From: cleoabram
The valuation of art, particularly digital art and NFTs, often leads to questions about how such high prices are justified [00:00:12]. While explanations often focus on underlying blockchain technology [00:00:38], a deeper understanding requires examining the historical context of how art has been valued [00:00:47].
The Scull Auction of 1973: A Turning Point
On October 18, 1973, a pivotal event in the art world took place in New York City [00:01:15]. Hosted by collectors Robert and Ethel Scull, who were known for their in-depth collection of living artists like Warhol and Rauschenberg [00:01:24], this auction at Sotheby’s changed the art world forever [00:01:20]. It marked the first time that living artists’ works sold for tens of millions of dollars [00:01:49].
This shift was met with significant backlash, similar to the contemporary criticism of NFTs [00:01:57]. Critics felt it represented an unseemly “marriage between art and money” [00:02:01]. Artist Robert Rauschenberg even engaged in a fistfight during the auction, dismayed that his work, originally sold for 85,000 without him receiving any profit [00:02:10]. This event fundamentally “exploded art prices forever” [00:02:43].
The Rise of the Celebrity Artist
The 1973 auction was a crucial moment when living artists began to achieve celebrity status [00:02:57]. Andy Warhol, active in the 1960s, notably used celebrity as his medium, becoming as famous as the celebrities he depicted [00:03:00].
When art’s value becomes tied more to the artist’s personal celebrity or the conceptual ideas behind the art, rather than the physical object itself, its valuation becomes “untethered from other benchmarks of value” [00:03:18]. Traditional metrics like production cost, time spent, or aesthetic appeal become less relevant [00:03:28]. Instead, the question becomes: “How much is that idea worth?” [00:03:37]. Since this period, art prices have consistently risen [00:03:41].
Redefining Art
Along with skyrocketing prices, the very definition of what constitutes “art” expanded dramatically [00:03:50]. Art can now include:
- Text phrases displayed publicly [00:03:54]
- A pile of candy meant to be eaten [00:03:57]
- A banana taped to a wall [00:03:59]
- Instructions for creating the art yourself, as seen in the work of Sol LeWitt, whose wall drawings are site-specific and created on location [00:04:01].
Artists like Andy Warhol deliberately blurred the lines of originality and authorship [00:04:23]. Warhol himself stated, “I think it would be great if more people took up silk screens so that no one would know whether my picture was mine or someone else’s” [00:04:28]. Appropriation artist Elaine Sturtevant, who copied works by Warhol and Jasper Johns, even received Warhol’s own silkscreen to create her appropriations [00:04:34]. This engagement with what is original versus what is a copy is central to understanding Warhol’s art [00:05:01].
When art becomes more about branding, concept, hype, ego, speculation, and investment, these dynamics apply to all forms of art, not just the avant-garde [00:05:11].
Art Valuation Today: Concepts and Certificates
While concerns about money laundering and fraud exist in the art world [00:05:27], a more profound aspect of art valuation is that some individuals genuinely pay for the concept behind the art [00:05:36]. In these cases, what is owned is the fact of having made the purchase [00:05:46]. For certain conceptual works, like Sol LeWitt’s wall drawings, the physical drawing is not the artwork; the certificate is the artwork [00:05:52]. Without this certificate, the artwork holds no value [00:05:57].
NFTs and the Modern Art Market
The core difference between NFTs and earlier forms of art is not why they have value, but who decides that value [00:06:07]. With NFTs, a new group of people is excited about a new form of art, challenging the traditional art critics who might dismiss their value [00:06:13].
NFTs allow for the ownership of digital images through a shared database, often utilizing blockchain technology [00:07:07]. This database acts as a critical mass of agreement on who owns what [00:07:13]. Even if an image can be easily screenshotted, the value resides in the recognized ownership record on this agreed-upon database [00:07:24]. The concept mirrors the traditional art world’s reliance on certificates; just as a certificate validates a conceptual artwork, the blockchain validates an NFT [00:07:41].
The “Original” in an Age of Copies
The concept of originality is fluid [00:08:11]. For example, an art collective bought an Andy Warhol drawing for 250 [00:08:13]. Most people would likely pay more for an “original” if it came with a certificate, driven by a desire for uniqueness or potential resale value [00:08:27]. This demonstrates that “value” is an incredibly flexible idea, even for those outside the traditional art world [00:08:43].
When people question the value of NFTs by saying, “I can just screenshot that,” they are echoing questions the art world has contemplated for decades: “What is value? Where does it come from? What is too much, for too little?” [00:08:52]. NFTs simply take these questions to an extreme by involving more money, no physical product, and decentralized decision-making [00:09:13].
Despite the discomfort some feel regarding the high prices of NFTs for digital images [00:09:31], they are part of a much broader context of art itself [00:09:52]. They represent a new medium and canvas for a new generation of artists creating exclusively with digital platforms in mind [00:09:56]. In essence, NFTs offer a clearer reflection of our own perceptions of value [00:10:11].