Reposting an old comment. The art world obeys supply and demand - where demand has no relation to the real world:
If you are more curious about the contemporary art world market and why $29M is not that expensive[1], I recommend "The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art".
In general, brand (in this case Christie's and Sotheby's) ranks supreme above all else. Once you are branded, you can pretty much sell anything as expensive art.
Also, an interesting factoid - when we hear of Far East/Middle East buyers bidding tens of millions (or more) for a painting, we naturally tend to think - who buys that without seeing it - but as the book points out - the painting has most likely gone to see the buyer already (e.g. Dubai/Hong Kong pre-auction private tour).
Excerpts from the book:
"Money itself has little meaning in the upper echelons of the art world -- everyone has it. What impresses is ownership of a rare and treasured work such as Jasper Johns' 1958 White Flag. The person who owns it (currently Michael Ovitz in Los Angeles) is above the art crowd, untouchable. What the rich seem to want to acquire is what economists call positional good; things that prove to the rest of the world that they really are rich."
[1] "If a great apartment costs $30 million, than a Rothko [big deal famous contemporary artist] that hangs in the featured spot in the living room can also be worth $30 million - as much as the value of the apartment. But no one could envision a $72.8 million apartment to use for comparison..."
Isn't that true of just about anything relating to the very rich? Maybe excluding the Buffett-style low-key-lifestyle rich. I find it difficult to get more worked up about millions for a painting than millions for a Maybach or ostentatious yacht/mansion/jet. I'm somewhat bothered by the inequality of such concentration of wealth existing in the first place, but if it's going to exist, I guess it's fine with me if they waste it on status symbols.
Jets are actually really useful, and even yachts and cars can be actively enjoyed. Buying shitty ugly art just as a status symbol is nothing like that, and you pretty much deserve a guillotine or a bullet for that kind of bullshit.
It's not really conspicuous, since it's usually not revealed who owns the painting, and the paintings are warehoused or displayed in a private home. It's also not really consumption, since it's just a painting.
If you are more curious about the contemporary art world market and why $29M is not that expensive[1], I recommend "The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art".
In general, brand (in this case Christie's and Sotheby's) ranks supreme above all else. Once you are branded, you can pretty much sell anything as expensive art.
Also, an interesting factoid - when we hear of Far East/Middle East buyers bidding tens of millions (or more) for a painting, we naturally tend to think - who buys that without seeing it - but as the book points out - the painting has most likely gone to see the buyer already (e.g. Dubai/Hong Kong pre-auction private tour).
Excerpts from the book:
"Money itself has little meaning in the upper echelons of the art world -- everyone has it. What impresses is ownership of a rare and treasured work such as Jasper Johns' 1958 White Flag. The person who owns it (currently Michael Ovitz in Los Angeles) is above the art crowd, untouchable. What the rich seem to want to acquire is what economists call positional good; things that prove to the rest of the world that they really are rich."
Jasper Johns' White Flag
http://michaelovitz.blogspot.com/2011/04/weve-featured-this-...
http://www.metmuseum.org/toah/works-of-art/1998.329
Estimates on the artist economy:
"40k artists resident in London (about same number in NYC)
For London and NYC each:
75 superstar artists (>$1M/yr income)
300 mature, successful artists (>$100k/yr income)
5,000 part time artists (need to supplement their income)"
http://www.amazon.com/The-Million-Stuffed-Shark-Contemporary...
[1] "If a great apartment costs $30 million, than a Rothko [big deal famous contemporary artist] that hangs in the featured spot in the living room can also be worth $30 million - as much as the value of the apartment. But no one could envision a $72.8 million apartment to use for comparison..."