Archive for February 18th, 2010

This Walking Man I from the late Swiss artist Alberto Giacometti.

A week or so back it became the most expensive piece of art ever sold at auction, selling for a cool $104.3 million.

I’ve always been intrigued by the life and work of Giacometti so I’m not going to rant about the relative merits of any work being truly worth such a sum of money.  If someone feels that it is worth that, then it is worth that.

However, there was an interesting editorial piece in Tuesday’s New York Times from Eduardo Porter that used the sale of this Giacometti as an example that the economic downturn is at an end.  At least for the type of person who can afford $104.3 million.

The fact that the super-rich are once again secure enough to parctice conspicuous consumption is a positive economic indicator especially when it comes to things such as works of art and other luxury items, which are considered Veblen goods. These are are items whose appeal grows as their prices rise.  Think Ferrari.  Louis Vuitton.

The Veblen Effect is an interesting one.  The idea that the same item becomes more desirable simply because it’s price is raised seems somewhat counterintuitive.  One would think that common sense would make such a thing a rare occurrence.  But we know better, don’t we?  Status seeking overrules all common sense.

I have seen the Veblen Effect at work.  I have a painter friend who, a number of years ago, had a painting sitting for a long time in his possession.  He felt it was a very good piece, one that was a great example of his body of work.  It was priced modestly and sat for months and months with no interest.  Frustrated one day, he more than doubled the price of this painting.

It sold within days.

Now this is certainly not on the level of the Giacometti’s Walking Man.  It’s just a little illustration of how we all can be affected by this drive to show our desired status in this world.  I’m not saying it’s wrong or right.  It’s part of who we are as a species and will probably never change.  The important thing is to determine who you really are as a person and be comfortable with that. 

Because who you truly are shows through even the most  or least  expensive coverings…

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