The law of supply and demand suggests that art prices should continue to increase. On the supply side, the fact that most of the world’s pre-eminent artists are dead and that museums and long-term collectors acquire the finest artworks means that the available stock is constantly shrinking. Moreover, each artwork is essentially a monopoly, owing to its inherent uniqueness.
But there are signs that the market may be turning. Since the 2008 financial crisis, Art Basel has become a leading indicator of the state of the superrich and, consequently, of rising global wealth inequality. As billionaires’ fortunes grew by more than 380 per cent since 2009, art sales have surged as well, with sales exceeding US$10-million increasing byJust over a decade ago, Benjamin Mandel, then an economist at the Federal Reserve Bank of New York,the art market.