Martin Parr, Dubai, 2007. Via Magnum

One should always be able to judge a book by its cover, or at most by a cursory inspection of its cover, index and table of contents. The cover of Art of the Deal features a photograph by Martin Parr. A tanned and pneumatic female shopper, her head cropped out of the picture, is shown beladen with bags and jewelry. In the background, a sheikh is conducting a conversation with an excessively earnest and scantily clad middle aged woman on a bright lawn of astroturf. Parr, visual commodifier of middle class self-loathing, has a knack for catching reality at its most cartoonish. A quote from dealer Leo Castelli precedes the table of contents: “I have to deal with myths from 10 AM to 6 PM every day. And it becomes harder and harder.” If the contents followed the front matter, this would be an exposé laden with satire and spleen.

Other metrics contradict that impression. Art of the Deal is published under the imprimatur of Princeton University Press, runs to 384 pages, weighs in at over 500 grams, and is printed on acid-free archival paper. Encomiums from the obligatory luminaries plaster the back cover. Daniel Birnbaum: “In recent decades, the world of contemporary art has developed into a global business. To fully grasp how this has changed the art world and our relationship to art, we need a thorough analysis of the financial forces involved. The best place to start is this groundbreaking study by Noah Horowitz.” The library of congress declares the subject to be ‘art-history-marketing-20th century’, implying the sobriety and the earnestness of a socio-economic tome deployed to smooth the tenure track of a professional academic.

This is a book, then, that from the outset presents a slightly bipolar attitude to the reader. To take it seriously we can apply some metrics of our own. It’s useful to know how much is said about who and what. The index runs over a dozen pages. The columns for ‘art dealers, and ‘art collectors’ run about 7cm apiece. Christie’s gets 5cm, and Sotheby’s 8cm, Matthew Barney 4cm, ditto Rirkrit Tiravanija. Video art gets a full 17cm, while The British Rail Pension Fund, of which I had never heard, earns two and half centimeters. Pierre Bourdieu fills a line, Karl Marx receives a single solitary entry and a footnote. Foucault doesn’t appear at all, nor does Baudrillard. Jacques Ranciere, Thierry de Duve, Boris Groys, James Elkins each appear not once. The appendices contain extensive tables of record breaking prices for video art and the identity of art investment funds. Good, so now we know something of what we have on our hands.

On the flyleaf, the besuited but casually tieless author gazes into the camera with a look that could least offensively be described as quiet optimism. The biography indicates that Noah Horowitz received his doctorate from the Courtauld Institute of Art, London, currently lives in New York, is a faculty member of the Sotheby’s Institute of Art and director of the VIP Art Fair. It’s your elitist preconceptions that read VIP as Very Important Person. Rather, the acronym refers to the ‘Viewing In Private’ art fair, the first international art fair to be conducted wholly online, allowing collectors to bid on fine art in the comfort of their pajamas.

A business minded book about the art market is not an entirely unwelcome thing. For had Noah Horowitz written a contemporary, Marxist-ish denunciation of the art world, it is unlikely the book would neither be so detailed, nor, it must be said, so damning. Although Horowitz makes frequent references to cultural capital, a concept for which he has some enthusiasm, Art of the Deal does not much resemble Pierre Bourdieu’s Distinction: A Social Critique of the Judgment of Taste (1984). Horowitz gives the impression of having closed The Field of Cultural Production halfway through to immediately begin work arbitraging cultural capital. He gets an early start here, noting in the acknowledgments that as a result of the interviews conducted for the book, he is pleased to be able to call Hans Ulrich Obrist and Daniel Birnbaum friends.

Everyone needs a job, but perhaps a line should be drawn at a university imprint text written by the director of a fair with a disingenuous name. This may seem inequitable, even canting, but Horowitz himself writes that ‘moral hazards may arise when academic economists appear on panels about art investing sponsored by art funds and art financial services firms eager to promote the legitimacy of art as an asset class.’ (168). It’s also arguably unfair to tease an author for enjoying friendships with power figures in the art world, an environment in which social links and business relationships are close to indistinguishable. Or it would be, if such an obviously compromised position didn’t so completely undermine the author’s performance of disinterested detachment. And it further undermines his criticism of other figures—the art world econometrists Mei and Moses being two—whose judgments might have been formed under the shadow of a conflict of interest. Might also have been, Horowitz should have added.

Isaac Julien, True North, 2004. Via Akron Art Museum

Caveats aside, Art of the Deal can be divided into two parts. The first is concerned with how the contemporary art market assigns prices to the least tangible art world products , namely video and performance. The second deals with the emergence of new investment vehicles designed to transform art into an asset class for the purposes of speculation

Video art, one would think, would be resistant to fetishization on account of its perfect reproducibility. Unlike a print from a wood block which can only be reproduced a certain number of times before the image begins to decompose, the very idea of a limited digital edition is entirely artificial. A DVD can be infinitely copied without loss, not only by the artist but by collectors themselves. As such, scarcity has to be carefully maintained by a conspiracy of all parties, and the valuation of the work is perpetuated through the details of a contract.

Horowitz presents some breathtaking analysis of the financing models behind video art projects. Isaac Julien’s True North (2004), to give one of many possible examples, was sold in an edition of six as a three screen version for £60,000; in an edition of ten as single-screen version for £12,500, and additionally as a dual channel version for £50,000. Also sold were production triptychs, photographs and lightboxes for anywhere between £6,000 and £25,000. A total of 148 items with a combined list price of £2,357,000 against a production budget of roughly £336,000. The pricing agenda divides collectors into tranches, the most expensive slices being sold to museums and institutions and the individual ones to private collectors. Julien, in an interview, mumbles something incomprehensible about “valorizing a practice” (p 64), but Horowitz’s analysis makes it quite clear that the works have been made to fit a pricing structure, not the other way around. And this is not to slander Isaac Julien—the production of Matthew Barney’s Cremaster Cycle produced nearly a thousand marketable items (60).

Performance art, for lack of a discrete object, seems at first sight as ill-suited to commodification as video. The work of art is the event, and all that is left over after the event has transpired are some memories, and the material traces of trash and documentation. However performance art can still create material value for galleries by functioning as a loss leader, a loss making art action that helps generate prestige for an art dealer, and leads indirectly to the sale of more conventional items (Bataille’s potlatch in the service of Bourdieu’s symbolic capital).

In its innovative use of the contract as the actual object of exchange, conceptual art provides some useful precursors. Yves Klein, the grand-daddy impresario, sets a kind of gold standard with Transfer of a Zone of Immaterial Pictorial Sensibility (1959-1962). The artist offered collectors the opportunity to purchase an immaterial zone in exchange for payment in gold. Then, in front of a curator or critic and at least two witnesses, Klein would dramatically throw half of the gold into the Seine. The act was photographically documented, and the collector received a certificate confirming the transfer. This was, however, a promissory note. To complete the transaction and truly own their immaterial zone, the collector was instructed to burn the certificate. The final flourish, the destruction of the certificate, admirably drew attention away from the real outcome of the work—the transfer of gold from collector to Klein. On such japes, Horowitz writes well, with a refreshing frankness and open admiration—at least for artist’s business nous, if not for their aesthetic impulse. At such junctures, it’s a tremendous relief that he is not an art historian, obliged to make the usual genuflections at the altar of art theory.

Theses sections are, unfortunately, the exception: in general the book is written fairly badly. It’s rushed, with ugly sentences marred by malapropisms and trade jargon, and paragraphs perforated by line graphs, statistics and tables. It’s written, in short, like a business text. But it is still a surprise to see Princeton publishing books that describe presentations as ‘replete with whizzy charts, graphs, and academic citations’ (156). ‘Whizzy’ is not a word, and while it might be possible to be ‘ambivalent or antagonistic to the market’s espousal of singularity and objecthood’ (32), I found that most of my antagonism was directed towards that sentence.

We wade through 125 pages before we get to the money shot, the “changing demographics” that Horowitz discretely refers to as the fundamental engine behind all this frantic diversification of the art market. Quoting Paul Nunes and Brian Johnson’s Mass Affluence, Horowitz writes that “the top 1 percent of earners has seen its share of income explode, from less than 10 percent of total income in the United States in 1979 to 18 percent by 1997 and 21 percent by 2000.” Such developments create an extraordinary opportunity, indeed a necessity, for market differentiation amongst those who cater to the consumption of this 1 per cent.

Such moments remind us that the only extant volume of surrealist macro-economic theory – George Bataille’s The Accursed Share – remains the best book yet written on the art market. As Bataille argues, the interesting economic question is not how wealth is produced. Any idiot, and any society—no matter how idiosyncratic—can produce wealth in some form or another and the ways in which they do so are monotonous and apparent (commodities, goods and services). What differentiates one society from another is how this accumulated stock of wealth is destroyed. Endless reinvestment of profits offers no solution, as it merely creates more profit that must be reinvested. Ultimately, there has to be a point of pure expenditure: a systematic, exhibitionistic, glorious transmutation of the useful into the useless, into the sacred and the profane. Compared to war and sex, art is perhaps the least uncontrollably damaging means of non-productive expenditure; an inevitable manifestation of the concentration of wealth that, as a form of presentation, is, at the very least, distinctly preferable to the alternatives.

Thomas Gainsborough, Robert Andrews and His Wife Frances, about 1748-49. Via Olga's Gallery

Horowitz leaves many of the most interesting questions entirely open. Rather than asking how art accrues in market value, a more interesting question is exactly how an artwork loses value, measured both as price, and yes, cultural capital. The prices of arms and armor and tapestries have all been in real decline since the First World War. Why? It is not as if any new medieval armor has been produced in the meantime, so what drained these objects of their prestige? The postwar period also saw irremediable decline in the prices for Gainsboroughs, the most famous exemplars (Pinkie and the Blue Boy) now appear to be almost kitsch. More recently, we can refer to the decline of stars of the 1980s art boom such as Julian Schnabel or Eric Fischl. Neo-expressionist painting, which received a rapturous response from the market, and sometimes caustic one from critics, present an intriguing cautionary tale on the application of business metrics to cultural products.

Art of the Deal is a bad book, but it’s bad in an interesting way. Filled with the same breathless art world gossip that marks the genre, as well as an awkward and incomplete mash of statistical analysis, case studies and calumny; it suffers from its attempt to appeal to too many constituencies—art world insiders, critics, economic historians, investors—without being of specific use to anybody. But one intriguing possibility is that the sum impact of the book, with its ivy league publisher, hardcover binding and archival paper, will be that it lends credibility to art world speculation—in stark contradiction to Horowitz’s own warnings in his conclusion. The investor who has badly read this badly written book feels forewarned and forearmed against the whims of the art world. Such an investor is able to enter the market with more confidence, because the book is weighty, and it provides a kind of gravitas to what is, in the end, a slippery and fanciful industry.