Art auctions are often the talk of the town, with prices in the hundreds of millions of yen.
In the art world, where large sums of money are traded every day, how are the prices of artworks determined?
And are "price" and "value" the same thing in the art world?
In this article, we will explain the concepts of price and value within the art world.

The "price" of art is determined relatively and fluidly.

The "one-of-a-kind" nature of art works

There are many collectors who want works by very famous artists such as Takashi Murakami, Yayoi Kusama, KAWS and Richter because they are famous.
Artwork is bought and sold at a price, but what makes it completely different from other things is that it is all "one-of-a-kind.
They are one-of-a-kind and in high demand. When this happens, prices have no choice but to go up.

Popularity, recognition, and historical reputation

Of course, the creation of a work itself is costly, so in the "primary distribution market," the market where the work first appears, its price is determined by the cost of production and the degree of popularity.
However, works often leave the hands of their first owners and are priced on the "secondary market," such as at auctions. Here, the price changes based on popularity, recognition, and historical evaluation, apart from the price in the primary market.
It is very difficult to perfectly predict each of these price-determining variables, and they can easily fluctuate depending on the presence of a handful of gallerists, collectors, dealers, etc.

Jitsumasa No Name, "Low Quality Hell, Kumamoto ver.

The price of art is not the price of labor.

A piece of cardboard can cost hundreds of thousands of yen?

For example, the price of a laptop is determined after calculating the cost of materials, labor, and distribution costs since it is an industrial product. The price of almost everything sold in the world is quoted after taking into account the various costs required to provide the product and the seller's profit.
However, in the case of artwork, it is fair to say that there is no such system at all.
To take an extreme example, a work of art on cardboard with a cost of 10 yen (including the cost of paints) can sell for several hundred thousand yen, or even several million yen.
(Works by Katsuhiko Hibino, current Dean of the Faculty of Fine Arts at Tokyo University of the Arts, and others)

Katsuhiko Hibino, "LIFE

What is the difference between "value" and "price"?

So, what do people find "value" in and what do they pay such a "price" for?
Of course, this will vary greatly from person to person, but the major common denominator is probably "whether or not it resonates with one's own aesthetic sense and outlook on life.
For example, Sueo Mizuma (Mizuma Art Gallery), who runs one of the leading galleries in Japan, said the following in a 2017 interview.

Just drawing a single line on a canvas can have tremendous value. It can't be measured by economic rationality.

You're wondering if I'm worried that the world doesn't appreciate it?　It's the opposite, that's what I'm saying. You think, "I'm telling you it's good, but you don't get it, everyone's a knave." You can't gallerist without that certainty."

The criterion is, "Will it go down in history?"

What are the people inside the museum thinking?

Let's change the perspective a bit and take a peek at what curators in charge of artwork collections in museums are thinking.
In the same interview in 2017, Kenjiro Hosaka, then curator of the National Museum of Modern Art, Tokyo (now director of the Museum of Art, Shiga Prefecture), said that his criterion is "whether it will remain in history.
For example, a work by Paul Klee, a 19th - 20th century Swiss and German painter, was purchased for 250 million yen. However, considering Klee's historical reputation and the high degree of perfection of his work, Hosaka says that it was a rather inexpensive purchase.

Paul Klee, "Destroyed City
In contrast, when purchasing Chim↑Pom's "Kiai 100 Renshot" (a video work shot in the disaster-stricken areas of Fukushima Prefecture in 2011), which continues to make its presence felt in the Japanese art scene, the price was a thousand times less than Klee's, but it took more "Kiai" than buying Klee's work, he said. Chim↑Pom "Ki" is a Japanese word meaning "spirit" in Japanese.

Chim↑Pom 《 100 rounds of "Kiai" (spirit)
The question is not the price, but whether the work really belongs in a museum (i.e., should it remain in art history?). The reason is that it is necessary to make a judgment from the viewpoint of "does the work really belong in a museum (i.e., should it remain in art history)?

The "value" of the existence of an international contemporary art exhibition

This perspective is shared by Mr. Yasuharu Ishikawa, President of the Ishikawa Cultural Promotion Foundation, the organizer of the Okayama Art Exchange.
Ishikawa says that his first collection was of works by internationally acclaimed contemporary artist On Kawahara. He says that he was looking for a buyer for Kawahara's works, which were coveted by collectors around the world, when the former owner, a Japanese national, decided to part with them. A gallerist acquaintance of Ishikawa's told him, "It is a great loss to have such a great work of art leave the country. If you like contemporary art and want to take the first step as a collector, I recommend you buy this first." This suggestion led to Ishikawa's decision to collect the work in order to preserve an outstanding historical artist from Japan.

On Kawahara, "Mar. 11, 1967
The Okayama Art Exchange, mentioned earlier, is also a fairly hard-core conceptual art exhibition of contemporary art, and one feature of this international contemporary art exhibition, held every three years, is that many of the works on display are difficult to "buy" in the usual sense.
Ishikawa's goal here is not economic activity through direct sales of artworks, but rather the broader, ripple economic effects of supporting pure artistic activity and sustaining events such as this international exhibition.

Precious Okoyomon, "Touching my little tail until the sun notices me.
As mentioned above, the greatest characteristic of a work of art is that its "value" can vary from person to person.
This is why some works of art can generate a large "price," while others can be recognized as valuable even though they do not generate a price.
Many players in the art world (artists, gallerists, collectors, dealers, curators, etc.) are constantly thinking about the issue of "value" and "price.
Source.



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