On the logic of pricing an artwork at 100 million dollars

Skull II, 1887, Van Gogh, Oil on canvas

There is no point in recounting the current brouhaha over the cost of Damien Hirst’s latest artwork or who its final buyer might be (the artwork "For the Love of God" is a life-size cast of a human skull in platinum and covered by 8,601 pave-set diamonds weighing 1,106.18 carats. It is still available in the marker for an asking price of 100 million dollars. It took about 20 million dollars to create).

What was instructive and was on my mind for all of last week was the interview that Mr. Hirst gave on artnet (linked here) and the following advice for up and coming artists. In this he essentially tells you the reason for charging the work 5 times its cost price and I must say that the reasoning is fairly solid. I don’t like the guy too much, but after this interview, I decided to pay a little more attention to what he says...

Copied here are parts of the interview that struck me the most. The interviewer was Joe La Placa of artnet.

At the time of writing this article, no less than six potential clients were competing to purchase For the Love of God. One client, wishing to remain anonymous, if successful in purchasing the piece, had already organized a two year tour, calculating he’d make a large percentage of the purchase price back from exhibition fees.

Joe La Placa: For The Love of God has a huge sale price of $100 million. . .

Damien Hirst: It’s too cheap! People really want it.

Joe La Placa: £50 million is too cheap?

Damien Hirst: Definitely! If the Crown Jewels were on the market, they’d sell for a
hell of a lot more than that. It’s just one of those objects.

Joe La Placa: Yes, but in relation to what other contemporary art has sold for, this
is over the top, particularly for a living artist.

Damien Hirst: Not really. What do you mean, living artist? That’s a bit of a fucking red herring really, isn’t it, a living artist? I mean, art lasts for thousands of years; it’s been going on for thousands of years and a human’s lifetime is less than a hundred years. There are only a few artists alive, relatively speaking. And the art market is, what, 2000 years old and beyond, of artistic activity? You need to forget about the living artist and just talk about art.

When I got into the art world, I consciously wanted to change it. I found it really annoying because it seemed like a kind of club where people would sell cheaply to investors and they’d make the money. Collectors would take the art off the artists and, because they came in early and they gave the artist a little bit of money, later, when the artwork got resold, it would be the collector who made the big money in the secondary market. And I always thought that was fucking wrong. I’m the artist, the primary market. And I want the money to be in the primary market.

I’ve always said it’s like going into Prada and buying a coat for two quid and then selling it next door a charity shop for 200 quid. It’s totally fucking wrong! Why are they doing it that way round? Art should be expensive the first time around. There shouldn’t be all these old boys making loads of money on the secondary market.

Joe La Placa: So you’re saying it’s the artists who should make the lion’s share of the money, not the dealers or collectors?

Damien Hirst: Right. We should have learned from what happened to Van Gogh. Art has a kind of value now! People fall for that old fucking vintage trick, don’t they? "Oh, it’s a vintage antique, so it must be expensive." But that’s another priority. When you go in someone’s house and see a painting on the wall, a new painting should be much more exciting than an old painting . . . and that should be where the money is spent.

I am sure that gallery owners and speculative hedge fund managers would not like it if this kind of a feeling took root. Imagine most of the galleries in Chelsea would be charging the final price of the artwork guaranteeing the artist maximum benefits and the buyer maximum pleasure from owning the artwork while simultaneously denying the buyer postprandial pleasure in selling the artwork for 5 times the original price in the futures market...

Of course, the above will never happen, but it always good to indulge in a bit of wishful thinking.