Supply and demand doesn't really flesh out in the art world. Lots of people get to wanted status simply because they knew the right folks or were lucky.
It isn't so much originality or that there wasn't a supply of art. There is a supply of art. Good, well done art that will meet your needs and slews of folks that will do commissions if you do. If anything, there is more art than there is demand, even if you are into non-mainstream stuff. If it were different, art school would be an excellent choice for your financial future.
As another reply said, there is a lot of money laundering in the art world as well. I imagine there are some questionable tax dodges in it too.
> Supply and demand doesn't really flesh out in the art world.
Yes, they do. It may be the case that demand in the art world defies the expectations of rational choice theory that demand will be a function of utility realized by the buyer if they are successful in the transaction, but prices are still driven by supply and demand.
> Lots of people get to wanted status simply because they knew the right folks or were lucky.
How demand is generated and whether or not it is rationally-grounded has no bearing on whether supply and demand “flesh out”.
> It isn't so much originality or that there wasn't a supply of art.
It's that art works that you consider adequate substitutes for each other are not considered adequate substitutes by a sufficient subset of buyers such that the availability of tons of generic art at cheap prices does not drive down the market-clearing price of less-available in-demand art.
While economics 101 often talks about the rational person, when you go deeper you should discover that the rational person is much like the "spherical cow" in physics: everyone knows it doesn't exist, but it is often a useful fiction anyway. How the irrational person affects economics is a complex question.
I don't think it's quite as bad as that. Especially in systems that are tied to monetary value, where irrational actors are punished monetarily, you can assume that the irrational actors vanish from the system over time. Those models often come with a specific bound on how many actors need to act rational (usually 33, 50 or 66%) for it to hold up.
I'm curious though how many actors act rational in specific economic systems. Especially with cryptocurrencies I feel like the low amount of rationality might be a significant hurdle to establishing a robust economy, even if everything else is ironed out (proper use case and incentive system).
Humans are not rational. People pay money to have pictures of their kids - this is completely irrational, but we would all agree that someone who doesn't have pictures of their kids is lacking sanity. People pay a lot of money for clothing that is in style when something cheaper would be just as good - sometimes better.
Irrational actors are only punished when their irrationality exceeds a threshold, which is rare in these days where we don't let people starve to death easily.
By what scheme would an irreplaceable object become priceless? In all pricing schemes I can think of, it's value either doesn't depend on or goes up with its uniqueness.
You can not replace any original copies, however just because something is an original copy doesn't mean it is priceless. For instance few would pay much money for the original copy of one of my notebooks, but it is irreplaceable if lost.
