Collectors

Why Is Art So Damned Expensive?

Posted December 5th, 2011

Art Market, Collectors


A pile of stools for $575,000. A cabinet full of surgical instruments for a cool $2.5 million. The global economy’s in a tailspin, but among the world’s elite collectors, works are selling for record prices.

The Daily Beast has a closer look at what makes an artwork expensive or not: “The veteran New York dealer Arne Glimcher speaks of the “scuzzy” people who keep the Warhol market hot by manipulating his auctions. Simon de Pury, chairman of Phillips de Pury auction house, has counted a dozen other price boosters. He says a bigger picture is always worth more than a small one. He notes that you pay a premium for a piece once owned by someone famous. And he points out that something that has been shown in a museum is worth extra. But such explanations only tell us why one object might sell for more than another. They don’t tell us why so many buyers in Miami spend more on a picture than the rest of us spend on a house.

Despite the flatlined economy, the art market has been roaring. In the first half of this year, total worldwide art sales hit a record of €4.3 billion ($5.8 billion), up 34 percent from 2010, according to the French Web site Artprice.com. The same site reports that 663 works jumped past the million-euro mark during that period, 200 more than in the first six months of 2008, which once held the record.

The top art prices may have little to do with classic economics. Noah Horowitz, whose Art of the Deal is a crucial text on the subject, says in the long run your investment in art may only do about as well as your holdings in bonds—and comes with greater risk. (But, as one major New York collector put it, that’s not so bad, if you have nowhere else to store your income. And anyway, “bonds aren’t that good to look at.”) At this moment, when the 1 percent has the cash to burn, buying art is less about finance than about the cultural value of money, and of art. “A dollar is not a dollar is not a dollar,” says Viviana Zelizer, the great Princeton sociologist who wrote The Social Meaning of Money. The dollars spent in Miami are “cultural dollars,” Zelizer says, and that makes them obey their own rules. ”

Read on at The Daily Beast