Auction houses on the mainland are hoping that collectors will start buying again after prices of some works shot up 10 times between 2008 and 2010 before sales plunged last year. Experts say prices are now based on artistic value rather than driven by speculation.
SCMP, May 28
What do art experts mean by artistic value?
I confess that I myself don't know what art is. It used to mean pretty pictures and you learned to appreciate them by consuming wine and cheese. I gather it now means anything awarded a government arts grant and it includes the odd obscenity in order to demonstrate free spirit.
But while I have no idea what art means, I have put some time and effort into puzzling out what people may mean by value. I have thus learned to define artistic value.
Artistic value consists in thrills of appreciation, shivers of delight and emanations of enchantment.
That's the coin of artistic value and the wonderful thing about this currency is that it applies to anything at all that you may want to define as art. Pictures, sculptures, music, even silly yellow ducks, all of them can (or not) produce the same neural reaction of "Hey, Doris, this speaks to me!"
But my question was what art experts mean by artistic value and this definition does not satisfy the requirements of art experts.
Thrills of appreciation are not accepted in payment at the BMW dealership and if art experts didn't drive BMWs, how would anyone know they are art experts?
When art experts speak of artistic value, they mean money value. They want to be paid. What is artistic value in money terms?
The answer to this question is simple. There is no such thing. Value in money terms can only be ascribed to things that generate money, and a Ming vase pays no rent, dividends or interest.
I can take a decent guess at the value of a rental property, for instance. It will be some multiple of the annual net rental income, the exact figure to be determined by such things as the particular nature of the property, its location, the general yield on financial assets in the currency, a political risk factor and so on.
The same holds true for stocks. Look at the earnings, the prevailing price-earnings ratio of the market, the things that might give this stock a better or worse rating than the market, and you have a range of value.
It becomes almost directly mathematical with bonds and other fixed-income instruments.
But all I can say for a Ming vase is that if the proper display of it produces 1,000 thrills of appreciation annually, then its capital value may be 10,000 thrills of appreciation. I can only value it in terms of the value it creates.
This is not to say that I cannot set a price on a Ming vase. It is easily done by reference to most recent auction deals in them. But this is not a value. It is only a price. It is entirely and only speculative in nature.
It depends purely on what other people have paid in the past and how much the potential buyers swallow the auctioneer's hype that prices can only go up.
The auctioneer may be right. He may be wrong. Flip a coin. You have nothing else to go on. This is a gamble.
You may say, of course that a Ming vase in your hallway confers prestige on you. It may indeed do so (after costing you a bundle for building security and theft insurance) but how do you value prestige? We're no further ahead than with thrills of appreciation.
And how much prestige do you get if the price of Ming vases falls and people laugh at you because they have evidence in your hallway that you bought at the top of the market? How much prestige is it worth if the next generation decides, as wastrel heirs do, that they prefer yachts?
The prices of some art works may indeed have shot up 10 times between 2008 and 2010 but they were equally overvalued and/or undervalued at both times. They have artistic value only in the coin of thrills. In money terms, art is always a speculation.