Recent bids of $179.4 million for a Picasso painting and of $141.3 million for a Giacometti sculpture at New York auction houses on Monday, May 11, illustrate increasing global income inequality. As incomes of top earners rise faster than the incomes of low earners, those at the top of the wealth distribution can afford to exert economic power that drives up the price of “blue chip” artwork. Collectors from over 40 countries competed at the May 11th auctions, with a third of the spending from Asian buyers. The art market is vulnerable to factors that limit the demand of high-end art, like trends in taste that are no longer determined by a European or US elite or political restrictions deterring foreign buyers from displaying their wealth. Buyers of high-end art are investing in the art for the short-term, banking on the income inequality trend to remain intact so that greater profit can be reaped during coming bidding wars. Read more here and here.
(Image courtesy of Wikimedia Commons)