Investment Art: A Beginner's Guide

Forget your shares portfolio - the recession-dodging art market is increasingly proving to be the most profitable place for high-stakes investment

Oscar Wilde may have been mistaken when he claimed “all art is quite useless”. A new use for art has been emerging in recent years, and it may be the most pragmatic of all – as a solid investment. In a time when stock markets are sinking, debts are rising and the looming threat of double-dip recession cannot be entirely eliminated, the art market still sporadically dazzles with record-breaking profits. The unique economic buoyancy of art has long caught the eye of not just aesthetes, but also discerning investors.

Art now falls under the category of the "SWAG" asset. The term, coined by analyst Joe Roseman of Investment Week denotes "alternate investments" which manage to defy economic gravity – namely silver, wine, art and gold.

As well as being decidedly sexier than the FTSE 100, the trend of investing in luxury assets makes a lot of economic common sense. SWAGs often outperform other equities in times of economic downturn for several logical reasons. Firstly, they benefit from the uniquely profitable principle of "scarcity economics" (their value is related to their rarity). Secondly, in an unsteady market, people are drawn to stability, and all the SWAG assets are durable – they have a historical precedence of desirability and can be bought and stored almost indefinitely. Lastly, as their returns are not related to the patterns of the stock market, they add a sensible diversity to any portfolio, the literal asset equivalent of not keeping all your eggs in one basket.

So, we’ve all been there - you’ve got a few spare million in the savings account and you can’t decide whether to invest in the Damien Hirst or the Château Lafite. Luckily, help is at hand. The art market’s unique ability to maintain a bubble of prosperity amidst a global recession has given rise to a new type of business – the art investment advisor.

Businesses of this sort were virtually unheard of a decade ago, and yet the demand  for art purely as an investment has seen a proliferation in recent years. As well as increasing numbers of private banks offering advisory services to their clients, specialist companies such as Fine Art Wealth Management and The Art Investor exist to assist buyers on making choices for bespoke portfolios which can maximise returns. Perhaps most significant in this field, however, is The Fine Art Fund. Set up just over a decade ago by Philip Hoffman, this was the first business of its type to invest in art as an asset. Currently, they manage more than $150m of assets and achieved a net annual return of 6.34 per cent over the past eight years.

Hoffman recently told the Sunday Times, “In the old days people invested in bonds, stocks and cash, and now they’re investing in ten different subject headings and art is just one of them ... People don’t look at their gold bars and, in some cases, they treat art in the same way.”

The rise of these businesses is necessary because the unregulated nature of the art market means that it still straddles an awkward line between solid economic sense and a frantic, wild gamble. On one hand, there are plenty of promising statistics: in 2011, the Financial Times reported that the art market made an 11 per cent return to its investors, a frantic outstripping of stock market return. This year, sales have been promising, with impressive prices achieved at Art Basel in June, and there is a wealth of evidence that the top end of the market has been immune to the turbulence underneath it. In fact, over half of the 20 most expensive auction sales of all time have been completed since 2008, indicating an economic buoyancy which overcomes even the recession.

So far, so lucrative. Yet, the mechanics of the art economy are governed by strange, volatile forces which means that it is never a safe bet. Charles Saatchi himself noted “Art is no investment unless you get very, very lucky” in his 2009 book My Name is Charles Saatchi and I am an Artaholic. In many ways the art market is an economist’s worst nightmare. It is wholly speculative and subjective, and therefore constitutionally unpredictable. The valuation of contemporary art, in particular, is based on a collection of changeable and changing opinions. It is constantly affected by external circumstances, and trends are capable of crashing out of fashion just as swiftly as they crashed it. Additionally, it is fundamentally impossible to confirm the value of the market as a whole. Private sales comprise approximately 75 per cent of the total market, and these are almost always undisclosed. “The art market is the most illiquid, opaque market in the world,” explained Jeff Rabin, quoted in The Art Newspaper. Given this, manoeuvring within it is always going to be a guessing game.

Other industries have, too, sprung up in reaction to the demand of fine-art investment, notably the specialist storage port. Investment art is, emphatically, not bought to be hung on the wall. Instead, collectors are increasingly storing their assets in state-of-the-art warehouses. Christies are currently expanding their "Fine Art Storage Service" due to increased demand, and new ports are due to open in Singapore and Luxenbourg, adding to existing onces in Geneva. These large-scale warehouses offer highly regulated storage controls with humidity and light protection as well as extensive on-site security. They also have a notably appeal to the money-minded collector in that they allow the temporary postponement of VAT and customs duty payments.

The implications of this are vast. Not only with regards to the valuation of art, but with an entire overhaul of its purpose. Art bought as an asset and stored, indefinitely in a warehouse, far from the damaging light of day denotes a new mode of art ownership – one where the object d’art is reduced to a purely monetary transaction.

“It’s a depressing thought,” comments Connie Viney, a London-based artist who regularly exhibits at The Vyner Street Gallery, “Just recently there was the news that Sotheby’s have once again broken their auction record by selling a Rothko for £47.3m. By all accounts, it seems that that price will just increase once again next time it’s sold. With sums like that, how can people think of art becoming anything but a get-rich-quick scheme?”

Is this the real status of art in today's world? Elite, out-priced, stored out of site and endlessly circulated in a micro-economy closed off to all but the super-wealthy? "Art for art’s sake" is a 19th century concept. "Art for the people", too, is becoming swiftly outdated. The motto for our times, it seems, is "Art for the 1 per cent".

Auctioneers place bids during the Damien Hirst's Beautiful Inside My Head Forever, at Sotheby's in 2008. (Photo by Daniel Berehulak/Getty Images)

Kamila Kocialkowska is a freelance journalist based in London.

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It's unfashionable to call someone a "genius" – but William Empson was one

Father than denying the contradictoriness of being human, Empson revelled in it, as The Face of Buddha reveals.

William Empson was a genius. Describing anyone in this way is distinctly unfashionable nowadays, because it suggests a level of achievement to which most of humanity cannot aspire. There is nothing you can do to acquire genius. Either you have it or, like the rest of us, you don’t – a state of affairs that cannot be remedied. The very idea smacks of elitism, one of the worst sins in the contemporary moral lexicon. But if talk of genius has come close to being banned in polite society, it is hard to know how else to describe Empson’s astonishing originality of mind.

One of the most influential 20th-century literary critics and the author of two seminal books on language, he was extremely receptive to new thinking and at the same time combative in defending his views. He was a poet of the first rank, whose spare and often cryptic verse was immediately understood and admired by Ludwig Wittgenstein. Incomparably more thoughtful than anything produced by the dull atheist prophets of our own day, his book Milton’s God (1961), in which he compares the Christian God to a commandant at Belsen, must be one of the fiercest assaults on monotheism ever published. And as a socialist who revered the British monarchy, he had a political outlook that was refreshingly non-standard.

Empson’s originality was not confined to his writing. He led a highly adventurous life. Expelled from his research fellowship and his name deleted from the records of his Cambridge college in 1929 when one of the porters found condoms in his rooms, he lost any prospect of a position in British academic life. For a time, he considered becoming a journalist or a civil servant. Instead his tutor I A Richards encouraged him to apply for posts in east Asia, and in 1931 he took up a position at a teacher training college in Japan. For some years he taught in China – mostly from memory, owing to a lack of books, and sleeping on a blackboard when his university was forced to move to Kunming during the Japanese siege of Beijing. By the late Thirties he was well known in London literary circles (written when he was only 22, his best-known book, Seven Types of Ambiguity, was published in 1930 and a collection of poems appeared in 1934) but just scraping a living from reviewing and a small private income. During the Second World War he worked at the BBC alongside George Orwell and Louis MacNeice.

He returned to China in 1947 to teach in Beijing, living through the stormy years just before and after Mao came to power and leaving only when the regime’s ideological demands became intolerably repressive. He continued his academic career, first at Kenyon College in Ohio, briefly at Gresham College in London, and finally at the University of Sheffield, where he was appointed head of the English department in 1953 and remained until his retirement in 1972, but always disdained academic jargon, writing in a light, glancing, conversational style.

Inordinately fond of drink and famously bohemian in appearance (T S Eliot, who admired his mind and enjoyed his company, commented on Empson’s scruffiness), he lived in a state of eccentric disorder that the poet Robert Lowell described as having “a weird, sordid nobility”. He was actively bisexual, marrying the South African-born sculptor Hetta Crouse, equally ­free-spirited, and with whom he enjoyed an open relationship that was sometimes turbulent yet never without affection. His later years were less eventful, though rarely free from controversy. In 1979 he was knighted, and awarded an honorary fellowship by the college that half a century earlier had struck his name from the books. He died in 1984.

The publishing history of this book is as extraordinary as the work itself. “The real story of The Face of the Buddha,” the cultural historian Rupert Arrowsmith writes in his richly learned introduction, “began in the ancient Japanese city of Nara, where, in the spring of 1932, the beauty of a particular set of Japanese sculptures struck Empson with revelatory force.” He was “bowled over” by three statues, including the Kudara Kannon, a 7th-century piece in the Horyuji temple representing the Bodhisattva of Mercy, which fascinated him because the left and right profiles of the statue seemed to have asymmetrical expressions: “The puzzlement and good humour of the face are all on the left, also the maternity and the rueful but amiable smile. The right is the divinity; a birdlike innocence and wakefulness; unchanging in irony, unresting in good works; not interested in humanity, or for that matter in itself . . . a wonderfully subtle and tender work.” Gripped by what the art historian Partha Mitter describes as a “magnificent obsession”, Empson travelled far and wide in the years that followed, visiting south-east Asia, China, Ceylon, Burma and India and ending up in the Ajanta caves, the fountainhead of Mahayana Buddhist art. First begun in Japan in 1932, The Face of the Buddha was written and repeatedly revised during these wanderings.

Empson made no copy of the manuscript and in a succession of mishaps it was lost for nearly 60 years. The story of its disappearance is resonant of the boozy Fitzrovia portrayed in Anthony Powell’s novels. On leaving for his foreign travels in 1947, Empson gave the manuscript to John Davenport, a family friend and literary critic, for safekeeping. The hard-drinking Davenport mislaid it and in 1952 told Empson he had left it in a taxi. Davenport’s memory was befuddled. He had in fact given the text to the Tamil poet and editor M J T Tambimuttu, who must have shelved it among the piles of books that filled the rat-infested flat vividly described in the memoirs of Julian Maclaren-Ross. When Tambimuttu retur­ned to Ceylon in 1949 he passed on Empson’s manuscript to Richard March, a fellow editor of Poetry London, which ­Tambimuttu had founded. March died soon afterwards and his papers mouldered in obscurity until 2003, when they were acquired by the British Museum. Two years later an enterprising curator at the museum, Jamie Anderson, spotted the manuscript and informed the author’s descendants of its rediscovery. Now Oxford University Press has brought out this beautifully illustrated volume, which will be of intense interest not only to devotees of Empson but to anyone interested in culture and religion.

Although a fragment of his analysis appeared in the article “Buddhas with double faces”, published in the Listener in 1936 and reprinted in the present volume, it is only now that we can fully appreciate Empson’s insight into Buddhist art. His deep interest in Buddhism was clear throughout his life. From the indispensable edition of his Complete Poems (Allen Lane, 2000) edited and annotated by his biographer John Haffenden, we learn that, while working in the Far Eastern department of the BBC, Empson wrote the outline of a ballet, The Elephant and the Birds, based on a story from Buddhist scriptures about Gautama in his incarnation as an elephant. His enduring fascination with the Buddha is evident in “The Fire Sermon”, a personal translation of the Buddha’s celebrated speech on the need to turn away from sensuous passions, which Empson used as the epigraph in successive editions of the collected poems. (A different translation is cited in the notes accompanying Eliot’s Waste Land, the longest section of which is also titled “The Fire Sermon”.)

Empson’s attitude to Buddhism, like the images of the Buddha that he so loved, was asymmetrical. He valued the Buddhist view as an alternative to the Western outlook, in which satisfying one’s desires by acting in the world was the principal or only goal in life. At the same time he thought that by asserting the unsatisfactoriness of existence as such – whether earthly or heavenly – Buddhism was more life-negating and, in this regard, even worse than Christianity, which he loathed. Yet he also believed Buddhism, in practice, had been more life-enhancing. Buddhism was a paradox: a seeming contradiction that contained a vital truth.

What Empson admired in Buddhist art was its ability to create an equilibrium from antagonistic human impulses. Writing here about Khmer art, he observes that cobras at Angkor are shown protecting the seated Buddha with their raised hoods. He goes on to speculate that the many-headed cobra is a metaphor for one of the Buddha’s canonical gestures – the raised hand with the palm forward, which means “do not fear”:

It has almost the same shape. To be sure, I have never had to do with a cobra, and perhaps after practical experience the paradox would seem an excessively monstrous one. But the high religions are devoted to contradictions of this sort . . . and the whole point of the snake is that the god has domesticated him as a protector.

It was this combination of opposite qual­ities that attracted Empson. “A good deal of the startling and compelling quality of the Far Eastern Buddha heads comes from combining things that seem incompatible,” he writes, “especially a complete repose or detachment with an active power to help the worshipper.” Art of this kind was not only beautiful, but also ethically valuable, because it was truer to human life. “The chief novelty of this Far Eastern Buddhist sculpture is the use of asymmetry to make the faces more human.”

Using 20th-century examples that illustrate such asymmetry, Empson elaborates in his Listener article:

It seems to be true that the marks of a person’s active experience tend to be stronger on the right, so that the left shows more of his inherent endowment or of the more passive experiences which have not involved the wilful use of facial muscles. All that is assumed here is that the muscles on the right generally respond more readily to the will and that the effects of old experiences pile up. The photograph of Mr Churchill will be enough to show that there is sometimes a contrast of this sort though it seems that in Baudelaire, who led a very different kind of life, the contrast was the other way round. In Mr Churchill the administrator is on the right, and on the left (by which of course I mean the left of the person or statue, which is on your right as you look) are the petulance, the romanticism, the gloomy moral strength and the range of imaginative power.

With such a prolific mind as Empson’s, it is risky to identify any ruling theme, but he returns repeatedly in his writings to the thought that the creativity of art and language comes from their irreducible open-endedness and susceptibility to conflicting interpretations. As he wrote in Seven Types of Ambiguity, “Good poetry is usually written from a background of conflict.” Rather than being an imperfection that must be overcome for the sake of clarity, ambiguity makes language inexhaustibly rich. In The Structure of Complex Words (1948) he showed how even the most straightforward-looking terms were “compacted with doctrines” that left their meaning equivocal. There was no ultimate simplicity concealed by the opacity of language. Thinking and speaking invoked deep structures of meaning which could be made more intelligible. But these structures could not be contained in any single body of ideas. Wittgenstein’s early ambition of reducing language to elem­entary propositions stating simple facts was impossible in principle. Inherently plural in meaning, words enabled different ways of seeing the world.

Empson’s message was not merely intellectual but, once again, ethical. “It may be,” he wrote in Complex Words, “that the human mind can recognise actually in­commensurable values, and that the chief human value is to stand up between them.” The image of the Buddha that he discovered in Nara embodied this incommensurability. Rather than trying to smooth out these clashing values into an oppressive ideal of perfection, as Christianity had done, the Buddhist image fused their conflicts into a paradoxical whole. Instead of erecting a hierarchy of better and worse attitudes in the manner of the “neo-Christians”, as Empson described the pious humanists of his day, the asymmetrical face of the Buddha showed how discordant emotions could be reconciled.

Whether Empson’s account of asymmetry can be anything like a universal theory is doubtful. In support of his theory he cited Darwin’s The Expression of the Emotions in Man and Animals to show that human emotions were expressed in similar ways in different cultures, and invoked speculation by contemporary psychologists on the contrasting functions of the right and left sides of the brain. But the scientific pretensions of Empson’s observations are less important than the spirit in which he made them. Entering into an initially alien form of art, he found a point of balance between values and emotions whose conflicts are humanly universal. Rather than denying the contradictoriness of the human mind and heart, he gloried in it.

It takes genius to grasp the ambiguities of art and language and to use them as Empson did. But if we can’t emulate his astonishing fertility of mind, we can learn from his insights. Both in his life and in his work he resisted the lure of harmony, which offers to mitigate conflicts of value at the price of simplifying and impoverishing the human world. Instead, Empson searched for value in the ambiguities of life. He found what he was looking for in the double faces of the Buddha described in this lost masterpiece.

John Gray is the New Statesman’s lead book reviewer

The Face of Buddha by William Epson, edited by Rupert Arrowsmith with a preface by Partha Mitter, is published by Oxford University Press (224pp, £30)

John Gray is the New Statesman’s lead book reviewer. His latest book is The Soul of the Marionette: A Short Enquiry into Human Freedom.

This article first appeared in the 23 June 2016 issue of the New Statesman, Divided Britain