The estimated size of the global art market in 2024 was $57.5 billion. That represents a decline of about 12 percent from the previous year, with the high end of the market acting as a drag. But art fairs, auctions, and galleries continue to do brisk business, catering to the world’s wealthiest people.

What are the primary and secondary art markets, and which is bigger? What role do free ports play in the global art market? And what determines the value of a piece of artwork in the first place?

The estimated size of the global art market in 2024 was $57.5 billion. That represents a decline of about 12 percent from the previous year, with the high end of the market acting as a drag. But art fairs, auctions, and galleries continue to do brisk business, catering to the world’s wealthiest people.

What are the primary and secondary art markets, and which is bigger? What role do free ports play in the global art market? And what determines the value of a piece of artwork in the first place?

Those are just a few of the questions that came up in my recent conversation with FP economics columnist Adam Tooze on the podcast we co-host, Ones and Tooze. What follows is an excerpt, edited for length and clarity. For the full conversation, look for Ones and Tooze wherever you get your podcasts. And check out Adam’s Substack newsletter.

Cameron Abadi: There’s a primary art market, where art is sold for the first time after being made by artists, and then a sizable secondary art market, where it’s sold after that initial purchase. Which of those markets is bigger?

Adam Tooze: The whole thing, just for sake of argument, is around $57 or 60 billion. It’s a little hard to estimate because it’s opaque and multifaceted. Around 45 percent of that total is the so-called primary market. And this is overwhelmingly dominated by galleries and some [other] platforms now where artists sell art, but most effectively within those platforms, artists are represented by galleries.

So, if you go down to any fancy town, there will be a gallery district. And they maybe have 10 or 20 paintings, pictures, sculptures by two or three artists at any given moment. Maybe they’ll have a show. And these are artists that the galleries represent. So galleries talent-spot artists at an early stage in their career, ideally, and adopt them and then sign contracts where the gallery represents the artists worldwide or in a particular geography. And then galleries will join together to represent an artist across many different continents.

And these are the artists who are going to break out onto the main stage. There are a few thousand people who are represented at the very top level by the biggest galleries. The largest galleries of all are the Gagosians, the........

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