Picasso: the price of everything

People instinctively like record breakers: fastest man, tallest building or longest winning streak. Records provide us with a frame of reference and a benchmark by which to judge what has gone before as well as what lies ahead. Records, we are often told, are there to be broken: they can inspire greater performances and provide a target to aim for. “Les Femmes d’Alger”, sold last May at $ 179 million by Christie’s, set a new world record price for a work of art sold at auction. Prior to this sale, the previous record (after inflation) was a picture that had sold 25 years previously: Van Gogh’s “Portrait of Dr Gachet” (1890), that made $82.5 million (equivalent to $148 million today) when it was offered at Christie’s in May 1990. To put the price in context, “Les Femmes d’Alger” ranks only fourth on the list of record prices for artworks. The first two are Paul Gauguin’s 1892 “Nafea Faa Ipoipo” (When Will You Marry), which brought a reported $300 million in February 2015, and Paul Cézanne’s 1892–93 “The Card Players”, which sold for a reported $250 million in April 2011. Both were purchased by the Qatar Museums. Number three on the list is Mark Rothko’s 1951 “No. 6″ (Violet, Green and Red), which sold in August 2014 to Dmitry Rybolovlev at €140 million.

“Les Femmes d’Alger” is the only one of these four paintings to be sold at auction; the other three were private transactions. The most expensive previous work sold at auction was Francis Bacon’s “Three Studies of Lucian Freud” (1969), which was estimated at $85 million and sold for $142 million. Until the “Les Femmes d’Alger” sale took place, the most expensive known prices for works by Picasso were $155 million in March 2013 for “Le Rêve” (1932) and $104 million in May 2004 for “Garcon à la pipe” (1905). The entire 15-painting series of “Les Femmes d’Alger” was purchased for…$212,500 from Picasso’s dealer Daniel-Henry Kahnweiler by American collectors Victor and Sally Ganz in 1956. Ten of the 15 were later sold to the Saidenberg Gallery; the couple kept ‘O’. That version sold for $32 million in November 1997 in the Ganz collection sale at Christie’s New York. It was purchased by a Saudi collector living in London, who was the consignor of the sale at Christie’s. The painting increased in value by 459 per cent in 17 years.

When viewed from an historical perspective, the fact that exceptional artworks command enormous prices is nothing new. Commissioning and collecting art has always been the preserve of the wealthiest in society, from kings and prelates, to industrialists, oligarchs and even nation states. Nicholas II, the czar of Russia, paid $1.5 million for Leonardo da Vinci’s “Benois Madonna” in 1914. A standard way to adjust historic art prices to account for inflation is to run them through Index inflation. Using this method, the czar’s big 1914 price for the Leonardo is equal to $35.5 million today. What effect do record prices have on the market overall and what can we say about a painting that sells for $179 million, an amount that would purchase three Boeing 737s?

It could be argued that breaking records at the top of the market, where only a handful of the world’s super rich can compete, bears no relation to the rest of the market but this is not true. Record-breaking sales are a talking point for the general public and are seen as a barometer for the health of the art market as a whole. They encourage new consignments from owners wishing to take advantage of favourable market conditions and at the same time publicity may tempt new bidders into the market at different levels. Nor can one invoke the argument that these works are lost to the public for generations: many high-profile purchases end up on loan to blockbuster exhibitions or as permanent attractions in one of the many private museums being created all over the world. Record breakers are good for the market in a variety of ways and deserve to be celebrated. A work of art is not great because someone will pay a record price for it; however record prices are paid for great works of art. There is, of course, a danger of confusing high prices with aesthetic value; as Oscar Wilde put it, of knowing ‘the price of everything and the value of nothing’.