Some rich people invest to get richer, but as The New York Times Magazine's Adam Davidson points out, sometimes buying that $120 million piece of art is just the simplest and bluntest way to tell people you have $120 million to blow.
We'll be the first to admit that we don't really get how someone decides that this photograph is worth $4.3 million or that Munch's Scream fetched $120 million. Which is why Davidson's piece comes in handy. Beyond some of the lingo (did you know there's an upper stratosphere of rich people dubbed "UHNWI" or Ultra High Net Worth Individuals?), it's as surprisingly simple market to understand: People are determined to show you how rich they are and how rich you aren't. Per Davidson:
Artwork itself may be a lousy investment, but selling it (and advising on it and being an art-world consigliere) can be pretty profitable. Because each piece of fine art is unique and can’t be owned by anybody else, it does a more powerful and subtle job of signaling wealth than virtually any other luxury good. High prices are, quite literally, central to the signal — you don’t spend $120 million to show that you’re a savvy investor who’s hoping to flip a Munch for $130 million. You’re spending $120 million, in part, to show that you can blow $120 million on something that can’t possibly be worth that much in any marketplace.
Go on and head over to The Times Magazine for the full story, but first let's all take a moment to say how much we love our jobs and we'd never, ever, go into anything like art collection, art advising, or selling art just for the money... right?
This article is from the archive of our partner The Wire.