Booming Market of Antiques

In the West there has emerged a booming market in antiques, which include old idols, icons, coins, manuscripts, old books, paintings, etc. The volume of demand for them has been soaring at an ever-accelerated rate. To match this almost insatiable demand, smugglers and looters have been increasingly active. No amount of government surveillance and legal enactments has been able to decelerate, not to speak of stopping, this plunder. Notwithstanding all the glib talk by the Bush administration, the heritage of the Iraqi people dating to their ancient civilization has been looted and smuggled to the West. Almost the same thing has happened in Afghanistan and the Balkans.

Take the case of India, its temples, old forts, and museums are continuous targets of the looters and smugglers. Not many years ago the dresses of the last Mughal emperor, Bahadur Shah Zaffar and the empress Zeenat Mahal were stolen in spite of heavy security around the historic Red Fort and, till now, they have not been recovered. The government and the public are aware of the scale of pilfering of the antiques from Orissa, H.P., U. P., Rajasthan, Gujarat and Madhya Pradesh. Years ago, the Government of India enacted a law that antiques in private possession must be registered with designate authorities and loss of them must be convincingly explained. Nobody knows whether this law has been really implemented.

It is quite often heard that old records and manuscripts have been taken away from the archives and museums usually with the connivance of corrupts officials and employees. If the government undertakes a thorough stock taking of the antiques, especially the huge amount of manuscripts, brought from Tibet and by the renowned scholar Rahul Sankrityayan and deposited with the Patna Museum, one is sure to realize that a substantial portion is not there but has reached the West. Not only this, but also the records and manuscripts in private possession have been taken out of the country because there is no law to stop this.  To give a concrete instance, the private papers of Swami Sahjanand Sarswati, one of the builders of peasant movement in India during the first half of the 20th century were taken away by an American scholar, Walter Hauser, of Philadelphia. Some years ago, with a great deal of difficulty, the Nehru Memorial Museum and Library could secure microfilm of these papers to facilitate the work of researchers. Very recently when Mahatma Gandhi’s manuscripts came to be auctioned by Sotheby in London, there was a public hue and cry. The Government of India stepped in and could bring them back, as grapevine has, after paying a substantial amount of money.

It is rumoured that Western, especially American scholars, have been taking away original records from the National as well as State Archives after propitiating the staff. Under the rules, no scholar is allowed normally to enter the rooms where records are stacked. These rules are observed more in the breach.

The boom in the market for the antiques and paintings may be underlined by the fact that, according to The Economist (May 26), “Sotheby’s set a record total for contemporary art auction this month, raising $254.9m in one night, including the highest amounts ever paid for 15 individual artists. But within 24 hours the figure was smashed by Christi’s, its rival, with a $384.7m buying binge, including 26 artist records.” A prominent Manhattan dealer, Richard Feigen, corroborates this by asserting that “There’s a mood of speculation that I have never seen before in my 50 years in the business.”

The main reason behind the surge in this market, we have already mentioned, is due to ever-growing volume of demand, which in turn, is the result of increasing wealth and incomes of the people at the top in the society. The Economist terms this as a result of “a global wave of liquidity … pushing up asset prices everywhere.” As The Forbes magazine has underlined, the number of millionaires have been increasing all over. These millionaires and other entrants to the category of the neo-rich, as The Economist says, are said to “have run out of houses to buy and yachts to launch, and would like to display their wealth on their walls.”  There are a number of features that place the market for antiques and paintings at a higher pedestal. It will forever go on expanding and there is no danger of crash like other market. The volume of demand will always exceed that of supply. In addition, this market has gone global after the demolition of barriers in the way of exports and imports and relaxation of vigil on the borders.

Antiques and coveted paintings are not normal goods. They are, in the language of economics, positional goods. Fred Hirsch, in his 1976 book The Social Limits to Growth, divided the economy into two parts, namely, material and positional. The material part produces goods like food items, clothes, cars, television sets, washing machines, shoes, umbrellas and so on, whose production and supply are regulated by market forces, keeping in view the changing volume of demand. As neo-classical economists say, the law of diminishing marginal utility applies in their context. In other words, as a consumer starts acquiring the units of such goods, the amount of utility derived from each successive unit falls and he stops his acquisition at the point where the amount of utility forgone indicated by the price paid is equal to the amount of utility derived.

This law does not apply to the items termed as positional goods because their supply is, in the language of economists, very, very inelastic. It can never be increased enough to match the volume of demand. Their supply can never be enough to satisfy the demand of everyone wanting them. To give certain examples, lively beaches, hill resorts pf scenic beauty, the painting like Mona Lisa, Mahatma Gandhi’s letters, folio volumes of Shakespeare’s works, coins of the Mauryan times, swords of the conquerors of the days of yore, and so on cannot be increased at all. Highest jobs like presidency of India, the post of Secretary General of UN, the position of being a Nobel laureate, etc, are bound to be extremely limited at any point of time. If Pratibha Patil became President of India, Shekhawat was deprived of it. Obviously the possession of such goods elevates the possessor’s status in the society. Pratibha Patil will be looked at with the kind respect that no one else will command in the country for five years. Similarly, a person possessing the original copy of the Nobel Prize winning book Geetanjali by Rabindranath Tagore is sure to be highly regarded in the society. People will sing praise to his refined taste and cultural status. Howsoever one may try, one cannot get a substitute or match. Thus positional goods have been rightly described as goods without substitutes and this gives them high ranking in desirability. To quote sociologist Dr. Katharine Betts, “In general, positional goods cannot be created, only redistributed, while material goods can be created with time and effort.”

Since  these goods are not subject to value depreciation, there is not much risk involved in investing in them. As assets they are matchless. During the lean days a person can sell them and recover much more than what he has invested.

Let us end our discussion by quoting from a report “Prices soar as world’s super-rich invade London art market” (The Guardian, June 23): “Although the art market has been on a steady upward curve since 2002, this week’s London sales have catapulted it into new territory. … wealthy collectors from China, Russia and the Middle East are becoming regular fixtures in auction rooms and giving more established names from Europe and the US a run for their money.”


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