On the forecourt at Art Basel 2008

Every other year “the Olympics of art” and grand-daddy of all artfests – the Venice Biennale – coincides with Art Basel, the world’s prime commercial fair for modern and contemporary art. In theory, everything separates the two events. Venice is “pure”, unsullied by commerce, directed by a leading light in the art world (this year it’s Daniel Birnbaum, rector of the Staedelschule in Frankfurt-am-Main, Germany, and a co-director in 2003) and aims to present the best artists from participating countries – a record 77 for this, the 53rd Biennale. Art Basel is all about the market, where pretty well everything is for sale, from gigantic installations in Art Unlimited, multimillion-dollar Picassos in the modern section to scrappy doodles by young hopefuls in the newest galleries.

But the picture is more complex than this black-and-white scenario, and in some ways the art market laps into Venice long before anyone has even got to Basel. For a start all the art dealers are there, laying on smart parties in yachts or in palazzos for their select clients. Deals are wrapped up between the Giardini park and the Molo pier, poolside at the Cipriani or over prosecco in the Danieli. At the 2007 biennale, for instance, Christie’s owner François Pinault snaffled Polke’s much-admired suite of paintings, “Axial Age” (2005-2007), which were exhibited in the centre of the Italian pavilion, from Polke’s dealer Michael Werner gallery within days of the opening. The paintings go on show this month in Pinault’s new Punta della Dogana museum, which opens today.

Again in 2007, London’s White Cube gallery was openly selling works by the much-contested British selection, Tracey Emin,at prices between £3,000 and £100,000; more than 75 per cent of the works at the British pavilion were sold, the gallery said at the time, before the Biennale officially opened.

But does this matter? “The market has always been part of the art system,” says Francesco Bonami, director of the 2003 Biennale and now guest curator at the Chicago Museum of Art. “People think the art world is either ‘pure’ or ‘evil’ – that’s preposterous and it’s an illusion to think there never was a commercial transaction [in Venice].”

In fact, selling art used to be an accepted part of the Biennale. Between 1942 and 1968, the Italian dealer Ettore Gian Ferrari had the official job of placing works for any willing artist, earning 15 per cent for the Biennale and 2 per cent for himself. This was stopped, ostensibly so that the Biennale was not commercially tainted, although Ferrari’s daughter Claudia says the real reason was that the artists’ regular dealers began to object to the practice.

Not surprisingly, dealers do their utmost to get their artists into Venice, which boosts their careers as well as providing an excellent selling argument. Some galleries subsidise the production, transport and installation of works at the Biennale. “For the national pavilions, it’s essential and commonplace for dealers to participate, because public institutions don’t have enough money,” says Angela Westwater of Sperone Westwater, which represents Bruce Nauman, the American selection this year. Almost all the works by Nauman have been lent by institutions; only two are commercially available, but his presentation spans three sites, including two gardens: “This was inevitably costly,” says Westwater.

So does exhibiting at the Biennale boost prices? “Yes, you create more exposure and more attention for the artist, and that has an impact,” says Rachel Lehman of Lehman Maupin, whose artist Do-Ho Suh represented Korea in 2001. “If the artist is strongly in the ascendant, this does have a significant effect,” says Lisson Gallery owner Nicholas Logsdail, who represents Tony Cragg and Anish Kapoor, past British selections for Venice. He cites the 1986 selection of Tony Cragg which, he says, “coincided with US collector fervour to buy new works, plus museum interest” and which contributed to a number of sales during the Biennale.

The online database ArtPrice tends to confirm the “Biennale boost”. Its indices show that Tracey Emin’s prices rose by 34 per cent in 2007 and Gilbert & George’s by 85 per cent in 2005, in each case the year they were selected for Venice, while Robert Gober, the 2001 US selection, saw his auction prices rise by 184 per cent in 2000, drop by 7 per cent in 2001 and then rise by 30 per cent in 2002.

Ultimately, though, says Bonami, the quality of the art is the most important thing. “There’s an illusion that the Biennale can help an artist’s career but it all comes down to the quality of the work. Bad artists are helped for 10 minutes and then fall into oblivion,” he points out.

But to conclude that the Biennale is just a covert art fair would be wrong. The “traditional” countries with pavilions in the Giardini tend to show artists who are already well established and have an existing market, so it is inevitable that pieces are sold there. But this year sees new pavilions from Montenegro, Monaco, Gabon, the Comoros and the United Arab Emirates, as well as the chance of finding newcomers from other countries in the 38 collateral events. Many will come from countries without a developed gallery system, and the excitement of the Biennale is this element of discovery. “Biennales are very different from art fairs: they are laboratories,” says Hans Ulrich Obrist, co-director of London’s Serpentine Gallery, who has directed biennales in Berlin, China, Russia and elsewhere. “They are often about process and experimentation.”

Experimentation is another difference between Venice and Basel; the Biennale allows artists to make work that may have little commercial value. Previous events have featured a lot of video or installations; the display in the Arsenale at the last Biennale had virtually no painting at all. But at Basel, where commercial considerations inevitably prevail, there is very little video and lots of painting, as it is the easiest art to sell. This year, with the art market affected along with everything else by the financial crisis, it is safe to bet that the fair will feature even more “saleable” art, while it is hoped that the Biennale will continue to surprise visitors with new discoveries, challenging concepts and an ever-broadening overview of contemporary artistic practice from across the world.

Venice Biennale, June 7-November 22; www.labiennale.org

Art Basel, June 10-14; www.artbasel.com