We used to believe in economies of scale, commoditisation and things getting better and cheaper all the time. Because we were making things in the thousands and millions, we could automate, become more efficient, deliver just in time and bring unprecedented variety and quality to the market for historically low prices.
Of course, with art and artworks, those economies of scale don’t really apply. Each piece is unique and singular. If there is a mass market in art, it is because of replication. We do have access to art cheaply, because we can obtain DVDs of movies, download albums and buy prints. That has led to a very subtle problem, however.
The concentration of wealth is undeniable. There is more money in the economy now than there has ever been, but it is concentrating into the hands of the few at an unprecedented rate. The inequality between rich and poor has seldom been so marked, historically. The unintended consequence of this concentration is that it has destroyed the mass market. There is no longer enough money available in the mass market to pay for goods at anything like a price that covers the investments necessary to create mass market products and benefit from economies of scale. Sure, there is demand, but demand that has no purchasing power. This is why we have seen a race to the bottom to produce nearly everything in poorly paid sweatshops.
But wait a second. There is more money in the economy now than there has ever been; it’s just concentrated in a few hands. What’s going wrong? I think the explanation is simple. Those that have the wealth have come to expect mass market prices for everything they buy. They expect everything, even bespoke and custom items, to be priced comparably to the prices achievable with grand economies of scale – mass production that can no longer be supported by the residual spending power still held by the majority of the market.
So with the mass market no longer viable, that can only mean one thing. The price of everything that those with the wealth still buy has to rise. It has to rise, because that is the only way to support production for such a small constituency of buyers. Instead, all manner of production and businesses everywhere are closing. Why? Because those with the concentrated wealth won’t pay a fair, market price for the limited scale of production that they require. They are not paying their way. They want to buck the market.
What does this mean for artists? It means that more than ever before, prices of limited, hand-crafted things should be soaring, simply so that a tiny market of individuals can support the production of these things at all. If they don’t, the wealthy simply won’t have them. Mass production cannot be supported because the masses have reduced spending power (a direct consequence of wealth concentration). If the wealthy won’t pay what it costs to support limited scale production, nothing will be produced.
My advice to anyone that makes or does anything in business, at present, is to charge more money, because only those with wealth can afford your output at all. The mass market is gone, stripped of its purchasing power. Everything you do is now for a much smaller potential customer base. To remain viable, that can only mean that unit prices must rise and substantially. It’s what market forces demand.
So instead of being a starving artist, get paid what it costs to produce for an exclusive, elite, smaller market. Make a margin on top. It only makes good economic sense. The fact that millions of people cannot afford your work is not your doing. They already cannot. They couldn’t the moment they lost their purchasing power.
Those with the wealth are going to have to get used to the fact that producing for an exclusive minority costs a lot more, per unit produced and prices have to rise way beyond what could have been achieved with mass production.