Investing in art: to him that hath shall be given a Monet
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The sale of Monet’s painting of Waterloo Bridge last week triggered a rush of reflections and questions – on aesthetics, on real value, and on history’s first worldwide credit bubble. The painting sold at auction for a vast amount, put at £17.9m by one source and £18.5m by another. Either way, we are talking serious money – about twice what experts had expected.
Meanwhile, The Daily Telegraph came to succour the poor, offering its readers a glossy reproduction of said painting for free. This posed a question. We didn’t know whether it was an existential question or a financial one – but it haunted our sleep: what is the difference between a genuine work of art and an ersatz copy? So deep and troubling were the resulting cogitations that we spent all of last night in prayer, meditation and inebriation, trying to make sense of it all. The answer, of course, was established – to the penny – at the auction. Mr. Market expressed himself in no uncertain terms. Still, he changes his mind.
The typical hedge-fund manager knows all about making money; he is an expert at it. But when he has made it, he is completely unprepared for the next phase – getting rid of it. It sits on him like a mink coat on a rap star, making him look a little sweaty and ridiculous. Part of the problem is that he has too much money to spend in respectable ways. When you make $1bn a year, you can buy the most expensive house in the world – every year – and still have $900m left. So, you have to buy bigger and ever more gaudy accoutrements. Finally, your yacht is so big it gets stuck in the East River and your friends laugh at you. That’s the problem with big spending. You’re trying to buy status; but you’re always in danger that your attempts will backfire.
The hidden appeal of art is that you can spend as much money as you want without jeopardising your reputation. Instead of wearing a diamond-encrusted watch that chimes “nouveau riche” on the hour, you buy a $100m diamond-encrusted plaster skull, created by Damien Hirst. It’s not a silly prestige item, you tell yourself; it’s art!
If you wanted to look at Monet’s painting of Waterloo Bridge, for example, you could get a print for nothing. Or, you could pay $35m for the real thing. From a distance, you can barely tell the difference. You have to get up close. The closer you get, the more you can appreciate the artist’s genius. You see the texture, brush strokes, and subtle colours. And there, at maybe a range of two feet, you can appreciate the master’s skill. Maybe that’s worth $35m. Maybe not.
Paintings are visual things. Poke your eyes out and you will get no pleasure from a Monet at all, except perhaps a vicarious pleasure from letting your guide dog look at it. Even if you have eyes, the benefit you get diminishes with distance. Logically, at a certain range, the Monet image must be equal in value to the print, which we know, thanks to The Daily Telegraph, has a value of zero.
This little insight might have rested comfortably on our stomachs, had it not been for an earlier art auction, in which a print by Andy Warhol was deemed worth $71.5m. And here we are getting a little queasy. For Warhol never lifted a paint brush at all. You can get as close as you want. Stick your nose to the canvas. You won’t find any greater detail. You could print up a million copies. Each one could be as faithful to the original, and as readily passed off as the real thing, as the next crisp new dollar bill to leave the US Bureau of Printing and Engraving.
Green Burning Car is not a painting at all – but a print; the “original” is a reproduction of a newspaper photo. The only thing that might be considered authentic or original about it was that Warhol put a green cast over the image and disorganised the picture a bit. So, if authenticity, originality, or painterly talent were the only source of such high prices, we cannot explain the Warhol phenomenon. The visual difference between a print and a print of a print is almost undetectable. Both give exactly the same satisfaction at any range. If the print of the print has zero value, the print itself should have approximately the same. Why then would anyone in his right mind pay so much for it?
‘Because it will go up in value’, you say? We can practically read your lips. ‘It’s a good investment.’
The previous record for a Warhol was set last November, when a portrait of Mao, reproduced from a photo in Newsweek, sold for $17.4m. In six months, Warhol oeuvres increased in value by 100%. But the increase in prices merely increases our puzzlement. It’s as if modern art were a way for a thoroughly modern money bags to take leave of his loot. Like the dotcoms of the tech bubble, contemporary works of art have so little apparent value they can have infinite prices.
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