An Ironic Perspective on my Hypothesis about Damien Hirst

At the beginning of last month (the day after April Fools’ Day, to be specific), I wrote a post entitled “Damien Hirst Tests What the Market will Bear.” This was based on the hypothesis that Hirst was less interested in any aesthetic evaluation of his work than he was in how the market reacted. I observed that he warranted his position in one of his public statements to the press in which he cited a Rembrandt painting as an example of art whose value was determined primarily by market behavior. I concluded that “if Hirst can find enough people willing to pay his asking price that he does not have to lower it, then more power to him.”

Thanks to Julian Bell’s review of the current Hirst exhibition at the Tate Modern, which appeared in the May 24 issue of The New York Review, I encountered an ironically amusing afterthought for that punch line. It turns out that the first major “market endorsement” of Hirst’s work was an “outrageously successful” (Bell’s words) auction of his work in September of 2008. Bell read great significance into that date, citing it as “the very moment of the Lehman Brothers default.” I think Bell may be on to something more than a clever turn of phrase.

Yesterday, when meditating on the misfortunes of the price of Facebook shares (which are continuing today), I felt it necessary to pay attention to the man behind the curtain with the assertion:

Trading on Wall Street is basically a shell game.

A shell game is, of course, a major species in the confidence game genus. The game is rigged against the player (the “mark”), but the guy on the street giving the spiel builds up the player’s confidence that he can actually win. Back in December of 2009 I suggested, drawing upon the work of Mark Taylor, that all of economic behavior is a confidence game (including, of course, how we attribute value to money) and that the collapse of Lehman Brothers was a prime example of what happens when the “marks” finally lose their confidence. From this point of view, the auction revealed a sector of the population (not necessarily a “critical mass”), which had decided that putting money into a piece by Hirst (however outrageous, if not patently offensive, that piece may have been) was more secure that turning it over to Lehman Brothers to mange. Regardless of what you think about Hirst’s aesthetics, on the basis of how things turned out after that auction, it looks like those folks made the right judgment call!