If Famous Architecture Were Priced Like Paintings, a Le Corbusier Would Cost the Same as the Entire American GDP.

Posted by | June 25, 2009 | architecture | 22 Comments

villa stein

[ If this building was priced like an equivalently famous painting, it would cost more than the entire US GDP ]

The top floor of Corbusier’s Villa Stein (one of perhaps the top 500 most important houses of the late 19th/early 20th centuries – i.e. a Van Gogh of houses) is for sale for the same price per sq.ft. (approx $1400) as buildings in the same area of suburban Paris, designed by nobody in particular. Meanwhile, Van Gogh’s Portrait of Dr. Gachet sold for an inflation adjusted price of $136 million yet a poster of similar square footage and style costs around $10.

In other words, a work of art that you can actually live in has zero premium over a commodity item, but one that you can look at has a premium factor of 13 million over a commodity one.

There are 2 possible conclusions: architecture is vastly under valued or painting prices are almost entirely irrational.

Given that the cost of a single floor of the Villa Stein would be almost exactly the same as entire US GDP ($13 trillion) in the former case, and that Le Corbusier’s mediocre paintings sell at a vast premium compared to the buildings he is famous for, it’s the paintings that are too pricey.

The world’s two most expensive painting purchases were by Steven Cohen the Hedge Fund manager and David Martinez the corporate debt financier. Both work in finance, where the creative output is money rather than painting, quantitative rather than qualitative. Money hidden in a vault, is a less visible form of status than a picture, so the two can be exchanged, where the highest quantitative measure, status, can be accrued by buying the most famous paintings. If it were a purchase based upon qualitative measures such as the highest value to the buyer, then the sentimental subject matter of the painting would override or skew the ownership of the most famous paintings with the richest people, but that tends not to be the case.

Famous painting prices are based upon the idea that fame equals talent and that absolute fame is absolutely priceless. They are bought for quantitative price rather than qualitative value. They are a form or elite rather than mass hysteria where the wealthy attempt to buy prized individual taste, something you can’t really buy, by purchasing mass taste and therefore inevitably get ripped off.

The sub-conscious force that drives this bubble market is that the action of buying famous paintings is not to buy for private enjoyment but for pubic (even if it’s just your friends) prestige. This is perhaps based on the underlying psychosis that actually possessing rather than merely being surrounded by an acknowledged work of art somehow bestows a portion of the artist’s great taste and vision on the one who possesses it. Is this really any different from magical flesh diets such as the primitive practice of swallowing a lion’s heart for strength or eating powdered Rhino horn to get an erection?

The portability and size of paintings allow them to be possessed and coveted in a way that buildings can’t, but there is another factor. You can move a Van Gogh to the Upper East Side, but its more difficult to do that with the Villa Stein. Paintings are an historical, but irrational, standard benchmark of wealth, rather like diamonds. But the reason for their prestige is no more permanent than the prestige of lyre playing which was the pinnacle art form of ancient Greece, but is not coveted today. Painting is the reserve currency of art – but reserve currencies can change.

The fact that the obvious, near total, fallacy of the art market is rarely questioned seems conspicuously odd. Is there a form of sub-conscious cultural censorship at work? Perhaps the preservation of the painting myth is based on the fear that to challenge it means that you can’t appreciate or understand it? To even suggest that the Emperor is naked is to sound cliched.

But perhaps painting is a religion? When you read a book you can enjoy it even if you know its not true, but for the religious, the Bible cannot purely be a work of fiction, it has to have some truth. Art allows you to have a quasi-spiritual feeling by temporarily suspending reason and disbelief, unlike religion which requires you to permanently do so.

Why should art (temporary belief over reason) be any different from religion (permanent belief over reason)? Why is it more surprising that people worship Van Gogh irrespective of true merit when people worship god? Somehow, to suggest that art is largely religion is, well, heresy, or at least philistinism. Bizarrely, in our secular culture, where Madonna has replaced The Madonna, art is more sacrosanct than religion when it comes to questioning value.

Value is difficult to judge, but perhaps it’s the mark of a true Philistine like a money-is-everything Hedge Fund manager to believe in the price of a Van Gogh. Perhaps painting is a specific case of an art form that has become a religion, the opiate of the rich.

22 Comments

  • [...] David Galbraith calculates that if buildings by famous architects were priced like paintings, a Le Corbusier building would be worth more than the entire US GDP. The top floor of Corbusier’s Villa Stein (one of perhaps the top 500 most important houses of the late 19th/early 20th centuries – i.e. a Van Gogh of houses) is for sale for the same price per sq.ft. (approx $1400) as buildings in the same area of suburban Paris, designed by nobody in particular. Meanwhile, Van Gogh’s Portrait of Dr. Gachet sold for an inflation adjusted price of $136 million yet a poster of similar square footage and style costs around $10. [...]

  • greg.org says:

    It’s irrational as far as it goes, but it may be a couple of orders less irrational than your analysis indicates. After all, those paintings aren’t being priced by the square inch, so maybe it overstates the equivalent price to use square footage for significant houses.

    It might be plenty crazy to do a 1:1 comparison, Most significant painting: Most significant architecture. Would Frank Lloyd Wright’s Fallingwater be worth $136 million? Easily. But maybe that’s not the right comparison; if Picasso’s Demoiselles d’Avignon came on the market, it’d blast by that $136mm in a heartbeat. Would Fallingwater keep up?

    Actually, Richard Neutra’s son used this exact premise a couple of years ago to try to sell his father’s old office building in Silverlake. Never mind that it’s a dump on a run down commercial strip. He felt that its rarity meant it should be worth the same as a “Klimpt or Pollack” painting. Never checked back to see how that turned out.

    http://greg.org/archive/2007/04/17/neutra_for_sale_calling_michael_govin_sic.html

  • [...] From David Galbraith’s blog (a new discovery) comes this stunning observation: If Famous Architecture Were Priced Like Paintings, a Le Corbusier Would Cost the Same as the Entire … [...]

  • admin says:

    @greg

    “After all, those paintings aren’t being priced by the square inch, so maybe it overstates the equivalent price to use square footage for significant houses.”

    That’s obviously a key point, they aren’t a commodity by definition, so a quanitative measure such as square footage can’t always apply.

    But the truth is actually really weird. Impressionist paintings WERE sold by major auction houses in the 70s, mainly to the Japanese, with prices that were based upon the square inch, and large famous paintings do still seem to command a premium.

    But largeness is within constraints. Jason Kottke pointed out that its difficult to use a non portable object such as a house as a signaling device. I said in the post that its difficult to move a Corbusier to the Upper East Side of Manhattan.

    But the generic signaling value is not the whole story, because even the people that live in the same area as the Villa Stein are not prepared to pay a premium for it. Similar non architect designed houses in the district area are similar prices.

    As to Neutra, you could buy a Neutra for under a million dollars in parts of LA ten years ago (one went for $800K) and I would be surprised if Falling Water would actually fetch more than $100million, very few houses have and none were modernist masterpieces to my knowledge.

    What this all means, I suspect, is that there is no extreme requirement for signaling wealth (using globally famous designers rather than more pedestrian suburban measures such as 2 car garages and 5 bedrooms) in that particular Parisian suburb compared to a place like the Upper East Side, where there is an extreme status arms race that requires people to show off with globally relevant metrics (most famous painting in world etc.).

    The famous paintings art market is driven by rather prosaic one-upmanship and penis envy writ large.

  • [...] Just A Lazy Mill Euros will put you into Corb’s Villa Stein http://www.architectureforsale.com/a…roperty_ID=701 Bargain! N’est ce pas? http://davidgalbraith.org/architectu…ican-gdp/2074/ [...]

  • [...] more at David Galbraith’s weblog. [Hat tip: Nancy [...]

  • Troy says:

    There’s also property tax and maintenance costs to consider.

    heh, that’d be a great way to get some more tax revenue, start slapping a 20% transfer tax on Old Masters.

  • admin says:

    @Troy property tax and maintenance on a $1 million home are Trivial compared to the insurance costs of a $100 million painting.

    There is an implicit transfer tax since the money gained from selling a painting is taxable like anything else.

  • kiat says:

    I tend to agree with the last point that art is a religion, thus any price is justifiable, whereas, architecture is not…

    On a more practical note – (a) while the villa stein could have been charged like a van gogh, at $13 trillion, no one would have the means to acquire it at this price, i.e. no demand despite the availability of demand. (b) while a building can be a work of art, real estate is ultimately location, location, location.

    Conversely, art in the range of $100m is still “affordable” to some (also with lower maintenance costs – read: cost efficiency of item of obstenstation), and not affected by the mantra of location, location, location.

  • david says:

    I think the discussion is missing the idea of “authenticity.”
    Van Gogh actually painted the things. Corb designed, but did not build the Villa Stein. Therefore, a replica of the house, while not totally original, would somehow be seen as more authentic than a reproduction of a Van Gogh. How else do we account for the many architectural gems that have been renovated/rebuilt over the years?

  • [...] of why the architecture market is does not follow the art market responding to a blog post by David Galbraith lamenting the low prices for works by reknowned architects. A great piece of architecture in a [...]

  • david galbraith says:

    @david “I think the discussion is missing the idea of “authenticity.”
    Van Gogh actually painted the things. Corb designed, but did not build the Villa Stein.”

    The difference between original art and designed architecture is not so clear cut.

    Many artists who command a vast premium over commodity prices in comparison with architecture produce designs which are then executed by others in a manner no different from architects. Two well know examples of designer artists are Sol LeWitt and Carl Andre. With larger pieces and sculpture this is more common, e.g. Jeff Koons.

    Another thing that blurs the notion of an artist original is the involvement of collaborators, something which is the norm in architecture. Here again the line isn’t clear cut, or reflected in price. Before the advent of photography, when the ability to produce a compelling likeness had higher value than originality the means to this end produced less angst about original authorship. Well known painters such as Rembrandt operated in a manner more akin to an architects office of today than a contemporary painter, with large numbers of painters on staff.

    Lastly, the commoditization of pictures is actually more extreme than architecture. There is only one Villa Stein, yet it costs no more than a design by someone unknown. On the other hand, a limited edition print by a celebrated artist, with several hundred copies usually fetches a huge premium.

    There are three things that matter in collectible status objects like paintings and diamonds, compared to houses: location flexibility, location flexibility and location flexibility.

  • Dan Davies Brackett says:

    The price difference between buildings and paintings is large, yes, but the primary reason for that is

    ARCHITECTURE IS NOT ART. It operates under different constraints than art, it is more divorced from its products than art, it’s parsed differently than art is. When architecture is treated as art (by architects or by the people who commission their designs), it produces abominations of design – places that alienate rather than invite. Places that provoke thought rather than facilitating life.

    Comparing the price of a building to the price of a painting is as sensible as comparing the prices of an orange and box of screws. Both rely on incorrect assumptions.

  • Phil says:

    “not to buy for private enjoyment but for pubic [sic] (even if it’s just your friends) prestige.”

    Spellcheck! ;)

  • monarchist says:

    It is true that paintings can be insanely overpriced, but they have the advantage of portability. Also they aren’t exposed to the weather and restoration can often be accomplished with spit and Q-tips.

    It might be fairer to look at the integration of building and painting. The Sistine Chapel is priceless.

  • Dmytry says:

    Nice trolling.
    How’s about comparing Einstein to Chuck Norris. Per newton of kick force. Or per lbf if you wish.

  • Dmytry says:

    Actually, not. Both Einstein and Chuck Norris, at least, are famous. It’s more like comparing Einstein to B movie actor who’s playing math teacher, per frame of video footage.

  • admin says:

    So you’re saying a famous painting is Einstein and a famous architect is Chuck Norris?
    I think the apples and oranges problem is at your end.

  • admin says:

    Le Corbusier is the world’s most famous modernist architect! It may be that you just hadn’t heard of him.

  • IT Support says:

    i agree with the guy who said that art and arch are two different thinga

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