When Adam Smith wrote The Wealth of Nations in 1776, he was mainly criticising government interference and protectionism. He famously argued that free market forces would act as ‘an invisible hand’ putting resources where they were best needed, at the best price, at a time when most governments imposed crippling tolls, duties and regulations to try and force trade in the direction they desired. Though he was writing on a very specific issue, he was also laying the foundations of modern economic thought. The Law of Supply and Demand was formulated later, but was based on his ideas.
Auction houses are the best places to see a demonstration of how this Law works. If, for example, the National Gallery of Scotland suddenly decides to flog Raeburn’s ‘The Reverand Robert Walker Skating on Duddingston Loch’, we can be sure the demand will be higher than the supply. Potential buyers would have to outbid each other, thus establishing a final price, where supply meets demand. Two hundred years ago, Raeburn himself would also have been subject to the above Law. Being a portrait painter, he would have negotiated fees with patrons after something approximating Supply and Demand—ie higher fees the more famous he became. With over 700 portraits to his name, he can be considered a typical jobbing artist, working for money.
The poor artist, who works only for inspiration, was a rare figure in Raeburn’s and Adam Smith’s day. Painters expected to be paid, as much as patrons expected a flattering likeness. The impoverished-but-inspired artist, a true child of modernism, became much more common later on. Artists living today may not starve, but are often prepared to make sacrificies, even pay, for the privilege of making art. Artists of modest success are happy to sell art at such undervalued prices that they have to subsidise studio time with a second income. This means they are paying people to buy their art. To explain why they do this, I would like to formulate the Law of Motivation and Effort. In effect, this investigates how there can still be a Supply when the Demand is so inadequate.
Let Motivation be the need an artist feels to make an artwork; his urge to express himself, his vanity and ambition, his creativity. Let Effort be what it costs him in time, money, stress and sacrifices. These entities are impossible to measure with absolute values—all we need to look at is how they relate to each other as subjective quantifications in the artist’s own mind. We are not trying to predict how an artwork will be received on the market, but why it is there in the first place. Set Motivation on the vertical y-axis and Effort on the horizontal x-axis and mark out all the potential ideas and projects the artist is thinking about on the grid. Slash a line from the zero point right through the middle of all these potentialities, and you will clearly see that the ones above the line are the ones the artist is more likely to bother with.
When an artist starts selling work or receiving funding for a project, something funny happens to the curve. Dots on the grid take a sudden jump upwards. The monetary compensation, real or imagined, boosts the artist’s motivation with an amount relative to the payment he expects to receive. If an Arts Council grant of £2,000 comes through, the project jumps to the top of his list of priorities, but if the grant fails, it keeps floating in the middle as a ‘maybe later’. This explains the sudden homogenisation a lot of artists experience once they start selling work, even if only for a fraction of the real cost of production.
As a logical consequence of this, the Law of Motivation and Effort only seems to work as long as the artist is making a loss on the sale or not selling at all. If the money he receives for his art is enough to compensate for his efforts, even if he is barely motivated at all, the curve takes off. Often this is accomplished by the artist hiring assistants to make his art, then selling it for enough money to pay for the low motivation of the assistants. His own effort hits the bottom, and there is nothing to stop him flooding the market with more-or-less useless luxury items. Somehow, as soon as an artist gets decently paid for making work, the tension that existed between his motivation and the efforts facing him disappears and we can no longer rely on him to make work he finds motivating. Of course, this doesn’t mean that all expensive art is rubbish, but we can no longer trust that the artist really thinks that his own art is worth making.
So, of what use is this proposed Law and its subjective predictions? For artists, it can be useful as a reminder as to why we started making art in the first place. Are we working to sell or are we selling in order to be able to work? Of course, this is a useless Law for determining the value of an artwork for the market, since it only regards the inner state of mind of someone passionate about art. But, by understanding the Law of Motivation and Effort we can formulate useful rules of thumb for buying art:
1. Only buy art if it costs more for the artist to sell it to you than it costs for you to buy it.
2. If you are buying art by an established artist, make sure it’s stuff produced before he realised someone would actually pay for it. Or buy work that the artist had to fight to put in a show because it was ‘too difficult’.
3. Only buy art from an artist whose judgement you trust. If he is bonkers or has bad taste you might suspect him to be motivated to make bad art no matter what the effort. This is a very important exception to the rule.
Tobias Sternberg is an artist based in London