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Opinion

Opinion

Opinion: Conspicuous consumption

November 27, 2013

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The art world has very much been in the news the past few weeks. First, German police found a cache of art obtained during the Nazi era in Germany. The art has been valued at over $1 billion. Second, Christie’s, the international auction giant, set a new record for a work of art when it sold Francis Bacon’s study of Lucian Freud for over $142 million and, at the same sale, sold a sculpture of a cartoon dog by Jeff Koons’ for over $58 million.

Most recently, the New York Times ran an article about the dispute over a supposed painting by Jackson Pollock. If it is real, it is worth millions of dollars; if it is not by Pollock, then the painting has been valued at $50,000. The monetary values of these art works is astronomical, far greater than any normal person could ever dream of spending. Indeed, the value of many of these paintings is far greater than the total amount an ordinary American will earn in a lifetime.

I find the insane values being attributed to and paid for major artworks to be fascinating when we consider the fragile economic condition of the United States and most of the rest of the world since 2008. It seems to me that these prices do not reflect the inherent value of the works. I have no doubt that many of these art works are treasures (I do have some doubt about the inherent value of Koons’ giant stainless steel cartoon dog sculpture) but when we talk about amounts that reach such unreal levels, then we have to wonder what is going on.

Take, for instance, the sale price of the Francis Bacon painting: $142 million. This amount of money, were it applied to medical research or providing social services to the poor, would improve, if not save, the lives of tens of thousands of human beings. Instead, it is likely that the painting, which was sold to a prominent New York art dealer on behalf of a client, will be a new adornment for a super wealthy collector. I was particularly struck by the Times report that the dealer was bidding from a “sky box” at Christie’s. Who knew that auction galleries had “sky boxes”?

It seems to me that the remarkable values attributed to and prices paid for art works today is less about art at all and far more about the growing wealth of the global “super-rich:” the hedge fund managers and tech billionaires who now earn so much money that they have a hard time finding places to spend it. When you need to spend billions, why not drive art prices through the roof? These prices are about conspicuous spending by the super-rich and about the flourishing today of a new “gilded era” when a few people have so much money that they can spend whatever they want on whatever they want while the vast majority of people struggle to get through each day.

But, perhaps, those who spend millions on art (let alone on other luxury goods) should be careful because when conspicuous consumption is the primary goal in purchasing art, you can do things that the rest of us might think eccentric, if not down-right crazy: like paying $58 million for a cartoon dog sculpture. I suppose that those of us who are not part of the magical 1 percent can at least be amused by how the wealthy are spending their funds. Maybe that makes the new gilded age a bit more tolerable for those of us not in the 1 percent.

— Mike Hoefich, a distinguished professor in the Kansas University School of Law, writes a regular column for the Journal-World.

Comments

Leslie Swearingen 4 months, 4 weeks ago

I would assume the only reason for spending that amount of money is because you are buying something that will appreciate with time and you will be able to get your money back if you are so inclined. It might be because they truly understand the intrinsic worth of the art piece.

What about all the works of art that have been legally stolen by archeologist and taken back to their home countries to be put on display,while the natives of the lands that produced such womders will never even know they exist.

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