The interview below was instigated by Amelia Ilangaratne, a Ph. D. student at the University of Leeds who has been polling a number of people about the effects of value on demand for Damien Hirst’s work. Ilangaratne asks the questions that many people do about the art market. So I thought it worth reproducing here my opinions on what drives Hirst’s market forward.

Do you believe, in the past decade, that Damien Hirst has increased his focus on creating artwork with the purpose of investment (for his own financial gain) rather than aesthetic or personal value? 

I don’t think Hirst made art for investment purposes. Nor do I think he is primarily motivated by making money. There’s nothing wrong with his desire to make money from his art or to have his art be exceedingly popular.

Recent figures show that works made by Hirst from 2005-2008 have sold at a 30% loss. Do you believe there to be reasons for the decrease in prices, besides the oversupplying of work?

The primary reason for the drop in his prices has been his failure as an artist post-2008 when he began to paint again. The loss of mystique that those poorly received works caused is a greater detriment to his prices than the over-production. But the uneven quality of much of his over-produced work echoes the poor quality of his recent artistic practice and has halted his momentum as an artist.

Have the tactics employed by Hirst and his dealers to increase the value of his work, e.g. bidding on his artwork, helped to raise the demand for his work, or simply aroused publicity over the artist and his work? 

I think the question is structured to make an answer impossible. An active market that is actively made by participants with a financial interest does not necessarily create demand or publicity. An actively managed market is a reflection of demand being attenuated or tempered but not created. Publicity is never something that can be generated simply by fiat or the will of the beneficiary. Complaints to that effect are both naive and petty. The use of the word hype is a tell that the user is making a value judgment but not looking into the actual cause or structure of demand. If hype were easy to create simply by spending money, all artists with backers would be hyped. It’s a tautology.

What evidence could suggest that ‘For the Love of God’ can be considered an artwork made with the sole purpose of creating profit for the artist and his dealers?

No. So far that work has not made any money for the artist, his dealer or financial backers. Quite the reverse, in years to come, For the Love of God will live on as an emblematic work of the aughts and will be reproduced in every historical work about the time. It was not sold and likely won’t ever be sold. Buying the work would be a stigma for the owner and it not having ever been sold will continue it as an emblem of a period of loose credit and heedless chasing after wealth. Of the few truly important works that Hirst undeniably has made (the shark, many of the spots, the medicine cabinets, the vitrine with the rotting cow’s head and fly zapper), the skull will stand out as one of the most memorable and reproduced.

Collector Alberto Mugrabi cites the preference of collectors for expensive work, due to the associations with status that the work brings. Would it be possible that a drop in the prices of Hirst’s work, and hence a taint in the brand, could result in less interest from these collectors, who are only interested in the work due to its connotations with brand and wealth?

Again, your question is built on premises that I can’t agree with. Artists are not brands. Cookies are brands. Other useful objects made in mass quantities that need to be differentiated from similar products are brands. Those who buy a work simply because it is by Damien Hirst without regard to the quailities of the work itself–and there are surely many–are buying because they perceive the work to have continuing value or currency to others. So, yes, if that perceived value or currency erodes, the prices will not recover. In that scenario, the prices for many of the works could fall to zero.

As stated above, though, the prices have dropped more because of Hirst’s failure to move forward as an artist in a meaningful way and the variable quality of his over-production (the spots show revealed that many of the spot paintings were simply not works of art or even decoration.) But once the prices started to fall, they will continue to fall (or, more likely, not transact) until an exogenous factor regenerates demand. That might be simply time or Hirst creating new work that once again excites collectors or critics or demand from another factor.

If a drop in prices results in a drop in demand from wealthier collectors, do you believe that a lower price level for Hirst’s could be established? Could this enable a new market for his work to potentially emerge which is more representative of today’s prices, therefore helping to maintain the demand for Hirst’s work? 

Does it matter? Prices are not a thing in themselves. They are a reflection of demand and supply. Unless you own Hirsts as an investment, the price is irrelevant. It is true that many buyers will feel safer buying something that is expensive and seems to have its value validated but that’s not what drives the transactions. When buyers see social, art historical or currency value in works by Hirst, they will buy them at whatever prices are current. There are many genres of work and artists whose prices have fluctuated wildly over time.

The Damien Hirst retrospective put on for the Olympics at Tate Modern may not have excited the art world or revived Hirst’s market after the lukewarm reception to his global Spot show. But the artist’s popularity has not waned in the least. The Tate released attendance figures for the recently close show: nearly half a million visitors streamed through the former power station on the Thames to see Hirst’s career high points:

The figures released by the gallery today will be a welcome vindication for the world’s wealthiest artist. While his reputation still divides the art world there is now no arguing with the ability of Hirst, 47, to pull in the crowds. The 463,087 visitors make it the most visited solo exhibition ever held at the gallery, ahead of the Edward Hopper retrospective in 2004 and Gauguin in 2010/11.

It is also the second most visited exhibition in Tate Modern’s history, after the joint Matisse Picasso show in 2002 received 467,166 visitors.

Hirst’s greatest hits make £6m for Tate: record-breaking show attracts 463,000 visitors (Evening Standard)

The scythes are really coming out in Britain for Damien Hirst’s tall poppy. The recent Spots-tacular show at Gagosian failed to re-ignite the market for the spots or the rest of his work. Now with the opening of his retrospective at the Tate Modern which launches the run-up to London’s Olympics, the Financial Times publishes this chart from Art Market Research:

“Damien Hirst has underperformed since 2008 as there’s been a fundamental rethink about his work. People have been asking – is it really serious? Was he just very effectively hyped?” said Robin Duthy, managing director of AMR.

In 2008, the peak price for the most expensive 25 per cent of his work was nine times what it was in 2000, but it is now being bought for less than three and a half times the 2000 price.

By contrast, the top 25 per cent of the Contemporary Art 100 index, which includes 100 popular modern artists, did not reach such heights: it peaked at about five and a half times the 2000 price. But it has also enjoyed a stronger and earlier recovery and is now trading at about five times that price.

Colin Gleadell addresses in the Telegraph Hari Kunzru’s screed in the Guardian without ever mentioning the piece. But where Kunzru relied on melodrama and an outsider’s wishful thinking about the art market, Gleadell offers some important and considered facts. To be sure, Gleadell makes some of Kunzru’s points—that Hirst sees the value of art accruing to the artist, no the collector—better than Kunzru could because he relied on his reporting and experience, not his prejudice:

The skull has never been sold properly, so doesn’t have a real value – only the price attached to it. And the effects of the Sotheby’s sale are still being played out, as works that were bought there (perhaps with the extended credit terms that were offered) resurface on the market, selling for half or two-thirds of the price they sold for initially.

This fits well with Hirst’s intentions to reverse the normal pattern of accruing value – to buy the new work from the artist or his dealer for, say, £1,000, wait for the value to go up, and then resell for £10,000 – excluding the artist from any profit.

Hirst objected to that process, saying he believed artists should make their work more expensive at the first point of sale. “The first time you sell something is when it should cost the most,” he said. It means treating a work of art like a new car or a piece of furniture, but it is the way an artist, who does not profit from auction resales, can make the most money.

If this is what happened at the Sotheby’s sale, with Hirst pocketing the lion’s share, it has been the buyers who have suffered a loss at the point of resale, not Hirst.

How Damien Hirst Tried to Transform the Art Market (Telegraph)

What is it about the art market that draws out the nutters with their elaborate conspiracy theories based upon nothing but envy, hurt feelings and a pallid imagination? The Guardian published a long essay this weekend from novelist Hari Kunzru that would have earned the writer derision had he published it as fiction. Kunzru repeats as fact the cartoonish character of the hedgie-turned-art-speculator-and-market-manipulator without offering one credible fact for this assertion.

Although Kunzru has no evidence to back up his assertions, we can easily falsify an number of his simple-minded claims. The first is that Damien Hirst is the world’s richest artist living artist. Kunzru seems to pick that up from the press but has nothing to support the claim but his very limited knowledge. It’s unknownable who is the artist with the greatest net worth. But we have had reports that the recently deceased Cy Twombly left an estate far greater than Hirst’s supposed net worth. Maybe that was an anomaly. But Just because we hear a great deal about Hirst that doesn’t mean Hirst’s significance—economically or art historically—is equal to his publicity.

Kunzru commits the same sin of lazy thinking when talks about hedge fund owners as art buyers:

This is how it works. A few major collectors make the market. Where they lead, the horde of hedgies follows. Many of the new breed of art investors (not Cohen, who is known to be a man of great taste and exquisite legal representation) have jettisoned even the pretence of connoisseurship. Some of these guys care about the bragging rights that come with a blue-chip work hanging in the loft. Others are all about the numbers, and employ the same tools and decision-making processes to play the art market that they use at work. A few have also discovered that many of the regulatory mechanisms that apply in other markets – preventing insider trading, price-fixing by cartels and sundry other abuses – simply don’t exist in the art world. It is possible to game the system in many ways, and the careers of certain artists look not unlike a classical Ponzi scheme, where money from new investors is used to pay returns to those further upstream.

Since 2005, observers have been predicting the dire effects of having seasoned traders as art collectors. Yet most of the identifiable hedge fund buyers have been either patient and thoughtful collectors—Rachofsky, Cohen or Sender, for example—or bought works by canonical artists (sometimes getting burned like Pierre La Grange.) Like the popular myth of dark billionaire commissioning daring thefts from the world’s great museums to fill the walls of his secret lair, the hedgie art market manipulator remains a figment of lesser imaginations.

Consider the truth of the eerily-timed 2008 Hirst sale at Sotheby’s. No one really knows the details about who bid, who bought and, most important, who paid. Even without knowing the buyers (Hirst’s dealers were in there playing as were other substantial holders), we do know that the sale and the credit crisis have conspired to stop the Hirst market cold. Even the elaborate Complete Spots show, contrary to Kunzru’s perfervidly imagined scheme, has failed to re-ignite the overall Hirst market or even the market for Spot paintings. So the big, bad Hirst might not have pulled of much of an art market heist after all.

Kunzru clearly doesn’t know any of this. But why let a little research get in the way of a good screed.

Why not have something to say about Hirst’s art which isn’t that hard to dismantle once you take away all of the teeth gnashing over Hirst’s earnings. Blake Gopnik offers this handy dismissal:

Julian Stallabrass, a Courtauld Institute pro-fessor and the smartest of the anti-Hirstians, the “supposedly universal values” that Hirst appeals to are easy and empty clichés. “The surprise is that people haven’t gotten more bored with the objects, considering he keeps repeating them.”

Damien Hirst and the great art market heist (Guardian)

Damien Hirst Repackages Warhol for Our Times and Sells Himself (Newsweek)

Jerry Saltz has been using his Facebook page to ask artists to make him facsimiles of famous works that seek to remove the artist’s hand from the production process. He’s offered to pay for a Richter Abstract painting and a Hirst Spot. Artist Daniel Maidman took him up on the offer to make a Spot painting and discovered a real appreciation for the works.

Maidman’s post on the process explores Roberta Smith’s comments on the color choices. The post is worth reading. Though be warned ahead of time that he takes quite a bit of space to make his point. Here’s an example below:

It seems crucial that the colors have been chosen by different people; it is part of their randomness and creates a variety that might not be possible if the paintings were made by one person. In this regard Mr. Hirst’s spot paintings are more collaborations than art made by assistants. They are made not only by different hands but also by different minds, and this may be the most interesting thing about them.

From an information-theory perspective, what Ms. Smith is describing is not randomness, but redundancy. Each assistant makes characteristic color choices and juxtapositions, causing the spot paintings, as executed, to deviate from true randomness, from maximum entropy: “This crimson spot tells me Joe the Assistant made this painting; I can assume there will be no pale pink spots in this painting, because Joe does not use that color.”

I can report that these distinctions are more or less borne out by my own experience with the spot paintings (while his assistants choose the individual colors in the paintings, I suspect Hirst has carefully identified the parameters of the palette – an oddly shaped color space, for instance, would make sincere forgeries – unlike mine – next to impossible to produce).

How I Learned To Stop Worrying And Love Damien Hirst’s Spot Paintings (Huffington Post)

The Telegraph reports Damien Hirst’s comments on the news that he will be opening a gallery of his personal art collection in 2014:

The most remarkable bit of this interview between Damien Hirst and Time’s Belinda Luscombe isnt the banal effort to trap Hirst into declaring his net worth or the moment where Luscombe wonders whether Hirst is serious as he outlines a key to the meaning of the spots (“red = love.”) No. The best parts are where Hirst declares his love of Pimp My Ride and suggests that his studio assistants should not be too talented lest they upset the conceit that anyone can make his art.