The Art Market: The Most Irrational of All Games

THE GROOVE

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I am Maria Brito, an art advisor, curator, and author based in New York City.

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Adam Smith, the 16th century Scottish economist and philosopher, who is usually labeled “the father of capitalism” was probably the first person in history to argue, albeit obliquely, that markets are irrational. In his 1759 seminal book The Theory of Moral Sentiments, he noted that people's decisions could be swayed by passions, vanity, and other non-rational factors.

Now, 265 years later, even Adam Smith would be astounded by the madness that the art market has become.

Last week, Comedian, the work of sculptor and conceptual artist Maurizio Cattelan, that consists of a perishable banana (replaceable by the owner at their own expense) which is then affixed on the wall with duct tape following a series of instructions provided by the artist, sold for $6.2 million (including buyer’s fees) at Sotheby’s. Comedian originally debuted at Art Basel Miami Beach in 2019 at the booth of Galerie Perrotin, it’s an edition of three and each was priced $120,000. Editions one and two sold to art collectors, the third edition was donated to the Guggenheim Museum.

For the buyer of the second edition (the one sold last week) there was probably a 5-year non resale clause written on his invoice as well as on a separate contract, which is customary practice of Perrotin. That may explain why the seller waited until 2024 to cash out on his banana. Comedian generated a 4,900% return on a piece of art that the original owner didn’t have to insure, pay shipping for, or store. Just a certificate of authenticity and a set of instructions which may have lived inside a safe box or casually in a drawer. It’s like the tale of Jack and the Beanstalk on steroids adapted for the 21st century.

The buyer, Justin Sun, is a 35-year-old Chinese entrepreneur, who not only plans to pay for his purchase with a form of cryptocurrency but also has told the press that he intends to eat the banana every day enacting his own form of performance art. You can’t make this up.

The sale of Comedian has reignited debates about the absurdities and irrationalities of the art market, where prices often defy logic and provoke disbelief among the public. How can something so ephemeral and seemingly trivial command such a price? The answer lies in the complex, often illogical mechanisms that drive the art market, blending psychological factors, social status, and speculative investment.

The art market, like any other, is theoretically governed by supply and demand. However, the value of art is far more subjective than that of, say, real estate or stocks. With Comedian, there is no physical permanence; the work is a concept: buyers receive a certificate of authenticity, not the banana itself. Yet it fetched millions because the art market doesn't prioritize intrinsic value.

Instead, the art market thrives on perception: how collectors, dealers, and the public view the work's cultural significance or its creator's prestige. Maurizio Cattelan, an Italian sculptor with a 40-year career, is known for his provocative, humorous art, and his reputation alone imbues his work with an aura that transcends the object.

Scarcity is another driver of irrationality. The art market fetishizes uniqueness and rarity, even if the scarcity is artificially manufactured. While anyone could tape a banana to a wall, it wouldn't be Cattelan’s banana. This exclusivity is bolstered by branding. Just as luxury fashion relies on a designer's name, so too does the art market rely on the artist's brand. Cattelan is a darling of the art world, represented by Perrotin, Gagosian and Marian Goodman, he has had hundreds of institutional exhibitions and is backed up by some of the biggest art collectors in the world. As a bona fide art celebrity and jester, he elevates the value of everything he creates, no matter how absurd.

Buying expensive art also confers status. Justin Sun didn't just acquire a banana; he acquired a story. Owning a Cattelan becomes a badge of cultural capital, a signal to peers that the collector understands and participates in contemporary art discourse and even more so, he wants to tell others that he gets conceptual art (but does he?). It’s an irrational, yet deeply human, behavior. People are willing to pay exorbitant prices for objects (or ideas) that elevate their social standing.

The irrationality of the art market is magnified by Comedian’s self-awareness. The work is a satire of the art world itself, a commentary on excess, absurdity, and the commodification of ideas. Yet, in its sale, it ironically became the very thing it critiques. This recursive irony adds layers of meaning (and perhaps value) that further fuels its allure.

In our 21st century the concept often outweighs the physical artwork. The art market operates in a realm where value is determined by perception, not practicality. Art doesn't conform to conventional rules of valuation because it occupies a unique space where image, status, and speculation collide. While some might scoff at the idea of a banana commanding such a price, others see it as a reflection of the times, a reminder that in the art world, value is as much more about the maker and the story behind it than it is about the object itself.

Whether this is genius or folly depends on who you ask, but one thing is certain: the art market, with all its absurdity and irrationality, is an endless well of fascinating material and I’ll never tire of diving in it. Neither should you.

All of human history can be boiled down to these three verbs: want, take, and have. Effective marketing is precisely the art and science of making these three words dance. This is at the core of everything that we consume, and it has to be the most creative and innovative endeavor to bring any return. Otherwise, it is wasted money, especially in our current society where we are inundated with options and everyone is vying for a piece of attention. Read about the five marketing hacks Salvador Dali used and that you can start using today.

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