Marion Maneker: What’s different now in the art market?

Larry Gagosian: We’re going through a kind of art recession. That’s probably the simplest way to describe it. Prices have come down for a lot of historical works, as well as living artists. And volume has come down. Auction houses are feeling quite a bit of pain. This is a normal cycle; to me, it’s nothing to get terribly alarmed about. It’s more about how you deal with it, because the cycles are unavoidable. Nothing now is even close to what happened in the early ’90s. The phone didn’t ring; nobody wanted to buy art. I don’t think we’re anywhere near there now. In fact, I think things are starting to improve. There’s an advantage for a gallery like mine in this kind of auction market, particularly because, notwithstanding the guarantee structure, many collectors are more inclined to sell things privately now, so you’re seeing a lot of very big private sales in the last six months. The problem is, we don’t have the megaphone of the auction house to trumpet our successes, because we’re supposed to be discreet. The picture isn’t balanced. Also, private galleries and private dealers tend to be a little more nimble, and they can adjust more easily than a company that has 2,000 employees. That’s something I wouldn’t want to be in the middle of. The other big issue in the primary market is that prices have gone up substantially. There are a lot of artists whose primary prices are higher than their secondary sales. What’s the way out of that situation? There’s this thing that pricing is somehow sacrosanct, and that you can’t lower a primary price, because it’s some sort of sign of defeat. That doesn’t make sense to me. It’s like any market—you have to adjust, and you try to do it in an intelligent way that preserves the value of the artists. But you can’t just levitate prices and hope they stay at that level. Those conversations, particularly now, come up more often.