A David Hockney painting has sold for $90m , and it couldn’t happen* to a nicer guy. Actually I have no idea whether Hockney is nice, but he’s certainly an endlessly interesting, provocative artist with whose work I never tire of engaging.
*In fact it didn’t happen to him: I think he’s doing OK, but this sale was by a speculator/collector and it didn’t put this awesome sum into the artist’s pocket.
What, though, does this event mean? Philip Kennicott reflects on the event in WaPo. He explores two questions, one right and interesting (how can a painting be worth so much money?) and the other partly wrong (is it right to spend so much on a painting when there are homeless and all the other real needs?).
OK, let’s consider the first one. As far as we know, what was sold was the physical chattel; not the copyright for reproductions or web posting, not the right to think about it while writing blog posts, not the right for other artists to riff on it in future work. An asset’s value is the discounted time stream of the economic value it can create put to its best use, and the best use of a physical painting, once it has been photographed to create a high-resolution file for various purposes, is to hang on a wall and be looked at by people. The economic value thereby created is in the heads of that audience.
If we put that Hockney to work like any other asset, a dozen people might practically be engaging with it at once (it’s fairly big). On exhibition eight hours a day, every day of the year, that’s 12 x 365 x 8 = about 35,000 person-hours of engagement per year. The Mona Lisa maybe gets this level of attention, but it’s an upper bound on our estimate for sure. I have seen Hockneys, including this one, on display in several first-class museums and there are rarely more than a half dozen people looking at any of them.
An asset worth $90m has to return about $4.5m worth of value per year at 5%, so for this painting, the viewers have to think it worth $130 per hour. Good seats at the opera cost about that, but they aren’t eight hours a day all year. Again, twelve people at a time (however long each stands in front of the work), all day every day, forever.
Obviously this whole story is a fantasy; no-one would spend real money on a proposition like this (and if a museum bought it to display, the trustees and the responsible curators need some remedial reality training). Prices like this are speculative “bigger fool” bets; someone expects to sell it for more than $90m–but this just moves the question one buyer down the line. If an asset doesn’t eventually create value commensurate with its price, we’re talking about tulip bulbs and the sociology of a chain of fools, not economics and not art.
Kennicott’s second question implicitly compares the sale to different ways the $90m could be spent, but this importantly confuses price and cost. When a rich person (or anyone) sells a painting to someone else, no cost has been incurred; the buyer has just transferred control over a bunch of assets to the seller, and control over the painting went the other way. No economic resource–not human labor, not paint and canvas, not sandwiches–is been used up (as it would if someone commissioned a new work of art, perhaps an enormous outdoor sculpture, that actually cost $90m to make), and the world is no less able to house the homeless or cure cancer or offer public concerts.
It is true that the buyer could have done all sorts of good work with that money, and then real resources (the staff time of his foundation, or the medicine he might ship to Yemen) would be used up and not available for something else. We might well explore the psychology of someone rich enough to buy this painting who prefers to use his money to show off to his rich friends in this way, but that’s a different issue. Where Kennicott’s question really does bite is when a museum makes a purchase of this kind, or someone gives it the painting instead of a check for $90m as Kennicott hopes, because to the museum, that’s really a cost. Within its scope of action, there’s $90m less to…to…well, there’s quite a list: conserve the art it already owns, build 90,000 more square feet of gallery to show lots more paintings in, hire educators and curators to increase the value of visitors’ engagement, bring its future visitors (school kids) to the museum to get them addicted to art, put on classes for amateur painters…the mind reels. What we know is that there’s no chance possessing that painting will create $90m of value. Especially $90m of net value, because it will displace some other painting from the wall, out of sight into storage where it will no longer be looked at.
Pierre Bourdieu described a consequential, if not important, function of art: it’s ammunition in a stalemated war between élites of money and of education for social dominance. Today’s art prices are evidence of that exercise running wild in a new gilded age, and the “art market” is a financial bubble in which “success” has almost nothing to do with the art itself, or for that matter engagement with it as art. After all, so much of the art is sitting unseen in Swiss warehouses like gold bricks in Fort Knox , while ignorant, insecure millionaires trade titles to it for fun, like Monopoly houses.