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There has been a lot of talk lately about staggeringly high real estate prices, and whether or not they're too high – whether we're seeing a new outbreak of "irrational exuberance."
It's not just houses. The prices of fine art have also been climbing like crazy lately. A John Singer Sargent painting called "Group with Parasols" had a recent estimated pre-sale auction price of $8 to $12 million --and then sold for $24 million. And on just one night in May at one auction house in New York, seventeen separate artists' auction-price records were set. One of Joseph Cornell's gorgeous little boxed collages sold $2.5 million, five times the price any of his work in the past. And an Edward Hopper painting of the inside of a train car went for $14 million, six times his previous record.
So I guess it's no wonder these days more economists than ever are analyzing the history and dynamics of art prices. According to a new study by two NYU economists, the certified art masterpieces are not the best investments. It's kind of the economic Catch-22: apparently, because everyone has agreed for a long time that such paintings are valuable, they don't appreciate so much in value. Although the same economists found that in general, despite busts and (like now) booms, art has been an excellent investment during the last 50 years, increasing in value at more than 12% a year, better than stocks.
Another economist, David Galenson, at the University of Chicago, has an even more elaborate and provocative theory. He hasn't just tracked art prices, and compared the greatest with all the rest. He has presumed to divide all 20th century artists into a two-part typology.
There are the virtuosos like Claude Monet and Jackson Pollack, whose claims to greatness come from working lives of endless experimentation, and not from any single world-changing high concept. If you're buying art, it makes sense to by works by those kinds of artists painted later in their careers, after they've had time to experiment and grope toward greatness. Galenson's study found that artists born before 1920 – such as Monet and Pollack -- tended to do their most highly prized work after the age of 40.
The other kind of artist does make his name with a single, big, world-changing invention, such as Marcel Duchamp's declaration that an ordinary urinal was art, or Andy Warhol's dependence on commercial images. Those kinds of artists do their greatest work, however – according to the art marketplace – when they're young, when their high concepts are still new and exciting.
But Galenson found that the market has been both kind and cruel to this later group of artists. The good news for Pop and conceptual artists – artists born since 1920 -- is that their prices have zoomed most astronomically of all. But only for the work they did when they were young, before they turned 40.
I wonder how this might work for people who, say, for instance, host radio shows and write novels. Speaking as somebody now well over 40 – as someone who didn't even start doing radio or publishing novels until he was over 40 -- I am hereby opting for the slow upward journey to middle-aged excellence rather than a meteoric youth.
