Let’s talk about Richard Polsky.  He’s an art dealer-turned-author who wrote the 2009 book, I Sold Andy Warhol (Too Soon). He has published another work recently and, just in the last week, could be found signing copies of it alongside Shepard Fairey (you know–the artist who streetified the AP photo of Obama which became the famous ‘HOPE’ poster?) at a venue in West Hollywood.

Polsky’s Warhol book is candid and confessional and worth a read for art market geeks.  The writing isn’t outstanding but the insider’s perspective on the art market is unusually enlightening.

Richard Polsky's 2009 art market exposé.

One theme in Polsky’s work is the complete lack of regulation of the art market.  He points out that in most states you need to be licensed to give manicures; however, there are no minimum criteria for someone who wants to sell you a million dollar painting.  It’s both fascinating and intimidating to consider whether this is a hindrance or an enhancement to the art market.  As with anything, it isn’t black and white, most likely it is some complex combination of the two.

From an art appraisal standpoint, the most interesting idea he promotes is the “Mugrabi Factor.”  This is the increasingly common phenomenon of wealthy collectors manipulating the auction market.  The Mugrabi family recognized the simultaneous marketability and undervaluation of Warhol’s work in the 1980s so they bought as many Warhols as they could get into their hands.  Within a decade they began submitting them for auction and bid them up like crazy.   Some credit the Mugrabis for nearly single-handedly pushing Warhol’s once $300,000 works to the multi-million dollar level by the early 2000′s.

One of many versions of "Fright Wig"--the Warhol Richard Polksy sold 'too soon.'

What about when the Mugrabis get into a bidding war over a Warhol?  Alberto Mugrabi has been quoted to claim that, “I’m only helping my collection.  If I don’t get it, I’m keeping the market healthy.”  Interestingly, at one point, the Mugrabi family was rumored to have amassed nearly 800 Warhols.  Some art market analysts credit them not only for the astronomical rise in value for Warhol’s works–but also Basquiat’s.

Charles Saatchi, the British advertising superstar, has been known to create similar value for artists in his own collection by creating a market for them.  Really, this type of thing is no secret.  Creating a market and demand for your artists is the basic approach art galleries use–the shift with the Mugrabis and Saatchi is that they started doing this with their private collections and did so through the avenue of auction houses–their hope was to deepen their pockets by creating a false sense of demand for their ‘pet’ artists with their up-bidding.

So what does this mean from an appraiser’s standpoint?  Well, it means that when a good appraiser values artwork, he or she should not rely solely on one market level; in this case, the top-tier auction level.  Both public auction sales (at multiple levels) and private dealer or gallery sales must always be researched and analyzed.  It also indicates that the art market for individual artists can be altogether unpredictable despite the general trends in the market overall.  The best folks to analyze these complex and occasionally competing trends?  Yup. You guessed it.  Trained, accredited, professional art appraisers.

Final note: I recommend listening to a recent Polsky interview on public radio.  It isn’t all that long and it covers a lot of art world territory.  I recommend it even though, when posed with the question, “How does one go about finding an honest and scrupulous appraiser?” he says, “You don’t.”  Come on, Polsky!  I would beg to differ!