Charles Xavier

02/24/2013
The International Art Trade
Sothebys Holdings Inc., colloquially known as Sothebys, is an internationally renowned
corporation known mostly for the ultra-exclusive and illustrious items of aesthetic value that they
auction off each year in a variety of consigned lots. The company is rich in history, culturally, and
as a business. The evolution of the economic model of Sothebys is at least as intriguing as the
cultural evolution of the company. Albeit, the business model of Sothebys has, until somewhat
recently in history, been more of a mysterious mechanism than almost any other employed by
corporations, especially considering that the company is a publicly traded company (BID on the
NYSE). This paper hopes to trace the historic and economic development of Sothebys, and to
give a better idea of what goes on behind closed velvet doors, looking at the company history,
recent major price-fixing scandal of the 1980s and 90s, to where the company has positioned
itself today.
Sothebys was not, somewhat embarrassingly, founded by either a Sotheby, or in 1744, as
Sothebys claims in its self-provided company history. In fact, Sothebys started in 1734 by
Samueal Baker, a rising eighteenth century capitalist who was positioned in an era of large
amounts of new wealth to cater to the needs of new wealth, which include looking like old wealth
as quickly as possible. Baker began selling books, which were, at that time, prized commodities
which denoted wealth, and class, and also provided a major source of entertainment for the
patrician, and increasingly capitalistic patrician, class. Bakers keen eye for rare, and exotic books
quickly lead to success on fixed price lots, but he soon saw the advantages of English Auctions,
and founded his business on the idea of highest bidder takes the prize. Thus began a new era of
auctioneering.
In 1778 Baker died and left his half of the firm to his nephew John Sotheby. The
company then became Messrs. Leigh and Sotheby. Leigh and Sotheby remained in the book
trade, selling off illustrious libraries of the nobility, and feeding off of Christies crumbs, the then

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single auctioneer of paintings and sculptures for the nobility, in an extraordinarily booming
English art market. Sothebys did score unbelievably grand literature collections; such as the
private library of Napoleon which he had taken with him toe St. Helena.
In 1823, when John Sotheby and Samuel Leigh had both passed on, Samuel Sotheby
began to engineer the Sotheby name into the distinguished art auction house that it is now. He
began to steer the business, with his son Samuel Leigh Sotheby, into the art market, which was
then almost 100% controlled by the celebrated Christies.
The business was difficult, as dealers were primarily profiting from art deals with private
clients by utilizing the auction houses as wholesalers. Lacking in connections to nobility, which
Christies monopolized, and in business clout, which the dealers of West End monopolized, The
young Samuel Leigh Sotheby began to build a third commodity, which would eventually prove
monumental: a expertise in identifying prestigious goods. This expertise transformed the image of
the auctioneer as mere salesman, into a formidable business entity, qualified on par with the art
dealers of dealers of the day. The creation of the prestigious auctioneer involved implementing
educational foundations of the company to make experts of auctioneers, that exists to this day. In
a particularly bold move, Samuel Leigh Sotheby exhibited a falsely valued urn, which he himself
greatly admired, with a four page history at an exhibition which displayed to the world Sothebys
extreme dedication to identify all valuable assets in the world, dedication which was so strong
that they would declare when they had misdiagnosed an object. This was a pivotal event in
shaping Sothebys name in the minds of the Art public. By the 1840s Strand Magazine cited
Sothebys (which was then furthered by John Wilkinson and Edward Hodge, under the name
Sotheby, Wilkinson, & Hodge) as the only rival in fine art expertise on the planet.
The prestigious name, and monopoly over literary sales lead to major international sales
in this period, especially the 1870s and beyond, as great American aristocrats such as J.P.
Morgan, Henry Clay Folger, and Henry E. Huntington began to purchase stupendous amounts of

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fine books from Sothebys. The dealing was mostly one-directional, but it set the stage for
expansion of Sothebys into foreign markets.
In the winter of 1908-09, a businessman by name of Clement Anderson Montague
Barlow was offered a chance to purchase Sothebys. He raised the investment capital to purchase
the with two shrewd experts Geoffery Hobson and Felix Warre, Warre was an expert in coins and
antiquities, which were a rapidly growing market in America. Barlow was the first businessman
to see the opportunity to capitalize on the prestige of Sothebys, and to begin to professionalize
the auctioneering trade the way that lawyers of the time were professionalized.
Sothebys began to enter into private deals by treaty, which they did not have to make
public. This practice allowed the auction house to encroach on the art dealer territory
significantly, and also created a necessity for a more international environment. The partners of
Sothebys (which included the old Hodge) brokered deals with wealthy American collectors like
J.P. Morgan for 130,00 ($15.8 million in todays dollars), and $750,000 ($15.9 million).
Sothebys pocketed all proceeds over 100,000 in many such deals, leading to profits that
previously had been entire years of operating revenue. In this new era of calculated business
deals, Sothebys suddenly began selling lots including the famous love letters of Browning and
Bennett, for the equivalent of millions of todays dollars. Given the sublime success, Barlow
made the decision to penetrate the pictures market traditionally controlled entirely by Christies.
When Sothebys auctioned off a Frans Hal portrait in one of their first pictures sales, they ended
up trouncing Christies, who were selling two other similar works by the same artist. For the first
time in history Christies had been beaten, by a business oriented, and international mindset
firmly rooted in expert education; by 1916, Sothebys had taken up its famous residence on New
Bond Street as a new rival to Christies.
Sothebys has always been propelled by the famous Three Ds, death, divorce, and
debt, and, thanks to the high portion of both death and debt (from severely increased estate taxes)

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after WWI, Sothebys saw a rapid period of growth, particularly because the buyers of the high
level of English estates being sold off were American. The most significant shift to date in
auctioneering came during this period. Great paintings in the Old Masters category suddenly
flooded the market from the fatted estates of Britain. (Unfortunately the really big names tended
to still be dealer brokered deals, but paintings of students of Rembrandt and Rubens and such
masters were now being sold by the auction house). Previously these works were quietly sold in
private sales, but Barlow saw a gigantic opportunity to utilize Sothebys connections to the
relatively new mega-wealth in American, with whom they had been dealing for a generation
already, by creating an auctioning department for the Old Masters, and getting wealthy Americans
to bid on them. The strategy was a goldmine that has lasted to this day. Every Wednesday during
that period was designated as Old Masters day. This new business eventually attracted more
and more business away from the old firm Christies.
It was not mere imitation of Christies the propelled Sothebys into the secondary position
in the auction business, but rather the business structuring Barlow brought to the company. From
the time he purchase Sothebys to the 1920s, Barlow had introduced modern business technology
(typewriters), modernized staff (they hired a woman expert, Mrs. Sowerby in 1916), defined
holiday and bonus schemes for the employees, and cultivation of foreign markets contributed
significantly. The name of the company was changed to Sotheby & Co. When Barlow cashed out
his shares and retired just before the Wall Street Crash of 1929, he left Sothebys in the best shape
of its young life. In fact, following the crash, for the first time, Sothebys beat Christies in
annual turnover for the very first time: 35,000 to 29,000. This feat is attributed almost directly
to the underlying business structures of Sothebys, which resulted in them losing much less then
the unprepared Christies.

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Such was the case of the rising star into the 1930s and 40s. In 1937 a young man
obsessed with antique shops came aboard Sothebys as a porter (the traditional post used to
determine if one had the eye for fine goods of high value). By 1939 the young man had made
junior partner and was being set up to head the firm. This young man with a brilliant eye for
treasures was Peter Cecil Wilson. Shortly after becoming a junior partner and director at
Sothebys, PCW (as he was professionally known at Sothebys) was whisked off by WWII. He
performed espionage for MI6 under the code name 007, and befriended the writer Ian Fleming,
and inspired the famous movie series. PCW was so fantastic at espionage that he was offered a
full-time position as a spy. However, he preferred the work at Sothebys and returned there after
six years of service.
PCW had proved himself adequate of not only an extremely good eye, but of a highly
unique talent for composing romantic tales about the art objects which he poured into Sothebys
catalogues. He came from a patrician background, and so brought that certain aristocratic touch to
Sothebys that it had been sorely lacking for the first hundred or so years of its business. What is
even more important was that PCW had been stationed in Washington as a spy, and he had seen
what the American art market looked like first-hand. PCW gained more than that though, he
gained a feel for the global art market, a concept which he was birth. His ability to make social
connections, mixed with his treasure hunting talents, and selling abilities made for a potent
cocktail, and he was poised to make Sothebys a truly international company, whereas, even
though huge deals had been brokered with Americans in the past, Sothebys had remained
primarily an English venture.
In December of 1952 PCW had his first chance to propel Sothebys into international
acclaim when the Egyptian leader King Farouk, the worlds greatest collector of nearly
everything at the time, was deposed, and his estate had to be sold off for the government. PCW
immediately took a plane to Cairo, and was able to become the leading face of the auctioning of

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the estate. It took bargaining with the new military junta, and eventually having a law passed that
made it impossible for Farouk to ever attempt to file legal suit against Sothebys for the
auctioning, but eventually a huge, exotic sale was staged with Sothebys as the lead auctioneer.
The famous sale of 54 sale was an economic disaster, yielding profits so low that the
Egyptian government refused to pay the auctioneering fees, and eventually Sothebys was forced
to write off the whole ordeal. But PCW had successfully planted Sothebys in the global spotlight
since the auction had attracted major art buyers from around the world, and not only because
anyone with 5,000 or greater credit was allowed private access to one of the worlds most
extensive pornography collections ever assembled, but for the exotic nature of the sale, and
especially of such global treasures as the Double Eagle coin. Thanks to PCWs efforts in Cairo
Sothebys came out an international business phenomena.
The next business coup of PCWs was to completely shatter the glass ceiling, which was
still surrounding the auctioning of Old Masters paintings. Barlow had made great strides in the
selling of pictures, but he had not succeeded in selling truly prestigious, ultra-expensive paintings
by the Old Masters themselves. PCW was determined to change this, and in 1956 he managed to
do so by contracting to sell a major Poussin painting for a guaranteed 35,000. Sothebys ended
up having to make up a 6,000 deficit, but it had shown the world that an auction house could
fetch an extremely high price (29,000) these materials. The public did not know it was a loss for
Sothebys, and the mystical veneer is what stuck.
During this same period, Sothebys cultivated a certain Jewish audience in the migrs
from Germany, and in 1956 ended up hiring the Jewish wife of a deceased pictures expert,
Carmen Gronau, to run the pictures department. Where rival Christies had practiced xenophobia,
Sothebys had extended a warm hand to key migrs, including the shrewd placement of Mrs.
Gronau. This foreign policy was handsomely rewarded after the war when the connections lead to
Sothebys landing the contract to sell off famed the Impressionist collection of one Jakob

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Goldschmidt. Following the success of that sale, despite several of the paintings having to be
bought in, Sothebys suddenly became the number one choice for selling collections of master
paintings, almost overnight.

In 1954, currency regulations with America were made favorable for trade, and PCW had
decided it was time to employ an agent, John Carter, to break into the American market. By
giving knowledgeable lectures in major cities, and mingling with American wealth, Carter was
able to bring a great deal of American collectors to Britain, and to secure highly profitable lots in
America for Sothebys. Part of the success that Sothebys had was that Park-Bernet had a
monopoly on the fairly new American art-market, and Parke-Bernet did not engage in the secret
reserve practice, which marked English auctioneering, and they charged much higher
commissions. Parke-Bernet auctions in American were somewhat lowbrow affairs with an
everything must go! vibe. Sothebys offered international prestige, coupled with charm and
dignity, plus lower commission rates, and a record for record sales figures to Americas wealth.
By 1964 Sothebys American turnover was larger than Parke-Bernet, and they secured a lease on
a building on Madison avenue, thus making Sothebys fully international. In 1964, Sothebys
bought Parke-Bernet and became Sotheby, Parke and Bernet.
1967 saw the introduction of the Times-Sotheby Index, which was the first general
tracking tool for watching the prices of art in a similar fashion to the prices of stocks. PCW
understood well, and promoted strongly the connection of art and money, and the new index was
the logical conclusion of that philosophy. The atmosphere of the 60s was one was one in which
international laundering was commonplace among the wealthy of the world, and under PCWs
directorship Sothebys catered to these needs of tax evasion with an expertise that would have
suggested theyd been an international company forever. Within a few years Sothebys had
opened branches in nearly every major country around the world, and was making smooth deals

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across borders for new wealth the world over. This business practice was particularly brilliant in
that it enabled Sothebys to trade actively without selling to museums overly much as it had in the
50s and early 60s. Selling to museums put exceedingly valuable art works behind bars, and
this new strategy of facilitating wealth movement around the world became a cash cow for
Sothebys, which became the go-to place for anyone wishing to transfer money out of their home
country to a foreign country, or convert their fortunes into foreign currencies, or to international
investors increasingly looking to invest in a commodity with faster growth than the stock
markets.
At the same time, PCW spearheaded further divisions in the art market, and designated
sales for the various types of art: Impressionism, Modern Art, Old Masters, etc This created
new, and multiple categories that generated new interest and added value to the market, and
allowed Sothebys to open expert departments to more effectively handle specific consumer
subsets, as collectors purchasing Modern Art, were often not purchasing Old Masters.
Additionally, when the index was formed, it showed that the highest end of the market
was booming, as well as the low end of the market, which consisted of upper-middle class patrons
of the arts. Sothebys also exploited these figures in increasing dealings in these previously
ignored lower ranges of goods below 5,000. It was a perceptive move, and lead to an ever larger
world market share of art dealings. It was a golden age.
But starting in 1969, things began to fall apart. The art bubble died, and all of the
international expansion put a monumental strain on the company. PCW ran Sothebys in a much
more serious, business-like fashion to try and compensate. His aggressive tactics lead to the
Higgons scandal, where Sothebys had created a private investment fund to ensure a steady
supply of Impressionistic paintings for huge advances on credit, which wiped out company
profits when the bubble burst, and caused the resignation of several key staff members. Then the
Sothebys cigarette deal was pushed through by PCW to get some coin in pocket. However, it was

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seen as tarnishing to the prestige of the firm, and caused more experts to resign. Then America, in
1971, put a definitive stop to the concealment of bought-in pieces of auctions, which all of the
major firms, not just Sothebys, had utilized for hundreds of years, and had been recently utilizing
to project strong images despite the huge losses coming from the burst bubble.
The Sothebys Cigarette failed miserably, but the deal brought in a little bit of capital to
the ailing firm. Then the firm decided to start making estimates a matter of public policy,
eventually publishing extensive estimates figures with every lot. This came with more userfriendly catalogues as well. Sothebys was trying desperately to encourage new business from
novices, but they did so by giving up age-old tools of the trade, tools that had made them massive
fortunes. However, Sothebys did manage to continue bringing in some funds through new
auction types such as wine and jewelry, which the middle-class of the times had digested from
traditionally aristocratic tastes. And Sothebys Works of Art Course program came ot be seen an
the worlds finest finishing school and generated excellent profits.
The 70s saw both Sothebys and Christies struggling to maintain profits, and in 75,
both simultaneously introduced a buyers commission of 10%. The two auction houses were
accused of collusion, but no proof was ever successfully proffered. In 77 Sothebys went public,
in Britain, issuing twenty-five thousand shares at 150P, which ended at 2, making the directors
instant millionaires several times over.
By the time the early 80s had arrived an art slump had rattled Sothebys significantly,
and they were on the brink of being bought out by two corporate raiders Cogan and Swidd.. It
was during this period that A. Alfred Taubman purchased the company, at the very bottom of the
art economys cyclic motion, renaming it Sothebys Holdings Inc, and finally to simply
Sothebys when he took the company fully public [both Britain and America] in 1988. Taubman
would be yet another big businessman intrigued by the art business, and determined to make it
more of a business, and less of a circus affair.

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Taubman changed the structure of the company by appointing a CEO, Michael Anslie,
and later, when Anslie left, the now infamous Diana Dede Brooks. This was seen as an obvious
step to better organize the business by the industrial tycoon. It was an effective move, which
enabled Taubman and his socialite wife, Judy, to travel the world, and host parties at their various
residences to court potential clients. Meanwhile, Taubman charged his new corporate team
(Anslie, and Brooks under him, then later Brooks as CEO) with tightening the ship. The expert
departments were recognized as the most integral element of the business, but all accounting,
financial projection, etc had been completely left up to the specialists, with little to no
accountability. Anslie and Brooks worked very hard to get every expert department their own
accountant, and to start implementing fiscal goals. Experts began to have better planning schemes
for future sales projections. When the Tuabman administration took over, it was so bad that they
uncovered dozens of notes indicating debts owed to the company without any indication of who
owed the debt! Brooks was very friendly with the experts and amicably explained to them that
this was no way to run a business.
Taubman also wanted to more aggressively offer credit, or financing, and actually
officially opened the finance department at Sothebys. The idea was another play on attracting a
new kind of client: investors. While Brooks and Anslie restructured Sothebys into a businessmachine out of a circus, Taubman and his wife were constantly courting clients who would not
normally have ever gone to Sothebys auctions except perhaps as spectators. Taubman took up the
same philosophy as Wilson, that art cannot be detached from money, and convinced many of his
investor friends to invest in art the same way they would invest in hedge funds. Taubman also
began to require that everyone at Sothebys act much kinder to clients. He viewed a major issue
of the companys lack of sales as emblematic of the fact that most people in the world were afraid
to deal with a snooty institution like Sothebys. He said he was treated very poorly when he had
dealt with them in previous years. So part of the restructuring was to return Sothebys to its

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merchant roots. With that in mind, Taubman thought that dealers were useless middlemen who
needed to be cut out of the Sotheby equation. He began to aggressively go to private collectors,
and cut dealers out of the supply chain. He wanted Sothebys to be purely retail, not wholesale,
something the firm had never wholly escaped. At the same time, Taubman discontinued the past
policy of selling to the low end of the market, which no longer produced profits, but merely
sucked away resources. Sothebys stopped selling anything below $5,000 unless the item was part
of a larger, more expensive collection.
Interestingly enough, this period also correlates with Sothebys becoming more American
than British. The way the business was being structured, the new American owner, etc
happened to coincide with a very large movement of wealth in the art economy to the U.S.A. The
ultra-luxury goods, such as Old Masters, as well as Modern Art, were selling for record-high
prices every year. Although the U.S.A. makes up only some 15% of the worlds art volume on
average, it brings in about 46% of world art revenue (in contrast Britain does about 13% of the
volume, and accounts for about 26% of the revenue). At the same time, Britain was taxing art
auction buyers more heavily, while the U.S.A. still lacked much regulation in that area, besides
forced reporting of which pieces were bought in. The U.S.A. actually does still allow Chandalier
bidding, which is the practice of bidding up to the reserve on lots via false bids; the practice is
seen as bidding on behalf of the seller in the industry. Taubmans focus on the high-end market
went hand-in-hand with where the global market has gone.
It is important to note that Taubman did understand the auction business fairly well. He
understood that the whole art economy was based on creating a certain prestige, a perceived need,
an attribution of class with objects, and he understood that the auction process was an age-old
process involved a certain element of mysticism. He was rather unhappy when new regulations
required even more explicit reporting to clients at auctions of lots that were bought in after
Christies lied to the press up huge sales. He thought that the magic of these auctions could be

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preserved certainly, and although he wanted to return to the merchant side of things, and to run
things like a more traditional business, without the snooty look, he succeeded in making a leaner
and more efficient firm, and greatly enhancing the vision of previous Sothebys chairmen, and
have unquestionably helped to avert total ruin following two fiascos under Taubmans reign.
The first fiasco was merely the decision, which Taubman disliked, but allowed, for
Sothebys to take its auctions online. It turned out to be a costly, and mostly pointless move.
Although analysts find it interesting since there is no rival to the website, it makes perfect sense
when one thinks of the clientele that Sothebys cultivates. The art business is one of personal
connection, of patrician pampering, and cocktail courting, combined with the magic of live
auctions. Online auctions will never be able to translate those elements effectively.
The second fiasco was the price-fixing scandal, which then CEO Brooks orchestrated
with Christies new CEO Christopher Davidge The way that the auction business is traditionally
run has been to pass on higher rates to buyers via the buyers premium charge, which is added
to the hammer price at auction. These buyers premiums have always been tolerated as a
painful tax that collectors had to endure. But a raising in these rates would almost certainly be
fatal for either Sothebys or Christies if the action was taken alone. Christies still did a large
amount of high-end volume in Britain, and couldnt really afford to raise the buyers premiums
given the taxes already imposed. Sothebys was in bad need of money though, as was Christies,
and so both CEOs agreed to raise the sellers fee. Traditionally this fee is done on a sliding scale
of 10% for the first $100,000, and decreases by ~2% per hundred thousand thereafter. Often for
illustrious, and/or economically prodigious lots, the sellers fee would be cut very low or even to
zero. It would be death for either of the firms to raise their sellers fees singularly,, although
analysts have said that what one firm did, the other would have almost certainly followed anyway
(Sothebys controls about 60% of the global market, and Christies about 40%). The two firms
raised the rate to 15%, and solved their balance sheet problems almost overnight. When the

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scandal was uncovered the major worry was that the firms would lose their reputations. In a
crooked court case, Brooks was given a very light sentence to indicate Taubman, and Taubman
ended up in jail. The British company had records indicating Brooks and Davdige only, but the
U.S. court suppressed the evidence. Taubman went to jail in 2002 for antitrust violation. Still, it
was Taubmans extreme philanthropy, and the well-knit web of social connections that mostly
saved Sothebys reputation. Certain people were outraged, yes, but almost all of Taubmans
connections believed there was no way he could have been involved, and placed the blame of the
scandal entirely on Brooks and Davidge.
The Taubman years represent a very interesting case study in taking an international firm,
and changing its base of operations to a different country. It also illustrates some of the extreme
dangers of having large competitors located in foreign markets because of the different laws
applying to you. It is a business tale that should make executives in every industry more cautious
of how they talk to, and respond to the actions of their competitors if they are based in different
countries. On the other hand, the Taubman years also illustrate the benefits of being able to move
freely in a global economy, and restructure an ancient corporation into more modern idioms by
playing the currents of the world, and of national laws to your advantage.
Taubman has since left Sothebys, but the strategy he implemented is still the driving
force behind the company. The focus on ultra-luxury level items is starting to pay off again. The
latest financial reports indicate that Sothebys is in neutral territory. Probably due to the recession
in the U.S.A. Sothebys has been shifting volume back to Britain, with British volume overtaking
American volume in 2008: $296.7 mil, to $227.6 mil (Hoovers). Following the scandal years
Sothebys reported net losses, but reported gigantic profits in 06 ($107 mil) and 07 ($213.1 mil),
but in 09 they reported a loss of 6.5 mil (Hoovers). The 07 boom was probably related to
Russian expansion, and an opening of an office in Moscow, leveraged against the recession in the
U.S.A. (Sothebys lives and dies by the three Ds: Death, Divorce and DEBT!). That expansion

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was a response to an increased Russian presence in Sothebys business, which perhaps also
accounts for the short bloom in 06 as well.
Sothebys lives and dies by the art economys cycle. The years leading up to the bloom in
06 and 07 were marked by net losses and then large leaps in income. Given the expansion into
prosperous markets such as Russia, and the recent super success of Sothebys Hong Kong Spring
Sale (Wall Street Journal), it seems that in the coming years we can reasonably expect the stock
price to take a large jump along with expected profits as Sothebys leverages the massive amounts
of bankruptcy in the U.S.A against the new wealth in the Russian and Asian markets, as well as
continuing to resort to the tried and truth British market. The lesson of history seems to clearly
indicate that an investment in Sothebys stock at the current price is almost certain to yield
excellent gains in the near future [and almost definitely in the long term).
Sothebys has had one of the most exotic, histories of any company to ever conquer the
globe and build a corporate empire. It is a unique kind of company, which is based on old
traditions of magic and mystic, however modernized it may seem. It is a kind of special relic from
another age, like the very art objects it lives or dies by. Yet Sothebys rich history is a virtual
lesson book for international expansion, with many lessons to be learned about the intricacies of
operating a business on this level. And creating an economy out of art, is certainly interesting in
its own right. In todays economy, one might well consider putting some of their retirement funds
into an art fund, or purchasing some stock in Sothebys.

Comparison Section: How Painting Has Shifted In Social Function

From this analysis of Sothebys something fascinating emerges. In the process of
constructing an international market for art, specifically for fine art paintings, the entire
nature of painting as an art form has shifted in society. Whereas previously, paintings
were judged according to their aesthetic merits, based upon schools of thought and/or

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technique, by art critics, paintings are now judged based upon their perceived economic
value in terms of their ability to command high prices at Sothebys auctions to be used as
instruments of wealth transference, or investment vehicles for the wealthy class.
While painting as high art had always been something that functioned socially
amongst the elite classes, the construction of the international art market that Sothebys
oversaw marks a transition from paintings as cultural transference units to paintings as
pure economic transference units. Whereas paintings used to function primarily in the
transfer of aesthetic technique and knowledge that were judged by the critical element of
the academy (university) so that the height of paintings were what represented the culture
from which they emerged, it is now the primary function of paintings simply to act as
objects to be added to investment portfolios. What is prioritized is the critical discourse
surrounding the paintings, but that critical discourse no longer comes primarily from the
academy, but rather from Sothebys itself so that there is a level of guaranteed value
added to the paintings that the discourse, which is directed by Sothebys, confers, thus
allowed for the facilitation of wealth transfers, and increases in the investments that the
paintings have become.
As an interesting side fact, this may not be wholly destructive to painting as an art
form. As we have entered the 21st century the world has seen the near collapse of most of
the ancient arts. Symphony halls can hardly keep their doors open, poetry is mainly read
in English classes, and hardly anyone reads novels instead of watching films anymore. In
general there isnt much money, or respect in most art forms. The obvious exception is
fine art painting where one can still become a millionaire several times over. The reason
for this seems to be the success of Sothebys model precisely in making paintings

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economic transference units in a society that has come to prioritize monetary value over
any other sort of value. Thus Sothebys, by fundamentally changing the function of
painting, has actually saved painting.

Works Cited
Hoover's. (2010, April 13). Sothebys. Hoover's Company Records - In-Depth Records.
Retrieved from Hoovers.com.
John Jannarone. Sotheby's Is Set for Run-Up. Wall Street Journal. New York: N.Y.: April
8, 2010. Web.
Ken Bensinger and Daniel Costello. Sotheby's Push Onto the Web Faces Problems. Wall
Street Journal. (Eastern edition). New York, N.Y.: Mar 8, 2000. pg. B.1
Lacey, Robert. Sothebys: Bidding for Class. Toronto: Little, Brown & Company
Limited. Print.
Mason, Christopher. The Art of the Steal. New York: G.P. Putnams Sons, 2004. Print.
McAndrew, Clare. The Art Economy. Dublin: The Liffey Press. Print.
Rees, Steven, et al. Sothebys. March 1, 2010. J.P. Morgan Analytic Report. Retrieved
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Charles Xavier
02/24/2013