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Disintermediation Manifesto, Part 0: Introduction

Post #1615 • August 1, 2013, 8:27 PM

I have been thinking for months about the post-crash art world. Not the one we've been suffering through since 2008, but the crash to come, predicted by various fiscal conservatives operating under the Austrian or neoclassical label. There are several ways it could come to pass, but the premise is that the aggressive asset purchases under three rounds of Fed-ordered quantitative easing, the third being open-ended and continuing as we speak, will finally destroy the dollar or force a default on the federal debt, or asset purchases will be discontinued and the recovery will be exposed as a sham. I agree with Peter Schiff's statement that if you have a bubble, it hardly matter what finally pops it. The question is whether we have a bubble.

I'm not at all certain that this crash is inevitable. I read across the economic spectrum from Brad DeLong to Frank Shostak, and no ones' rhetoric alarms me more than those who are certain that this crash will or won't happen. (I give Peter Schiff a pass on this because of his brilliant call about the fundamentals of the economy as early as 2006 - they were garbage - and the fact that he makes his living by stewarding other peoples' money, which means he has to put his where his mouth is.) David Henderson says that he's learned over the years not to be excessively pessimistic. Stephan Kinsella, who is as libertarian as they come, takes the long view. Too many libertarians, especially of the sky is falling crowd (the ones who have been predicting major societal collapse for 40 years), are sure we are in End Times. He then reckons the myriad ways in which society has improved over the last half-century and sums:

For my part, since I believe in the power of freedom, free markets, and technology, I think it’s reasonable to predict that the economy and innovation will continue to increase, over time, in absolute terms, despite the state’s depredations. I could be wrong. It’s possible. But it seems to me that bugging out is not a viable solution. If doom is coming, doom is coming. For me, it’s not a reason to give up. Far from it; it’s a reason to try to be more successful—to acquire more money and power, to better withstand any coming statist calamities.

This is a sensible attitude, but I can't muster the same sanguinity. Schiff has been saying for a long while that as far as he can tell, the Fed doesn't have an exit strategy for QE, and if anything it might step up asset purchases. Bernanke proved him right back in June when he spoke to the press about the possibility that the Fed might have to reduce such purchases by some unknown amount at some unknown date in the future, and in one day, the Dow fell 350 points and T-bond yields spiked. It was Bernanke's Irrational Exuberance moment. Bernanke proved him right again a couple of weeks ago when he, ahem, clarified that the Fed's asset purchases were "by no means a preset course" and he might even accelerate them, sending the markets upwards. If the markets go into cardiac arrest when the doctor merely talks about taking them off of life support one day, we might as well not characterize our current scenario as a recovery.

In any case, much of what we take for granted in the art world is going to fall victim to Stein's Law. Eventually, the higher education bubble is going to pop. Eventually, the High Line is going to price the galleries out of Chelsea. Eventually, you're going to be able to count the number of full-time, working art critics in America on one hand.

And it may yet come to pass that QE Infinity ends, and the markets answer with the depression that we supposedly avoided in 2008. Economics is hard. Let's go have an art career!

The silver lining to all this is that disintermediation, the phenomenon of removing intermediaries from a supply chain, is now possible for the visual arts in a way that it never has been before. Over the next few weeks I'm going to write about disintermediating art training, art display, art sales, art scholarship, and if this leads where I think it might be going, some kind of disintermediation of art itself, in which we cross the verbal, philosophical divide between the work and our experience of it. If no crash comes the exercise will be useful, because responsibility for the shape of our lives as artists rightly lies with us. If a crash comes it will be necessary, as the infrastructure for the art world falls down around us.

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