Art markets in crisis: how personal bonds and market subcultures mediate the effects of COVID-19

Mediators in the art market have experienced COVID-19 as a major disruption lacking historical precedent. With the shutdown of gallery spaces, art fairs, and live auctions, they lost their personal means to engage audiences. While the contemporary art market has long resisted online sales (Horowitz 2012[1]; Khaire 2015[2]), mediators had to leverage technology to keep business alive during the COVID-19 crisis. Yet the change toward the digital has not played out consistently among galleries and auction houses. The reasons for this lay also in their different market subcultures, particularly the extent to which transactions depend on personalized trust relations and the direct appreciation of art.

As key gatekeepers in the art world, gallerists promote artists to both cultural institutions and collectors (Becker 1982[3]). Friedrich Petzel is a successful New York gallerist who opened his “space” in 1994 in what was then New York’s primary gallery neighborhood, SoHo. His original purpose was artistic: “I wouldn’t have called myself an entrepreneur,” he confides, “more a ‘fan’ of contemporary art” (Cappelletti and Meris 2013[4]). Several artists that Petzel has championed have become recognized by museums and major buyers. Consistent with the decline of SoHo, the gallery now is located in Chelsea and the Upper East Side, and operates a joint venture in Berlin. Petzel claims that he focuses on building artistic careers rather than merely selling works for profit, reflecting the anti-commercial culture that typifies the primary gallery market (Velthuis 2005[5]; Bourdieu 1993[6]). He reports, “The entire thing is bigger now… but it remains a gallery built with artists and for artists.” Perhaps this seems overly romantic, but it is consistent with the narratives of many gallerists.

Before the coronavirus outbreak, Petzel’s days involved numerous face-to-face meetings. Because he promotes artists internationally, he traveled extensively. He had planned trips to Rome, Hong Kong, and Germany. Personal interactions were critical. He had to see artworks and exhibition spaces, discuss budgets, and win the trust of collectors. “If someone is going to spend up to a million bucks with me,” he says, “they want to know that I am not a crook.” Presumably, a direct meeting permits this assessment. Face-to-face encounters also allow Petzel to screen buyers and create affiliative bonds. He shuns speculators who “flip” works at auctions, which can destabilize artistic careers: “I want to make sure with the handshake… that this thing does not show up at the next auction house.” “Building trust,” he adds, is “the basis of what we do.” His emphasis resonates with the “logic of a moral economy” that dominates the primary market in which “meaningful goods are transacted on the basis of personal long-term relationships” (Fillitz 2014[7]; Velthuis 2005[8]).

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