Economics Have Long Driven Shifts in Art World

Unconventional works of art that today are considered masterful would not have even qualified as legitimate advanced art a century ago. And artistic standards have evolved mostly because of economics, David Galenson, an economics professor at the University of Chicago, said at the Federal Reserve Bank of Atlanta's July 22 Public Affairs Forum.

Until the late 19th century, the market for fine art was dominated by a small number of individual patrons and institutions. If an artist did not please that influential circle, Galenson explained, the artist could not make a living. One of the foremost of those institutions was the Paris Salon, the official art exhibition of the French Academy of Fine Arts.

But in 1874, a group of young artists led by Claude Monet began holding their own exhibits independent of the French Academy. Driven by their desire to earn a living outside the constraints of the existing system, the Impressionists launched a movement.

Picassos as "documents in economic history"
"The critical change the Impressionists initiated was the elimination of the Academy's monopoly of the ability to present fine art in a setting that critics and the public would accept as legitimate," Galenson said in his talk at the Atlanta Fed. "The conservative jury of the Salon would no longer determine whether aspiring artists could have a successful career."

Thus freed from the influence of a handful of conservative patrons, artists had latitude to innovate, which Galenson describes as "experimental" or "conceptual." (See the related Q&A article for more on this subject.)

One such innovator was Pablo Picasso, the Spaniard who pioneered not only cubism but also the business practice of selling works through individual art dealers, outside the traditional group exhibits. Picasso did this by painting portraits of important Paris art dealers, appealing to their vanity in a clever gambit to create a trade in his paintings, Galenson said.

Picasso thus used his art to create a competitive market for that same art. His dozen-plus portraits of dealers, Galenson said, are really "documents in economic history, visual evidence of the birth of a new regime in the history of art markets."

The overthrow of the monopoly system gave artists freedom to innovate. With many dealers competing for artists' work, the artists were unleashed from the demands of often conservative patrons, Galenson remarked. Dealers, collectors, and artists quickly recognized that the most innovative art—which changed genres and most influenced other artists—would be the most valuable.

Of course, art historians have long discussed the different periods and genres in art. But scholars of art have never illuminated the (mostly economic) forces that brought about the major shifts in the art world, according to Galenson.