The Ullage of Luxury: the economics of the art fair

Last night I took part in an exchange with Julian Stallabrass about the Frieze Art Fair organised by the Marxism in Culture group at UCL, London. This is the paper I gave.

Art’s relationship to wealth has been transformed by the unfettering of capital and its global circulation through neoliberalism. Frieze is emblematic of the intensified encounter between art and money that grips an increasingly large section of the artworld today. Art museums did not stage ‘blockbuster’ exhibitions until business leaders rather than academics began to dominate the Boards of public art museums. While the biennial is, effectively, a large public gathering of artworks on a global scale (according to the no doubt compromised concept of the curator), the Art Fair is an epic invitation for a mass of artworks to be privatised.

Art Fairs were once rare and marginal but now they are the lifeblood of many galleries, providing multiple opportunities throughout the year and across the globe for galleries to capture a concentrated population of collectors in a reduced period of time. If the Art Fair has now become economically dominant in the artworld calendar then this is because it has proven itself as a highly effective method for turning art into money. Politically, therefore, it is not the rise of the biennial but the victory of the Art Fair in general, and Frieze in particular, that is to contemporary art what the cotton mill was to Marx’s political economy of industrial capitalism.

Wealth has been associated with art since the beginning, but the sheer size of the art market today is staggering compared with any period in art history. Fifteenth century bankers sunk their fortunes into art and nouveau riche industrialists amassed impressive art collections, but the similarity ends there. Artworks and antiques have passed through the hands of dealers and auctioneers since the early Renaissance, but this merely establishes a relationship between art and merchant capital and art and finance insofar as the most successful Renaissance merchants became bankers. This says nothing about the relationship between art and capitalism.

In response to last year’s Frieze Art Fair Julian wrote a short piece for the London Review of Books. Why, Julian asked, would anybody pay ‘a hefty fee to visit a mall’? No one should doubt that the organisers of Frieze will have a businesslike interest in the balance between outgoings and income and that the participating galleries and artists will hope for sales, while a small proportion of the visitors will actually turn up to buy some art. The rest of us – those who do not buy artworks at art fairs – if we attend the Art Fair, merely get the chance to look, according to Julian, at the interior decor of the super-rich.

The image is striking. What’s more it is politically provocative. An economics of the art fair immerses art in a world of mega-wealth, super-galleries, celebrity artists, billionaire collectors, monopoly prices and monotonous commodities. Economic reductionism insists there is no other story to tell. The non-purchasing audience seems irrelevant to such an account, or functions, cunningly, as spectators of magnificence and therefore as ideological subscribers to the dominant decor.

Like an episode of Downton Abbey in which the servants are permitted to take a peek at a lavish dinner before the toffs arrive to eat it all, the role of the non-consumer at an Art Fair appears to Julian, to use the words of Leonard Cohen, as ‘the shy one at an orgy’. The spectator of other people’s luxuries and the financial transactions they complete to obtain them is a pitiful figure. If artworks were standard luxuries then we might conclude that the non-purchasing public of art resembles a crowd of workers cheering on the shareholders.

Although neither the labour theory of value nor the marginal utility theory of prices applies to artworks, it has always seemed more realistic and more radical to highlight the ways in which art resembles commodity production, including luxury production, rather than the ways in which it differs from standard commodity production. Politically, the exaggeration of art’s commodification, such as calling an art fair a shopping mall, has something going for it, but it leaves the Left with nothing to do but echo neoliberalism in a bitter tone of voice. Economically the exaggeration is superficial and distorting. A critical theory of the art fair requires a more nuanced understanding of art’s relationship to the economics of luxury.

There are three theories of luxury. Mainstream economics defines luxuries as those commodities for which demand increases more than proportional to increases in wealth. Marx defined luxuries in Capital Volume II, as products that are neither used as instruments of production nor as means of subsistence. Thorstein Veblen, the sociologist, defined luxuries, in his book ‘The Theory of the Leisure Class’ from 1899, as purchased precisely to display the wealth of the purchaser. Artworks are not standard luxuries in any of these senses.

Mainstream economics is correct insofar as the consumption of sports cars and designer clothing increases at a greater rate than the consumption of bread and cheese, thereby becoming an increasingly large proportion of the expenditure of the wealthy. Certainly it is also true that the super-rich not only purchase more artworks than the rest of us but they they do so increasingly in proportion to their wealth. Nevertheless, most of us view art for free and viewing art for free is not a luxury in this definition.

Marx distinguishes production into two ‘departments’, the second of which is divided again into two. This division provides us with three different circuits of productive capital. Department I, consists of products involved in the means of production, and Department II, concerns the means of consumption which Marx divides into IIa, daily necessities, and IIb, luxuries. Within this schema, if a product is neither consumed by the means of production nor consumed as a necessity, then it is a luxury. Spending in the two departments, therefore, is split between the expenditure of capital and the expenditure of revenue. Within Department II, a luxury is distinct from what Marx called ‘sustenance’. Sustenance consists of the consumption of necessities. But Marx does not give a list of necessities or identify what sort of needs must be fulfilled by them. This is because necessities change from context to context and period to period. A necessity is a commodity consumed by the workers of a given society. Luxuries, therefore, are consumed exclusively by capitalists. ‘Articles of luxury’, Marx says, ‘enter into the consumption of only the capitalist class and therefore can be exchanged only for spent surplus-value, which never falls to the share of the labourer’.

If we just follow the money then artworks are luxuries in Marx’s definition since they are not purchased by workers but are collected exclusively by the capitalist class. However, since the French Revolution, which, among other things, expropriated certain luxuries from the aristocracy, particularly painting and sculpture, and placed them in public institutions for all to enjoy free of charge, the consumption and use of art has been separated from its purchase and exchange.

As part of Veblen’s argument that the wealthy engage in ‘conspicuous consumption’, Veblen argued that ‘pecuniary struggle’ (gaining status through the exhibition of wealth) and ‘pecuniary emulation’ (the attempt to equal or surpass the status of other wealthy individuals) were important incentives in the consumption patterns of the very wealthy. A Veblen good has technical features that the mainstream category of luxury good lacks. A Veblen good, counter to the normal laws of supply and demand, sees an increase in demand as prices rise. Lowering the price of a Veblen good can therefore reduce demand, because the consumer loses a portion of the motivation for purchasing it. The consumers of Veblen goods display their wealth through these purchases and therefore extremely high prices are incentives to purchase rather than, for ordinary goods, disincentives.

Luxury goods such as sports cars, fine wines, islands in the sun, the empire state building, and exotic pets are purchased, at least in part, to position oneself competitively with other wealthy consumers and to display one’s purchasing power.
Consuming a sports car generally means driving it, consuming a designer dress means wearing it, and consuming a yacht means sailing it. Seeing somebody else drive a sports car, wear a dress or skipper a yacht is not in itself the consumption of the sports car. Looking at a luxury item is not the same, normally, as consuming it. Artworks are different in this respect. When a non-owner of an artwork looks at it, they are consuming it without purchasing it and without any diminution in the enjoyment of the product. Art collectors continue to treat artworks as Veblen goods, nonetheless, of course, displaying their wealth and taste by loaning the works they own to public museums and important exhibitions. The difference in the case of art is not in the behaviour of the owner, but in the use-values afforded the non-owner by the display of the Veblen good. If artworks are luxuries they are non-standard luxuries that are not reducible to luxuries.

Treating artworks as nothing but commodities leads to the qualities and significance of artworks (and the visitors who focus on them) taking on the status of ullage – the amount by which the contents fall short of the volume of the purchased container. Ullage doesn’t stand completely outside of exchange relations but it doesn’t quite complete the metamorphosis from commodity capital to money capital. It’s value is not realised because it is not exchanged. Ullage drops out of circulation. Ullage is that part of the product that is purchased for exchange but is never exchanged.

Julian portrays the non-collector at the Art Fair as a spectator of other people’s luxuries, as a non-participant in other people’s pleasures. This is made worse, of course, by the fact that these spectators of other’s luxuries are asked to pay an entrance fee. What the entrance fee veils, however, is the anomalous fact that artworks can be consumed without being purchased. In consuming artworks for free, however, it seems we are the witnesses that the Veblen good desires, those to whom wealth is displayed, not those to whom artworks are displayed. If artworks are anomalous luxuries in which their display permits consumption without purchase, however, then the closed circuit of exchange and consumption is broken. The Art Fair cannot display wealth to non-purchasers without also displaying works that can be consumed for free. There is an incalculable amount of ullage here. We might even go so far as to say that the art market is the market of infinite ullage.

The exceptional economics of art demands more attention to detail. Comparing the art fair with the book fair sheds some light on this. Books are mass produced while artworks are (economically) unique objects. We might conclude (socially) therefore that books can have a popular readership while artworks are almost inevitably luxuries. But we can also conclude (economically) that books conform to the economics of commodity production for a market whereas artworks are not since neither the labour theory of value nor the marginal utility theory of prices applies to unique objects.

Books are luxuries according to the mainstream definition – as wealth increases we buy more of them proportional to our income – and books can be Veblen goods insofar as they are displayed in large book cases and so on, but they are not luxuries in Marx’s definition since workers buy them and read them. But what of book fairs? Do we think of book fairs as business fairs pure and simple or events at which ideas are circulated? Of course, the purchase of books is not limited to the super-rich, so the display of books at a book fair is not a display of luxuries beyond the purse of most of us. However, the display of books at a book fair does not permit the consumption of the works without purchase, as it does in the case of art.

The contrast between the book fair and the art fair has a social rather than economic root. Art was described by Julian in his article last year as ‘the wilfully eccentric conversation pieces with which millionaires and billionaires decorate their rooms’. He called art ‘their culture’, identifying ‘them’ as ‘crooks, swindlers, tax-evaders and the architects of banking scandals’. Artworks, in his view, are purchased by the super-rich for one purpose alone: for the collector to say, quote, ‘look at my money!’ Any attempt to defend art as having qualities independent of the luxury trade merely acts as ideology or marketing that serves to boost that trade. The idea that art might be more than a commodity is summarily dismissed by recategorising all the values and debates around art as ‘the intellectual garnish which is laid lightly over the business of selling’.

Julian evidently puts Veblen above Marx in his account of the art fair. However, there is no trace of the anomalous nature of art as a Veblen good. There is no ullage here: everything is accounted for in infinite exchange. Consuming artworks for free disappears so that the anomaly is lost, leaving us with the impression that visiting an art fair, or even visiting a commercial art gallery or a public museum of art, is nothing but the witnessing of luxury transactions and the codified display of cash.

However, since the establishment of the Louvre shortly after the French Revolution, when the Fine Arts became public property, there has been a notice on all collections of art, saying: these works belong to all and may legitimately be taken out of private ownership by representatives of the public and placed on permanent public display. The infinite ullage of looking at art for free is a legacy of the nationalisation of art and remains a threat to the private exchange of artworks.

There is a political point to Julian’s exaggeration but looking at art is not the same as looking at other people’s money.