The $12 Million Stuffed Shark:
The Curious Economics of Contemporary Art
By Don Thompson
Palgrave MacMillan, 256 pages, $24.95
On Sept. 15 and 16, Sotheby’s auctioned off 223 new works by British artist-provocateur Damien Hirst, who raked in $200.7 million (having already, over the course of his relatively brief career, amassed a purported billion—billion—dollar fortune). I know: Your eyes are glazing over at news of yet another record-setting auction of outrageous contemporary art. But that’s because you’ve misplaced the emphasis—it’s not that it’s Damien Hirst or that it’s contemporary, it’s that the works are new, as in produced within the last two years. Mr. Hirst is the first major artist to take his art directly to auction, bypassing the dealers whose function, traditionally, is to introduce artists’ work to the marketplace.
Mr. Hirst is cutting out the middleman (and the middleman’s fees), and with the same swift stroke hopes to achieve a price reflecting the true value of his art. Auctions are, after all, the very embodiment of the infinitely wise free market, right? No specious “waiting lists” to pique demand for an artist’s work; no right of first refusal for market-manipulating dealers; and (at last!) no more snotty gallerinas. The price of admission is … the price of admission. Transparency comes to a notoriously opaque world.
NOT QUITE, SAYS ECONOMICS professor Don Thompson in The $12 Million Dollar Stuffed Shark, an engaging survey of the high-end art market. The title is a reference to Mr. Hirst’s The Physical Impossibility of Death in the Mind of Someone Living (1991), the tiger shark in formaldehyde currently on display at the Met.
Since the early 20th century, Mr. Thompson explains, aspiring artists have had to pass muster with a series of gatekeepers, the first of whom are the art dealers who search for talent among each new crop of art school graduates. The next step is for the dealer to place the artist’s work with an appropriate collector—not merely to sell it, but to place it. The euphemism on one hand reflects dealers’ eagerness to downplay the commercial aspect of their work, yet also reflects a fact of life in the art world: Just as a new artist’s work accrues value by virtue of its dealer’s reputation, placement with a prominent collector adds still more value—both to the placed work and to future works the artist produces. If a collector like, say, Charles Saatchi decides to acquire an artist’s work (as he did in 1988 after inspecting Damien Hirst’s breakthrough show, Freeze), the whole art world takes notice, including that ultimate guarantor of price levels, the museum curator.
That’s been the paradigm until now: Artists accept large dealer commissions in return for careful stewardship of their careers. In recent years, however, auction houses—led by Sotheby’s and Christie’s, and driven by speculators with seemingly unlimited cash—have bid contemporary artworks to astronomical levels (last November’s Tuesday evening auction of postwar and contemporary art, for example, earned Sotheby’s a record $315.9 million in sales). But those works were consigned by dealers and collectors, not the artists themselves.
Mr. Thompson seems to have known what was coming next: “An auction house offering to sell the whole output of a hot artist is a scenario that terrifies dealers; the artist would lose some promotion and mentoring, but might find the offer tempting: ‘My work sells out; why give my dealer 40 or 50 percent when an auction house will take 15 percent or less, and might achieve higher prices?’ If the two major auction houses expand their sale of primary market art [i.e. art being sold for the first time], that would speed the demise of a great many dealers, and signal a permanent change in the ecology of the art market.”
What kind of change? Mr. Thompson quotes Amy Cappellazzo, a Christie’s specialist in postwar and contemporary art, who said in 2006: “One can see how auction houses look like big box retailers trying to put mom-and-pops out of business.” If that’s true, Damien Hirst’s greatest masterpiece—his prodigious moneymaking—could transcend anti-art to become something truly profound: anti-dealer, anti-gallery, anti-art-world as we know it.
Maybe those gallerinas weren’t so bad after all.
Damian Da Costa is on the staff of The Observer. He can be reached at email@example.com.