I’m underdressed. The realisation sets in as two door men dutifully pull open the heavy glass of the Howick Place entrance in London’s Victoria where Paddles ON! is holding its second “digital art” auction. The white walls of the reception area set the ominously neutral tone for what is more of the same upstairs, except for the Warhols and Basquiats that line them, while some appropriately attired people are cradling glasses of wine, eyeing up a Lucien Smith. I don’t think I’m alone in feeling weird as artists and onlookers, clearly not there to bid, wait outside for the 7pm start. It’s an evening that would be warm and calm if not for the high-rise buildings blocking the sun, the air thick with apprehension for the private sale of works by the likes of Evan Roth, Harm van den Dorpel, Dora Budor and others, while a handful of their peers gawk on.

What’s more unsettling, maybe, is the fact that 3.5-year-old gallery Arcadia Missa –hands down one of, if not the most interesting art space in the UK capital –is partly behind it. In rejecting their circumscribed position as merely a platform for launching others artists’ careers, they recognised an opportunity to raise some much needed funds off the back of the cultural kudos by working together with 319 Scholes curator Lindsey Howard, and major auction house Phillips. One hundred per cent of the profits would go to the galleries and their artists, proceeds of the buyer’s premium to support online art commissioning body Opening Times, and nothing but the cool points to the capitalists.

“We have cultural capital, but we have no actual capital. They have actual capital”, says co-founder Rózsa Farkas before the auction, outside one of several identical Costa Coffee outlets confusingly scattered across Victoria Station, “at least they’ve put their cards on the table and there’s a fair exchange there.”

It’s all rather bizarre. One week I’m squinting at the confused abjection of It’s been four years since 2010 –a group exhibition featuring Genesis Breyer P-Orridge among others and realised in collaboration with Mexico’s Preteen Gallery –the next I’m looking at some of the same work in the stifling commercial sphere of START Art Fair. Now here I am stood staring at a peppy auctioneer in a blazer yelling numbers from a podium next to a projection of Amalia Ulman taking a selfie in the mirror wearing knickers on her head.

As a gallery at the vanguard of a rising generation of artists and curators at the tipping point of total online-offline art integration, Arcadia Missa is just one potential casualty of a competitive and self-interested art market that sees independents like them as nothing more than a low-cost source of talent, labour and ideas. With government funding cuts and private backing for organisations like this one dwindling, they’ve had to look elsewhere to keep their programme going.

“Maybe, it’s aimed at getting young people, which is good?” says a huddle of equally young-ish looking viewers before the auction starts. They’re stood in front of Maja Cule’s ‘The Horizon’ (2013). It’s a looping video shot from an aerial perspective as a woman dangles precariously from a high-rise ledge as we, her audience, look on at the distant traffic below and its deadly inevitability. I agree, this an event aimed at young people, but less in the sense of getting them involved than exploiting them as a resource, especially when you consider the stomach-churning language of “in recognition of the increasing viability of this work in the contemporary art marketplace” from the Paddles ON! press line. It reads less as a programme for nurturing emerging art and more like a real-estate catalogue for a new ‘creative city’ built on the bones of post-industrial warehouse communities in favour of what Gerald Raunig so acidly refers to as “a post-educated-middle class neo-bourgeoisie with a cultural affinity”.

In a city as expensive as London, one of the most political things Arcadia Missa can do is continue to exist, holding on to property within the stranglehold of speculative real estate. Maintaining a place of assembly in a physical space with an autonomous program offers a practicable way to organise against the complete commodification and depoliticisation of the emerging artists a gallery like this one represents. The attitude that project spaces should remain project spaces –with no security and no means for paying its artists –is a way of maintaining the imbalance of the existing art world ecology. Perhaps, there’s a way of counteracting the hegemonising effects of routine disenfranchisement that a neoliberal art market’s claim to outsourcing to temporary ‘project-based’ organisations promotes.

Here’s where the issue of ‘selling out’ –or more accurately, legitimising the practices of art as pure commodity by working alongside auction houses, advisors, fairs, art flippers –exposes the bleaker reality of a deepening structural inequality and competition in the economy-at-large. Galleries need money to run, as does any organisation. People need to eat. With no economic capital of their own, it is capital in its cultural and social forms that becomes central to the material value of an enterprise like Arcadia Missa. That value is only useful insomuch as it can be sold, and with few, if any, connections to wealthy collectors to buy the work of the artists a gallery represents, they have no option but to utilise the channels for finance made available to them, like selling work at an auction. “Sorry it’s gauche, but now this is a class issue,” offers Farkas. “Because it’s fine to sell if you do it invisibly but you can only do it invisibly if you don’t have to put your neck on the line, because you’re already rich”.

That’s why if Phillips is a part of an art world that is, according to its press, “adapting to and engaging with new technologies”, then those galleries and artists working with those new technologies need to adapt in kind. In her essay accompanying the Paddles ON! Tumblr, curator Howard avoids directly addressing the issue of becoming involved in this problematic art-commerce exchange, instead nodding to it through her description of Sara Ludy’s ‘Bouquet’ (2012): “There’s a desire to create something beautiful and human, but always within the limitations of the environment.”

Those limitations are where organisations like Arcadia Missa have found themselves colluding with the very structures their rhetoric as a publishing house appears to oppose. But in an attempt at retaining their stake in a niche they themselves had a role in carving out and maintaining the collective within the melee of what has inexplicably accelerated into a virtual land grab of cultural capital, they’ve had to make a compromise. After all, with fracture as the moment and commodity as the norm, it’s not in opting out but counter-conduct that the real potential lies. Because it’s only a matter of time before the ‘digital’ works, across video, sculpture, prints and mixed media, are no longer relegated to their separate section round the back of an enterprise like Phillips. Damien Hirst and Petra Cortright are out the front. Let the latter be an omen. **

Paddles ON! is an online and live art auction that held its second event at London’s Howick Place on July 3, 2014.

Header image: Maja Cule, ‘The Horizon’ (2013). Film still.