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| Lydian coin from around 600 B.C. |
Many artists have an aversion to
talking about money, believing that the world of finance and
economics is something that is completely unnatural to artists and
should be left to auctioneers, dealers and art fund managers to deal
with. However, upon examining why human beings have given art any
value whatsoever, monetary or otherwise, one may find that the
reasons humans value money come from the same innate biological and
psychological impulses that humans find art to be valuable: the
desire for the beautiful and rare.
The Shiny Stuff
The first forms of money were based
upon precious metals, such as gold or silver. Humans were first
attracted to precious metals, especially gold, because these
materials were shiny and their reflective qualities were deemed
beautiful. Precious metals became the first forms of money when the
precious metals began to be measured and traded for goods and
services (4).
Although the first forms of visual art
created by humans were probably more for storytelling and historical
record during prehistoric eras of various parts of the world, humans
began to value art simply for art's sake based upon ideas and notions
of beauty. Essentially, humans began to value visual art because it
looked good, to put it plainly. This is precisely the same reason
humans began to value precious metals which they began using as the
first forms of money.
The Art of Money
In fact, when precious metals began to
take the shape of coins, humans still wanted their coins to be
beautiful. This is one of the reasons why coins have always had some
type of artistic imagery depicted on the surface. The earliest coins
which date back as far as the fifth and sixth century B.C. had
artisan images of animals, symbols and artistic designs engraved into
the surfaces of the coinage (1).
Scarcity and Money
Along with beauty, scarcity was also a
reason both art and precious metals have been considered valuable by
human beings. Gold is considered more valuable than other metals,
such as cooper or aluminum partially because gold is incredibly more
scarce. If one were to collect every piece of gold in the world and
melt it down, it would only amount to approximately one 20-meter cube
(5). This makes gold an ideal metal for the basis of currency.
However, contemporary monetary systems
are now designed in that the currency is no longer made of actual
gold, nor is the money being printed tied to or has any relation to
gold or any other precious metal or physical asset. This has allowed
central banks to continuously print money with no limit. Although
this sounds like a great idea, in reality there are consequences,
since the more money printed the less scarce the currency is and
ultimately less valuable. The federal government understands this
concept and even physically burns and destroys dollar bills in order
to control the money supply (6).
Scarcity and Art
In the case of art, the relationship
between scarcity and value can be seen in the art print reproduction
market. Limiting the number of print reproductions of an original art
piece creates scarcity and therefore potentially increases the price
valuations of art buyers. It is common practice for artists to number
their prints in a set edition with a predetermined and announced
quantity that is to be printed. Original artworks are always
considered more valuable than their print reproductions, since the
original artwork is one-of-a-kind and therefore more scarce than
print reproductions.
However, how an artist decides to
negotiate the relationship between scarcity and value of artworks
will depend upon the financial goals of the artist. If the artist is
looking to increase his or her art's value over the long-run, the
artist may want to go with limited edition prints. On the other hand,
if the artist just wants to make more money in the short-term, he or
she may decide to not limit the quantity of prints and simply print
more to match market demand.
At Thumbprint Gallery we have dealt
with artists who understood this concept while there were others who
did not. One artist (who we will call “Artist A”) had some
digital reproductions of his original art pieces created. However,
instead of limiting his edition size and numbering each print, he
decided to create 1000 copies of each print. We knew that Artist A
had a steady job with decent income and was not desperate for money
to pay that month's rent. Also, from conversing with him regarding
his goals and intentions for his art career, we knew he was in the
art business for the long-run. This is why we suggested that he begin
limiting the quantity of his reproductions.
Burn, Baby, Burn!
On the other hand, the relationship of
scarcity and value in art does not only apply to reproductions. This
concept is also applicable for the original artworks market as well.
For example, another artist (who we will call “Artist B”) that
also exhibited with Thumbprint Gallery did have an understanding of
the relationship between scarcity and value in the art market. Artist
B is a prolific painter who is quite capable of producing at a faster
rate than market demand could support.
In order to deal with this, the artist
would literally paint over pieces that had not sold to purposely
limit supply therefore increasing value based upon maintaining
scarcity, similar to the federal government burning dollar bills in
order to limit supply. Alternatively, artists may simply limit
accessibility of artworks by not putting every single piece of art
they create on the market, rather than destroying unsold artwork with
paint or flames. This will at least limit supply while the artist is
alive.
Of course, beauty and scarcity are not
the only factors that affect the value of art. Art can also have
value based upon its historical significance as well as a variety of
other factors which I will attempt to delve into in future blog
posts.
Sources:
