A funny thing may happen on the way to the recovery from the financial markets’ historic collapse. The art market, that alternate universe, may not change much at all—certainly not in any profound structural way—as economies around the world teeter, dangle their legs over the rim of a volcano and are forced into reinvention. Of course, the art market’s scale will contract as the larger economies contract. But not enough account is being taken of speed. This isn’t 1929 or the recession of 1974. This isn’t even the 1989 downturn in the art world, which wasn’t really a world then as it is now, with fairs and biennials in every port. The advances of the Web have sped the growth of art knowledge, and knowledge powers the expansion of older markets and the explosion of new markets; witness China and India, Russia and Brazil. How long the art market will stay down will be relative to the speed of communications and transactions. Even more significant, the fundamentals of the art market aren’t concealing some Katrina-size cataclysm. The essential model for the art business hasn’t changed in a century. Still, let’s put things in perspective: Iceland announced in October it was a heartbeat away from bankruptcy. Stock markets are rising and falling 1,000 points in a day. Thomas Pynchon couldn’t have written this.

The titanic struggle over credit reform and toxic financial instruments’ trillion-dollar drain will inevitably catch galleries with poor cash reserves in the maelstrom of the money world’s perfect storm. Even megagalleries may shrink, given that their clients are holding a ton of paper worth a shred of what it was months ago. What Russian oligarchs and the Steve Cohens of the world will do is anyone’s guess. But it couldn’t be more obvious that collectors, like stock investors, with cash and nerve have in front of them an embarrassment of discounted riches. Players with the wherewithal, both big and small, will get bigger in 2009, while collectors needing to raise money will see lower reserves and more-modest returns. The big auction houses may see more volume, along with more buy-ins. A spate of records for contemporary and modern works isn’t in the cards. That can mean only one thing for online auctions, with their fluidity and lower ceilings: more buyers and sellers and increased inroads into traditional venues’ business. Turbulent markets always favor new technological answers.

What the new year will bring for the Asian market, with its relatively recent gain in art power, is best reflected in the gross domestic products of China and India, which zipped along at rates of 9.3 percent and 7.9 percent, respectively, according to the International Monetary Fund’s 2008 projections, while the old-world economy of the United States was sputtering along at 0.5 percent and the dollar promised to be the new peso. Chinese buyers haven’t known a ceiling for the prices that lifted their country’s artists into the art world’s firmament on piles of cash. This past October’s auction of Chinese art at Sotheby’s Hong Kong, with its 65 percent buy-in rate, may be a bellwether, but only of an adjustment that cools the market from a boil to a simmer. And nothing is changing in the scale of either the Chinese market or India’s in the long term.

Would that it were the same for museums and art schools. With the glitz of the market suddenly dimmed, MFA degrees are going to be less alluring for a spell, while any museum in the midst of a capital campaign for a new palace by a starchitect may well consider eating the development fees and putting its plans on pause. Acquisition budgets? Big loan shows? Sorry, pass me another martini.

With all this, let’s not forget what every collection, museum, gallery, school and art market is based on: artists. For them, the social issues that have galvanized so much of their work will have a new urgency as the 21st century sees its second seismic societal reconfiguration since 9/11. But this time economic crisis is leading to cooperative global reformation—something that neither the politics of counterterrorism nor any financial statecraft since Bretton Woods, in 1944, has achieved. In essence, this historic moment isn’t just about economic transformations but also about their inevitable impact on the culture. Artists never make less-interesting work in hard times. Just the opposite.
"Essay: Spreading the Wealth" originally appeared in the December 2008 issue of Art+Auction. For a complete list of articles from this issue available on ARTINFO, see Art+Auction's December 2008 Table of Contents.