We have updated our Terms of Use.
Please read our new Privacy Statement before continuing.

Art and commerce

9 May 2012 By Edward Hadas

From a narrow economic perspective, the art world is working brilliantly. But the success shows just how narrow that perspective really is.  

Start at the very top end of the art market: last week’s sale of Edvard Munch’s “The Scream” for $120 million, a record for any artwork sold at auction. It may seem bizarre for an icon of cultural despair to become a token of financial exuberance, but the transaction reinforced the social meaning of art among the elite.  

Sociologists talk of positional goods: possessions and activities which express social standing. A normal skiing holiday is like a sign saying, “I’m solidly middle class”. A mansion states, “I’m rich.” A multi-million dollar painting tells the story of money to burn. And a $120 million pastel screams out, “I’m at the top of the heap, and cultured besides.”  

The industrial economy has changed and developed, but it has consistently supported the positional value of artworks and other so-called collectibles. Demand has expanded along with the number of wealthy people. Prices have risen along with the quantity of money available for ostentatious spending. The recent increase in the share of global income and wealth taken by the very rich has accelerated that trend.  

Prices would be even higher if the supply of positional art had not also expanded. That growth is puzzling. The number of worthy artworks from the past available for purchase is actually decreasing, as museums expand their collections. Contemporary art isn’t an obvious substitute, because there’s no scarcity and no way to know what’s really good. The possession of something of uncertain quality that is readily available should bring little social status.  

But collectors have overcome this supply problem with a tacit agreement to assign high values to just enough stuff to keep prices up. I can’t explain how this arrangement is made – the formation of social consensus is always a mysterious business – but for some reason a preserved shark by Damien Hirst is deemed worthy of a high price, while a stuffed tuna signed by his cousin probably would not be.  

High priced art gets most of the headlines, but the industrial economy has also successfully turned artistic production into a mass product, much like food, clothing and medicine. From the normal economic perspective, art looks like another consumer success story.  

Sure, paintings aren’t really suitable to modern economic treatment (although high-quality digital photographs of Munch’s works can be sent anywhere for about $200). But other art forms, both new and old, do fit in. The technology needed for mass production does no harm to the quality of books, recordings, photographs, cinema and anything on the Internet. Copies are identical to the original.  

The result of mixing art with industrial production is much like applying industrial techniques to agriculture or sewing: finished products that are readily available in a wide variety at reasonable prices. The gains are impressive. The pre-industrial peasant who might never read a book or see a professional work of visual art has been replaced by a jaded internet surfer who can choose among millions of books and images. Mass production has been complimented by mass distribution, so even people with unpopular tastes can find the art they like.  

Most economists would stop the discussion there, but I think something more needs to be said. Art should be different from food and clothing. Works of art are supposed to offer something more valuable than social status or pleasing entertainment. They are supposed to strive for the beautiful, to make manifest something greater than the petty comforts and regrets of everyday life. For all its cleverness, efficiency and popularity, the modern art market does not serve this higher master well.  

That claim is controversial; contemporary art, both elite and popular, has articulate defenders. Still, even champions of the new rarely claim that the modern search for greater material prosperity has been accompanied by an equally intense search for beauty.  

The failure is not precisely economic. The social decision to make art either exclusive or popular, but not necessarily beautiful, is not motivated by any sort of economic shortage.  There’s certainly enough wealth around to fund another Renaissance. If the production of beautiful works of art were deemed an important social goal – like education or sexual equality – who knows what masterpieces could be produced?  

The money is available, but the will is missing. For that, the industrial economy might bear some blame. Perhaps a culture which is dedicated to efficient mass production cannot also give beautiful art its due.  

In 1802, William Wordsworth complained about the coarsening effect of the Industrial Revolution: “getting and spending, we lay waste our powers”. “The Scream”, painted almost a century later, is almost a picture of that despair over the modern world. Perhaps it is fitting that after another century the work should attract such a high price.


Email a friend

Please complete the form below.

Required fields *


(Separate multiple email addresses with commas)