NOBODY LIKES THE middleman, and the same is probably true in the art world. The middleman is positioned between customer and seller, and takes a cut. In the art world, that would be the agent or gallery owner. In economies across time and place, the middleman has created both enclaves of success—often with ethnic identities—but also drawn resentment and persecution.
Artists have always needed middlemen to succeed. If in prior times, some of the most famous dealers dealt in traditional and Impressionist paintings, the names resounding in our time have trafficked in contemporary art, dealers such as Castelli, Saachi, Gargosian, Boone, et al.
Today's artists have some alternatives. We hear of the days when talented painters stacked their wares on a street corner in New York City, London, or Paris, and sold directly to passersby. Still, some artists, especially the young and vigorous, do this. Then there is the Internet to attempt sales.
The successful artist, however, still requires an agent or gallery, a necessary third party, but one that also generates mixed emotions. Typically, it is argued that the middleman does not produce anything. Instead, he profits off the buyer and the "producer." Yet it is unfair to say the middleman produces nothing, or pays no price.
Let’s look at middlemen in general across history, those who were deeply resented. Scholars have called them "middleman minorities." Often ethnic groups, these enclaves have succeeded in retail and lending business by kin networks, thrift, mobility, and sacrificial hard work. Their case studies are legion: the Lebanese, overseas Chinese, Armenians, Koreans, Jews, Greeks, tribes in Africa, Indians in East Africa, Vietnamese in the Caribbean and Scots in Poland.
All such cases are notable because of their financial success. Also, they are notable for revealing patterns of persecution. They have been denounced as clannish and predatory. There's also the group psychology: lazy sectors in a society resent those who work harder and thus succeed.
Expanded to the world stage of tragedy, the Marxists reviled them as petty capitalists. The Turkish exterminated the middleman Armenians. And the Nazis did likewise with the successful entrepreneurial Jewish population. There are other slaughters as well, though not on such scales. And, even after the atrocities subside, the stereotype has tended to stick to the "middleman minority" ethnic group.
All of this is on a scale far beyond the narrow world of art commerce. Yet the historic cases show some outlines of why the middleman has had such a hard time. At the least, we can say that some of the same mixed emotions arise in the art market, and certainly in other sectors of exchange.
Take real estate agents. Agents for seller and buyer take up 8-10 percent of the sale price of an average home. They sometimes give good advice, but often merely want to push through the next sale. In publishing, you needed an agent to make headway. "Publishers hate agents,” one agent said. Still, agents winnow the wheat from the chaff and save publishers time. Literary agents take a 15 percent commission.
The standard commission in art sales in 40 percent, explaining why many in the public experience "sticker shock" when they see a painting listed a $2,000. That’s because $800 of that goes to the gallery or agent. Galleries have rents and expenses, so the high cut is usually justified—if only the public can appreciate that.
For a few centuries, the greatest art dealers had a kind of secret credo: Don’t tell the buyer the dealer’s cost for the painting, and don’t tell the artist the final sale price. The middleman’s profit could enrage both parties. This was much easier to do before modern communications.
Painters have the normal mixed feelings about this triangulation. The painter Richard Schmid once counseled fellow painters to make sure their agents or galleries are transparent (no doubt he had unhappy experiences). Historians of art dealing tell the same story: artists and dealers are in constant love-hate relationships. That’s because middlemen do, in fact, produce something essential: the chutzpah to sell, a sense for the market, and a "client list" of buyers.
All in all, the art world middleman is not like a historic "middleman minority," risking life and limb and suffering ethnic prejudice. But they can definitely be resented, especially because they are so few. A Washington D.C. gallery owner once said, "There are too many painters and too few collectors." And, meanwhile, too few effective art dealers in between.
In all areas of commerce, there will be winners and losers. The middlemen always play a role, riding that ebb and flow, doing their best to bring the "producer" and the customer together—with all the mixed feelings that are inescapable.