What makes Modern Art so Expensive?


Most of us have come across news headlines that scream of how some piece of modern art was auctioned for an exorbitant price. For instance, in 2015, a painting (shown below) by noted modern artist V.S. Gaitonde was sold for Rs. 29.30 crore at Christie’s India auction.

An Untitled Oil Painting by VS Gaitonde
Image Source: LiveMint

Or take the case of SH Raza, whose two paintings, Saurashtra and La Terre, were sold for Rs. 15.9 crores and Rs. 18.8 crores respectively. For people who don’t understand modern art, these numbers can be baffling. A layman would wonder what is so special in this piece of art that people are willing to pay such high amounts for them. In this article, we try to explain why modern art is so expensive?

Understanding Art

Before we talk about modern art specifically, let’s understand what is art? In simple terms, art is an expression of creativity and imagination to create work, which is appreciated for its beauty and emotional power. In the words of American novelist Saul Bellow, “Art has something to do with the achievement of stillness in the midst of chaos.” As such, art is anything that makes any one of our senses (such as visual or auditory) feel good.
Within art, modern art is something which is made recently and is the art of today. The objective of modern art is to see the world with a fresh perspective and keep traditions of the past aside. Just like there’s classical music and modern music, art can be considered as traditional or modern. Many people are specifically surprised at the high value commanded by modern art. While most people understand why a painting by Pablo Picasso or Vincent Van Gogh is so expensive, they often wonder why modern art by relatively lesser-known artists is so dear.

How does Pricing of Modern Art Work?

Aesthetic and emotional appeal: Pricing of a piece of art is hugely influenced by its aesthetics and emotions conveyed by it. There’s no price for emotional satisfaction and pleasure and people are willing to pay absurd amounts for something that can generate strong emotional reactions. This holds true for all forms of art, including modern art.

Supply and demand: One needs to understand how the principle of supply and demand comes into play in the pricing of modern art. If an artist is deceased, scarcity is a key driving factor for pricing. This explains partially why paintings by artists like V. S. Gaitonde (1924-2001) or J. Swaminathan (1928-1994) are sold for steep prices. For living artists, other factors influence the pricing of their works. Some artists, for example, create very limited works of arts, thus commanding a higher price.

Extensive marketing: Just like all fields, there’s a marketing angle involved in pricing of modern art. Dealers, artists and auction houses spend huge sums to promote works of art and create a perception of the future value. If an artist’s work is put in popular magazines or is made a part of well-known art collections, the work gets external validation. For instance, if a vintage bottle of wine is approved by four different wine experts, it automatically is perceived as more valuable. Apart from promotion, art galleries and dealers also serve as tastemakers for general audiences, which further helps in marketing.

Reputation of the artist: Very much like all other items, art is valued in relation to other pieces of art. Recent auction prices influence the price of modern art. So for instance, if the work of an artist has fetched a huge amount, other works of that artist will also be perceived as valuable. And once an artist becomes a brand, sky is the limit for putting a value to their work.
There’s an old story about renowned English painter Damien Hirst, which explains this phenomenon. A.A. Gill, a food critic for Sunday Times London, once bought a portrait of Stalin made by a communist artist. When he tried to sell the painting to Christie’s, they refused it as they didn’t want to be associated with Stalin. However, when Gill asked them what if it was a work of Hirst, they said they would have definitely bought it. Gill called Hirst, who made some very minor changes to the painting using a marking pen and signed it. Subsequently, Christies’ was willing to pay up to 20,000 pounds for the same painting, which they were not interested in some days back.

Investment value: Many people buy art as an investment, and not necessarily for their passion of art or as a hobby. This is particularly true in countries like India and China. Banks, luxury goods dealers, & watch companies are some players that view art as an asset. Again, this drives up prices of art, because people pay for it keeping in mind some perceived value in the future.

Social status: Many people also see art as a status symbol and a gateway to a glamorous lifestyle. There are a large number of art fairs, auctions and events with after parties, and the rich and famous consider it as a prestige status to attend such events. Moreover, investing in art also allows the wealthy to make a statement about their spending power and become the talk of the town. There’s also an exclusivity factor with art. Billionaires can buy lots of yachts or sports cars, but they can buy only a few paintings of Gaitonde or Raza.

Branding: Just like Louis Vuitton or Gucci are well-known brands in fashion, branding also comes into play when buying modern art. For instance, Tyeb Mehta is a huge brand. And if one buys a Tyeb Mehta from another popular brand like Christie’s or Sotheby’s, it speaks volumes about the buyer’s personality. And as with all other items, branding overpowers the artistic or aesthetic appeal of an object. So people are willing to pay a premium for a Louis Vuitton bag or a Rolls Royce car simply for the brand, irrespective of whether they are pleased by it or not.


Final Thoughts:

In summary, there are several factors that influence the pricing of modern art. The next time when you hear a painting sold for an astronomical amount, remember that it’s not the art alone that’s making it so pricey.