[MSN] Booming Market of Antiques. To match this almost insatiable demand, smugglers and looters have been increasingly active.

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Booming Market of Antiques
 
by Girish Mishra; August 07, 2007  

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."

E-mail: gmishra at girishmishra.com

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