The Halcyonite

By Yuki

’23, Halcyonite Editor

The price of a piece of art ranges from single digits worth of the local currency to hundreds of millions of dollars. So what gives art its value?

One might say that the value of a piece of work depends on the time and labour put into making it. But this doesn’t work out. Did the banana taped to a canvas that sold for $180 million take a million times more skill and effort to produce than a $180 painting from a local artist? No, clearly not. We need to find a better explanation.

You could say that it is a simple case of supply and demand – expensive paintings are expensive because there is high demand and low supply. In the supply side, there is a limitation – the artist. In fact, for many artists there is the ultimate limitation of being dead. However, not all dead artist’s work is exorbitantly valued, so we must go to the demand side. It would be redundant to point out that demand is high for some art and not others. But why?

This simple answer is money. Art is a commodity, whose value is arbitrarily and completely subjectively set by a small collection of individuals and organisations. If you were a millionaire looking for a get quick rich scheme, the art market would be the perfect place to set up shop. You buy some art at a low cost and convince the world that it’s worth millions. Suddenly, you’ve found a way to drastically increase your wealth.

However, what if you can’t convince the world that the art you bought is worth as much as you say it is? By getting someone to buy it. But convincing someone to buy your piece of art at the price you say it is worth turns out to be very difficult. So insead, you get someone to buy it for you, on your behalf, at the highest price you can reasonably get away with. You claim this artist’s work is incredibly valuable, and buy up all the other artist’s works, artificially driving up the scarcity and therefore the price. Whenever a piece from this artist sells, you ensure you have someone out there on your behalf to drive up the price in a bidding war. Whether you win or lose, the value of your current collection rises.

The art industry is one that is ripe for abuse and it very often is used by ill-intentioned people as a way to multiply their fortune and exploited in their own self-interest. That is not to say that all art is bad or a scam: it isn’t, but there is potential for a large segment of the market that is abused.