There’s a – partial – parallel process in the Contemporary Art market. The supply of old masterpieces is of course very limited, and many are in museums and will not come on the market unless revolution occurs (or be burnt when the mobs riot). – –
In the Contemporary market, however, dealers, and those who try to rig the market (museum directors, critics, curators, etc) have the advantage of commissioning living artists to create new works which then become tokens in a speculative game – say, three large paintings to be offered at $1.3 m each at a big art fair, for which they were created to order.
They call the artist a ‘rising star’, point to a historical rising trajectory in their prices, and see what happens.
The price is simply plucked out of the air and has no foundation in real value, except that the purchaser is willing to play the art investment game with them.
The perceived value is based, of course, on the assumption that no great economic crisis will occur, and at some stage that purchase can be redeemed at a profit, or will lose less than other possible investments.
The painting itself produces nothing, and is very vulnerable to decay or damage – like a new real estate development that sits empty. In the meantime, commission is made on the transaction. The investor may have an asset to leverage in other ventures.
All from something created from nothing, some wood, linen and pigments costing next to nothing, using the labour of an artist who is usually incapable of doing anything else.
Is this honest or dishonest, or just human delusion and self-deception?
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