An interesting, but probably not immortal, Bacon sold for $142 million at auction yesterday. Note that it’s a tryptych, which might (depending on the droit d’integrité laws in effect where it winds up), be broken up and treated as three paintings, so maybe this wasn’t the high point being proclaimed: asterisk in the record books. This got a work of contemporary art (well, less than half a century old) on the front page of the NYT along with a story that said nothing, not a word, about it as a painting, and then went on to wallow in miscellaneous additional art price porn and celebrity collector gossip.

OK, I guess the important thing here is the transaction. What happened here? First, it was a transfer in which practically no real economic resources were consumed. The painting went from someone’s wall or storage to someone else’s. This is a very different matter from commissioning a work, or building an office building. About a fifth went to Christie’s, which is a nice hourly rate for the use of the hall and gavel.

What were the high bidders thinking, though? Giving up control of $140m in return for something either means you are an idiot beyond rational analysis, or you expect the something to get you a stream of benefits that tots up to more. For example, you might be making a pure speculative play, counting on someone else to pay close to $200m to cover your commissions, storage costs, insurance, and foregone interest on the investment until you sell it on. If that’s all there is to this, it’s a bubble and someone along the line is revealed to be the fool holding the bag.

You might be making a gesture like Pogner in Die Meistersinger, who put his daughter up as a prize in a singing contest to prove how admirable he and his insecure bourgeois pals are by embracing art. As the buyer is not publicly known yet, this gesture might be for the quiet, discreet admiration of his rarefied small circle of friends. (The Northwest Indians had a ceremony in which the chief would act out generosity at a big party with gifts to all and sundry to demonstrate his merit; of course the gifts had to be redistributed with interest, so this preserved and reinforced the chief’s relative status.) For this purpose, the stream of benefits is an elevation of the buyer’s positional standing, and all it requires is that it be known in the right circles that he spent enough money on advice from art experts, and the purchase itself, to stand in the reflected glow of this painting. It’s a little like the scene in La Dolce Vita where a Morandi on the wall certifies Steiner’s cultural standing to Marcello (whether or not it should). What’s important about this angle is that, like the Times story, it has nothing to do with the painting itself, only reputation and the fact of the purchase.

Speculative investments, if they aren’t a bubble, rest on the expectation that an asset will eventually create real economic value (not necessarily value priced in money) for someone or some people. For a painting, this value might reasonably have to do with people engaging with it as a painting, and this can happen in two ways. The obvious one is the old-fashioned way, standing in front of it, looking, and letting it do stuff to the inside of your head. If that’s what this is about, Bacon’s work will have to generate (at 5%) something like $3600 worth of this value/working hour forever; maybe ten people each benefiting at a rate of $360/hr eight hours a day, M-F? The best seat at the Metropolitan Opera costs about $150/hr., but maybe une expérience plus raffinée is a better comparison: I see tickets to the 49ers on sale for more like $500 per hour of presence, $1500 per hour of actual playing. In the case of a painting, though, I’m not aware of anyone able to sell access at rates anything like that, much less day after day forever. There are not a lot of works in the world with a gaggle of ten people in front of them all the time, even at much lower ticket prices; even MOMA only costs $25/hr for a short visit, less than $4 if you make a day of it.

It can also be consumed in reproduction, but whether the buyer got that piece of the package is not known; did Bacon’s estate sell the copyright along with the canvases? It seems from the photo credit that the Times had to obtain rights to its picture from the Artists Rights Society representing Bacon’s estate, but even if reproduction rights are included in the purchase, and the painting somehow becomes a must for every history of art book ever published until forever, and maybe gets on a stamp or blows away the poster market, I can’t make up a $140m story for it.

What should we think about this nonsense from a societal perspective? On the one hand, it’s a little worrying that people with such poor judgment have so much money to throw back and forth to each other. But maybe it’s good for art: painters in garrets will observe this windfall for Bacon’s heirs and redouble their efforts to make great works that will someday be worth millions, works that will enrich our lives!

Right. Like the kids shooting hoops instead of doing homework in order to have a zillion-dollar NBA contract and buy their mothers nice new houses. This is not an efficient allocation of labor and effort.

What could you do with $140m if you really cared about art (and artists)? Well, you could leave that painting to the next bidder (it’s not leaving the planet if you don’t buy it) and invest it to earn a cool $7m per year to provide twenty live-work spaces, for artists being driven out of the neighborhoods they gentrify for you and your rich hipster friends, again and again. You could hire a hundred art teachers for public schools, forever. You could build a really nice community black-box theater where people could make the magic of performance for their neighbors.

But if you did one of those things, you couldn’t have your rich friends to an exquisite dinner, with that painting on the wall certifying how much you love art. Do I hear $150m, in the back on the right? Are you all in, and all done…?

[Cross-posted at The Reality-Based Community]

Michael O'Hare

Michael O'Hare is a Professor of Public Policy at the University of California, Berkeley.