How Much for That Banana?
At the 2019 Art Basel in Miami, the artist Maurizio Cattelan produced and sold a piece of art aptly titled Comedian for $120,000. The piece, pictured below, was an actual banana affixed to the wall with duct tape, along with a certificate of authenticity and replacement instructions.
What could possibly make a banana taped to the wall worth $120,000, more than my first house? The immediate impulse is to discredit the piece, and I suppose the buyer as well, by asserting that it has no utility or aesthetic value and could be effortlessly reproduced by a child. But that’s to misunderstand the value of art.
I find art easiest to think about by first focusing on literature (or theater or film). For example, we almost daily read about war and the numbers of people killed or otherwise affected. But as a one time seventh grader, the novel, All Quiet on the Western Front, conveyed to me the very real, visceral experience of war. A truth otherwise inaccessible to myself and others who haven’t lived it. The same is true for so many of life’s deeper truths: love, heartache, triumph, etc. And so, art is a very particular method of communication. One that can bypass our rational minds to convey deeper, more heartfelt truths.
It’s humorous that the particular point that Cattelan was making with Comedian was to satirize the market for art, and I suppose markets in general. He invites the viewer to consider the absurdity of a piece of art being worth so much more than the exact same object when not presented as art. And I fear he does have a point. In Economics, we assert that the value of an object, art or otherwise, is best proxied by what a buyer is willing to pay for that object. And for THAT buyer, I suppose this is true. They were free to spend that money on other things, but chose not to. But this same logic doesn’t hold when speaking of relative values across a society. Market value reflects not only relative preference, but also ability to pay. And so a wealthy collector deciding a piece of art is worth more than a modest home doesn’t necessarily make it so, a lesson driven home quite effectively by Cattelan.
The value of something is the value attributed by the observer, based on what seems most relevant to that person.
But at least subconsciously, is there not a glimmer of doubt in our minds?
And why might someone have been willing to pay to own this piece of conceptual art? Because he made the point so well that we’ll long remember his contribution to the “conversation” about the meaning and value of art. And maybe for this reason this piece of art might someday be considered even more valuable.
I’ll wrap up by saying that in Economics, we take the value of any object to be whatever the buyer is willing to pay for that object. The idea is that the amount the buyer is willing to pay stands in for all of the other things that the buyer could buy otherwise. And so, they must value this object more than these other foregone purchases. Of course, this is
What am I going to do with a banana affixed to the wall? Yet if utility value were all that mattered, why would anyone purchase a Porsche when a Honda could get you to the same place.. Or why live in an oceanfront home when the modest ranch is so much closer to work.
Another take on value is to base it on how much (human) effort was involved in its production. Handmade suits are assumed to be more valuable than mass produced suits. And certainly the holiday sweater hand-made by your sweet aunt is worth more than one bought last minute at Target. But Marx’s Labor-theory of value runs afoul of our first notion. Exactly how valuable is your aunt’s sweater if it doesn't fit correctly or keep you warm?
But yet, it was your sweet aunt. Which brings us to sentimental value. Some things we value simply because we do. And I would argue that is where we’ll find the justification for art. Art doesn’t have much obvious utility value beyond perhaps momentary novelty. And while some art does entail many months of work, a banana affixed to the wall does not. But yet, we value it because it represents something else to us. Something we want to be reminded of.
As economists we tend to be more open-minded about valuation.
If we’re to follow that reasoning, your child’s art has no value either. After all, what’s it good for? Wouldn’t it be more useful if they were just to save up their allowance and get you a gift card from Target? But the time and effort it took them to create the art is much more relevant to its meaningfulness than its more objective qualities. If you had to choose between it and a better piece of art from said big box retailer, would that really be a hard choice? So, even though the art doesn’t have utility value, and perhaps doesn’t have aesthetic value either, it does have sentimental value, and that counts too.
I suspect no one, including Cattelan, feel particularly sentimental about Comedian. But someday someone might. There are artists living and working today that paint just as well as, sometimes even indistinguishable from, the great masters. What makes their original work so valuable is then not the objective qualities of the art but the value we place on that artist and their role in the development of artistic expression.
And so, why was someone willing to pay $120,000 for a very conceptual piece of art? Perhaps because they believe that someday, perhaps soon, perhaps later, those who matter will think sentimentally of Cattelan’s influence on contemporary art and so, Comedian, as a representation of this art will indeed be valuable. But then again, to be more cynical, maybe it was utility value after all. Perhaps being able to spend $120,000 for a banana will impress the right people, increasing the social standing of the buyer. Art is an odd thing.
This problem intrigued me because it exemplifies a long standing tension between a Neoclassical view of value and an alternative, perhaps Marxist counter interpretation. In Neoclassical economics it is held that market prices are a reasonable proxy for value. The value of something reflects nothing more than an ordinal ranking of all possible uses of money. If a buyer is willing to pay $120,000 for a piece of art, that simply implies they value it more than anything else they might have used $120,000 for. Marx on the other hand argued that objects had an inherent value, and that value reflected the necessary labor required to produce the object. How can the output of the garment worker toiling away at their machine hour after hour be worth so much less than the output of a professional baseball player?
I have great sympathy for the critique. But I think it fundamentally misunderstands value.
The value of the product indirectly represents the value of her time and thus herself. In one sense, this does seem true. If she were to gift me a piece of art, the time she took to create that piece of art would be more relevant to its meaningfulness as a gift than its other qualities. Unless she’s deciding which piece she’s going to gift and selects the most desirable. But then again, that reflects her sacrifice. So, attributing value based on how much one puts into something as the producer can make sense.
So, what gave this piece of art such a high market valuation? First, we should understand how economists think about valuation. The maximum amount someone is willing to pay for something, like a banana on a wall, is only a proxy for that person’s valuation. To the economist the only meaning of valuation is relative valuation. If there are two objects and I’m willing to pay $20 for one and only $10 for the other, I apparently have a higher relative valuation for the first because I’m willing to sacrifice more “other stuff” to acquire it.
The buyer of Comedian gave up the ability to purchase a luxury vehicle or very modest home, not to mention countless less notable bananas, so that they could acquire this piece of art. To understand why, and in so doing understand valuation, consider two holiday gifts. In the first case, the giver gives the receiver a $50 gift card to a big box store. In the second case
To start, the market value of something is nothing more than the amount someone,
The first is based in neo-classical economics. The maximum amount someone is willing to pay for a good is a reasonable proxy for that person’s valuation.
The value of something is reflected in the amount the highest valuing user is willing to pay. To
A mistake I made for years was not clearly enough delineating between three, equally valid, ways of conceptualizing value. The market value of an object or service is simply the amount a potential buyer is willing to pay for it. This reflects the idea that
The reason is that this represents the amount of other goods that the person is willing to sacrifice to acquire this good. If they are willing to pay $10 for one object and $20 for another. They clearly value the second more.
Let me start with an assertion and then proceed to explain that assertion.
The value of something is the value attributed to it by the observer, based on what seems relevant to that observer.
I posit this in place of the simpler idea that the value of something is simply what someone is willing to pay for that something. The latter is based on the prevailing view coming out of Economics. The maximum amount someone is willing to pay for a good is a reasonable proxy for their valuation. The reason is that this represents the amount of other goods that the person is willing to sacrifice to acquire this good. If they are willing to pay $10 for one object and $20 for another. They clearly value the second more. How do we know this? Because they were willing to forgo the purchase of two $10 pizzas for the second one. But they were only willing to forgo one for the first. So, in Economics the amount someone is willing to pay for something simply represents the sacrifice they’re willing to make to have it.
Conceptually this is mostly sound. In practice, the price someone is willing to pay isn’t a reliable way of comparing valuations across people. If I’m willing to pay $20 for a pizza and you’re only willing to pay $10 in no way guarantees that I value it more than you. You may have substantially less income and therefore $10 is a more important sacrifice. Nor is it likely that we have equal information about what choices are available to us.
But the
This will be my inaugural post in this new journal. I had the idea this morning of having a free form journal to direct and focus my thoughts around Value Creation and AI. This won’t be for external consumption and so I can ramble, make grammatical mistakes, and generally waste time possibly.
The value of something is reflected in the sacrifice the user is willing to make to acquire that something.
I’ve had that thought in my Evernote for weeks now. Finally, it has a place to live. People have a lot of perhaps misguided ideas about value. Jasmine attributes value to her art pieces sometimes based on how much of her time went into them. This seems very akin to the labor theory of value. But unlike the labor theory, her doing so is understandable. The value of the product indirectly represents the value of her time and thus herself. In one sense, this does seem true. If she were to gift me a piece of art, the time she took to create that piece of art would be more relevant to its meaningfulness as a gift than its other qualities. Unless she’s deciding which piece she’s going to gift and selects the most desirable. But then again, that reflects her sacrifice. So, attributing value based on how much one puts into something as the producer can make sense.
So, the statement I made may be poorly written. Instead, I offer the following.
The value of something is the value attributed by the observer, based on what seems most relevant to that person.
In my original statement, I was focused on the meaning of market value, and should have said so. The market value, or price paid, of something represents the sacrifice made by the buyer of that something. The sacrifice is time working required to buy it. Or the foregone other products that might have been purchased instead.
But these are very different ideas. But we use one word for both. This is always a bad idea. The art you produced is very valuable because you made it. But it may have a different value to someone who doesn’t know you. They may value it less because there are other “things” they’d prefer to spend their money on. Or, perhaps you were fooling around coloring and produced something of great value to another. That happens too.