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Insatiably Seeking Status

The prevailing mood at this year’s Art Basel, the world’s most influential art fair, was one of anxiety and trepidation. After years of continuous and seemingly boundless growth, the art market appears to have reached a plateau, suggesting a decline in confidence among the world’s richest people.

ZURICH – Billionaires are not accustomed to waiting in line, especially not in scorching heat. But Art Basel, the world’s most influential art fair, often triggers a feeding frenzy at 11 a.m. on opening day as the most substantial and eager buyers vie to purchase rare works or discover an elusive piece missing from their collections. This year’s edition, recently concluded, featured 284 galleries from 36 countries showing works by 3,200 contemporary artists.

The Sotheby’s Mei Moses Index, the most authoritative measure of art prices, has increased eightfold over the past five decades since Art Basel was launched in 1970. In 2017, Saudi Crown Prince Mohammed bin Salman made global headlines by paying $450 million for Leonardo da Vinci’s “Salvator Mundi,” the most expensive painting ever sold.

The law of supply and demand suggests that art prices should continue to increase. On the supply side, the fact that most of the world’s preeminent artists are dead and that museums and long-term collectors acquire the finest artworks means that the available stock is constantly shrinking. Moreover, each artwork is essentially a monopoly, owing to its inherent uniqueness.