For some years now, the essay accompanying our summer “Recent Acquisitions” exhibition has surveyed the current state of the art market. However, this past year has been unlike any other in the history of our nation. The September terrorist attacks, which happened to coincide with the start of the art season, resonated within our relatively insular art world just as they did throughout the broader population. The art community’s reactions in many respects mirrored those elsewhere: grief, fear and anger, on the one hand, were balanced by generosity and compassion, on the other. Although members of the art world are unusually privileged, culturally and often also financially, art itself expresses the most universal of human impulses. If there is an answer to the dilemma facing us today, a balm to heal our wounds and make us whole again, it may as readily be found in art as in the more ostensibly pragmatic actions of politicians, diplomats and soldiers.

In the weeks following September 11, pundits often told us that everything had changed. Irony was declared dead, as were materialism, celebrity worship and all the other excessively narcissistic aspects of American society. America, it was said, would never be the same. Today, a scant ten months later, such statements seem overly cataclysmic and in themselves somewhat narcissistic. First of all, the only thing that really changed on September 11 was America’s longstanding sense of invulnerability; the international developments that led to the terrorist assault had been unfolding for many, many years before. And second, the death of irony, materialism and celebrity-mongering proved to be no more than a relatively short moratorium.

It was bizarre (and genuinely ironic), in the wake of the airplane attacks, to hear our political leaders promote shopping as a patriotic duty. Yet rampant materialism has become so intrinsic to our nation’s well-being that any significant downturn in consumer spending could theoretically have caused more economic damage than the attacks themselves. Throughout the autumn of 2001, many Americans, acting out of respect for the dead, emotional shock and existential uncertainty, did curtail their shopping. But the absence of any further domestic terrorism (other than the mercifully short-lived, if still unexplained, anthrax mailings), and the unexpectedly rapid rout of the Taliban seemed to sanction a return to normalcy. By early 2002, relief, pent-up desire, low interest rates and a lackluster stock market had spurred spending, particularly on items, like art and real estate, that could be viewed as potential investments.

The shape of our supposedly recovering economy remains uneven. One commentator recently likened it to an hourglass: fat on the top and bottom, but skinny in the middle. This makes sense. The rich have plenty of money, and low-cost items are low-risk, but the vast middle of our economy is still anemic. In the art market, the middle range has been eroding for several years now. Our “State of the Market Report” last summer described this phenomenon in some detail. Increasingly, collectors, dealers and the auction houses have been focusing their attention on the uppermost tier, generating enormous prices for works that are perceived to be superior in quality. As a result, there are now really two entirely separate art markets: one for top-notch works, and another for everything else.

While it is tempting to try to justify this two-tier market in objective terms, the truth is that sometimes there is little qualitative difference between an “A-level” and a “B-level” work. And even in cases where a quality difference is palpable, the price gap between the two levels often exceeds the gap in quality. It is no longer possible to logically extrapolate the value of a “B-level” work from an “A-level” work, because in addition to rational factors such as aesthetic merit, size, provenance and condition, there is often an unquantifiable element (generally involving some combination of hype and hubris) that skews the price of the latter. The pricing dichotomy between top-and mid-level works has become so extreme that it is undermining the whole structure of comparative valuation that undergirds the art market. The element of chance that has always been part of the auction environment plays a far larger role today than ever before.

The much publicized trials and tribulations of the auction giants Sotheby’s and Christie’s are thus far more than a high-stakes soap opera or the latest manifestation of America’s love-hate obsession with wealth. The recent criminal conviction of Sotheby’s majority shareholder, A. Alfred Taubman, for colluding with his counterparts at Christie’s represents the failure of a marketing strategy that has dominated the art world for nearly two decades. When Taubman took over Sotheby’s in 1983, he initiated a concerted campaign to transform the auction house from a wholesale to a retail player, in the process popularizing the notion that auction prices could be used, somewhat like stock indices, as a market barometer. Presumably, if Taubman’s approach had been profitable, collusion would not have been deemed necessary. He and competitors who followed his lead invested enormous sums in marketing and promotion, but the auction houses never really succeeded in becoming full retail operations. Because sales results can range anywhere from below wholesale to above retail, auction pricing remains an unreliable barometer of value.

During the 2000-2001 art season, another ill-fated attempt to transform auctions into a lush retail environment was made by Phillips Auctioneers, long a second ranking sales venue. Hoping to profit from the financially draining civil penalties imposed on Sotheby’s and Christie’s for their collusion, Phillips positioned itself as a high-end art boutique and began offering sellers outlandish guarantees to secure top-flight consignments. Even though the sales proved relatively successful, Phillips lost tens of millions of dollars because the guarantees regularly exceeded realized prices. Stung in part by the economic downturn after September 11, Phillips’ parent company, the luxury-goods purveyor LVMH, finally pulled the plug in early 2002, transferring a majority interest in the auction house to two of its directors, Simon dePury and Daniella Luxembourg.

Phillips’ overfunded bid for dominance was a late-blooming example of the market paradigm that proved devastating to a lot of businesses during the boom of the late 1990s. Like many an Internet start-up, Phillips bought into the erroneous idea that a company can invest huge sums of money to gain market share without worrying about the bottom line. All these companies endeavored to bypass the tedious processes entailed in building a corporate infrastructure and providing an economically viable product or service. The illusion that wealth can be generated easily and quickly, which sucked people into the stock-market bubble and fueled the financial shenanigans of behemoths like Enron, should by now be thoroughly discredited. Nevertheless, a residue of that misguided philosophy remains with us in the art world.

The hunger for a “sure thing” is perhaps understandable in the wake of so much insecurity and anxiety. Since September 11, our world seems a far more dangerous place, and human existence appears far more fragile than it did previously. This perception is particularly acute in a city like New York, which not only bore the brunt of the terrorist attacks, but is also the center of the international art market. Disappointed with stocks, collectors would like to believe that art offers a more solid alternative. People crave certainty in art, even while acknowledging that certainty exists nowhere else.

The quest for certainty exacerbates the bifurcation of the art market that was already evident before September 11. This quest, which pushes the top of the market higher, can also be observed at lower altitudes. In every price range, collectors aver that they want only the “best.” As the amount of art on the discard heap grows larger, and the quantity of cream at the top smaller, one imagines that a moment of reckoning cannot be far off. It is difficult to predict what form such a reckoning might take. A universal price collapse is surely possible. But equally possible— and in fact necessary— is the reestablishment of a rational pricing structure that hews more closely to genuine gradations in quality while at the same time recognizing the difference between retail and wholesale.

The big auction houses failed in their bid to become viable retail outlets because an auction always comes down to the circumstances and whims in play on the date of sale, and the retail market simply cannot absorb all the art that is available on any one day. Dealers have historically acted as holding areas for this excess art, evening out transient variations in supply and demand and ensuring that both sellers and buyers get a fair price. Whereas auction results fluctuate based on the pressures of the moment, dealers have the leisure to accurately assess the quality and value of an art work in the context of other pieces by the same artist.

With the auction houses retrenching, knowledgeable dealers have a far greater role to play in shaping the future of the art market than at any point in the last twenty years. In addition to safeguarding a reasonable hierarchy of value, a good dealer can help a collector determine which works really are the “best.” Although certification by an outside authority (a famous name in the provenance, publication in a respected monograph) can provide seemingly objective guidelines, all aesthetic judgements are ultimately subjective. And tastes change over time. There are no short cuts or sure things in the art world, any more than there are in the rest of the world. True collecting entails protracted self-education and the honing of an idiosyncratic personal vision. Dealers serve as indispensable guides on a long journey of discovery. In this spirit, the Galerie St. Etienne has always seen its role as primarily educational. We strive to provide collectors with the information necessary to make their own determinations of both quality and value. Just as important as showcasing the singular extraordinary object is the ability to provide historical context for a broad range of art works. During this last year, we have employed both approaches in our roster of exhibitions. The season was bookended by two of our signature theme shows: one, in the fall, on Expressionist prints, and another, in the spring, on images of labor. The two central exhibitions of the year featured the artists for whom the gallery is best known. A presentation of drawings by Gustav Klimt, Egon Schiele and Oskar Kokoschka and another of paintings by Grandma Moses were timed to coincide with two travelling museum exhibitions organized by the Galerie St. Etienne (in Italy and the U. S. respectively).

Our summer “Recent Acquisitions” exhibition, as is traditional, recaps the gallery’s shows of the past season while simultaneously highlighting the most interesting additions to our inventory. At a time when collectors and dealers are complaining of a shortage of good material, we are especially pleased with the “new” works by Henry Darger, Klimt, Schiele, Käthe Kollwitz, Alfred Kubin and Moses that have come into the gallery during the last few months. As always, we accompany the art of these renowned masters with a broad selection of work by other Expressionists and self-taught artists, including (in the latter category) our recent “discoveries,” Pavel Leonov, Josef Karl Rädler and Vasilij Romanenkov.

Our principal contemporary artist, Sue Coe, while continuing to explore the animal subjects to which she has long been devoted, was (like all of us) deeply shaken by the events of September 11. Her monumental drawing 9-11 memorializes both the heroism and the profound sadness which will hereafter be associated with that historic date. Signed, limited-edition prints of the image may be purchased from the gallery for the benefit of the Henry Street Settlement, a social-services agency that has performed critical outreach among the direct and indirect victims of the World Trade Center disaster.

And so we return, full circle, to the subject with which our essay began. This has been a year in which we all yearned for quick and easy answers. We wanted to be done with the pain, to either move on, or if possible, to go back to the status quo ante. Collectors looking for that elusive “sure thing” will gradually come to realize that there is no certainty in art, but art does offer a haven of a different kind. Art is one of the oldest forms of human expression. It speaks to the indominability of the human spirit, the sacred and ineffable amidst the mundane. As we grope our way toward an understanding of what has happened to us, and what it will mean, there is still solace to be found in art. Given time and reflection, the answers will come.

Checklist entries include catalogue raisonné numbers, where applicable. Unless otherwise indicated, image dimensions are given for the prints and full dimensions for all other works.