Get rich schemes do not exist. Nevertheless, every student, when they find themselves treading the perilous tight rope of an overdraft, have sat, gazing out of a window, searching for some miracle scheme that will turn £50 into £500. The problem with all money-spinners is you need to speculate to accumulate, and if you view your student loan, and any other money you have, in terms of groceries and washing-powder then you'll never accumulate.
Recently, while I was working at the Hampstead Affordable Art Fair (AAF), which ran from 12 - 15 June, I began to think about the money that could be made in art.
Here are the economics to show why you shouldn't see art at the AAF as an investment.
First, the facts.
All art at the Affordable Art Fair is priced between £40 - £4,000 which, for art, is cheap. However, this year's TEFAF report (The European Fine Art Foundation) found that in the global art market 'The volume of transactions increased in 2013 but by less than the growth in value showing that the market increase was driven by higher-priced works not more sales.' What this means is that the art market is not selling a lot of low value art but instead a small number of high priced pieces at the auction houses. We can say then that the 'Affordable' market is small, but just how small? In numerical terms the global art market in 2013 was valued at €47.4 billion (around £37.9 billion). From a total of 15 fairs in 12 cities in 2013 the AAF's total revenue came in at £29 million which puts the AAF global market share at approximately 0.08% which is minute.
What kind of art does AAF sell?
The art at Affordable Art Fairs can be anything at all; from painting to sculpture to installation to collage. There are no restrictions. There are street artists like Pure Evil, ornate design artists like Jack Frame and fantastic portrait photography from James Sparshatt. Aside from the variety, another great thing about the fair is you can find originals and prints from the same artist so you're able choose whether you want to spend £200 or £2,000. AAF claims, and justifiably so, to have 'revolutionised and democratised the art market.' The 'About' page on the AAF's website quotes the artist William Morris who said, 'I do not want Art for a few any more than I want education for a few, or freedom for a few.' Pricing and choice certainly means there is something at the fair for everyone.
How does the AAF's business model affect the art?
That the AAF should quote William Morris reveals a lot about the company's ethos. 'Morris's name and reputation', writes the V&A, 'are indissolubly linked to wallpaper design'. In the nineteenth century Morris created decorative wallpapers, drawing inspiration from delicate objects from nature. His designs were beautiful but could never be 'art' because a paper lovingly designed in Morris's studio could be reproduced and plastered across a thousand different homes.
As Ha-Joon Chang says in Economics: The User's Guide, 'production is the ultimate foundation of any economy'. Art's value is determined by the skill of the labourer and the number of times it is reproduced, or it is governed by what is widely called 'rarity value'. The rarity value of Morris's wallpaper was low because they were so extensively reproduced. Despite the fact that Morris produced many different designs each was worth the same because they had been produced and marketed under the same conditions.
Similarly, by fixing the price of art in such a narrow bracket the AAF are left with a limited range of marketable works. Walking through the 110 galleries on exhibition at AAF Hampstead this year the art seemed to amalgamate into one homogenous product. AAF art, like William Morris wallpaper often comes in print form. It's great news if you want to buy into a name like Damien Hirst cheaply but prints have little value, like Morris's wallpaper, because the skill of the original craftsmen (or labourer) is made supplementary. Even when the work is original the £40-£4,000 price bracket means that you will be buying a relatively unknown artist which is unlikely to increase in popularity and value.
If affordable art is not an investment, why does the market hold any value at all?
As a student, the money you invest in affordable in art may well perish like the groceries you sought to avoid budgeting for, but the fair caters for a demographic with a disposable income. So see art at this level as an indulgence to be enjoyed later in life rather a scheme to help stay off budgeting.