canal or trekvaart system. The canal network complemented and assisted the dealers whilst the dealers facilitated collecting by individuals. <Trading in paintings: The traffic from Antwerp to New Soain via Seville, c. 15401670> It is acknowledged that prior to 1540 the pairings form New Spain were specifically commissioned from Spanish artists by the Casa de Contracticion. Nevertheless by the mid-16th century, the artists stated to initiate the work themselves, thus attracting local

and international merchants. The Flemish merchants in particular were heavily involved in filling orders for paintings received via agents abroadreceiving payments prior to or not long after shipment. What is most intriguing is that these Flemish dealers were not considered to be dealers. Rather, they were integrated international traders in paintings, who were involved in production, thus cementing another role in the functionality of the art market. Selling paintings I: Artist-Dealer Relations < Securing payment for invention> Changes in artists pay were shaped by new models of business formed by traders, in particular, a charge for invention. Distinct artist-dealer relationships formed in Venice and Rome because of differences in regulation. The market in 17th century Antwerp provided a model for the modification of payment for artwork by regarding original copies of artwork as capital and charging for invention. Here, artists raised the price for an original work compared to a reproduction. For example, Jan II Brueghel priced original paintings at twice the cost of a copy. Since the size, subject and medium were the same, the only additional cost would be that of invention, or the design and creation of an original. A framework was created in which even lower ranked painters could charge for their thoughts and design. Instead of the patrons claiming the original idea as their own as it had been in the commission nexus in Florence, artists could charge for their artistic ingenuity. <Selling paintings in Venice and Rome> In Venice, artists were conflicted between the processes of production and sales as the market became increasingly driven by foreign demand and exportation. Only artists were permitted to sell in the domestic market, causing artists to combine the roles of artist and dealer. This created a problem as artists had to split time between creating artwork and competing with international merchants for sales on unequal terms. In effect, in the early 18th century, merchants and specialized dealers gained significant control and artists began to fill serial painting orders for art by these traders instead of working directly for the market. In Venice, the painters guilds resisted the marketing of paintings by others in an effort to maintain control, but instead resulted in a long-term disadvantage. In contrast, the retail market flourished in Rome with fewer regulations than Venice. There was a supply of both artists and buyers and a growing appreciation of pictures as pictures rather than exclusively the records of some higher truth (102). Renting whole rooms was common, as many were only interested in seeking decoration. Collections in Rome were formed largely by acquiring paintings on the street, or at dealers shops but in either case by direct purchase and not via commissions (103). Dealers were also concentrated by location in areas such as Piazza Navona. Here, an early model of a gallery district was established as collectors could shop around within a narrow physical compass and compare offers (103). This retail market catered to knowledgeable, wealthy collectors as well as a lower-priced market with non-specialist dealers.

Selling Paintings II: Auctions <Dutch auctions in Amsterdam> Auction rules evolved significantly in 17th century, apparent in the examples of auctions in Amsterdam, Lille, London and Paris. The descending price method used in auctions in 17th century Amsterdam is no longer employed for the sales of paintings. <Magistrate-imposed rules for transparent auctions in 17th century Lille> New auction rules were established that provided mutual transparency and fairness for the seller and buyer. In the example of Lille, Antwerp dealers had to conduct their sales without reserves. Everything had to be sold in the open, restricting private side sales. In addition, false bidding was prohibited. Of course, there was not always a guarantee to this ideal outcome, but these rules encouraged future interactions between buyers and sellers. <Auctioneer-contrived rules, London, late 17th century> Printed auction catalogues in late 17th century London contained more familiar rules. For instance, the buyer was required to leave a portion of the purchase price before leaving the auction in order to minimize irresponsible bidding in which the bidder had not intention of paying. In order to ensure that bids reached a satisfactory level, auctioneers introduced a minimum increment-of-bid rule. In addition, no bids by the auctioneer on anothers behalf were accepted. Reserve prices were public in larger sales or for more ordinary paintings, while in other sales, there were undisclosed. <Creating value through auctions: the dealer Gersaint in Paris, 1733-1750> Gersaint, the first prominent dealer and organizer of auctions in Paris, emphasized the idea that anyone could appreciate art and form a collection with the trusted guidance of a knowledgeable dealer. He established the model of a non-artist professional dealer. His printed auction catalogues were informative and viewing days were provided. Instead of marketing paintings through authorship and subject matter, he introduced paintings as objects that could be valued through viewing pleasure. It was a radical idea that an individual could assign his own value to a painting, which extended the demand for painting into new markets. Gersaint made the marketing of art a natural complement to its production. Analysis A. The effect of transportation/communication technology on art market formation and the change of importance in geographic location Inventions of new transportation methods have been increasing our radius of activity dramatically throughout the history of human being. This lemma is fully applicable when we look at the history of the art market.

Adjacent cities and states tend to unit together to form art market focal points due to geographic reasons. There is no concrete date of the formation of the art market, but it generally started during Renaissance Italy. Florence was the political and cultural center of Italy at that time, thus it is not surprising that Florence functioned as the center of art market as well. However, starting from late 1400, Siena, a city that is only a few miles south of Florence, joined in and formed a larger art market center altogether with Florence. This did not happen coincidentally, rather, we have seen this process in different parts of Europe. There are some unique advantages that make this process inevitable. One of the biggest reasons is that this joint-market strategy could possibly drew much more market power than the sum of the two. Needless to say, transportation became extremely frequent between these two cities and so did artists and artworks. This kind of system offered convenience for both the supply side and demand side given the big picture of early art market. The adjacent states acted as cooperators at most of times while sometimes became rivals. Another example is the market shift from Bruges to Antwerp. A big factor of this phenomenon was the convenience of transportation provided for the shift that made it possible for artists, guilds and dealers to quickly move their equipment, studios and artworks. After the invention of canal and trekvaart system, one must-have for an art market was clear access to either canal/trekvaart or seaport. The development of ship transportation caused this market transformation. We are seeing more port cities or cities with sophisticated canal systems that tend to reach out to the sea that gained huge market power and became center of the art market. Amsterdam and Sevilla were both cities that offered great convenience for ship transportation and became centers of the art market at that time period. Nowadays, geographic reasons play a much less critical role in the determination of art market center because of the invention of air transportation. Nonetheless, we can still sense a trace of the importance of sea-access as lots of our modern day international art market centers such as New York, London, Hong Kong are all coastal cities. B. Several elements that the nowadays artist-dealer relationship inherited from the past (1) Rewarding invention and creativity: Art works are innovative works throughout the history. Even though in the first art markets, art was more purposeful as used for church decoration and interior fixture design, sense of innovation and products of invention were always rewarded. In 17th century Antwerp, original works were priced twice as high as reproductions. This might not seem to be enough according to nowadays point of view, but we have to admit that creativity was rewarded even two works appeared to be identical. Nowadays we are giving more and more credits to creativity while on the other hand, starting to punish copying in some sense. During the writing process of multiple art law regulations, for example copyright regulations, our priority was to promote creation even at the cost of giving chances to possible copying.

(2) Impact of laws and regulations on artworks: One thing that does not seem to change much was the fact that laws and regulations always have great impacts on the art market. This have been functioning both positively and negatively and the effect could sometimes be dramatic. When we look at the 18th century art market in Italy, both Rome and Venice were major players, yet it was the difference in regulation that led to completely different market development. The lessregulated Rome market became a more flourishing one compared to the strictly regulated Venice market. Lack of regulation seemed to drive more supply and demand in this case, yet the situation seems to be the opposite in the nowadays situation where buyers tend to favor a more regulated market. On the other hand, when we look at the art market in Mainland China for instance, lack of regulation and government control leads to market where short-term regional arbitrage and price manipulation becomes possible. This works almost on the opposite direction of the global trend as its supply and demand are mostly internal. This barrier will be bridged sooner or later as its market ought to be impacted by the international market just as its economy several decade ago.