The Gray Market: How an Artist-Run Bank Reveals the Extent of the Art Market’s Debt Dependency (and Other Insights)

Inspired by Daniel Edelstyn and Hilary Powell's "Bank Job," our columnist takes a high-speed tour of debt's role in the art market.

Artists Hilary Powell and Daniel Edelstyn, the duo behind the Bank Job project. Photography by Daniel Edelstyn and Linden Nieto. Courtesy of the artists.

Every Monday morning, artnet News brings you The Gray Market. The column decodes important stories from the previous week—and offers unparalleled insight into the inner workings of the art industry in the process.

This week, a look at the importance of debt to almost every level of the art trade…



In the New York Times this Wednesday, Josie Thaddeus-Johns wrote about the quietly revolutionary (in the political sense) practice of London-based artists Daniel Edelstyn and Hilary Powell. And while the duo’s concerns radiate beyond the narrow boundaries of the art world, their work nevertheless got me thinking about just how thoroughly the art market has come to model itself on some of the more unequal aspects of the financial markets.

The idea central to Bank Job, Edelstyn and Powell’s latest project, is debt. Since 2017, they have been printing and selling artworks in the form of an alternative currency out of a former bank in London’s Walthamstow suburb. The effort is both a protest of predatory lending and a means of combating it. The duo splits the sales proceeds, donating half to a quartet of local nonprofits and using the rest to buy bundles of payday-loan debts resold by banks at a deep discount below their face value.

Normally, the only entities buying these kinds of debts are collections agencies, which then profit on the trade by relentlessly hounding the individual debtors to try to extract more cash than the agency paid. Many, if not most, people who default on loans do so out of genuine hardship, often because of matters outside their control, rather than a conscious desire to give The Man the middle finger. So the collectors generally only manage to worsen the average debtor’s already humiliating and desperate state of existence.

But Edelstyn and Powell do something different with their newly acquired debts: void them. Although this outcome has a limited (at best) effect on the debtors’ actual financial circumstances—by the time your debt gets flipped on the resale market, your credit history is pretty much a raging inferno—it makes visible a world financial system that is, in key respects, designed to entrap the many for the benefit of the few.

To date, the artists have purchased and forgiven about £1.2 million ($1.5 million) worth of payday-loan debt. Aside from the social-practice element of the project, Bank Job will also live on as a forthcoming feature-length documentary by Edelstyn and Powell. And the connection they’ve established between the art market and the debt market reminds me of the various ways the former has adopted the latter, for better and worse.

A table full of Daniel Edelstyn and Hilary Powell's alternative currency inside the Hoe Street Central Bank (HSCB). Photography by Peter Searle. Courtesy of the artists.

A table full of Daniel Edelstyn and Hilary Powell’s alternative currency inside the Hoe Street Central Bank (HSCB). Photography by Peter Searle. Courtesy of the artists.


In the American art world, the one form of debt familiar to almost everyone is student-loan debt. Pursuing an undergraduate or graduate education in the US now plunges most budding artists tens of thousands of dollars underwater before they even emerge from the chrysalis of the university. A recent study by left-wing think tank the Urban Institute estimated that about one million American citizens per year have defaulted on their student loan debts since 2012, and about 40 percent of all borrowers in this category are expected to do so by 2023.

Keep in mind those estimates are just for college students in general, too. Based on 2016 US census data, fine art majors have the highest unemployment rate (9.1 percent) and lowest average wages (under $41,000 annually) out of graduates in 162 different concentrations. Results on the institutional side are sobering, too. As of this Saturday, a newly released online survey of museum workers’ earnings showed about 70 percent of salaried respondents grossing less than $60,000 annually, regardless of whether they lived in north Texas or New York City. (Figures do not include the value of benefits, which vary widely, and results will change over time as new respondents add entries to the spreadsheet.) Those financial realities make repaying student loans an even more colossal challenge for people aiming for careers in the arts, whether on the studio, administrative, or scholarly side.

But this is hardly the only type of debt at play in the art market. At the top end, major collectors (and a handful of major dealers) now use their art holdings as collateral to secure high-value loans, which they most often plow into other investments that throw off immediate income, according to the 2018 TEFAF Art Dealer Finance Report. In short, the rich use art as a means to get richer through the sorcery of financial engineering. The process thereby strengthens systems of inequality both inside and outside the art world itself.

<i>Big Bang 2</i>, 2019, a performance included in Daniel Edelstyn and Hilary Powell's fortchoming <i>Bank Job</i> film, in which the artists detonate a van full of symbolic payday-loan notes. Photography by Graeme Truby. Courtesy of the artists.

A still from Big Bang 2 (2019), a performance included in Daniel Edelstyn and Hilary Powell’s forthcoming Bank Job film, in which the artists detonate a van full of symbolic payday-loan notes. Photography by Graeme Truby. Courtesy of the artists.


Other consequential types of debt proliferate at all price tiers of the gallery and dealer market. Many, if not most, dealers offer what are effectively interest-free loans to collectors on their purchases by way of establishing payment plans at no additional cost. (This practice only formalizes what happens too often anyway, given buyers’ notorious tendency to pay weeks or months after an invoice’s due date.) And in the primary market, this “courtesy”—whether voluntary or not—also ends up being extended by the artists, who generally don’t get paid by the gallery until the gallery gets paid by the client.

Artists also often go into a different kind of debt with their galleries, who sometimes agree to front money for fabrication, framing, or other necessities of artwork and exhibition production on the condition that those expenses will be taken out of the artist’s cut of future sales when (or if) the works in question sell. These arrangements tend to work out better for the artist than the gallery. I have never heard of a gallery charging interest on the amount artists owe them for expenses, meaning here, at least, artists receive the same preferential treatment as collectors who take extra time to pay for works in full.

At least one purely positive example exists, too. Starting this September, Kunst Aan Zet, a government program in Flanders and Brussels, will extend interest-free loans of up to two years to buyers acquiring the work of artists based inside their borders, as long as said works are priced from €500 to €7,000 ($566 to $7,920). (Similar initiatives already exist in the UK and the Netherlands—though I wouldn’t necessarily count on the former surviving Brexit, assuming it still happens—and Art Money offers interest-free loans of up to 10 months to buyers at about 950 galleries worldwide.)

This is effectively a small-scale stimulus package for the emerging art trade in Belgium, a concept that feels as unlikely to land in the US today as a live sphinx. Technically speaking, Kunst Aan Zet puts the risk of covering any defaults on Belgian taxpayers, but the amounts here are so small and spread out over such a large population that the financial hit to the average citizen would be negligible. The beneficiaries would be the galleries and artists who need the money most in our increasingly winner-takes-all economy.

This isn’t a comprehensive overview of debt in the art trade, of course. Still, it’s eye-opening to consider just how much of the art market now depends on various manifestations of the concept—and how differently the trade might work if we revised our thinking about what has become, in so many places, so accepted. Unless we get to a point where anarchist hackers or revolutionary political parties manage to disrupt the world financial system as we know it, then, we should at least be aware of debt’s influence on the people, the art production, and the power dynamics that drive our weird niche industry.

[The New York Times]


That’s all for this week. ‘Til next time, remember: it’s a lot easier to say “money isn’t everything” when you have plenty of it to spare.

Follow Artnet News on Facebook:

Want to stay ahead of the art world? Subscribe to our newsletter to get the breaking news, eye-opening interviews, and incisive critical takes that drive the conversation forward.