An Antiquarian's Tale, Issue 270

Clinton Howell Antiques - January 22, 2024 - Issue 270

An Appreciation of English Antique Furniture

A semi biographical journey of my life in the English Decorative Arts

An Oped article in the NY Times by Peter Coy entitled, "How to Hold an Anticapitalist Auction" (12/13/23) described how an artist decided to hold a Dutch auction, meaning that he is selling sixty or so paintings by starting them at a high price and bringing the price down by $100 every hour. The artist who calls himself Penny Pinch, is not an angry anticapitalist, but is someone who is amused by the concept of doing such a sale. And it is kind of amusing if you understand just how the auction system works. By that I mean, you go to bid at auction and keep bidding until you are either successful in securing an item or drop out to a higher bidder. It's a pretty simple idea. But auctions are more than a sale of goods as they are really a service, a temporary market that covers transportation, insurance, photography, dealing with sellers and buyers (who can be quite difficult) expertise, rent, inventory control and so much more. Running an auction house is not a simple task. Penny Pinch's idea, whether he knows it or not, might upend that role while getting his art to "the people", whoever they may be.

The big names in the auction world for luxury and high end items are Sotheby's and Christie's and to a slightly less well known extent, Hindman, Phillips, Bonhams, and Heritage. Smaller regional auction houses have been purchased by larger groups and so the industry, like many, has consolidated considerably. But, there is a lack of inventory. The competition is fierce for those few estates that may have Tiffany lamps, Birkin bags, a Winslow Homer, Cartier bracelets, Ferraris or Chippendale furniture, but for homes without such accoutrements, there is little competition. Estates with less high end material become fodder that is grist for the mill, with the occasional wonderful object showing up among the chaff like the mirror I bid on in an auction in Pittsburgh last summer that was estimated at $1,000-2,000 which I underbid at $20,000. (Selling for $22,000 plus a 28% commission.) This is, in a nutshell, where I look to buy these days, not that I don't look at the larger scale auctions. You never know when something might be miscatalogued or just overlooked.

Do the big names have to rule the roost of the auction world? Does Penny Pinch have a good idea? These, and more, are questions I return to again and again in my fever dreams. The Dutch auction is not a terrible idea in some circumstances such as when everything must go, but the problem with it, aside from stripping the profit from auctioneers, is that in niche businesses, all the players that are buying know each other. Collusion is a threat to a fair auction and at a Dutch auction, that scenario might net the auction house nothing whatsoever. They can't operate like that--it isn't fair to the auction business owner. But, fundamentally there is a problem with auctions as they are now, since it is the auctioneer who benefits if a piece sells for considerably more than what was estimated. Presumably, both the seller and buyer are happy if a piece sells for more than estimate, but why should the man in the middle get more if they were prepared to accept less? 

The answer to this question is that if an auction house has marketed something particularly well, they deserve a bonus. As there are a plenitude of run of the mill auctions and not so many blockbuster sales, most items are estimated low so they will sell, as low estimate lure buyers, particularly dealers. Hence, when a good item comes up for sale that soars over estimate, does the auction house really deserve the bonus that comes with the high bidding? Take the mirror that I underbid--if the mirror had sold at $2,000, the commission would have been $560, but it sold for eleven times that. Yes, I believe they probably have earned the half of the commission that is tacked onto the sale price, because two of us found out about it, which means they did their job. But they are also making considerably more from the consignor who doesn't know anything else but to be delighted, But is it fair? If the item was only worth $1-2,000 when they valued it, presumably having a reserve which would have allowed it to sell for as little as $6-700 if there had been just one bidder, does the auction house deserve to get a bigger commission from the consignor? That's a fair question.