Talking Prices: Symbolic Meanings of Prices on the Market for Contemporary Art

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"Olav Velthuis has built a graceful, sturdy bridge across a torrent: the turbulent flow of art markets. On one side we have the supposition that art and money follow incompatible principles; on the other, the claim that markets reduce all commodities to creatures of supply and demand. By looking closely at the actual culture and social connections of art markets in New York and Amsterdam, he arrives at insight after insight into a meaning-drenched form of commerce, and by extension into the place of meanings in markets of every kind. This bridge stands firm."--Viviana A. Zelizer, author of The Purchase of Intimacy and The Social Meaning of Money

"A superb book! Talking Prices is the best thing I have yet to read on the way art markets-in any period-work. Written in the most fluid style, it is a pleasure to read and contains a great many juicy details that shed light on the inner workings of dealers and sellers and artists. Furthermore, it will carve out a space in the economic sociology of art that is occupied, at present, by nobody. Without question, it will leap across disciplinary boundaries, especially that huge and often ugly one between 'sociologists' and 'economists.' What tops it all off is that Velthuis is also an expert in art history and understands the aesthetic values and norms of composing art that matter not only to the artists who are selling to galleries, but also to the way in which artworks are sold and to the culture that shapes the way art markets operate. This is a major accomplishment."--Jack Amariglio, Merrimack College, coauthor of Postmodern Moments in Modern Economics

"A brilliant piece of work. Velthuis has taken the hardest case, and gotten out of it the best laws: about pricing, which the economist wants to read as prudence and the anthropologist wants to leave to the economist; and about high art, which the anthropologist wants to read as power and the economist wants to leave to the anthropologist. It's a brave book, and accomplishes what it ventures."--Deirdre McCloskey, University of Illinois, Chicago, author of Knowledge and Persuasion in Economics

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Editorial Reviews

Journal of Cultural Economics
Velthuis' essay is absorbing because it challenges our understanding of economics, culture, and society. Its narrative is stylish and refined; at times the discourse shows craftsmanship and attention to details, like a still-life of Pieter Claesz; at other times it is bold and sophisticated, like a painting of Karel Appel, or Kees Van Dongen. It is an essay definitely worth reading.
— Calin Valsan
American Anthropologist - Stuart Plattner
[Talking Prices] provides an excellent analysis of the tension between art and commerce that characterizes the art world.
Journal of Cultural Economics - Calin Valsan
Velthuis' essay is absorbing because it challenges our understanding of economics, culture, and society. Its narrative is stylish and refined; at times the discourse shows craftsmanship and attention to details, like a still-life of Pieter Claesz; at other times it is bold and sophisticated, like a painting of Karel Appel, or Kees Van Dongen. It is an essay definitely worth reading.
From the Publisher

Winner of the 2006 Viviana Zelizer Distinguished Scholarship Award, Section on Economic Sociology of the American Sociological Association

"The book is an excellent, readable and thorough analysis of how prices are set in the contemporary art market."--The Art Newspaper

"[Talking Prices] provides an excellent analysis of the tension between art and commerce that characterizes the art world."--Stuart Plattner, American Anthropologist

"Velthuis' essay is absorbing because it challenges our understanding of economics, culture, and society. Its narrative is stylish and refined; at times the discourse shows craftsmanship and attention to details, like a still-life of Pieter Claesz; at other times it is bold and sophisticated, like a painting of Karel Appel, or Kees Van Dongen. It is an essay definitely worth reading."--Calin Valsan, Journal of Cultural Economics

American Anthropologist
[Talking Prices] provides an excellent analysis of the tension between art and commerce that characterizes the art world.
— Stuart Plattner
The Art Newspaper
The book is an excellent, readable and thorough analysis of how prices are set in the contemporary art market.
American Anthropologist
[Talking Prices] provides an excellent analysis of the tension between art and commerce that characterizes the art world.
— Stuart Plattner
Read More Show Less

Product Details

  • ISBN-13: 9780691134031
  • Publisher: Princeton University Press
  • Publication date: 7/30/2007
  • Series: Princeton Studies in Cultural Sociology Series
  • Edition description: New Edition
  • Pages: 288
  • Sales rank: 1,002,189
  • Product dimensions: 6.00 (w) x 9.20 (h) x 0.80 (d)

Meet the Author

Olav Velthuis has worked as Assistant Professor of Sociology at the University of Konstanz and has been a Visiting Scholar at Princeton University and Columbia University. Currently he writes about economic affairs for the Dutch newspaper "De Volkskrant".

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Read an Excerpt

Talking Prices Symbolic Meanings of Prices on the Market for Contemporary Art
By Olav Velthuis Princeton University Press
Copyright © 2005
Princeton University Press
All right reserved.

ISBN: 978-0-691-13403-1

Introduction IN THE MIDDLE of one of the interviews which I conducted for this study, I decided to give up, desperate as I felt about the respondent's reluctance to respond to my questionnaire. The art dealer, whose gallery annex print-making studio was located in the geographical periphery of the New York art market, refused to discuss what I was trying to understand: how art dealers set prices for contemporary works of art. This dealer had explained casually that the prints made in his studio were priced at roughly two-thirds the price of a work on canvas, and that revenues of sales were split on an equal basis between him and the artist. Apart from that, however, he did not elaborate on pricing strategies, the dos and don'ts of price changes, or the rationale of the vast price differences between different works that prevail on the market for contemporary art.

His unwillingness to answer my questions was not informed by anxiety to disclose business secrets, but by a sheer disinterest in prices; at least that was what he tried to convey when my tape recorder was running. The art dealer claimed that he did not want to be a factory, a marketplace, or a banker; he and the artists he worked with would not, as he put it, "demean themselves to what is called commerce." Instead, thisfriendly but stubborn man characterized his own enterprise as a family. He elaborated on the egalitarian basis of his gallery and on the moral responsibility he felt towards the arts community; he repeatedly spoke about the gallery as a "mutually enabling environment," and claimed that his own role was to be "co-involved" with artists intellectually. Acquainted with many of America's best known painters, he emphasized how his relationship with them was based on "equality, harmony, and partnership." Regarding collectors, the dealer said that he only sold art to people who expect to "grow from it spiritually"; the fact that hardly any work he sold in the past had subsequently appeared at auction proved that collectors of the gallery "purchase [art] for the right reasons." This apparently pleased him, since he maintained that art loses its "emotional value" and degrades into "capital" once it appears at auction. The dealer did not leave any opportunity unused to make clear that this was to be avoided at all times. The "boom" of the art market in the 1980s, when prices for art rose steeply and works of art became popular as investment objects, had therefore done lasting damage to the art world, according to him.

After I had turned off the tape recorder, the dealer offered me a glass of white wine, and took me to his living space behind the gallery. He showed me his own, private art collection, which consisted of works by modern masters I had only seen in museums before. Then, as he described the background of his collection, and how he had put it together passionately throughout the years, his wording changed dramatically. The same dealer who had so carefully avoided invoking mundane interests before, turned out to remember precisely how much he had paid for the works in his collection in the past, and was also up to date about their present price level. Moreover, he eagerly and proudly emphasized that the current market value of his collection surpassed the past acquisition prices dramatically.

It seemed that my respondent stood the world on its head: in his commercial role as a dealer, when I expected him to be concerned about prices and profits, he refused to talk numbers. Instead, the metaphor he used to characterize his business was a "family" and a "community" rather than a marketplace-reflecting on his own enterprise in terms of commerce, marketing, or business strategies seemed out of the question. In his living space, however, the same dealer apparently felt inclined to discuss the value of his precious collection in bare economic terms. Since I expected that explicit monetary measurement is avoided in the private sphere, especially regarding goods with a strong symbolic value like art, this attracted my attention as much as his earlier avoidance of prices did.

Other dealers whom I interviewed for this book claimed likewise that they had not entered the art business to make a profit, but because they loved art, or because they wanted to help artists make a living from their work. References to commerce, such as price tags or cash registers, were conspicuously absent from their business spaces. They said that they would never allow their artistic priorities to be compromised by commercial objectives and that they did not let financial matters interfere with the way they conducted relationships with artists and collectors. At the same time, however, when they were casually describing their daily lifeworld, including social interactions, prices surfaced prominently in their discourse.


To make sense of the way art dealers talk about their business, we need to go beyond conventional understandings of markets. According to one of those understandings, instigated by mainstream, neoclassical economists, but also endorsed frequently in the media, markets are about individuals who pursue their self-interest ruthlessly and who exchange goods without regard for others. Within this understanding, the dealer's discourse can be safely ignored, since economic life is ultimately structured by some underlying universal principle such as the "laws of supply and demand," the "price mechanism," or the "invisible hand of the market." Cultural economists who study the art market have emphasized time and again that the buyers, sellers, and distributors on the art market are, like their counterparts on other markets, rational individuals who permanently strive to maximize their profits (see, e.g., Frey 2000; Grampp 1989). For such an economic analysis, the empirical evidence which interviews generate is fragmented, unsystematic, and anecdotal. Neoclassical economists prefer to look at outcomes like actual market prices, which directly reveal the behavior and preferences of economic agents.

According to another understanding, which has been put forward by economic sociologists since the mid-1980s, markets should be understood in network terms. Increasingly dissatisfied with the "undersocialized" perspective of neoclassical economics, these sociologists have argued that market exchange is invariably embedded in social networks. The emphasis that the art dealer put on his intimate social ties attests to the existence of such networks in the art market; these networks, the argument goes, can be formalized and have a decisive and measurable effect on the dealer's survival in the art market, on prices, on profit rates, or on some other indicator of success (Giuffre 1999). Within a third understanding, markets are the antithesis of social and cultural life. This view of markets, which can be found in social science as well as the humanities, and counts classical thinkers such as Karl Marx and Georg Simmel among its ranks, stresses the contaminating or corrosive effects that the market has on social and cultural life. When it comes to art, the market alienates artists from their work, their labor, and their public, while failing to recognize artistic values; moreover, through the price mechanism, which supposedly reduces all qualities to quantities, the market commensurates what is considered to be incommensurable.

The alternative understanding that I propose in this book is that markets are, apart from anything else, cultural constellations. Like any other type of social interaction, market exchange is highly ritualized; it involves a wide variety of symbols that transfer rich meanings between people who exchange goods with each other. These people are connected through ties of different sorts, whose emergence, maintenance, and possible decay involve complex social processes. What I argue, in short, is that just as culture infuses other social settings that sociologists and anthropologists have studied, it infuses market settings. This infusion is of such a degree, that it may be virtually impossible to separate market and culture analytically (DiMaggio 1994, p. 41).

Within the understanding of markets that I propose, even prices, which have long been considered to be devoid of any meaning at all, can be thought of as cultural entities. Indeed, the New York art dealer's sudden change of discourse when he showed me his private collection, from denying to emphasizing them, makes sense once it is recognized that prices have symbolic meanings apart from just economic ones. Referring to the difference between the original acquisition price and the present market value of the works of art he owns, the dealer in question expressed noneconomic values and sketched his capabilities as a collector of art. During the interview, he had referred to similar price differences of works by one of his artists as follows: "When I first worked with Sam Francis in the 1970s, his reputation had slipped away a bit, and we could not give the works away for $8,000 or $9,000. However, not so long ago his work was traded on the market for $195,000 It's interesting, it's a story. The figures describe a story that is not about the money." What I infer from these comments as well as those made by other dealers is that the price mechanism is not just an allocative but also a symbolic system: impersonal and businesslike as prices may seem, they are the numbers artists, collectors, and dealers live by (cf. Friedland and Alford, 1991, p. 247).

In advocating the role of culture in economic life, I do not mean to subscribe to a "culturalist" point of view, in which culture is the only or the prime explanatory concept (see Hannerz 1992). Neither do I think of culture as a stable, coherent set of values that decisively sets one group of people apart from another. Instead, building on recent strands in cultural sociology, I will show how culture simultaneously restrains and enables action on the art market (see DiMaggio 1997). Culture is restraining in economic life insofar as cultural values codetermine which types of goods can be exchanged, which social and cultural contexts are legitimate for conducting this exchange, and which business practices this exchange should be accompanied by. For instance, when it comes to the architecture of galleries, an avant-garde art dealer can hardly afford to deviate from the austere, white, spartanly furnished spaces that have dominated Western art markets for at least half a century. Doing so would, in most cases, seriously compromise his legitimacy within the art world. To give another example: when it comes to setting prices, ostentatious price decreases need to be avoided because such decreases harm the status of dealers and reputation of artists significantly in the eyes of their peers.

At the same time, culture is enabling, since it provides economic actors with the tools to shape markets, social relationships, and contexts of commodification, in legitimate and meaningful formats. I will refer to these tools in terms of a repertoire or a menu of possibilities (see DiMaggio 1997, p. 267). For instance, within the restriction of the so-called white cube, dealers can construct and fortify their identity by means of details inside of the space, by its location, or by the transparency of the gallery architecture. And when it comes to decreasing prices, dealers have an emergency repertoire at their disposal to carry these through less ostentatiously but more legitimately.

The conception of culture in economic life that I endorse differs from the toolkit notion of culture which was developed by Ann Swidler in the 1980s, and has become increasingly popular in recent years. According to Swidler, culture can be thought of as a toolkit which individuals can fall back on in order to find strategies of action of their own liking. Instead, the account of culture that I provide is a relational account, according to which artists, collectors, and dealers mutually construct the landscapes of meanings they inhabit. The term I use for these landscapes of meaning in economic life is "circuits of commerce." Randall Collins originally proposed the term "Zelizer Circuits" to denote the dense exchange patterns studied by the economic sociologist Viviana Zelizer. Zelizer herself subsequently coined the phrase "circuits of commerce" to illuminate that exchange is invariably accompanied by "conversation, interchange, intercourse, and mutual shaping" and gives rise to "different understandings, practices, information, obligations, rights, symbols, and media of exchange." Social ties are not uniform within these circuits, but are instead subject to differentiation. People may, for instance, mark the manifold exchange relationships they engage in, whether relatively intimate or relatively impersonal, by means of special names, the use of particular media of exchange, or the giving of appropriate gifts. The transfer of goods and services within circuits is in other words not restricted to either market or gift exchange, but often involves a combination of both.

Rather than being solely motivated by utility maximization, members of these circuits may be inspired by concerns of status, care, love, pride or power. In daily economic life, they not only need to collect information and make decisions on its basis, they also need to make sense of the behavior of the partners they engage in trade relationships with. This behavior may not be universally rational, but it does make sense within the circuits that economic actors inhabit. On the one hand, then, the notion of circuits serves as an alternative to the reductive notion of exchange that prevails in neoclassical economics; on the other hand, it suggests that there is more to markets than social structure.


This book is not about colorful biographical details of artists, dealers, and collectors, about "the powers behind the scenes," about chivalrous and mischievous behavior of dealers, about amorous relationships with dramatic endings, or other juicy stories that the art world has come to be associated with in the popular press. The aim of the book is to understand how contemporary art is marketed in western societies around the turn of the twenty-first century, and how art dealers determine prices for contemporary works of art. In the first chapter, I show that by reducing all values to price, or by radically separating the categories of price and value, dominant strands within economics and the humanities have failed to understand how dealers operate in two worlds simultaneously. Their disciplinary separation notwithstanding, the worlds of art and economy need to be negotiated in the daily practice of the art dealer. In order to do so, art dealers rely on an intricate business repertoire. For instance, a sharp distinction is made between the front room of the gallery, where artworks are exhibited and references to commerce are suppressed, and the back room, which can be seen as the commercial nerve center of the gallery. In order to separate art from commerce, dealers also make a sharp distinction between "right" and "wrong" acquisition motives on the part of collectors, and between an active and a passive marketing scheme. They furthermore try to control the biography of artworks in order to prevent these works from coming into contact with money again. By doing so, the "disentanglement," as Michel Callon has called it, of the artwork from its producer, remains incomplete on the art market (Callon 1998).

In chapter 2 I elaborate on the social fabric of the market. The art market is characterized by a dense network of intimate, long-term relationships between artists, collectors, and their intermediaries. As the dealer suggested at the beginning of this introduction, at times these relationships are framed like or grafted onto family ties and hardly look like the anonymous interaction assumed in neoclassical economic theory. I show how dealers, collectors, and artists maintain these relationships by marking, defining, and framing exchange; by doing so they actively manage the meanings of the transactions they engage in. A quid pro quo exchange between a dealer and an artist may, for instance, be framed both as a hostile act and as an act of care. Also, whereas some scholars are keen on making a sharp distinction between an (ideal) gift economy and a (corrosive) market economy I argue that this distinction is untenable, for circuits within the art market are characterized by economic transactions that are not quid pro quo, but involve mutual gift giving and delayed payments.


Excerpted from Talking Prices by Olav Velthuis
Copyright © 2005 by Princeton University Press. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
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Table of Contents

List of Tables and Graphs ix
Acknowledgments xi
Introduction 1
Chapter 1: The Architecture of the Art Market 21
Chapter 2: Exchanging Meaning 53
Chapter 3: Promoters versus Parasites 77
Chapter 4: Determinants of Prices 97
Chapter 5: The Art of Pricing 116
Chapter 6: Stories of Prices 132
Chapter 7: Symbolic Meanings of Prices 158
Chapter 8: Conclusion 179
Appendix A: Interview Questionnaire 191
Appendix B: Description of Interview Sample 194
Appendix C: Record Prices for Art 197
Appendix D: Multilevel Analysis of Prices for Art 199
Notes 209
Bibliography 237
Index 255
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  • Anonymous

    Posted February 9, 2007

    a reviewer

    Getting a handle on the economics of the art market is much like grabbing smoke. Dealers are loath to discuss the financial side of their business and the private nature of their transactions frustrates researchers. Even the ostensibly open world of auctions is full of slippery practices. None of that deterred Olav Velthuis, whose exhaustive research into the art market yields a fascinating economic analysis. He explores the anticommercial bias of dealers and even finds some tangible factors that influence art prices. While impressive, Velthuis' work would have benefited from a more conversational, less academic tone. His fascinating price study, for instance, focuses on 'coefficients' and 't-values' rather than on actual prices. Still, we recommend this study for its ambitious and intriguing attempt to shed light on a little-known corner of the economy.

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