In the last two years, two paintings have sold for about $100m each. Yesterday’s Picasso went for $51K per square inch, more than the largest US bill ($100,000) ever printed. It is not copyrighted, so only the physical object was in the deal.
What can prices like these mean? Suppose this capital asset were put to work sixteen hours per day forever. The ‘work’ a painting does is to be looked at (anything else, like being read about in research and criticism, enjoyment in memory, enjoyment in reproduction, etc., doesn’t require the actual painting), let’s say by three people at a time. At 5%, it would have to be worth $271 per hour. That’s not entirely crazy; people pay almost as much for opera seats and more to scalpers for various other performances, but can we imagine this really happening?
Paintings that have that intensity of attention exist; you can’t get close to the Mona Lisa without a private admission to the Louvre in off-hours. But not from people paying that kind of price. And there’s no chance it will be employed that way. In a museum, a Picasso will have one person attending to it most of the time, and the time is eight hours a day, so the painting has to be worth $1600/hr. to a viewer to justify such a price. Wow; people only pay about $5/hr for museum services, often less, even leaving out time at the café.
If it’s going in a private collection, the numbers go way up; no-one can look at a single painting all the time even if it’s in her office opposite the desk; a painting in a home is ‘used’ only a very few hours a week. Shall we say, 10 hours per week, and one person? That’s more than $9000/hr. Maybe a few people would pay this kind of money for an hour with a painting once or twice, but forever?
I conjecture that paintings at these prices are affording the most valuable (measured in money) per capita artistic experiences in history, at least since private performances of ensemble works like operas and concerts for royalty went out of style, and anyway, even King Ludwig’s musicians didn’t get Pavarotti salaries. And with no disrespect to Señor Picasso, I find it completely mystifying. Am I missing something?