Claude Monet, as one of the most expensive artists in the world, has, long after his death, people spending millions of dollars on his artwork. The reason for this is, to me, unclear; to some, art’s value is dictated by use of color, to others the value is derived from subject matter. In short, art’s value cannot be determined using an exact science. Therefore, I do not believe that art in its basic form is a sound financial investment. While a Monet will always have value and is very unlikely to fall in price unless destroyed, the average piece of art is in no way guaranteed to maintain value and as an investment piece would likely underperform. While many people would argue that investing in stocks poses an even greater risk than investing in art, the opposite is true; although the stock market can be volatile, using hard data and projections, it is possible to fairly accurately predict the movement of the stock market, art, however, is based solely on the trends of modern preferences and the price of a piece by Monet for example, cannot be predicted over the long run because there is very little data that exists on any specific piece.
Using this piece by Monet, Water Lilies, Evening Effect as an example, it is easy to see how art is not a measure of investment but rather a measure for the human experience. I find a certain beauty in this painting that takes me back to my childhood days in Finland, however, the same feeling is not necessarily transferable to all individuals. Others may see it as a conglomeration of paints fit only for the walls of an elementary school. This is the nature of art. Painting is a way of capturing a moment on canvas. Paintings have for millennia been used as a way of recording important events and chronicling the evens of an era. While this piece by Monet may fetch ten million today, fifty million tomorrow, and twenty-four, ninety five one hundred years from now, the image will remain, forever showing us the image of a lake with lilies at evening. The surrealist paintings of the 20th century capture the prevailing moods of the populous and each one tells its own story.
Paintings by Van Gogh, Monet, and Cezanne will likely never lose much value unless the painting is disturbed, and the best of their paintings will always be worth millions. However, investment in such items is simply unreliable. What is bought at auction for 100 million can, depending on the economy or simply demand, be sold for only 80 million at auction in four years. What dictates the price of different pieces of art are of course things such as size and quality (how damaged the piece is), but most of the time a piece’s value is simply a measure of an individuals or groups attachment to an painting. Why else would Card Players by Cezanne be worth over two hundred million more than View of Auvers, also by Cezanne. How we see a piece determines its value, that is why art is more important as a measure of the human experience than as merely an investment. There is a beauty in art not found in the average stock.
The Econ Diaries 