Why Stuffed Sharks Cost So Damn Much

The driving forces behind the "curious economics of contemporary art"

The poet Wallace Stevens, wealthy from his position as vice president of The Hartford Accident and Indemnity insurance company, once remarked that there was a huge difference between appreciating art and owning it.

But Don Thompson, a business professor at Toronto's York University and author of the insightful and compulsively readable The $12 Million Stuffed Shark, argues that the two activities are increasingly indistinguishable. Thompson spent a year touring auction houses, talking with dealers and even hanging out with artists, who emerge as altogether less interesting than the buyers and sellers around them.

Consider the case of British advertising legend Charles Saatchi, one of the central figures in Thompson's study of "the curious economics of contemporary art." Married to voluptuous TV cook Nigella Lawson, Saatchi is "the prototype of the modern branded collector," a tastemaker who doesn't just collect art but creates whole markets in the stuff, no matter how bizarre, sensationalistic or banal it might seem on first (or second, or third) blush. He adds value simply by his association with or interest in an artist.

Back in 1991, Saatchi commissioned "The Physical Impossibility of Death in the Mind of Someone Living"—a 15-foot tiger shark suspended in a giant glass tank—from Damien Hirst, whose reputation he had largely created via early patronage. Saatchi reportedly had fallen in love with Hirst's work after seeing "A Thousand Years," an installation featuring a rotting cow's head, flies and a bug zapper.

By 2005, the embalmed shark had turned green and lost a fin, but still sold for $12 million, the second-highest price ever paid at the time for a work by a living artist (a couple of years later, Hirst would set the record, surpassing Jasper Johns). The buyer was Steve Cohen, an investment whiz who earns $500 million a year and is, Thompson notes dryly, "considered a genius."

"Who pays $12 million for a decaying shark?" Thompson asks. The short answer is insecure rich people who want "prove to the rest of the world that they really are rich." And that they are cosmopolitan with good taste: "A great many people can afford a small yacht," Thompson says. "But art distinguishes you."

The best thing about Thompson's book is that it demystifies the art world by walking through its arcane financial customs and by insisting on an economist's appreciation for the subjective theory of value. He recognizes that value is dependent on context. Objects themselves have no intrinsic worth; what we're willing to pay at any given time is a result of the stories we tell ourselves.

Saatchi and many of the artists he promotes are particularly good about telling stories and creating myths about what is hot, compelling, subversive, or visionary. As Saatchi has said, "There are no rules about investment. Sharks can be good. Artist's dung can be good. Oil on canvas can be good."

And, of course, they can all be very bad, both as art and investments. Thompson notes that art is in fact a terrible investment. Buy art, he counsels, "If you love it and want to live with it, but not in the hope it will appreciate in value."

That's sound advice, as Wallace Stevens understood. In one of his most famous poems, he celebrated the fleeting, ephemeral nature of life itself, declaring "the only emperor is the emperor of ice-cream." And embalmed sharks.

Nick Gillespie is editor in chief of reason.tv and Reason Online. A version of this review ran in the August 31, 2008 edition of The New York Post.