Not long ago, a startling piece of news emerged about one of America's great museum directors. David Ross, late of the Whitney in New York and the Museum of Modern Art in San Francisco, was trawling round the Bowery in search of real estate for his new employer, a London art dealer based in Battersea.  I learnt this news with a pang. The last time I met Ross was while making a BBC programme about the Abstract Expressionists. Fervent, suave and wonderfully free with his time, he talked with exceptional eloquence about the pure direct hit he got from Barnett Newman. Here was a vivid champion of art for the people, who used to debate contemporary art with them online, opening a branch of the commercial Albion Gallery in Manhattan. Ross's gifts for enthusing the public were now going to benefit an elite group of Russian oligarchs, Asian super-collectors and American hedge-fund managers.  A few weeks later, the prodigiously successful London gallery Haunch of Venison announced that it had hired Robert Fitzpatrick to launch its new space in New York. Fitzpatrick was director of the Chicago Museum of Contemporary Art for a decade and before that dean of the School of Arts at Columbia. He described the career change to the New York Sun as no more than a continuation of his role as 'porte parole - carrier of the word' for art, an elegant gloss on his defection to the selling side of the street.  Why would such eminent Americans give up the intellectual and moral freedoms of museums to abide by the laws of the market? To industry insiders, impatient of such distinctions, this sounds like an old-fashioned question. The rules of the game have changed, they say, the old categories are all redundant. That London galleries are hiring Americans to front up their operations should not come as a surprise because they have already lured some of the most creative curators away from our museums. Departures have accelerated to such a degree that one supremo, who wished to be nameless, calls it 'a brain-drain with frightening implications for the integrity of British museums'.  One of the first to go was Susan May, once head of the Arts Council collection and later responsible for the Turbine Hall commissions at Tate Modern, from Juan Muñoz's eerie underworld of grey men to Olafur Eliasson's great glowing sun. She is now creative director of Jay Jopling's White Cube, London's best-known commercial gallery, which mounts museum-quality shows of artists whose works will then be shown all over again in museums - Gilbert and George, Antony Gormley, Tracey Emin. May sees 'no difference on the other side. Jay and [Tate Modern boss] Nick Serota exhibit the same creative flair, business acumen and intellect'. Some ex-colleagues bridle at hearing the two men compared.  Emma Dexter was a senior curator at Tate Modern - Luc Tuymans and the photography show Cruel and Tender were among her last projects there - before becoming director of exhibitions at the Timothy Taylor Gallery in Mayfair. One of her opening shows there, centring on the influence of Modernism on contemporary art, would not have been out of place at Tate Modern. But the shift from public to commercial 'appealed to my entrepreneurial side. Talent-spotting is something I am good at and now I am in a position to capitalise upon it, quite literally, for artist and gallery.'  Dexter is forthright about a tendency that others deplore. When Gregor Muir resigned as the Tate's Kramlich Curator of Contemporary Art in 2005 to become director of Hauser & Wirth in Piccadilly he was leaving public service behind. 'People said I had crossed over to the dark side when I left. On a personal level, it was very tough. I lost friends.' Presumably his former colleagues have overcome their dismay, however, for it has just been announced that one of H&W's artists, New York conceptual artist Roni Horn, is having a show at Tate Modern in February. This would not be possible without Muir's involvement.  Ten years ago, when I was a baby critic, there were scarcely any commercial galleries whose shows you always had to see - White Cube, Anthony d'Offay, Lisson Gallery. Now there are many more and their senior staff are the very people who used to mount the museum shows you always reviewed. Curators were not international names criss-crossing the globe so much as art historians who rarely strayed beyond museums. Muir, who had several publications to his name when he left the Tate, is what is known as a gallerist (as opposed to a dealer), even though he has the market in mind.  Larry Gagosian, the biggest name in the business, whose clients include David Geffen, Si Newhouse and Charles Saatchi, is the supreme dealer. Dealers sell product, gallerists curate intellectual property; the difference carries a value judgment within the industry. An auctioneer recently sneered that there were only two real gallerists left in New York, even though there were hundreds of galleries.  When Gagosian wants to enter new areas of the market, he often hires an intellectual. This year it was that venerable art historian John Richardson, biographer of Picasso, retained to advise on modern art. This caused a frisson of anxiety among competitors, for Gagosian had not yet plundered the prewar market; if anyone could advise him, it was Richardson, friend of Picasso, Léger and Braque.  Gagosian famously brokered the sale of Damien Hirst's shark to the US hedge-fund manager Steven Cohen in 2005. Serota wanted to buy it for Tate Modern and offered $2m, presumably with private support; Cohen bought it for $12m, almost six times the Tate's total acquisition budget for that year, and has now loaned it to the Metropolitan Museum in New York. It is worth holding on to the cautionary tale of the shark as an example of how private wealth affects public museums, but also of the colossal differences between the circulation of art in Britain and America.  In 2004, Gagosian appointed Mark Francis, head of the Andy Warhol Museum in Pittsburgh, and a highly respected British curator and writer, as director of his gallery in Britannia Street, London. 'I don't subscribe to the intellectual versus the salesman myth. I don't believe curating exists, per se. You just have to be intelligent enough to choose which things to show and which not.' Francis doesn't believe that museums have the intellectual advantage. 'If you look back at history, and who created taste in contemporary art it is so often private galleries: Leo Castelli lighting on early Pop and selling it to Alfred Barr at Moma.'  Francis's latest show is the first exhibition in Britain in 15 years of that giant of American sculpture, Richard Serra. Last time round, the sculptor showed (where else?) at Tate. With a scholarly catalogue and sold out long before it opened, the exhibition could accurately be described as a museum show in a private gallery, except that (in the terse understatement of Robert Shapazian, who last year resigned from Gagosian's empire) 'the works had generated invoices'.  But the point of convergence between public and private is sharper still with Robert Fitzpatrick's inaugural show for Haunch of Venison in New York. Not a single work in Abstract Expressionism: A World Elsewhere is for sale, because all have been borrowed from museums including Moma, the Whitney and Tate. What is the difference between this exhibition of loan works, written up by New York critics, and the same show in a museum? Not much in terms of art; everything in terms of shopping. If you like the look of that Barnett Newman, then Haunch will procure another and handle the transaction for you.  Why would museums agree to assist commerce in this way? Fitzpatrick told Lee Rosenbaum of the CultureGrrl blog that 'their comfort levels were increased by [Fitzpatrick's] own reputation and that of the art historian David Anfam' who curated the show. But there is more to it than that. None of these museums can afford to be aloof from Haunch; not just because the gallery has a star cast of artists that it both sells and represents, but because any museum that wishes to put on a show of these artists needs Haunch's co-operation.  Haunch of Venison perfectly encapsulates the interconnections that now exist between every part of the industry. It is owned by Christie's - the New York gallery is right there in Christie's Rockefeller Centre headquarters. The London gallery is to move into Royal Academy premises in February. Its shows are often organised by museum curators and its publishing arm includes monographs on Haunch artists by, among others, the director of the Whitechapel Art Gallery.  The entire industry is forming and reforming by the day like some monstrously engorged digestive tract, in which public and commercial are mulched. Consider the fact that François Pinault, the French billionaire who restored the Palazzo Grassi in Venice as a public museum for his private collection, is also the owner of Christie's International. Or that Albion, the gallery that has retained David Ross, now creates art projects in tandem with Moma and Tate. Or that Tate Modern rents out wall space to Swiss Bank UBS to display its private collection.  Or that every work in the recent Richard Prince show at the Serpentine Gallery came from the artist's studio (he was co-curator) and was tacitly for sale. Not so tacitly that the most historic work,  an early Marlboro Man, didn't sell for more than £1m. The gallery says that it took no commission, but this hasn't always been the case. When Emma Dexter was head of exhibitions at the publicly funded ICA she admits it sold works from the walls. 'It was unspoken, but understood, that we would take a very small commission. In the Nineties, everything we showed was so uncommercial you couldn't sell much anyway, but we had to get funding from somewhere because we had zero budget.'  Gregor Muir says his departure from the public realm was made considerably easier by this changed landscape. 'The tectonic plates were joined so I could walk quite easily from one place to the other. We were already more entrepreneurial than the last generation in any case. They relied far more on the state's money. And, personally, I hadn't ever really made any money until I turned 40 and got this job.' Even a layperson can identify the public-private connections through careful reading of catalogues and the panels on museum walls. Who donated what, who scratched whose back, which collector dominates the show and so forth. Look for any telltale occasion on which artists or dealers are cited as co-curators.  Last month's Damien Hirst sale at Sotheby's was not just unprecedented because it made the artist £112m in a single evening (a record for a single artist) but because Hirst was now going it alone, using Sotheby's as a gallery in which to curate his own public show before the auction. The art went straight from studio to collector, bypassing Hirst's usual dealers, White Cube and Gagosian. As someone from a rival house mirthlessly remarked to me: 'How long before he opens his own auctioneer's?'  Hirst is by no means the only artist to cut out the middle men. Last week, Annie Leibovitz announced that she was forgoing the services of a dealer to be represented exclusively by the auction house Phillips de Pury, like Mario Testino before her. Last week, Charles Saatchi opened his colossal new gallery in Chelsea in partnership with Phillips de Pury (reviewed on page 16). And what a grand shop window for both it is. Phillips subsidises the entrance price, Saatchi shows and sells through Phillips, and Phillips even has its own dedicated gallery. (In a further twist, Phillips was sold last week to a Russian luxury goods group.)  The ascendancy of the auctioneers is causing consternation to dealers. Haunch has been frozen out of the Frieze, Art Basel and Art Miami fairs because it now belongs to Christie's. Within the industry, most people know who bought what at auction, but the auctioneer knows who made the underbids and what those bidders are interested in buying. A dealer armed with such inside information has an obvious advantage over his competitors.  Rodman Primack, Phillips's London chairman, says he cannot understand why dealers get up in arms about Christie's. 'Dealers, gallerists, auctioneers: we are all on exactly the same page. Everything in the industry exists to support everything else, except that you have a flaw in the system here. In the US we have excellent tax breaks for collectors who wish to make public donations; that is the reason that, unlike Britain, we Americans have such tremendous works of modern art in our museums.'  And one good reason why we do not. Tate Britain has lately had some tremendous bequests - Simon Sainsbury's Gainsboroughs, Bacons and Freuds - and Hirst has given a work. But unless our government changes the tax status of donations we shan't enjoy the quality of art for free that Americans regard as their birthright.  Nor can our museums even begin to bid at auction if a Bacon can sell for $86.3m (£44m), as happened in May when Roman Abramovich bought Triptych (1976). It was rumoured that he would hand it to his girlfriend Dasha Zhukova for the Bacon retrospective she is holding in 2010 at her new art museum in Moscow.  But perhaps Abramovich will start his own museum. He owns enough Freuds, Doigs and Bacons to compete. Dozens of collectors are starting private museums now that their portfolios of houses are not enough to contain all their art. Victor Pinchuk, the secret bidder for several Hirsts at the Sotheby's sale, bought them for his Pinchuk Art Centre in Kiev. Chinese collectors are now entering the field. Pretty soon there will be no significant city without its museum containing a Jeff Koons sculpture, a Damien Hirst tank and a photograph by Andreas Gursky.  Even the curators who have not yet left our public museums can go and work for these plutocrats. Just as the art market is unregulated, so there appears to be no ban on private-public partnerships and there is a long tradition of museum directors advising collectors in a private capacity. David Ross once told a journalist that he used to encourage the trustees of the Whitney to buy a picture for $1m and then give it to the museum when its value reached $10m, thus receiving a $9m tax break; satisfaction to both parties. Sir Nicholas Serota is currently advising Dasha Zhukova.  What does all this mean for our museums, which are now in direct competition not just with collectors, but with private museums, commercial galleries and even auction houses when it comes to contemporary art?  If Tate wants to show an eminent living artist, it first has to find a commercial sponsor, which may come with strings attached especially if the sponsor has a corporate collection, as in the case of UBS. Then it has to work with a dealer and its independence is compromised if the works have to be rubber-stamped by dealers on behalf of their artists (or even themselves). It is well known, an insider told me, that Tate Modern's recent Cy Twombly exhibition had 'heavy intervention from Gagosian and Twombly'. Dealers can make a show, but they can also prevent it from happening in the first place. 'When there is this much money circulating round and round the system,' says Rodman Primack, 'we may all get corrupted in the end.'  As the boundaries between public and private blur throughout the industry, everyone dancing the same dance in perpetual motion, there is one vital distinction that must be maintained - which is that the latter and not the former must be the lab for experiments in failure. Museum art should be tested by time and not the market; if you want to see what hyper-liquidity has done to contemporary art just go to an auction. Knitted sea urchins, discarded leather jackets, front covers of the New York Times spattered with the artist's semen; these days, there is no art too sorry to be sold at auction. And anyone who thinks they are poorly served by the Tate, which shows extraordinary discrimination by comparison, need only go to the Frieze art fair this week and see what they can find to inspire the mind in that great acreage of product. As Robert Shapazian said after leaving the commercial sector behind: 'We have around us excess of all kinds, yet an intimation of essential impoverishment.'  Museums are and must remain the crucial arena for judgment, long learning and critical discrimination, for an approach to art free of the pressures of the market. Susan May quoted something Olafur Eliasson said when they were working on the Turbine Hall project: 'Museums are radical, meaning they have the capacity to challenge ideas beyond capitalist influence.'  It is a point Gregor Muir makes too. 'In a sense, there is nothing sadder than standing at the bar and hearing that the Basel Art Fair, which turns over millions, is better than the public Venice Biennale. Museums have moral responsibilities that commerce does not. This country should really keep its talent in the public sector.'  How this should occur is anyone's guess, although I have heard it said that if the art bubble eventually bursts then the whole process will go in reverse. Yet not a single curator I talked to had any idea of going back to museums, and the youngest could only imagine it if he 'had grown very old'. But what is in any case so different about today's bubble, compared with the early Nineties, is that it is not likely to end any day soon.  As Emma Dexter says: 'The private sector has now realised what it is capable of, certainly in London, and the credit crunch is just going to be a minor blip. Bad times are rarely bad for art.' Even if she is wrong about that - and this week's Frieze fair may well be an indication - one thing is sure: public and private are now fused. The map of the art world has changed for ever.  Andreas LeventisDirector, Alison Jacques Gallery.Previously: Assistant curator, Tate Britain.  Greg HiltyDirector, Lisson Gallery. Previously: worked for Hayward Gallery, and the Arts Council and London Arts.  Emma DexterDirector of exhibitions, Timothy Taylor Gallery.Previously: Senior curator, Tate Modern.  Susan MayCreative Director, White Cube.Previously: Curator, Tate Modern.  Gregor MuirDirector, Hauser & Wirth, LondonPreviously: Kramlich curator, Tate.  Mark FrancisDirector, Gagosian, Britannia Street.Previously: Chief curator, Andy Warhol Museum Pittsburgh.  Ben TufnellCurator, Haunch of Venison.Previously: Curator, Tate Britain.
As commerce dominates, where will the radical and challenging approach to art take place, free from the pressures of the market? By Laura Cumming