Why buy a portrait for £85.3m? The real reason why art is so expensive

What would you buy if you had enough spare cash to afford 294 average-priced UK houses, 176 Rolls-Royce ­Phantoms, or a fleet of 11 ­Learjets? In June, an anonymous Hong Kong collector decided they had a ­better use for their £85.3 ­million and blew it all on a single artwork: Gustav Klimt’s final portrait, Lady with a Fan, painted in 1917. Inspired by ­Japanese woodblock prints and full of East Asian motifs, it was described by Helena Newman, the chair of ­Sotheby’s Europe, as “a technical tour de force, full of boundary-pushing experimentation, as well as a heartfelt ode to ­absolute ­beauty”. The sale in ­London smashed the record for the most expensive ­artwork sold at auction in Europe, previously held by a Giacometti sculpture, which sold for a paltry £65 million in 2010.

The riches that some are ­prepared to part with in exchange for a framed canvas, or a bronze cast, are ­staggering. The Frieze art fair, which takes place in Regent’s Park each year – and returns in October – is such a magnet for billionaire ­aesthetes that the capital’s auction houses now schedule their own big sales to coincide with it. During last year’s fair, Christie’s, Phillips and Sotheby’s together made sales ­totalling £165 million (and that’s alongside the millions changing hands for uber-contemporary art inside Frieze’s own tents).

For those of us who like to think aesthetic value should be unsullied by monetary value, the sums exchanging hands seem distasteful, obscene even. Yet it seems there’s no end to the madness, despite the best efforts of some to embarrass the market into greater restraint. Banksy once attempted a wry ­comment on the absurdity of the market, when his Girl with Balloon self-destructed in its frame after the hammer fell following a ­million-pound bid at Sotheby’s in 2018. But his satirical gesture merely inflated the Banksy bubble even more. Three years later, the partially-shredded piece sold for £18.6 million.

What is driving these sales? The simplest answer is that art is a secure investment. But no collector is so vulgar as to actually say that they think of art as a financial asset. They reserve that for their rivals. François Pinault, founder of the luxury goods firm Kering (the owner of such brands as Gucci, Balenciaga and Yves Saint Laurent), once claimed that big-spending hedge fund ­managers were artificially distorting art prices. “In part, the inflation of the art market in recent years was fuelled by what I call the new ­collectors who ­considered art ­primarily as an investment rather than a true passion,” he told The Art Newspaper in 2009. “Now the real collectors are back.”

But even the hedge fund ­managers – 14 years on, still major players in the art market – are reluctant to label their personal purchases as canny investments. They like to emphasise their love of art, too. Consider how billionaire hedge fund manager J Tomilson Hill describes why he buys art: “The first thing that goes through my mind is ‘does this give me goosebumps?’ Is it something I will want to look at every day and with the same enthusiasm a year from now, or two years from now?”

Steve Cohen – another hedge fund manager, who bought Jeff Koons’s steel Rabbit sculpture for £71 million in 2019 – tells a ­similar story. He insists his art-­buying is “purely from the gut. And I know right away. If it stays in my brain – let’s say I go see a picture, if I keep thinking about it, I know it’s something I like.”

Kenneth C Griffin, who is – you guessed it – a hedge fund ­billionaire, is even more high-minded: “I believe that each of us in experiencing the arts has an ­opportunity for personal growth.” (Griffin, incidentally, is the 35th richest person in the world.)

It would be too cynical to doubt the passion of these collectors. After all, the desire to own original art is not restricted to the rich. Since 1999 more than half a million works have been sold to people of more ordinary means around the world at the popular Affordable Art Fairs. Prices at the fair’s London edition currently start at £50 and are no higher than £7,500, which would barely scratch the insurance costs of the mega-sales.

Original art is such a lure because it allows you to own what nobody else can. As the German philosopher Walter Benjamin argued in 1936, in an age of mechanical reproduction, uniqueness is valued in a way that it never was when everything was handmade (such that even the humblest table was a one-off). Art ­especially carries what Benjamin called the “aura” of individuality. “Even the most perfect reproduction of a work of art is lacking in one element,” he wrote. “Its presence in time and space, its unique existence at the place where it happens to be.”

Benjamin believed the aura of art “withers in the age of mechanical reproduction”. In fact, if anything the aura has grown, making originals even more desirable. Any old multimillionaire can have a huge house or a private plane. But each artwork presents a winner-takes-all opportunity: this is the logic that drives prices ever higher. And if there is one thing worse than not having the masterpiece you want, it’s knowing that another ­collector has it hanging on his wall.

I say “his” deliberately, because the vast majority of high-spending collectors are men. ARTnews’s annual top 200 collectors list is dominated by men, with most women in the list appearing as part of a power-couple alongside their male spouses. This would seem to reflect the sex mega-wealth gap (only 337 of the 2,640 people listed by Forbes as billionaires are women).

Still, the aura of an original doesn’t entirely explain why some people are willing to pay such ­astronomical prices. It is hard not to conclude that so much of the high-minded talk around art merely cloaks far vainer motives. Since the dawn of time, the wealthy have used expense as a form of ­peacocking – think of Cleopatra drinking a rare pearl dissolved in vinegar, a cocktail that would cost about £24 million in today’s money. But whereas Elton John’s Rolls-Royces and ­Bentleys are rather crude ways of ­broadcasting his wealth, his art-buying shows he’s loaded and ­cultured. And buying great art shows the world you’re more loaded and cultured than anyone else.

That is one of the functions of what the American sociologist Thorstein Veblen called ­“conspicuous consumption” back in 1899. Now we tend to think of the expression as referring to vulgar displays of wealth. But Veblen believed that “conspicuous consumption of valuable goods is a means of reputability to the gentleman of leisure”. Through art, the rich can acquire the kind of esteem that money usually cannot buy.

The gilded life of a top-level art collector is unquestionably status-affirming and anxiety-inducing. When people whose wealth has no limit expect to get anything they want, being thwarted is a real threat to their sense of identity. Which is why the art world has constructed a sprawling paraphernalia of gallerists and advisors to facilitate such thrill-seeking and to help construct this sense of scarcity. In his recent profile of Larry Gagosian for The New Yorker, the journalist Patrick Radden Keefe describes how prospective buyers employ the famed dealer to find the kind of work they’re looking for, hanging in someone else’s private collection, “then make the owner an offer he can’t refuse. If he does refuse, double the offer. Then, if necessary, double it again. It is the super-rich equivalent of ordering off-menu.”

But whereas ordinary off-menu ordering signals little more than the fact that you can you do what you damned well want, acquiring art that is apparently not for sale suggests something more significant. To use a somewhat old-fashioned word, it shows that the buyer is as magnificent as the art bought.

For the ancient Greeks, the ­magnificent were marked out by an ability to spend lavishly but well. For the historians Herodotus and Xenophon, this primarily meant promoting some kind of social or communal good, such as paying for public festivities or building amphitheatres for theatrical productions. That aspect of magnificence ­continues today in the form of philanthropy (usually with the donor’s name above the gallery entrance, to ensure the magnificence is noticed).

Aristotle gave the fullest account of this ancient Greek virtue of megaloprépeia. He shifted the focus to what the spending said about the character of the magnificent ­individual, in particular his good judgment and aesthetic sensibilities. “The Magnificent man is like a man of skill, because he can see what is fitting, and can spend largely in good taste,” he wrote. “He will ­consider also how a thing may be done most beautifully and fittingly, rather than for how much it may be done, and how at the least expense.”

Unlike Christian moralists, ­Aristotle thought it entirely ­appropriate that the magnificent would splash out “from the motive of honour” believing that this was “common to all the virtues”.

Magnificence is not thought of as one of our virtues today because it seems – on the face of it – to be out of time and place. The magnificent man was a Greek aristocrat of great wealth. Once Europe was Christianised, the ascetic, the frugal and the poor became more fitting role ­models. The buying habits of the super-rich, however, suggest that an admiration for magnificence is still deeply rooted in our culture.

Whether Aristotle would have thought this justifies the ­astro­nomical prices that are paid for art today is moot. Either way, his account suggests that there is an age-old respect for people who manage to combine good taste and the resources to satisfy it. And buying expensive art is one of the only ways in which the ­super-rich can make a display of such magnificence.

But can true magnificence be bought so easily? For Aristotle, the admirable person displays a range of virtues in all aspects of their lives. A person cannot be redeemed simply because they spend some of their wealth tastefully. The honour a good person desires is rightfully earned for true virtue – it is not the same as status or fawning deference to the power of money.

There may be a certain magnificence in the auction records broken by art collectors. But few can hope to achieve such greatness in spirit. More often than not, they are like the characters portrayed in The Marriage Settlement, the first painting in William Hogarth’s satirical series Marriage A-la-Mode (1743-5). We are presented with a sordid scene in which a wealthy city ­merchant is effectively selling off his daughter in marriage to the son of a bankrupt earl. This human trade is an exchange of cash for ­status. The walls are covered with paintings, as is fitting for any ­person of means. Yet they all portray death. Their message of human vanity is completely lost on their owner. The paintings’ ­juxtaposition of the beauty of art and the vulgarity of wealth portrays a relationship that is as difficult as the marriage in the series, but which has endured for much longer.

Great art talks in ways that words cannot, speaking to the heart, mind and senses in a language that defies translation. Money also talks, but loudly, and mainly about power, greed, and vanity. When money and art meet, these two languages create a confused babel in which nothing much makes sense. ­Collectors may genuinely believe they love art for art’s sake and that their purchases reflect their own magnificence. But there is surely a baser reason why some are drawn to the most expensive lots.

Frieze will take place from Oct 11-15 in Regent’s Park, London NW1 (frieze.com); the Affordable Art Fair is at Evolution London, Battersea Park, London SW11 (affordableartfair.com) from Oct 19-22