BY Hannah
Ghorashi
Adding to the other upheavals the art market
is currently faced with—the possible repeal of the tax code darling known as
the “1031 Exchange,” the amendment of the California Resale Royalties Act—an
article published today on Harvard Business School’s Working Knowledge blog
warns about the sudden deluge of Picasso works available for sale.
Back in
February, Picasso’s granddaughter Marina, heir to approximately 10,000 works of
art, announced her plan to sell off the majority of her inheritance all at once
and without involvement from auction houses or art dealers.
Marina
Picasso’s motivations, the article surmises, likely stem from turbulent family
history. (The post links to a New York Times article, which opens with the
sentence: “Since Marina Picasso was a child, living on the edge of poverty and
lingering at the gates of a French villa with her father to plead for an
allowance from her grandfather, Pablo Picasso, she has struggled with the
burden of that artist’s towering legacy.”)
So what
does this mean in terms of cold, hard cash? Mukti Khaire, an associate
professor of business administration at Harvard Business School, explains that
the art market is somewhat “illogical or strange” (ha!) in this regard:
“In many
cases, investors are happy when supply goes up because price goes down and they
can purchase more. But in the case of Picasso, and a few others, there’s a
slight subversion of that principle….If I own a notable Picasso work, I can be
reasonably sure it won’t lose value. But if I am the owner of a lesser-known
Picasso, I might be worried in this case.”
So there
you go. Famous Picassos will remain unaffected, but the values of lesser-known
works (pottery or early paintings, for example), are not immune to the whims of
capitalism and may start limboing. For the record, the prices of some
lesser-known Picassos are already as low as
£937 ($1,558), the price fetched by terracotta plaque Petit carré au
visage at Christie’s back in 2014.
Somewhere
in the article, Khaire adds, “On the other hand, it might be seen as a good
thing in bringing more art out into the world and allowing more people to
experience the joy of something as significant as a Picasso.” Let’s end on that
note.
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