I found this article to be very intriguing and
it related very closely to what we are learning in class. I have always wondered
why some art costs millions of dollars when to me it looks stupid and others would pay so much for it. This leads to the underlying fundamental economic principle that
values are subjective; and this is where art has the advantage that there is no
set price. We learn that there is in fact a minimum price to sell the art and
this is only to cover the price the artist must pay for the rent of the gallery
and other basic necessities to make it.
From this podcast we learn that there is a small
system to get an idea of the price of the art. The scale which is the bigger it
is the more it costs, the intensity of how much time was put into it, and the
medium which includes what it was made of and if there are any other copies of
it.
This is all true in finding out the price, but there
truly is no set price because in economic terms it relies on supply and demand
and also consumer surplus. As the podcast mentions in the book, Economics of Art, it is shown that the
more people that want your art, the more you can charge because there is a high
demand and not a large quantity. That is why if the medium you only have one
copy, it makes the art much more valuable and the price goes up.
Also as we learned in class, consumer surplus is the
difference between what you are willing to pay, and the market price. The piece
of art, “The Physical
Impossibility of Death in the Mind of Someone Living" or the shark in
formaldehyde went for $12 million. This is because since it was really one of a
kind, rich people who like art where willing to pay more than the artist’s
price because they wanted this one-of-a-kind work of art. This bid war made the
price to go up very high showing the consumer surplus in this item.
I think art is a
great thing but the podcast proves its point that art isn’t the best investment.
It is more pretty to look at than a piece of paper that shows you have a bond
or a stock, but there is no guarantee to what the art will be worth someday
because it is totally subjective.
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