The Value of Art

Michael Findlay has been a dealer for decades and was a director at Christie's, and this book examines what determines the value of art from someone who has priced it professionally.

His framework distinguishes three kinds of value. Commercial value is the market price, determined by provenance, condition, rarity, the artist's market and the specific circumstances of a sale. Social value is what ownership confers on the owner, including status, access and identity, which Findlay treats as a real and legitimate component of demand rather than as vanity. Essential value is what the work does for the person who looks at it, which cannot be priced and which he argues most participants in the market have stopped considering.

The practical material covers how the market actually works: the roles of dealers, auction houses and advisers and how each is compensated; the significance of provenance and exhibition history in establishing price; how an artist's market is built and maintained by dealers; the mechanics of auction including estimates, reserves and guarantees; and the difference between the price a work achieves at auction and what a private sale would produce. Findlay is critical of art bought as investment, arguing that the illiquidity, the transaction costs and the concentration of returns in a small number of artists make it a poor asset. The book is written with the authority of long practice and is less cynical than Thompson's treatment of the same market.