Courtesy Christie's

Across the pond: Claude Monet’s "Le bassin aux nymphéas," 1919, from an American collection, sold at Christie’s London in June for £40.9 million ($80.5 million), a world record for the artist.

Claude Monet Season Opens Softly at Christie’s The Purveyor of Modern Life Also This Month When in… London Navigating a Shrinking Art Market James Ensor Modern Art TV Show Wins an Emmy

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Most of the readers of this magazine—artists, dealers, collectors and not a few auction-house employees—are privileged to spend time in a world that focuses on material culture rather than finance. Not only does one derive more visceral pleasure from a painting on a wall than from a bank statement in a desk drawer, but even as the financial products touted as sure things have proved worthless, the artwork and decorative objects that fill our homes still represent what they always have. Neither synthetic nor derivative, they help to sustain our spirit even in these uncertain times.

That’s not to say, of course, that our world is all touchy-feely or that the art market exists in a universe unrelated to broader economic realities. Indeed, a 2005 study conducted by the Alliance for the Arts, a nonprofit advocacy group for arts organizations in New York State (allianceforarts.org), concluded that the auction and commercial gallery business had an economic impact (not counting sales and sales tax) equal to $1.4 billion and employed 7,000 people. That dollar figure does not include the billions spent by “arts-motivated” visitors to New York City.

In a 2007 speech given while campaigning for the French presidency, then candidate Nicolas Sarkozy made the rebuilding of that country’s art market a benchmark issue. After he was elected, his minister of culture, Christine Albanel, submitted recommendations for developing this market that include allowing auctioneers to provide guarantees and deal privately. For its part, London has waged a campaign to regain its 20th-century market prominence; its success is evident from our June sale in that city of the $135 million Miller Collection. This Columbus, Indiana, trove of such seminal modern and Impressionist works as Claude Monet’s Le bassin aux nymphéas, which sold for a remarkable £40.9 million ($80.5 million), ordinarily might have ended up in New York. The art market is global and interconnected, but still intensely local and personal.

The day that Lehman Brothers collapsed in New York, Sotheby’s London held what appears to have been a very profitable sale on behalf of Damien Hirst. The buyers, interested in collecting and dealing in works of art, shrugged off Lehman’s unsustainably leveraged trading of esoteric financial assets as only tangentially relevant to their salesroom decisions. I am surprised by the criticism of the reported participation in the sale of Hirst’s longtime dealers, Gagosian and White Cube, and of Hirst’s devoted collectors. The support of an artist’s dealers and patrons in private transactions and the auction market is a great benefit, providing, of course, that auction regulations are followed strictly.

I joined the Christie’s trusts and estates department just after Japanese buyers disappeared from the market. It was the autumn of 1990, and as our sales plummeted and sold percentages dropped dramatically, I learned how quickly the market can dissolve if major players pull all their money from the table, hoping, perhaps, for a collapse that creates speculative opportunity. Executors of estates, which are traditional sources of material for the art market, often found themselves in a difficult financial situation: They needed to raise money for taxes in a short period and were unable or unwilling to go to the market, especially when their financial obligations were so significant that they might not be met if something failed to sell. Executors don’t want to be forced to accept an unfair price because of their need to raise capital immediately.

We have a few tools to contribute to a healthy market. We know that in these turbulent times, great works will come to sale. We have encouraged sellers to agree to reasonable estimates and reserves and to be as generous as possible in providing extra time for buyers to pay. We have continued to provide some guarantees and assumed the risk that the market will be softer. We have reached out to third-party guarantors for additional capital and their commitment to take part in sales that are weeks away. We’re attempting to act responsibly by providing liquidity and stability. The art business, though, is only a small part of the larger economy, to which the availability of capital and the willingness of buyers to participate are critical.