Art price boom

The art world is trying to digest the results of a bunch of sales in early February that must change the way the market approaches Post-War and Contemporary Art. Many of the prices fetched were stunning, and fully bear out my view that an old-fashioned art boom, fuelled by immense amounts of money in private hands, is well under way. When Christies can sell two Francis Bacons for £5 million a piece on the same day, my diagnosis can hardly be denied.

But what about prognosis? One view is that the boom is a frightful phenomenon, which can’t last and shouldn’t: ‘A small but devastating crash would, in the long run, do the world of good’, writes Philip Hensher in The Guardian. He doesn’t say who would benefit from this goodness. Not the owners, certainly, nor the artists, nor the dealers. He can only mean the buyers, but they are also owners, whose buying is wonderfully encouraged by the monster prices.

Sir Anthony Caro, Sculpture Two, 1962

Speaking as a friend and admirer, I can see nothing but deserved benefit in the sale of a steel sculpture by Sir Anthony Caro for £1.3 million. The previous record for Britain’s greatest living sculptor (if not the world’s) was under £78,000. As Hensher wittily points out, take away the cost of the metal, and the aesthetic quality of that Caro was previously worth no more than that of a BMW. The boom may or may not be creating excesses of over-valuation: but excesses of like under-valuation will undoubtedly be corrected - and a good thing, too.

One area of under-valuation is my speciality - contemporary British, where prices have been held back by lack of exposure and interest in the vital American market, and by a small supply of Big Spenders in the UK. Some correction in these twin defects is unmistakably under way, and prices are moving upwards as a result. I don’t see this momentum being lost in a world where the lowest paid employee of Goldman Sachs earns over $500,000. Other Wall Street houses can’t be that far behind, and there are other industries - like property development and the e-revolution - where vast wealth is waiting to be spent.

The corollary is that Hensher’s ’small but devastating crash’ is likely only in the context of a large and devastating crash in the corporate wealth boom. This is founded on nothing stronger than the power of business leaders to exact totally unjustified rewards from their employers (i.e, themselves). This mega-scandal is far grosser than the shenanigans which laid Wall Street and the world low in 1929.

But any correction of these hideous over-valuations of business worth would have effects far beyond the art market. I suspect that the prices which shocked Hensher - £7.8 million for a Soutine, £12.3 million for a ‘major’ Gauguin and £6.2 million for ‘a perfectly hideous’ Munch - won’t seem at all remarkable in a couple of years from now. After all, the Munch has a remarkable provenance: it briefly passed through the hands of the perfectly hideous Field Marshal Goering.