The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art, Don Thompson

<em class="BookTitle">The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art</em>, Don Thompson

Anchor Canada, 2009 reprint of 2008 original, 268 pages, C$22.00 tp, ISBN 978-0-385-66678-7

One of the reasons why I’m reading and reviewing mostly non-fiction books these days is that the real world seems to have, in its quasi-infinite diversity, a lot more to offer than the well-trodden pathways of fiction.

For instance, it’s hard to imagine a fictional universe more irrational than the high-end contemporary art market.  What could possibly motivate otherwise intelligent and accomplished people to drop a few million dollars on objects of dubious artistic value?  Damien Hirsch’s titular artwork, after all, is £50,000’s worth of dead shark, preservation fluid, glass and steel.  Why would it be worth so much more to collectors, galleries, auction houses and dealers?  As contemporary art becomes baffling to the average viewer, why does it continue to fetch such high prices?

The simplest answer is a variation on “It’s crazy!”  But that’s the kind of explanation made to annoy every professional economist, trained to believe in the rationality and efficiency of the marketplace.  In other words, it’s a perfect research opportunity for academic economist Don Thompson, who sets out to understand the business of contemporary art in less than three hundred pages.

The $12 Million Stuffed Shark ends up being a far more revealing journey than anyone could expect.  If you want to start somewhere, go with the buyers and collectors.  One of the smartest passages of the book illustrates just how rich big-time art collectors actually are: Twelve million dollars, at their level of income, is something like a week’s salary –substantial, sure, but not crippling.  The buyers are from all around the world, and many of them are on a quest for social respectability.  How best to prove their upward mobility and refined artistic tastes than to display a work from a familiar name?  Some buy sight-unseen; others will borrow the work for a few weeks to see how it fits in their décor.  Other will buy for investment opportunities, but even Thompson (who has since joined the staff of The Art Economist magazine, a periodical aimed at art collectors/investors) cautions that overall, most art never sells for more than it was bought at.

Most artists, after all, reach a plateau; most art ends up stored somewhere; museums have more art than they can display (leading to a credible argument for museums selling work); and most would-be investors never see a return on most of their investments.  This makes art a risky investment, but not a hopeless one, because some work from some artists do appreciate, and everyone is in a race to identify the next hot artists before they hit big-time prices.

From that starting point, we get to explore art auctions, auction houses, the dance between dealers and their competitors, the increasing importance of art fairs and the artists that are getting most of the attention nowadays.  Get ready to distinguish your Saatchis from your Christies and maybe even appreciate some work from Jeff Koons and other contemporary artists.  One of the best chapters in the book explains the curious psychology of auctions in a wonderful wealth of subtle details that show how people react in constrained situations.

Even fast readers shouldn’t be surprised if they remain glued to the book for a while.  Thompson covers his subject through anecdotes, interviews, historical information, plenty of money figures and a few illustrations along the way.  Avowedly inspired by Freakonomics, The $12 Million Stuffed Shark becomes a layman’s introduction to contemporary art from a non-artistic perspective.  Thompson doesn’t spend a lot of time on quality judgement, except to suggest that if there is considerable disagreement as to what is a good art piece, it’s easy to quantify what is an expensive art piece.  This should make most artists and connoisseurs wince, but it’s an essential assumption if the book is to explain the field as it is rather than how it should be.

Ironically, Thompson’s book feels like dense reading in part because it doesn’t skimp on telling anecdotes, biographical profiles and preliminary conclusions on the state of the field.  I found it to be absorbing –I didn’t want to miss anything, so I ended up reading it very slowly to be sure to keep up with Thompson’s thorough exploration of the relationships between the various players involved in the field.  Perhaps more tellingly, I bought this book in the wake of the excellent “Pop Life” exhibition of contemporary art at the National Gallery of Canada, and now regret that I can’t go back to the gallery to see a few Warhols, Koonses, Hirsches and other darlings of the contemporary art market.  Thompson may have focused strictly on the economics of the market, but he may be able to stoke up a continued interest in the art.

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