Value for Money?

Looking at the BBC website at lunchtime while I munched a sandwich I’d bought for £1.40, the item that really caught my eye was a story about the sale of a sculpture at Sotheby’s for £65 million. The starting price for this particular work (L’Homme qui Marche by Alberto Giacometti) was set at £12 million, but only took a few minutes for the bidding to reach its final level. An anonymous bidder now gets to keep the sculpture, which will probably now be kept in a private location, or possibly even a bank vault.

Let me make it clear at the start that I’m not going to embark on a rant about modern art in general or Giacometti in particular. A couple of years ago I went to an exhibition of his work at the Museum of Modern Art in Louisiana, just north of Copenhagen (in Denmark) and I found his strange elongated figures really fascinating. He started out making small ones that he stretched and scratched  obsessively to get the shape he wanted. Over time the figures got larger, but he didn’t make many of them. I suppose the rarity of his work has something to do with why they are so valuable, which they obviously are.

But when I say they’re fascinating, I don’t necessarily mean £65 million worth of fascinating….

The point that has always really fascinated me about this sort of thing is exactly how something can acquire such an absurdly high commercial value and what it is that makes any collector decide to pay such a huge price. A work of art obviously has some intrinsic worth, but there doesn’t seem to me to be any simple relation between aesthetic, technical or historical considerations and the market value. That’s not just the case for modern art, either. Go to the Louvre in Paris and you’ll see hordes of people clamouring around a small, drab and frankly rather uninteresting painting called the   Mona Lisa –  and ignoring the dozens of wonderful things all around them in the same room, and even in the corridor leading to it. Some process – I don’t know what – has assigned a particular status to this painting and not to others which seem to me to have at least as much value, in an artistic sense. Not that I’ve any right claim my judgement is any better than anyone else’s, of course.

A similarly mysterious process goes on with other collectible things. Take wine, for example. I like a glass of wine now and then – or rather more often than that, if truth be told. I am, however, very fortunate that I don’t have a particularly discerning palate. I can tell the difference between cheap-and-nasty stuff and pretty good stuff but, generally speaking, my taste has saturated by the time the price reaches about £25 a bottle, and often long before that. That’s great because it means I can have a perfectly enjoyable evening drinking a bottle costing £15 when if I’d been an expert I would be unsatisfied unless I spent a lot more.

Years ago I went with a friend of mine to a house clearance in rural Sussex. He was an interior designer and he liked to buy old furniture from country houses and do it up to sell on. It’s a good plan, actually – old furniture is far better made than the modern stuff. Anyway in the middle of a whole load of junk was a case of vintage wine. Not just any wine, either. It was, in fact, Chateau Petrus – one of the finest Pomerols. It wasn’t a specialist auction, however, and nobody seemed to think it had any value. Bidding was slow when it came up in front of the auctioneer so I bid for it. In the end I bought the case (12 bottles) for about £300. When I got it home I realised what I had got. It turned out £300 per bottle would have been cheap. I was scared to open any of the bottles in case the wine was off or I didn’t like it, so I put it away. I sold the case some years later for about £6500.

Having told that story though, my main point is to wonder out loud about those wines that cost thousands of pounds per bottle. There is a roaring trade in these things – even ones that are two hundred years old – but I don’t think their value has anything to do with how  they are likely to taste. In the local wine merchant – conveniently located about 20 yards from my house – price is a good indicator of taste, but the scaling doesn’t apply at the extreme end of the fine wine market. Some other process is involved.

A house also  has a value that doesn’t have anything to do with anything other than what someone will pay to buy it.  But what sets this price? The market, obviously, but that is guided and controlled by Estate Agents who influence values in strange and subtle ways.

I suppose this all just goes to show I don’t know anything about economics, a point I’m now no doubt going to reinforce.

Governments also have to decide how much to spend on different things: health, education, defence, and so on. You can argue with the way their priorities work out at any given time, but the thing that baffles me is what the process is that leads to a decision to spend X on hospitals and Y on education. How can anyone possibly decide the relative value of £1 spent on health versus £1 spent on education?

I strongly support the notion that the government should support the performing arts, such as  the Opera. But how much it should spend is an unfathomable question to me. Some will say nothing, some would say more. Who decides? Clearly someone does.

And that brings us back home to science. The ongoing ructions about the financial crisis  at the Science and Technology Facilities Council –  unfolding in front of a parliamentary select committee –  seem to me to be really about the process by which value is assigned different bits of science by the people who hold the purse strings but probably don’t know much at all about science. I place a high value on astronomical research and, within that field, on cosmology. But that’s a personal judgement. Others will disagree. We all end up working in those areas we find  more interesting than the others so we can’t really be unbiased, but I think I’m more even-handed than many when it comes to the scientific merits of other fields. Having said that, it would take a lot of doing to convince me that the scientific value for money involved in sending, say, another probe to the Moon was anything like as high as, say, exploiting the full potential of the Herschel observatory.

Worse still, all spending on  blue skies research looks like to be cut back severely at the expense of shorter-term activity that leads to immediate commercial spinoffs. Commerce clearly trumps curiosity in the value game. If the STFC debacle was – as certainly seems likely to me – the result of a deliberate high-level decision, then who was it and what were their reasons for placing so little value on the quest to understand the most fundamental properties of the Universe?

And why doesn’t science have patrons like the anonymous buyer of the Giacometti figure? £65 million would solve an awful lot of STFC’s problems, as long as we stop certain people from wasting it on silly moon missions….


13 Responses to “Value for Money?”

  1. This reminded me of a piece I read recently call Publish the Poem, Not the Poet

    I completely agree with you about absurdity of money in these things. It’s very frustrating. Clocks and money. Those things have to go.

    The very frustrating thing for me, particularly being a US citizen, is the amount of money burned on killing people, while you have to beg, scrape and jump through endless hoops to get any money for more humanly beneficial causes. If we must have money, why is this?

    Anyway, yeah. I hear you.

  2. Mr Physicist Says:

    Concerning the value of wine, suggest you read “The Irresistible Inheritance of Wilberforce” by Paul Torday. Will put wine and life into context….

  3. Actually, science does have patrons, both individuals and companies, who contribute a lot. Personally, I think that such a source of funding is better than nothing, but I would prefer that the state fund as much as is necessary.

    With regard to the price of art and wines, I think there are two factors. First, general nonlinearity. There is SOME relationship between quality and price, but it is extremely non-linear. This is something we see in many places. For example, there are people who earn 100 times what I do. They can’t work 100 times as much; there aren’t that many hours in a week. Also, however it is measured, they don’t work 100 times as hard. In some cases, their work might be worth 100 times as much to their employer as mine is to mine, so perhaps their salary is justified from a business point of view, but not from many other points of view. Many things have a tendency to feed on themselves so that price as a function of quality is best fit by some exponential function.

    In the case of art and perhaps wine, an additional aspect comes into play: the non-connoisseur cannot determine the value. This allows more inflation in the price, since inflated prices are less obvious. Even those who think they are inflated might be hesitant about saying so, for fear of being deemed too unrefined to appreciate them. This encourages more bullshitting and thus the process feeds on itself. Dare I mention Nat Tate? Despite the obvious nudge nudge, wink wink in the name, many of the intelligentsia actually claimed to remember him, or know someone who did etc.

    Somewhat in-between are musical instruments. While there is certainly a difference between, say, a guitar for £100 and one for £1000, there might be little practical difference between one for £1000 and £10,000 and if so it would be much smaller than that between £100 and £1000. Old violins are particularly famous in this respect. However, I once heard from a reputable source than no-one can distinguish a £1,000,000 violin from one costing on-hundredth of that (£10,000) in a double-blind test.

    Once I heard of a high price being paid for a newly discovered Rembrandt or whatever, then the buyer got the money back when the painting turned out to be by someone else. This demonstrates, of course, that this has little to do with objective value. For someone buying the painting as an investment, though, it obviously does matter.

    A newly discovered work by, say, Mozart or Shakespeare is much more interesting (though, here, huge sums paid for the original is not so important) than something written by someone else (from whatever century) which is essentially indistinguishable. Of course, all the experts know all the known works, so the skill of a forger is not so much being able to imitate the style as being able to pass the source off as genuinely old and newly discovered by using appropriate(ly aged) paper, ink etc.

    Interesting is the case of Kujau (the German article has more information). He was a classic forger in the sense described above. He had real technical skill, painting not just copies of something by, say, Miro, but also by the likes of, say, Dali. He became famous after forging Hitler’s diaries and selling them to a magazine. Later, he painted original paintings in the style of famous painters. I doubt anyone could tell that they were not really by the famous painters except people who are so familiar with the work that they know all the paintings anyway (and these would only notice this because they know all the real paintings, not because they see any real difference). He became so famous that he himself became the victim of forgeries, with people trying to pass of their own paintings as original Kujaus (these, in turn, being in the style of the masters).

    In the next couple of weeks, I’ll visit the Botticelli exhibition here in Frankfurt. Leaving aside the question of monetary value, there is of course a big difference between viewing an original painting and even a good reproduction, so I do have some sympathy with people who like to have original paintings, at least if they actually look at them.

    Of course, it is not only art connoisseurs who sometimes lack what Carl Sagan called a baloney detector, as the Sokal hoax demonstrates.

  4. Anton Garrett Says:

    “Let me make it clear at the start that I’m not going to embark on a rant about modern art in general…”

    You can safely leave that to me Peter. What a piece of junk, the Emperor has no clothes, where’s the technique etc etc. As Edith Evans said about a modern painting, “I wouldn’t want that on my wall – it would be like living with a gas leak.” I often see the petits riens by Henry Moore dotted round the grounds of Clare College, Cambridge and think they should sell them and endow a good dinner on the proceeds, which would make everybody happier.

    Which brings to mind the Chateau Petrus. Congratulations! I’d have known what it was and gone straight for it… and probably drunk a couple of bottles before selling on the rest.

    I also prefer repro furniture to antiques. It’s cheaper, it doesn’t matter if it gets slightly damaged, and you can choose whatever styyle you think most apposite to your room and beautiful from the past. Imitation is the sincerest form of flattery.


  5. “What a piece of junk, the Emperor has no clothes, where’s the technique etc etc.” Reminds me of Joseph Beuys, who once had one of his “works” removed by a cleaner by mistake (IIRC it was some fat in a corner). Then there is the chap whose painting hung upside-down in a museum for several weeks before someone (the artist himself) noticed it. There have also been exhibitions of paintings which got good reviews which only later were revealed to have been painted by apes. And yes, once a newspaper had a “play the stockmarket” competition between some brokers and an ape, who picked his stocks by pointing with his finger. The ape won. (With regard to “analysts” etc on television: if they were really as smart as they claim to be, they wouldn’t be on television at 6 A.M.)

  6. The ape “won”, of course.

    Peter, some blogs allow the original commenter to edit his own posts for a period of a few minutes; any way you can set that up?

    • telescoper Says:


      I’m on the basic low-budget version of wordpress, so I’m afraid no fancy comment facilities allowed. I suggest instead you try reading your comments before submitting them.

      However, I can edit them so I’ve fixed the mistake.


  7. Anton Garrett Says:


    “I suppose this all just goes to show I don’t know anything about economics”

    That puts you in the company of most economists.

    “I strongly support the notion that the government should support the performing arts, such as the Opera. But how much it should spend is an unfathomable question to me. Some will say nothing, some would say more. Who decides?”

    The government does. Historically, the Arts were supported by wealthy patrons. If taxes went down so that more people had more of their own money for good causes, I am sure they would be again.


  8. telescoper Says:


    Quite a lot of businesses sponsor the arts in general and the opera in particular. Opera companies also have individual patrons as well as corporate ones. In fact, I donate money to both ENO and WNO as well as supporting them by going to performances and consuming excessively expensive drinks in the bar.

    I don’t know what fraction of their income this is compared to the government grants.


  9. I suspect that most opera houses etc are charitable organisations, or at least there is a charity which one can support which supports the opera etc. Thus, private donations are in effect subsidised by the government. Maybe not as good as cutting taxes from your point of view, but at least they get the subsidy only if they actually donate. 😐

    It would be interesting to see if massive tax cuts such as happened recently in some eastern European countries (where there is a strong tradition in many arts) has led to increased patronage.

    Even in high-tax countries, the list of patrons of the arts (individuals and firms) is quite long.

    The problem I have with government patronage is that the government decides, directly or indirectly, what is worth supporting. The alternative “support everything” is a no-go, since then anyone could call himself an artist (this was actually Beuys’s motto: “Jeder ist ein Künstler”) and collect money. Sure, he might have to produce something, but who is to decide that it is not as worthy as much other “modern art”?

    (A similar problem exists with a so-called “culture flat rate” to put a legal face on the illegal distribution of music and other copyrighted works. If it’s a flat rate, then I’ll sign up as an artist and release as many albums each year as the Rolling Stones do—and demand the same amount of money. If the money is distributed according to radio play, CD sales etc then this disadvantages musicians who don’t follow the traditional route. If it is based on the number of downloads, then someone can hack a script to download his stuff millions of times (possibly from millions of computers, via a virus—sure, that’s illegal, but I don’t see that as a valid argument coming from someone who otherwise supports illegal downloading). If we monitor who downloads what to determine which are legitimate, then we can bill the folks directly. Why should I have to pay for Madonna if I don’t listen to her?)

    I think the best approach is for the government to subsidise things like teaching, concert halls, purchase of gear etc with no say in what type of art is supported. Not just at university level, but for example for young children as well. The government can certainly pay for a concert hall, say, bringing down the costs for whomever plays there, whoever they might be.

  10. Anton Garrett Says:

    Peter: To clarify – I know and am glad that many businesses and individuals sponsor the Arts; but not to the extent that certain institutions could survive without government funding as well. Perhaps they could survive if we were allowed to decide how to spend a larger percentage of our own money.

    Phillip: “The problem I have with government patronage is that the government decides, directly or indirectly, what is worth supporting.” Absolutely!


  11. Just to put things in perspective, about 10 or 15 years ago I read that Pavarotti’s standard fee for one performance was DM 250,000. The Who were paid about the same amount (though almost 30 years earlier) for playing at Woodstock. Of course, their costs were slightly higher than Pavarotti’s. Woodstock wasn’t subsidised by the government, of course. The organisers lost money on the festival itself, but more than made up for it in record and film royalties.

    Lest we fear that scientists have no chance: I know someone who used to organise public speakers at Stanford University, so he knew what the fees were. 25 years ago, Carl Sagan got $20,000 for a one-hour speech. (Again, to put things in perspective, I read yesterday that Sarah Palin will collect $100,000 for her appearance at a conservative rally (“Tea Party Convention”). Bill Clinton and other former big-name politicians also have fees in this range.)

  12. Anton Garrett Says:

    Nobody is worth that much for a few hours. But if the world is sufficiently hungry for idols that it is willing to pay mad money (as it certainly is in sport) then more fool it: I would not countenance yet more legislation to cap fees paid to speakers or performers. And if ever I got onto “the circuit” I hope I would remain unchanged enough to command smaller fees and be selective about who I turned out for. More money is always nice, but being rich like that brings its own worries. Of course, if you have a specific charitable cause to which you wish to donate large sums of money then asking for and getting those sums will not put pound signs in your soul.

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