Sharks Stuffed With Money

The curious economics of contemporary art

The poet Wallace Stevens, wealthy from his position as vice president of the Hartford Accident and Indemnity 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 the author of the insightful and compulsively readable book The $12 Million Stuffed Shark (Palgrave Macmillan), 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 the British advertising legend Charles Saatchi, one of the central figures in Thompson's study of "the curious economics of contemporary art." Married to the 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 at first (or second, or third) blush. He adds value simply by his association with 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 of formaldehyde—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, at the time the second-highest price ever paid for a work by a living artist. (A couple of years later, Hirst would move into first place, at last 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" in the world of high finance.

"Who pays $12 million for a decaying shark?" Thompson asks. The short answer is insecure rich people who want to "prove to the rest of the world that they really are rich." And that they are cosmopolitan with exquisitely rarefied 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 and often misleading financial customs and by insisting on an economist's appreciation for the subjective theory of value. Thompson recognizes that value is brutally 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. This concept may be familiar to anyone who has ever held a garage sale, but it's worth repeating, especially regarding an art scene in which millions of dollars change hands at the twitch of a finger in auction. In mid-September, even as global stock markets got shocked like the flies in A Thousand Years, a two-part Sotheby's sale of Hirst's work pulled in almost $200 million.

The stories for sale need not be especially original. While the 43-year-old Hirst plays the role of artiste to the hilt, his work and persona clearly derive from roughly equal parts of Andy Warhol, Jeff Koons, and Francis Bacon. Nor do the stories need to add up to a single, consistent narrative of absolute, unerring genius. Sotheby's recently told the owner of a 1982 Hirst painting of an old girlfriend's pet cat that the picture was, in the words of the U.K. Mail, "worthless because it was not in his trademark style."

Yet Saatchi and many of the artists he promotes are particularly good at telling stories and creating myths about what is hot, compelling, subversive, or visionary, even when their work is repetitive. (Hirst has also dunked zebras and lambs in formaldehyde.) 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 as 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. But not, apparently, cat pictures.

Nick Gillespie ([e-mail]) is editor in chief of reason.tv and reason online. A version of
this review appeared in the New York Post.