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Opinion | Even the Rich Aren’t Rich Enough for Jeff Koons



The art market has a 0.01 percent problem. That much was apparent on Wednesday at the contemporary auction at Christie’s in New York, where a stainless steel rabbit by Jeff Koons sold for $91 million, setting a record price for work by a living artist. If it seems as if these sorts of records seem to be set much more often these days, it’s because they are — just last fall a David Hockney painting sold for $90.3 million, the previous record for a living artist.

Art collecting has always been an exclusive activity, but the world of contemporary art, in particular, has become dominated in recent years not by the 1 percent — the millionaires — but by the super-wealthy billionaires of the 0.01 percent.

This growing inequality threatens to upend how the market works. The small and midsize galleries that have long supported and nurtured unknown artists are finding it difficult to survive in the winner-take-all economy of contemporary art, meaning the next Andy Warhol or Donald Judd, who rose through the ranks of the gallery system, might never be discovered.

The art market reflects and magnifies trends in the larger economy. Recovering even faster than G.D.P., annual sales in the American market have more than doubled since the global financial crisis. According to a 2019 report published by Art Basel and UBS, in 2018 art sales reached nearly $30 billion, compared with just over $12 billion in 2009.

But these numbers mask a serious problem: A small number of large galleries and artists took in most of those sales. Art that cost more than $1 million accounted for 40 percent of the market but just 3 percent of transactions. The disparity is most severe in the contemporary market, where living artists’ work is sold out of art galleries. In 2018, sales from the top 20 living artists accounted for 64 percent of the market. Bigger galleries, the top 5 percent in terms of turnover, accounted for more than 50 percent of sales. Sales at smaller galleries declined over the past few years.

Clare McAndrew, the author of the Basel/UBS report, explained that the affluent but not super-wealthy collectors — the bankers at Goldman Sachs but not the partners — who used to patronize the mid- and lower-tier galleries stopped buying art after the 2008 crash and did not come back after the economy bounced back. They can’t afford top artists, so they would typically invest in emerging artists who are about to break through or well-established second-tier artists.

These collectors, Dr. McAndrew said, are put off by the sky-high prices at top galleries and auction houses. When they see a Hockney painting sell for $90 million, they assume the $50,000 work they can afford is not worth buying, especially if they can’t flip it for a quick profit at auction.

The loss of this middle tier of collectors, along with rising rents and tougher standards for loans, means that many smaller galleries are going out of business. According to international data from, in 2007 four galleries opened for every one that closed. That ratio began declining after the recession, and in 2017 more galleries closed than opened.

In the art world, small and midsize galleries serve an important function. Artists normally start at smaller galleries, where their work develops and they become known to collectors. Though galleries’ motives are not always pure, they play an important role in creating the pipeline of new artists. They mentor their artists, supporting them financially, introducing them to collectors and sometimes steering their work.

Small and midsize galleries are able to nurture up-and-coming artists because their more established artists bring in sales. Relying on these few artists for most of their sales has always posed an enormous risk for smaller galleries, because the artists who find success often will no longer remain exclusive to a small gallery and seek out a bigger one. In this high-stakes market, it happens faster and more frequently: An emerging artist has an even greater incentive to move on and quickly to reap the benefits of the superstar economy. Art news is full of sought-after artists leaving their smaller galleries for the likes of David Zwirner or Gagosian.

It creates a vicious cycle where small and medium-size galleries get squeezed out. Without them, it is unclear where the new artists from future generations will come from. In a winner-take-all art market, the artists who thrive are those with the political savvy to court top galleries early in their career or brand themselves to become Instagram stars.

A market where extremely rich people pay too much for mediocre art and shut out the not-quite-as rich may not be the biggest issue in a wildly polarized economy. But art is the record of culture we leave for future generations, and it too is being warped by our unequal economy.

Allison Schrager, an economist and a journalist at Quartz, is the author of “An Economist Walks Into a Brothel.”

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