On the seasonal circuit of galas, openings, and collector dinners (which always remind me of diplomatic functions where the unspoken objective is intelligence-gathering), I hear a frequent concern voiced between the canapés and cocktails: When did the art world become so financialized? The question reveals a yearning of sorts.
The early 20th century saw American financiers became Medici-level rich through a legal entity known as the corporate trust (or, if you asked them, their work ethic—end of story). It was a new and useful device that consolidated industry power in one enterprise, deliver monopolistic returns to a small group of trustees, and sparked the first anti-trust laws. Laws that came too late to impede the stunning wealth accumulation of the Fricks, Morgans, Huntingtons, and the like.
Dealers like Joseph Duveen noticed that “Europe [had] a great deal of art, and America [had] a great deal of money.” Art became the primary source of cultural capital for this cluster of ego-driven industrialists whose wealth could buy anything but refinement. Amidst the collapsing scenery of Europe, America’s barons traded capital for class, mostly in the form of Old Masters pictures.
When the wars ended, New York stood alone as the center of the art world (remember that art follows capital). Its artists struggled for creative truth in the ’50s, challenged social conventions in the ’60s, and explored conceptual mediums in the ’70s. But it was during the insomniac, disco-lit ’80s that two rather arcane financial developments would come to define today’s art world: leverage finance and securitization.
These concepts revolutionized capital allocation, expanded credit, and laid the foundation for wealth creation (in the form of hedge funds, investment banks, and private equity firms) on a scale that would make a Rothschild blush. Credit-savvy financiers, along with real estate developers, became the most active buyers, a trend that has only intensified over the past two decades. (Beard, 2017).
This article takes us back to when art and banking first became interconnected with each other. When I think about art, the finances and banking behind it all is definitely not what I first think of when I see it. Even the author questions when the two became so integrated with one another. Without getting too much into the actual history of the two, this article made me come to a realization. Banking is sneakily a part of everything. Despite this article simply focusing on banking and art, what are some other places that banking and finances are apart of that we don’t immediately make the connection to? Without realizing how often it’s shown up in our lives, we could overlook the significance banking has in our everyday routines. If we are always encountering banking, how can customer service make it so our experience with banks is enjoyable and efficient day-to-day?
References.
Beard, E. (2017, September 12). How banking innovations helped fuel art history’s greatest moments. Artsy. https://www.artsy.net/article/artsy-editorial-banking-innovations-helped-fuel-art-historys-greatest-moments
