22 December 2008

A modern tulip mania

Like the tulip mania of the Seventeenth Century, the contemporary art market, as it has come to be in recent decades, has lost connection with whatever set of aesthetic or cultural values that might create a lasting sense of value.

Ben Lewis and Jonathan Ford writing in Prospect, think the end is near for another galloping, unregulated form of financial speculation that has jumped the fence and headed for the horizon. Put the nag down, is what I say.

"Over the winter of 1636, the tulip mania reached its peak. One kind of bulb sold for 900 guilders (three times the price of a small town house), up from 95 a year before. The peak prices of Dutch tulips were achieved when the bulbs were snug in the ground, and were based on futures contracts—a form of leverage that allowed investors to place an enormous price on a bulb without actually laying down the cash. On 3rd February 1637, the tulip market crashed. There was no particular reason for the panic—except that spring was nearing and, on its arrival, the bulbs would be dug up, cash settlement sought for futures and the game would be up.

"We have surely reached the same point in the world of contemporary art. One of the emotions that has driven its boom is the narcissistic belief of the rich in the greatness of the age in which they are living. They thought they were buying masterpieces. But like the Dutch merchants and their tulips, the obsession of the new rich with contemporary art is likely to be remembered as the epitome of the vanity and folly of the age. The bulbs are still in the ground but the spades are poised."

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