Even leaving aside the astronomical values now common for 20th-century masterpieces—David Geffen got $140 million for the Pollock that he sold last year, reportedly to Mexican financier David Martinez—prices for the work of living, breathing contemporary artists have soared to stratospheric levels. This past February, respected midcareer painter Peter Doig saw his White Canoe (1990–91) sell at auction for some $10 million, while this November a seven-foot-tall Jeff Koons sculpture, Diamond (Blue) (2005), is going on the block at Christie’s with a $12 million estimate. And those numbers pale alongside the $100 million allegedly paid for Damien Hirst’s diamond and platinum memento mori For the Love of God (2007).
“It’s not a new phenomenon that work by living artists is more expensive than the work of nonliving artists, but today you can pay half a million for a brand-new photograph,” says Gary Tinterow, curator in charge of 19th-century, modern and contemporary art at the Metropolitan Museum of Art. “That wasn’t the case 10 years ago.”
Once upon a time in the Sixties, the world of contemporary art was run like a mom-and-pop business, with artists in SoHo making work that was thoughtfully scrutinized by critics, evaluated by curators and sold through a handful of dealers for relatively modest sums. Back then, the high- dollar auction sales came from the Old Masters, Impressionist and Postimpressionist departments. Today it’s the postwar styles of Abstract Expressionism, Minimalism and Pop that set new high-water marks seemingly every auction season, and the world of contemporary has transformed itself into something like a global commodities market awash with cash from Greenwich hedge fund managers, Russian oligarchs and Asian capitalists. Meanwhile, the markets for entire historical periods—Italian baroque and 18th-century French painting, for example—have stagnated. It’s not just the most sought-after work of mediagenic stars like Hirst and Koons that sells before the paint is dry. Artists barely out of graduate school are being collected by the likes of Charles Saatchi, the Rubell family and Eugenio López, and speculative purchases of works by young artists are rampant.
The market for contemporary art, in other words, may just be too darned hot these days. And while the average art lover probably won’t care whether Adam Lindemann—author of Collecting Contemporary and an advocate for the asset approach to art investing—realizes a lucrative gain on his investment, there is a danger that the discerning role of public institutions will be trampled in the stampede.
“There is a common public perception that high times in the art markets are good times for arts institutions,” says Michael Govan, director of the Los Angeles County Museum of Art. “Often exactly the opposite is true. In a hot market, people are buying everything in sight, and it’s very hard to raise funds for museum acquisitions. Because of the speed of the market and the price of the market, good times are not good for museums.”