For the majority of artists out there, whether painters, singers or anyone who makes art, when economic times are hard, there are fewer people who will buy their work. However, the problem with these generalizations is that the economy is so huge that there are variations in many places.
For example, those whose art have become desired by many or by a rich private market may find that their art now becomes Veblen goods, which are items that actually become more desirable the more expensive they become, which is the opposite of the normal economic price curve you probably studied in Economics 101. In general, most commodities will follow the typical price curve where, if supply is less than demand, the price goes up, while if supply exceeds demand, the price goes down.
Veblen goods such as luxury bags, luxury watches and collectible art and cars may appreciate over time. Their desirability rises as their price goes up, and these achieve investment status. More importantly, although their buyers may lessen if times are really hard, art is actually a good investment even for really bad economic times, as it is a tangible asset and not based on speculation. In other words, good art can be a hedge against bad economic times.
For the majority of struggling unknown artists however, their art becomes less sellable and priced less when times are hard. People have less money to spend on discretionary items like art and need to concentrate on economic survival and the purchase of basic commodities and needs.
One can argue from an artist‘s standpoint that art is not a discretionary purchase and is needed by the soul to survive. Unfortunately, outside the artist community, that is not how most people think and make buying decisions. Most people just think the economy is bad and that artwork can wait.
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There may be art connoisseurs who are supportive, but as their own businesses and investments lose value in a recession or down economy, their discretionary funding decreases. If they do buy art, it is with less money, and hence they buy less art, or just concentrate on well-known artists. With these people, if they like a piece of art they will buy it, because they have more than enough money.
An artist probably does not need to have a PhD in Economics to understand the relationship between lean times where there is less money chasing art out there, versus good times where spending happens left and right.
The US Federal Reserve may soon cut interest rates with a goal of injecting more money into the economy, and get businesses and investors excited. Hopefully, this will benefit not just the traditional stock and bond markets, but also the art market. When businessmen and investors make more money, they are more inclined to spend on things they do not need for survival. Hence it can help the art market, though we do not really know by how much.
Unless you are already a famous artist with a rich clientele, you should probably consider investing, keeping your day job or doing side hustles. For example, although Carolyn Davidson was paid by then-startup Nike a measly $35 to design their “swoosh” stripe, eventually they rewarded her when the company became a behemoth. Maybe you have a spare room in your house you can rent out, invest some savings in the market, buy dividend stocks for the income or figure out a side hustle that has a demand. Someone always wants something done that they are willing to pay for.
While famous artists and their work probably never have to worry since their rich clientele never stopped pursuing them, the larger group of unknown artists who are trying to make a living from their work will probably benefit if the economy fares better.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
