When I think of art, paintings by Rembrandt, Monet, and Van Gogh come to mind. Breathtaking masterpieces with seemingly immeasurable value that hang in museums for all to enjoy. Though “immeasurable value” isn’t correct, as once in awhile one of these paintings comes up for auction and, while we might gawk at the price, no one ever seems to question it. These are rare, beautiful objects that can never be replaced. They are in fact, priceless, and we all generally seem to take that for granted.
On the other hand, what I don’t tend to think of is contemporary or modern art; pieces by Damien Hirst, Andy Warhol, or Jeff Koons. Paintings, sculptures, and multimedia installations that seem designed to provoke, rather than inspire. In fact, when one of these pieces changes hands for staggering sums I’m much more prone to indignation or ridicule. “How could that be considered art, let alone be worth that much money?!?”
It was with that perspective that I read The $12 Million Shark: The Curious Economics of Contemporary Art by Don Thompson. In this book Thompson, an economist and business school professor, unpacks the high-end contemporary art market from all angles through an engaging narrative. He explores the roles of the artist, the auction house, the dealer, the art fair, and the collector, all of which are driven more by money than any true love of art. As a behavioral finance book, its a fascinating look at a fairly opaque market. As an art book, you may find it discouraging.
A great example is the piece referred to in the book’s title, officially known as “The Physical Impossibility of Death in the Mind of Someone Living” by Damien Hirst. The work itself is an actual dead tiger shark suspended in a formaldehyde solution encased in glass, funded by the noted collector Charles Saatchi and purchased in 2004 by hedge fund billionaire Steve Cohen for an amount rumored to be between $8 and $15 million. (It should also be noted that the original shark deteriorated so badly that it had to be replaced, so is it even the same piece?)
On it’s face, I cannot call this object art. And yet, through the alchemy of a branded artist, branded collectors, huge sums of money, and the associated publicity, not only is the dead shark now art, but the statuses and wealth of everyone involved were inflated. In fact, in this case without the title of the piece, it really is just a dead shark in a tank of formaldehyde. But with the title it somehow becomes much, much more as I sit here thinking, “well, maybe there really is something there.” Despite the absurdity of the work, there is a certain magic at play and maybe that’s what contemporary art is really about.
In the end, the question “what is judged to be valuable contemporary art” is determined first by major dealers, later by branded auction houses, a bit by museum curators who stage special shows, very little by art critics, and hardly at all by buyers. High prices are created by branded dealers promoting particular artists, by a few artists successfully promoting themselves, and by brilliant marketing on the part of branded auction houses.
The book makes clear that the high-end contemporary art market really is simple a mechanism through which the ultra-wealthy signal their wealth, like peacocks, to their peers, supported by a network of people on the take, sustaining their own livelihoods by stroking the tail feathers of others. There’s a certain irony at work when people, collectors, who have otherwise been wildly financially successful, battle one another for the ownership of a piece they may not even like or understand, by paying more for an object than anyone else will. It’s a fascinating behavior.
“It is sobering to think that purchasing at auction means that you have just paid more than any of hundreds of other people in the room thought the work was worth.”
One of my favorite pieces of contemporary art is a painting by John Alexander. I’ve been unable to find it online and don’t recall the title, but I have a vivid mental image of the work from the 2008 exhibition “John Alexander: A Retrospective” at the MFA Houston. The painting is of an art auction and everyone, the auction hammer, the assistants, the collectors, are wearing Alexander’s preposterous bird masks. It’s an arresting painting that has stayed with me these many years, but Thompson’s book clarifies and highlights Alexander’s indictment of all involved.
Everyone in the high-end art markets are complicit in a charade of their own making, dependent on its machinery to stoke their incomes, if not their egos. It isn’t quite the Emperor’s New Clothes, but there is a certain wink and nod at play. As a person involved in the financial markets, people using their wealth to signal status or prop up their own egos isn’t a surprise to me. It’s done all the time with watches, cars, houses and other trinkets. What surprises me in this case is how willing the collectors are to spend huge sums of money to own a tangible object they may not even want. Seriously, was Steve Cohen ever going to display the dead shark in his home or office?
The value of one work of art compared to another is in no way related to the time or skill that went into producing it, or even whether anyone else considers it to be great art. The market is driven by high-status auctions and art fairs that become events in their own right, entertainment and public display for the ultra-rich.
In the end, I found The $12 Million Shark: The Curious Economics of Contemporary Art by Don Thompson to be a fascinating read, both from a human psychology perspective, as well as from an economic one. If you’re curious about how markets work or how people with very deep pockets but a full measure of insecurity behave, this is a great read. And lest you fear that such a book would leave the reader jaded, unable to enjoy contemporary art and artists, I would say the opposite is actually true. Instead, it makes clear that the best way to appreciate, and perhaps even buy contemporary art, is solely on the basis of whether or not your heart and soul are stirred by the piece. Everything else is theater.
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