Blake Gopnik points to an important role that art prices play, not in the value as investments but as markers of a broader cultural value and importance. Of course, that’s a misguided measure because art is priced by its availability. A $100 million Picasso or Giacometti is not by definition the “best” example of the artist’s work. It’s the one that happens to come to market:

I asked the great New York collector Agnes Gund how she would feel about her artworks if their value suddenly halved. “I wouldn’t feel they would have changed,” she said, explaining that most of her pictures are promised to museums. Then I asked how she’d feel if their value doubled instead, and her story changed. “Obviously, it’s wonderful to see the price rise,” she said, since that’s confirmation of the object’s cultural worth. […] Aesthetics are the bedrock the art market is built on. But, for want of any other reliable measure, they often get tallied in dollars. One of New York’s biggest dealers told Velthuis, the Dutch sociologist, that collectors “permanently have to explain to themselves why they spend so much money on art, sometimes up to 40 percent of their total net worth. So that they want to hear all day long that it makes sense what they do.” And the easiest way to gauge the aesthetic “sense” of an art purchase is to check out the “cents” the thing is selling for. When you’re looking for great art, you may spot it by its price tag.

Why Is Art So Damned Expensive? (Newsweek)