| Sharkanomics |
|
I am still reeling from
the fact that Damien Hirst has made £111 million from
the recent auction sale at Sotheby's in London, mainly
of the works which remained unsold at the various
galleries through which he normally sold them, plus a
few new works.
From what I have seen in the news reports, they seemed mostly to follow the same theme - an animal or fish preserved in formaldehyde or butterflies on a painted background. There was for instance "The Golden Calf", sold for £9.2m - a young bull in a tank of formaldehyde wearing a golden disc. Or you could have for £9.6m "the Kingdom", which is a preserved tiger shark in a tank. If your budget didn't stretch quite that far then for £541,000 you could have bought "Strawberries and cream", described as "butterflies, manufactured diamonds and household gloss on canvas". And all this at a time when the financial world went into melt-down, with Mr Paulson, the US Treasury Secretary announcing in the same week that the various Banks' toxic assets (the mortgage backed instruments) would be taken off their hands by the American taxpayers and realised gradually over the natural lifetimes of those loans, meaning that their present day value (or lack of it) would cease to be of immediate relevance.
Now it is not unusual for an artist to produce works which are similar to each other. The same haystack can be seen in very many different pictures by Monet, although each in different lighting conditions, that being the point of it all. And Chaim Sutine produced pictures of sides of meat, a part skinned rabbit and a plucked chicken. These are hung alongside works by Renoir, Cézanne, Picasso etc in the Orangerie in Paris and just one floor down from Monet's world famous ‘Nymphéas'. But pickled animals? Just as the financial world seems in recent years to have been a house of cards, so I cannot help but think that these latest purchases will not prove to be quite the investment opportunity they may appear to be.
The banks depend on confidence to keep going. Once that disappears, then the system stops working. Assets which have a realisable value in the long term such as those based on house loans, some at least of which will be paid off normally, suddenly have no short term value, simply because no-one is interested in buying them. Without buyers, assets, however valuable they may seem, simply have no value. The art world depends not on confidence, but on that even more changeable thing, fashion. If an artist is not fashionable, then no matter how technically brilliant he is or how much his works may engage your emotions, big money will not be paid for them. Billionaires will not want to show off such works to their friends. And that is what it seems mainly to be about. After all, it is difficult to imagine people discussing the finer points of the Golden Calf's tank or the precise concentration of the formaldehyde used. Even the poor calf was just the product of nature. The golden disc is the only other thing and it is difficult to see long conversations ensuing from it. No, the point of it all is to own something which is both fashionable amongst your peers (i.e. can be called "cutting edge art") and has cost a lot.
From what I have seen in the news reports, they seemed mostly to follow the same theme - an animal or fish preserved in formaldehyde or butterflies on a painted background. There was for instance "The Golden Calf", sold for £9.2m - a young bull in a tank of formaldehyde wearing a golden disc. Or you could have for £9.6m "the Kingdom", which is a preserved tiger shark in a tank. If your budget didn't stretch quite that far then for £541,000 you could have bought "Strawberries and cream", described as "butterflies, manufactured diamonds and household gloss on canvas". And all this at a time when the financial world went into melt-down, with Mr Paulson, the US Treasury Secretary announcing in the same week that the various Banks' toxic assets (the mortgage backed instruments) would be taken off their hands by the American taxpayers and realised gradually over the natural lifetimes of those loans, meaning that their present day value (or lack of it) would cease to be of immediate relevance.
Now it is not unusual for an artist to produce works which are similar to each other. The same haystack can be seen in very many different pictures by Monet, although each in different lighting conditions, that being the point of it all. And Chaim Sutine produced pictures of sides of meat, a part skinned rabbit and a plucked chicken. These are hung alongside works by Renoir, Cézanne, Picasso etc in the Orangerie in Paris and just one floor down from Monet's world famous ‘Nymphéas'. But pickled animals? Just as the financial world seems in recent years to have been a house of cards, so I cannot help but think that these latest purchases will not prove to be quite the investment opportunity they may appear to be.
The banks depend on confidence to keep going. Once that disappears, then the system stops working. Assets which have a realisable value in the long term such as those based on house loans, some at least of which will be paid off normally, suddenly have no short term value, simply because no-one is interested in buying them. Without buyers, assets, however valuable they may seem, simply have no value. The art world depends not on confidence, but on that even more changeable thing, fashion. If an artist is not fashionable, then no matter how technically brilliant he is or how much his works may engage your emotions, big money will not be paid for them. Billionaires will not want to show off such works to their friends. And that is what it seems mainly to be about. After all, it is difficult to imagine people discussing the finer points of the Golden Calf's tank or the precise concentration of the formaldehyde used. Even the poor calf was just the product of nature. The golden disc is the only other thing and it is difficult to see long conversations ensuing from it. No, the point of it all is to own something which is both fashionable amongst your peers (i.e. can be called "cutting edge art") and has cost a lot.
But if Damien Hirst had
only produced a single work, then it would be highly
unlikely to fetch significant money. There has to be a
body of work which can, over time, make the artist
well-known and create a clientele all of whom have a
vested interest in seeing the works they have bought
go up in value. Having bought one work, they can be
persuaded to buy more, but at increased prices and to
persuade their friends to do so as well. Why? Well,
the more they are willing to pay for new works, the
more the works they have already bought will
appreciate in value. That is how it works. And so,
rather like a pyramid selling scam, it goes on
until...until the earlier sharks starts to rot, (which
they do despite the formaldehyde) or until someone
finds a new Damien Hirst, when the bubble in the
original Damien's work will start to deflate.
It has probably got to the point where Hirst no longer much cares about the money. He must after all be amongst the world's super rich. But his policy of producing lots of works which are similar to each other must in itself also eventually devalue the brand. Too many sharks in formaldehyde, whether wearing a golden crown or dressed in goggles and a snorkel tube will not be good for the resale market.
So it is to be hoped that the Banks have not invested in such works. If they have, then I can imagine a latter-day US Treasury Secretary announcing that they have set up a mechanism for taking the Bank's latest toxic assets off their hands and, this time, having to throw them back into the sea.
Paul Buckingham
September 2008
It has probably got to the point where Hirst no longer much cares about the money. He must after all be amongst the world's super rich. But his policy of producing lots of works which are similar to each other must in itself also eventually devalue the brand. Too many sharks in formaldehyde, whether wearing a golden crown or dressed in goggles and a snorkel tube will not be good for the resale market.
So it is to be hoped that the Banks have not invested in such works. If they have, then I can imagine a latter-day US Treasury Secretary announcing that they have set up a mechanism for taking the Bank's latest toxic assets off their hands and, this time, having to throw them back into the sea.
Paul Buckingham
September 2008