Just How Great Were Those Masters?

Written By:

Break out the wine and cheese, because today we’re discussing the art marketplace! I’ve been thinking about the esoteric aspects of the free market lately and the art market is a great example. The valuations of individual works in varying mediums depend upon particularly transient criteria, yet we see staggering outlays for their acquisition with greater frequency.

Aside from the cost of the canvas, or film, or block of marble, the price of a given piece of art is…whatever we say it is. Frequently, that ‘we’ doesn’t even include the artists themselves; most high-profile auctions are done secondarily, after the initial sale. The price is determined exclusively by whatever someone’s willing to pay.

Art as a commodity is an interesting concept. It says something, hopefully positive, about Western society that we regard ephemeral conceits like truth and beauty as more than mere aesthetics or topics for academia, but as items of real physical value. But that, in itself, seems ironic or paradoxical or both, because we don’t, strictly speaking, put truth and beauty up for auction—we put certain works up as concrete examples of these intangible abstracts.

And the picture muddles more when considering high-end art as an investment strategy. Unless you’re burdened by an oppressive state of wealth, I wouldn’t recommend it. I doubt very much the people capable of shelling out tens of millions for a Picasso earned their fungible lucre trading exclusively within the rare art world. I’d suspect, rather, that’s just one smallish part of their rather sizeable and diverse portfolios.

That said, a growing amount of auctioned artwork these days is, in fact, being purchased on the speculation that it will increase in value. This may well happen, and it’s certainly a fun game if you can afford to play, but paying gobs of money for a piece, only to wait for its appreciation to justify your expenditure isn’t exactly a sound money strategy for the rest of us. And the gamble gets even trickier the further down the food chain of mediums one travels—many artistic pursuits are still developing agreed-upon conventions and criteria, while still others fight to be considered ‘art’ at all.

Unless you got in on the ground floor of Michelangelo’s Pieta, it seems unwise to tie up too much of your set-aside investment money in art. And even if you did somehow luck-into that iconic Vatican treasure, who’s to say that despite 500 years of nigh-universally positive appraisal, a small but curiously influential minority of critics won’t someday decide Michelangelo was no great master, just a hack marble-jockey with a name commonly pronounced two ways?

“That won’t happen”, you counter. And, OK, you’re almost certainly right, Mr. Conspicuously Old, Affluent Art Collector. But if it did, then where would you be? And before you answer, remember: that’s an unwieldy item to schlep to a pawn shop—especially with that 500-year-old back of yours.

Society’s high-dollar valuation (some say overvaluation) of high-concept artwork is a decidedly humanist phenomenon in our seemingly cold and calculated capitalist system. And that makes you feel good. At the same time, converting your art purchase into a sound investment depends on making the next buyer feel good. That’s a pretty subjective nail to hang one’s personal finance hat on.

Yet you persist—Mr. Conspicuously Old, Affluent Art Collector—by asking: “So, what’s the difference between art speculation and, say, stock speculation—isn’t a stock’s worth whatever arbitrary figure the collective gives it?” Well…good point. To a certain degree, the two do share similarities, in that both are measured risks as purchases, exist in markets largely beyond your direct control, and with each there are potential profits or losses to be had.

Both are also subject to hype-driven bubbles that threaten to make shrewd, well-heeled investors look like fools from time to time. The difference? A stock, while affected by similar market swings, still generally represents something “real”. If a publicly-traded company goes under, shareholders may recoup lost funds by selling off assets, surplus inventory, machinery, etc., even if they end up with a loss. If the bottom drops out of your corner of the art market, you may end up with nothing more than this thing.

I’d pay more money not to see that than I would to own it, but if someone offered me, say, twenty-eight million dollars, and I agreed, that would theoretically be its worth, even if the sum defied rational thought for you and me. The potential floor for a work of art’s comparative worth seems as low as the price of paint, but the sky’s the limit for its ceiling, dependent entirely on what a buyer is prepared to part with.

Ultimately, it may be best to consider art a very worthwhile form of entertainment—an investment in the self—rather than as a hedge or wealth-building tool. You’ll never really ‘lose’ money buying something of deep and lasting significance to you, personally. In fact, such things we often term ‘priceless’.

‘Priceless’ sounds almost as if to imply an item has no financial value, when it really means a value so profound as to be incalculable. Our most cherished holdings cannot be secured behind pressure-sensitive glass viewing cases or subterranean vaults; they deplete in supply and skyrocket in value as we appreciate in age. They are our memories; our experiences individually and as a larger, cultural whole.

Art finds fullest expression and deepest meaning not in a price-tag, but in the individual experience thereof and impact made thereby. What are these things worth? What’s the correct dollar amount for the Mona Lisa’s cryptic smile—or for the feeling you get upon seeing it for the first time? Do I hear 50 bucks for the oculus of the Pantheon? 75 for Dying Gaul? And I like Cezanne as much as the next guy, but come on, buddy…you want how much for those pears?

Two-bits says I’m goin’ home with this thing.