A couple of weeks ago, a Wall Street Journal article discussed the old Keynesian notion of ‘animal spirits’ as a significant element associated with the current recession. One would assume, expressing for a moment a nickel’s worth of economic theory filtered through a penny’s worth of zoology, humans as animals have responded to the economic downturn in the same irrationally contagious manner as cattle do when moved to stampede over a cliff.
Maybe, but interestingly, in our galleries we haven’t lately found any real expressions of panic. Yes, we ourselves have found one or two good buying opportunities in English antiques, but nothing that speaks of gotta sell. Mind you, we’ve never experienced any episodes of panic buying, either- even in the best of times, our clients’ vascular content seems to be composed less of hot blood than it is of ice water.
The animal spirit we’ve seen I’d more accurately liken to a deer caught in the headlights of a car, a phenomenon encapsulated in the phrase my partner Keith McCullar would prefer I stop using, ‘seized up’. I like it, though, and perhaps this is ego, because it removes the animal spirit and replaces it with the predictable rationality of the pistons of a car engine stopping within the block because the motor has no lubrication.
Within this particular trope, confidence seems to be the human metaphor for lubrication, because, times being the way they are, we are finding plenty of people interested in our material, but very few confidently proceeding to the point of the sale. We aren’t even seeing any ‘bottom feeders’- people who make inordinately low offers on material, in the hope that we might sell out of desperation. Certainly, there is plenty of news about how dire conditions are, if not in the art market as a whole, then at least in the auction market. According to the New York Times, Sotheby’s and Christie’s both are reducing staff by over 10%. While both houses have realized a significant drop in revenue, this has more to do with decreased consignments than it does any drop in prices for fine and decorative arts. Consignors are unwilling to sell, of course, in a market where they are not confident of getting top dollar.
With a lack of confidence on the part of both buyers and sellers, the market has, well, seized up. The question is begged, naturally, what will turn conditions around? My car engine metaphor at this point breaks down, pardon the pun- maybe it doesn’t, if the mechanism of government intervention functions in the same manner as an engine rebuild, to unfreeze capital and restore confidence. Massive government intervention is as Keynesian as the notion of animal spirits. At this point, I invite my 20 or so devoted readers to pick their own metaphor, with the economic stimulus package either causing the crankshaft to turn, or the collective animal spirit to return to contented grazing. Simplistic, but, I admit, intellectually I have more in common with the painter Duncan Grant, Keynes’s great and good friend, than I do with John Maynard Keynes.