A Brief History Of Auctions and Valuing Art
Written By: Jeanne Stetzer
As many of you are aware, on November 9th the David Barnett Gallery participated in our first auction with Leslie Hindman Auctioneers and on December 12th and 13th at their Chicago location. David Barnett and the David Barnett Gallery initiated an auction program, selling multiple works of art to benefit a new non-profit organization to help emerging artists. To celebrate this turning point in the David Barnett Gallery we thought it would be appropriate to discuss the history of auctions and how auctions influence the overall value of art as well as its perceived value.
The first recorded auction dates back to Ancient Greece when Herodotus reported an auction in 500 B.C. in which women were sold for marriage. The Romans, are recorded as using auctions for family estates as well as the spoils of war, to pay off personal debts. It wasn't until 1674 in England when the first reported painting was sold at auction. This sale began the trend of selling works of art through auction houses, which is commonly done today.
Until fairly recently auctions have mainly been an exclusive engagement, admitting only art dealers and gallery owners. However this changed around the end of World War II, with the emergence of the middle class that created a new market of art collectors. The admittance of non-art dealers into auctions was for several different reasons, such as to prevent dealers from "pooling" and to increasing overall business within the auction houses. Specifically, "pooling" refers to a pool of two or more buyers acting in tandem in order to suppress prices. "Pooling" most likely begun in England hundreds of years ago and it wasn't until 1929 that the American government tried to outlaw it, but failed. Instead, auction houses decided to admit the general public into their auctions to diminish the possibility of "pooling" and also increase revenue for the auction houses themselves. This increase and exposure towards auctions developed what we now consider the modern auction house, where anybody has the opportunity to bid on a particular object of their liking.
The next major leap in the auction business occurred in 1995 with the launch of two major auctioning websites, Onsale, and eBay. Websites such as these enabled a wider range of auctions to become available to the average person, creating a spike in auction sales. Today, Internet art auctions are everywhere, and have become a mainstream for collecting art. However, this increased visibility of art auctions is both a blessing and a curse. In one way the consumer is able to inform themselves on the going prices for specific items, but are also more susceptible to fraudulent works online. Even most auction houses do not guarantee the authenticity of the items they are auctioning, and the better forgeries occur frequently. So how does one avoid this? Many galleries do offer authenticity guarantees as well as allow you to see the item in person. Due to reasons such as these, the gallery is still a major player in the art business and will continue to be for years to come.
What auctions do offer is the ability to determine what the general public sees as a fair market value of specific pieces of work. While this public perception is important it is not the only means of determining the market value of a work of art. Gallery sales are at the other end of the spectrum. According to David Barnett "While auction records by nature are public, private gallery sales are not. In turn the gallery represents the unknown true market value of an object. Where as the auction represents a value based on agreed upon sales price between a willing buyer and a willing seller at a given moment in time." What this means is that the price of an object can change from minute to minute in an auction setting, where as for the most part the prices at galleries are more stable. While they do change it is not nearly as drastic as what can be seen in auction houses. Thus the prices that are represented at private galleries are an important reflection of the value of art.
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