Let’s be honest about the art market (and why the prices there are insane).
Actually, there’s no mystery to it. It works somewhat like NFTs, only with a longer history and a better reputation.
The scheme is simple:
You take an item that hasn’t been on the market in this form yet (a painting, sculpture, installation — doesn’t matter). You call it an “important artifact”. It helps if you have connections — galleries, auction houses, billionaire collectors. If you don’t have connections, then find someone who does and sell the cow to them. Since uniqueness is required, there will be no paintings of bears in a pine forest, no matter how brilliantly they are done. There will be something distinct.
The very notion of “this is a painting/sculpture” — is just a convenient formality. The main thing is that the object can be incorporated into the already established art trading system.
Art is such — one of the most convenient ways to “optimize” taxes and move large sums of money. Paid 18 million euros for someone else’s work, and then someone “on your side” bought some of your work for the same 18 million. Virtually no money was really lost (just taxes), and now in catalogs and rankings, two works are each priced at 18 million. The price can be pushed up by selling them cascadingly. Win-win. Auctions are just in on the deal. Further, if you donate this work to a museum for charity, you can even cut more taxes. But it can also be sold. And here’s why.
Currently, there are simply too many free funds in the world. The number of billionaires and their wealth is growing faster than the availability of truly rare assets (real estate, companies, gold, etc. have all been divided already).
Art is one of the few markets where “scarcity” can still be created literally out of nowhere.
If you have access to a hundred such wealthy simpletons and you can tell stories (“this is an investment for 20-30 years, it will only increase”), then selling is purely a technical matter. Two or three interested parties = bidding already starts, and already you see +50-100% to the price.
Over time, real cases appear: someone bought in 2000 for 2 million, sold in 2024 for 80 million.
These cases are used to convince the next buyers. New buyers with their money confirm and amplify these cases. The cycle is closed.
Result: the rise in prices in the top segment of art is directly tied to the increase in the number of super-rich and their capital. As soon as a serious global crisis occurs and the extra trillions stop being printed/earned, and the pyramid collapses, the market will very quickly show where there was real cultural value, and where it was just a beautiful financial scheme.
P.S. This doesn’t mean at all that all contemporary art is a bubble. There are works that are really important historically and culturally. It’s just that at the very top of the price pie, cultural value has long ceased to be the main driver.
But at the summit of Olympus of the most expensive paintings of classic genius solitaries, there will never be, because galleries and dealers need artists who can produce 20-50 works a year to satisfy demand, organize exhibitions in five capitals simultaneously, and maintain turnover. Artists like Lopez Garcia, Odd Nerdrum, or Ron Mueck make unique pieces that will become especially valuable only after the artist dies.
Hi, I'm Rauf Aliev. 