Many investment bubbles have burst in the past year—housing, credit commodities, oil and so on. But only now are we getting to the real froth.
The boom in contemporary art has been an incredible phenomenon: a true bubble of bubbles. It has exhibited all the classic features of the South Sea bubble of 1720 or the tulip madness of the 1630s. It inflated faster and more violently than other contemporary bubbles. While British house prices took six years to double, contemporary art managed it in just one, 2006-7. Insiders have long tried to justify the sense-defying tulip like increases in the value of some artists—the work of the Chinese painter Zhang Xiaougang, for instance, increased 6,000 times between 1999 and 2008—by claiming that we were living through some sort of golden age.
This, however, is pure poppycock, as Ben Lewis and I argue in our essay for the latest issue of Prospect. To understand why the work of artists such as Damien Hirst and Lucio Fontana have become so valuable, one must analyse it as a classic investment mania: from the point of “displacement,” when a new object of investment attracts speculative interest, to the point we are now at, where credit becomes overextended and the mania ends in panic. All that will ultimately remain is a stock of work that has been churned out by cookie-cutter artists without much regard to originality of aesthetic merit….