Martin Gayford

Worshipping a golden calf

Martin Gayford considers whether we are in the final, pre-popping stages of an art bubble

Text settings

Martin Gayford considers whether we are in the final, pre-popping stages of an art bubble

Journalists arriving for the press view of Renaissance Faces at the National Gallery last week were greeted by placards. Why, the slogans asked — you might think reasonably enough — could that institution not pay its staff a little more, given that it was contemplating paying £50 million each for a couple of Titians?

They raised a point that troubles many people, including quite a few in the art world. In the early 21st century, the sums paid for works of art have climbed from the amazing, to the preposterous and finally reached the surreal. $104 million for a medium-quality Picasso was exceeded by a reported $140 million for a reasonably good-quality Jackson Pollock drip painting.

Last year I asked Jeff Koons what he thought of the stratospheric levels of the art market. ‘You have to pinch yourself,’ he replied. Shortly afterwards, he himself briefly became holder of the title ‘world’s most expensive living artist’ when his ‘Hanging Heart’ went for $23.6 million — a paltry amount since exceeded by works by Lucian Freud and Koons himself.

If Jeff Koons is obliged to check he’s not dreaming, many of the rest of us are reeling with astonishment. The dizzy heights of something — frenzy, art-market triumph, folly, it isn’t yet clear which — were reached on Monday 15 September 2008, a day likely to go down in two sorts of history, the ordinary variety and the art- historical kind.

In the morning, Lehman Brothers collapsed, precipitating a worldwide crisis, the aftershocks of which are shaking us still. In the evening the Damien Hirst auction took place at Sotheby’s London, and bidders duly shelled out £70.5 million for the first tranche of brand-new work, all signed and dated 2008. The most expensive piece was ‘The Golden Calf’ (knocked down for £10.3 million). The irony of this object was not lost on anybody, indeed doubtless intended by the artist. The worship of the calf in Exodus has often been taken as a metaphor for the adoration of that false idol: money. The sale, suitably entitled ‘Beautiful Inside My Head Forever’, might have been the last fling of an era intoxicated by vast, but illusory wealth.

There are further ripe pieces of symbolism lurking in the waters of the contemporary-art market. For example, the $12 million apparently paid by a New York hedge-fund broker for an earlier Hirst, the first, celebrated pickled shark — which was subsequently found to be going off. The fact that one financier should pay so much for a decomposing marine predator at a time when others were shelling out megabucks for parcels of toxic debt is undeniably piquant (even if $12 million now seems on the cheap side for a Hirst, and the shark was subsequently restored — or, rather, replaced).

The critic Robert Hughes, writing in the Guardian, reacted to Hirst and his auction rather as Moses did when he found the Israelites capering around the original Golden Calf. And as for paying that amount for a rotten fish, in Hughes’s view, it was ‘an outright obscenity’. But is it? Are art prices currently so high as to be a sign of cultural decadence? Or, putting the point in terms of economics rather than morality, are we in the final, pre-popping stages of an art bubble comparable with the tulipmania of the 17th-century Dutch?

The signs are ambiguous. Hughes himself has been mulling over the question of art values for a quarter of a century. In 1984 he published an essay on the subject, considering the historical oscillations in the value of paintings and sculpture. He noted that, since the 18th century, certain works had been bought for sums that struck people at the time as sensational. William Beckford splashed out £6,825 on two Claudes in 1799, for example, and they subsequently changed hands for £12,600 the pair.

Hughes cautiously suggested that equated to nearly $2 million in mid-Eighties money (pointing out that such conversions are ‘fraught with wild variables’). That $2 million would perhaps be roughly equivalent to around $4.5 million today. Therefore, the Claudes cost quite a lot, but not an amount to be compared with the $135 million that Ronald Lauder was reported to have paid for a Klimt in 2006. So, a very rough calculation suggests that the very top of the art market is now in real terms about 30 times higher than it was around 1800.

Is that so high that we must be heading for an art crash to follow the market one? That depends on how you view the question. There are now a lot more rich people than there were in 1800, and quite a few of them are interested in collecting art. Therefore, more and more money is available for a supply of a commodity that — even on the light-industrial scale of production of some contemporary artists — is limited. That is the way that Damien Hirst regards the matter. ‘I think the market is bigger than anyone knows,’ he declared after the auction. ‘I love art and this proves I’m not alone and the future looks great for everyone.’

Naturally, at that moment he felt optimistic. The pessimist can point out that a lot of people are much poorer than they were a few weeks ago, and going to get poorer still. There was an art-world recession in the early Nineties, to match the wider one. We may well see all that again, on a bigger scale. Art is a luxury, and in hard times it is luxuries that are likely to be cut out. There has been a boom in art prices for the past ten years — a decade-long bullrun in the art market, as Scott Reyburn of Bloomberg put it. Almost certainly a lot of people have paid too much for art that won’t retain its value. There may be as much negative equity in the pictures as there is on the walls of the house they are hanging in. The mood at the Frieze Art Fair and recent auctions has been subdued. In the art world, people mutter that a turning point has come.

That doesn’t mean that high art prices are an offence to morality. The value of anything is simply a measure of how much people want it, and how much there is. But it does mean that the value of art goes up and down. Hughes notes that Beckford’s Claudes were auctioned for £5,300 in 1947 —– a depreciation of 95 per cent. Now they have probably regained all that, and more.

In the long run, quality keeps its premium. Some of the work snapped up over the past few years will soon be worth no more than shares in an Icelandic bank; some will last (I’m sure Freud will, though I wouldn’t bet on ‘The Golden Calf’). And at £50 million each, the Duke of Sutherland’s two great Titians are probably a bargain, assuming anyone in Britain can still raise that sort of money.