Freakonomics Radio - 486. “The Art Market Is in Massive Disruption.”

Episode Date: December 16, 2021

Is art really meant to be an “asset class”? Will the digital revolution finally democratize a market that just keeps getting more elitist? And what will happen to the last painting Alice Neel ever made? (Part 3 of “The Hidden Side of the Art Market.”)

I'm Dr. James Deneen, and I'm a primary care internist at the Mass General Hospital in Boston, where I practiced for 45 years and retired from patient care in 2008. James Deneen is looking through some photographs from a long time ago. This is my sitting in Alice Neel's backyard. This is Alice beginning the portrait. Alice Neel was a painter born in 1900. Her specialty was painting people, what you and I might call portraits, but she didn't care for that word.

Neel was resistant to the genre of portraiture, which she associated with status and wealth. And that's Kelly Baum. She's a curator at the Metropolitan Museum of Art. Stuffy, stiff, uninspired, overly romanticized, without a critical or radical spirit. Neal preferred to call her paintings pictures of people that are also history.

Neal's pictures are always more than just the person they represent. Baum recently co-curated a massive Alice Neal retrospective at the Metropolitan Museum. It was called People Come First. The vast majority of the people Neal painted were not well-known. Dr. James Deneen fits that description well.

One day in the office, he said, I'd like to paint you. So this is in early 1984. And my son and I drove down to Spring Lake, New Jersey, and she painted me in her backyard. How did Alice Neal happen to meet James Deneen, and why did she decide to paint him? Okay, let's back up.

Neal had an eventful, often traumatic life. The early death of a child, another child essentially kidnapped by her estranged husband, a mental breakdown, and a couple of attempted suicides. This was all before she turned 30. She did have two more children. One became a doctor, the other an investment advisor. All the while, she painted obsessively. Neal had her fans, especially toward the end of her life, but her work didn't sell often or for much money. In her later years, she started suffering spells, bouts of confusion. Sometimes she would lose consciousness. She was hospitalized in New York and underwent test after test, doctor after doctor. No one could figure out what was wrong. By this time, her son, Hartley, was a radiology resident at Massachusetts General Hospital.

He arranged for his mother to be examined by an internist there, Dr. James Deneen. I remember vividly the night before having received the records from New York saying, wow, they did every test known to mankind and no luck. So I went in early the next morning and I'm sitting there doing the interview and all of a sudden she starts

having one of her spells, which is really vague mumbling and staring at the ceiling out of confusion. I followed an old rule that I learned from an internist at Yale Medical School. If you don't know what to do, a good idea is to simply take the patient's pulse, and they'll think you're doing something important. So, Deneen took Neal's pulse, or at least tried to. Well, lo and behold, she didn't have a pulse. So the problem was she needed a pacemaker.

So we put a pacemaker in, and all her spells went away, and she henceforth considered us the golden answer to medical problems. And that's how our relationship began. That's also how Neil wound up painting James Deneen in her backyard in New Jersey. Two things I remember vividly about that experience was, one, she had absolutely no tremor. She could hold her arm extended with a fine-tipped paintbrush, and there was zero tremor, which is really remarkable for a lady who was then almost 84. And the second thing I remember vividly was how smart she was.

She talked nonstop. She asked me so many questions about politics and religion and science and everything else. Had I read this book, had I read that book, and believe me, her worldwide experience was fast compared to my Harvard Yale experience in terms of general knowledge. And during all this chatter, she'd be busy painting. The painting of James Deneen was, in all likelihood, the last painting Alice Neel ever made. She died soon after.

Her family then called Dr. Deneen, said they wanted to give him the painting. So one day we went down and visited her apartment, which was also her studio, and the family gave me the painting. The painting shows Deneen sitting at ease, not quite smiling, but with a relaxed expression, perhaps slightly bemused. His hair is longish with a side part.

It was the 1980s. He's wearing a green polo shirt and checked pants. His hands are resting on the arms of the chair. One hand is open, the other slightly clenched. She really focuses on eyes, and she also focuses on hands. The hands are what stand out. The painting of Deneen has never appeared in an exhibition of Alice Neel's work. The painting is in our bedroom.

And so when my wife and I wake up every morning and look up at the wall, there it is. I don't think the painting looks quite like me, but I remember way back, one of the granddaughters, who was probably two or three, awakening from a nap and looking up at the painting and saying, Gramps. And I couldn't believe it that she at that age could recognize the painting, which she had never really seen before and no one had ever told her who it was. Between the time Alice Neel painted James Deneen in her backyard and today, Neel's reputation has undergone a, well, a turnaround, doesn't even begin to describe it. During her life, she was a marginal artist. And now, as evidenced by that massive retrospective at the Metropolitan Museum,

she is considered a master. Accordingly, the value of her works has skyrocketed. As we described in the first episode of this series, a single Alice Neel painting from 1966, and not a particularly noteworthy painting, recently sold at auction for $2.5 million. What does Dr. James Deneen think about that? Wow. Yes. Wow. It's hard to put it much better than that. Today on Freakonomics Radio, the

third and final episode of a series we are calling The Hidden Side of the Art Market. In the first episode, we examined the nature of the market and the major players. It's one of the strangest markets that I have ever seen. 99.9% of the artists that you see at galleries and exhibitions, their value will never increase. The art market is a fascinating, sexy, intellectually compelling, unregulated global market. In the second episode, we looked at the market from the perspective of the artists. It is extremely unregulated and subject to all kinds of monkey business that I can't fully understand. I think the whole thing is vulgar.

There's this phrase that was coined by a friend of mine called LPM, lies per minute. And in this final episode, we explore how contemporary art became such an elite product. It initially started off by Leo Castelli, who is the godfather of the gallery world. We'll look at the disruptors trying to change the market. I would say 99% of people signed up have no experience in the market. Including the digital disruptors. Imagine all of a sudden you had all this cash and there was no Bloomingdale's.

And of course, we find out what Dr. James Deneen plans to do with the last painting Alice Neel ever made. We did have somebody from Skinner's come by and look at it. Part three of The Hidden Side of the Art Market, coming up right now. This is Freakonomics Radio, the podcast that explores the hidden side of everything, with your host, Stephen Dubner. What's the point of art in the first place? That question is too big to answer, at least for me. Our species has been making art since the beginning. Art has served religious and political purposes, propaganda purposes. It's been made as social commentary and pure aesthetic expression.

And that's just from the maker's side. When you look at a piece of art or live with it, it may speak to you, even move you, though perhaps in a way that it doesn't move anyone else. What art likely wasn't meant to be was a product in a market that's become extraordinarily top-heavy. A market where a handful of top artists sell for millions of dollars, even tens or hundreds of millions, with the spoils going to billionaires, the spillover going to museums, and the public largely left out.

In a given year, only 25% of U.S. adults visit an art museum or gallery. Only 20% own a piece of original art. Meanwhile, the average price of contemporary art has tripled over the past two decades. You could argue that high prices do offer one big advantage. They create an incentive for artworks to be preserved over time, treated like a treasure. That said, anyone who thinks that art should be a central feature of the human experience is bound to be disappointed.

Like I said, it's a top-heavy market. If you want an uglier word, elitist. How'd it get that way? We somehow lost our love for art. That is the economist Magnus Resch, who studies the art market. We lost it because gallerists made it incredibly difficult to buy art. They established this aura of exclusivity. Is that intimidation, if it's fair to call it that, a strategy or just a product of the kind of people that end up running galleries? It initially started off by Leo Castelli, who is the godfather of the gallery

world. Leo Castelli opened his first gallery in New York in 1957. He was a dominant dealer for the next several decades, helping launch the careers of artists including Andy Warhol, Roy Lichtenstein, Klaus Oldenburg, and Donald Judd. Castelli did this by curating an international network of collectors and tastemakers. He believed the caliber of the buyer was at least as important as the price paid. He wanted to have a conversation with potential buyers, so he didn't put up the prices. However, now gallerists have pushed it to the extreme where they created this aura of exclusivity, which is just so not state-of-the-art anymore. I'm always fascinated when I see young gallerists trying to copy the

Castelli model that might have worked 50 years ago, but it certainly isn't working anymore. And what makes Resch say this model isn't working? You have 80,000 people who go to Art Basel in Miami every year. And of those 80,000, maybe 500 people are actually buying an artwork. That's a very poor conversion. The biggest problem in the art world today is that not enough people are buying art. We need to change that. This starts with price transparency. Right now, I go into a gallery and I have no idea how much the artwork on the wall costs.

I need to ask and then go through a beauty contest where the gallery director comes from the back and then looks at me and maybe tells me the price. That is not how our generation is used to buy something. I want to have all the information available immediately. Resch himself created an app meant to crowdsource gallery prices. As we heard in part one of this series, the app is now in limbo. We gathered over 1.5 million price points from galleries. It worked perfectly well, but then Apple shut us down because all the galleries complained. Organizations like Artnet and Artsy have created databases that include price and ownership history for artwork sold on the secondary market at public auction, but it's still hard to get information from galleries and other sellers on the primary market.

The primary market is a complete black box. Here's the good news. If you don't like the hidebound, secretive, exclusionary elements of today's art market, change may be coming. The art market is in massive disruption. That's Amy Capilazzo, formerly of Christie's and Sotheby's Auction Houses. She recently co-founded a firm called Art Intelligence Global. A massive amount of information available today that was not available 20, 30 years ago, even 10 years ago. But it's not just information. Technology has also affected channels of distribution.

During this whole time in COVID, auction houses, galleries have been managing to transact and sell things without people actually physically getting in front of them. That's new and astonishing because one would think a work of art needs to be seen in person to fully understand and appreciate it. If that were not the case, I would just cut pictures out of magazines and tape them to my walls. But obviously there's something about the real thing that's more satisfying and more interesting. Satisfying and interesting perhaps, but also, let's be honest and more interesting. Satisfying and interesting, perhaps, but also, let's be honest, more exclusive. One simple reason an original piece of artwork can be so expensive is that it's unique. That said, to Capilazzo's point,

online art sales did set a record in 2020, $12.4 billion, double the previous year. Online sales now make up 25% of the total art market. So if you are an old school gallery operator, even one of the most successful in the world, these numbers will catch your attention. All of a sudden, this whole world has opened up for us. That's David Zwirner, one of the most prominent art dealers in the world. He recently launched a separate business called Platform. Platform is the marketplace, and it's a marketplace that came about last year somewhat spontaneously when everything was shut down. Platform is a hub for independent galleries to sell a curated selection of works at relatively low prices,

$2,500 to $50,000. Zwirner takes a 20% commission on each sale. We realized that we had a pretty robust website that was able to communicate to a large audience, and many of the young colleagues, dealers, didn't have anything of that sort. So we invited international galleries to show artworks on our website that we helped sell for them. Unlike the typical gallery model, anyone can buy the art for sale on platform. There is no beauty contest, as Magnus Resch put it.

In fact, it's the opposite of a beauty contest, as David Zwirner discovered during the 2020 presidential campaign. In normal times, Zwirner would vet potential buyers ahead of time, and if they somehow made the cut, he'd follow up afterwards to add them to his roster of collectors. But on platform, during the pandemic... We did a fundraiser for Biden-Harris, but we were then told that we were actually not allowed to speak to any of the buyers. That's against campaign finance law. The buying has to happen automatically. We scratched our heads and said, what do we do now? We created a Buy Now e-commerce site just for our Artists for Biden initiative, and that was a ridiculous success. I'm not allowed to say how many millions we raised, but it was millions. So your commercial practice was totally changed because of the political

involvement. Very interesting, because all of us were like, what do you mean? You know, we need to talk to the buyers. That's what we always done. And then we realized we can't. That taught me the lesson that there is a buying public out there that doesn't want to talk to me and that there is a much bigger public out there that I had realized. Okay, so you mentioned that Platform is having other galleries come on to a site that you run. Here's what your arch rival Larry Gagosian says about Platform. I wouldn't be interested in doing something like that. It's a little bit of a wolf in sheep's clothing. My advice to smaller galleries would be to preserve your own identity and brand, even if you can't do it at the level of a large gallery, work within your means and don't hand

over your artists and client lists to somebody who might take advantage of it at some point. The somebody is plainly David's Werner. So how do you respond to that fear-mongering? I would say it takes one to know one, right? I appreciate that he's looking at what we're doing because it is an innovation in our industry, and it's good. The point is not at all to steal artists from younger galleries. It's an absurd assertion here. The point is to create a marketplace where young galleries

that have a harder time reaching large audiences can present their work. There's one more benefit that a market-like platform may offer. So we have a pretty big climate problem out there, right? And one of the drivers of our industries, the art fairs, have pretty, pretty complicated carbon footprints and also very capital intense, especially for young galleries. If you're a young gallery in the Lower East Side and you have to take your wares to London, it's going to be expensive. And if you want to take a chance on a young artist, let's say you want to do a one-person presentation, if nobody buys anything,

that happens often. You might be looking at a hole that you might not be able to fix. So platform gives you a much, much more user-friendly way to present your work. So does a platform like platform mean the art market is looking to abandon the elite status it's spent centuries cultivating? You might think that if you squint hard enough. On the other hand, let's not kid ourselves. For quite a while now, major works of art have been what investors like to call an asset class. Here's what the economist Canis Prendergast told us in an earlier episode in this series. Maybe 90% of the art that's sold sits in a warehouse rather than actually being seen by somebody. And some unknown share of that 90% is part of a gray and black market that uses high-end artwork for money laundering, tax evasion, and related escapades. In a recent episode we did about

corruption in China, the political scientist Yuan Yuanng told us that art is often preferred to cash when it comes to paying bribes. Because art is valuable, but the value is subjective. And so in the event that a corrupt official is arrested, he could defend himself by saying, well, it's just a useless piece of Van Gogh or something like that. There are other, more legitimate efforts to treat art like an asset class. Consider the investing platform called Masterworks. It is privately held and is valued at more than $1 billion. Masterworks is the first platform to take a painting public effectively.

That's Masha Golovina, head of acquisitions for Masterworks. We securitize artworks by filing them with the SEC as public offerings. And we make those available to retail investors, which means that anybody can invest.

This may have the whiff of democratization, but you get the sense the shift is more subtle than that. A shift perhaps from the billionaire class to the investor class. We focus on the most expensive segment of the art market. 90% of transactions are estimated to be below a million dollars. We focus on paintings that are 1 to 30 million. We buy from auction and we also buy privately from the auction houses. And then we speak to dealers and also individual collectors and collecting families that we have relationships with. I'm on calls probably four hours a day to source paintings for the company. Golovina herself studied art history and economics, worked in banking for a time, and then at Christie's Auction House.

I would say 99% of the 180,000 people signed up on the platform have no experience in the market prior to signing up with us. Most of our investors come to Masterworks looking for alternative investments, you know, telling their friends about having invested in a Basquiat or a Keith Herring is much sexier than talking about a real estate investment. So investors buy a share in a particular painting that Masterworks has bought, either privately or at a public auction. The idea is that the painting will appreciate over time, which means investors' shares will also appreciate,

and the profits are locked in when Masterworks ultimately sells the painting. But what happens in the interim? I mean, what happens to the actual painting that Masterworks has bought? Once we acquire the paintings, our number one priority is the physical well-being, the condition of the paintings. So they're stored in a fine art storage facility. However, we do loan paintings as we see fit. We've loaned several of our paintings out to museums in Europe, but the majority of the paintings we have are housed in a fine art storage facility. A fine art storage facility. Other people might call it something different.

Maybe 90% of the art that's sold sits in a warehouse. If you care even a little bit about the art, you have to ask yourself, is this how the art market should be operating? Putting the most desirable artwork in the world into storage, is that a desirable outcome? Coming up after the break, are there any new technologies that might really democratize the art world? Many of the NFTs have one very desirable feature, which is that it can be shown anywhere by anybody. And remember, this is the third part of our three-part series called The Hidden Side of the Art Market. If you haven't listened to the others, they are ready and waiting for you to hear them.

They are episode numbers 484 and 485. You can get all past episodes of Freakonomics Radio for free on any podcast app, as well as the other shows in the Freakonomics Radio network. So get busy. We'll conclude our series on the art market after this short break. We've been talking about how technology is disrupting the art market in a variety of ways. If you'd like the most pointed example of this, consider what happened at Christie's Auction House on March 11th, 2021. An artwork sold that day for more than $69 million. It was the third highest price ever fetched at auction for a living artist. The top two living artists are Jeff Koons and David Hockney. Them you've probably heard of.

I am confident you haven't heard of this third artist. You ready? His name is Mike Winkleman. Maybe you do recognize the name under which he makes art. It's Beeple. The $69 million piece Beeple created is called Every Days, the first 5,000 days. Aside from the price, there were two extraordinary things about the sale. The first is that Every Days isn't a physical piece of art. It's not a sculpture or a painting or an array of fluorescent light fixtures. It is a digital artwork, a collage of thousands of images that people have been posting online every day for more than a decade. It's quite beautiful. The other extraordinary thing about the piece

is that it is an NFT or non-fungible token. That means it was created via the blockchain, the digital ledger you've heard so much about and likely still don't quite understand. For what it's worth, we are working on a future episode about that, what the blockchain can do for you. But that's for another day.

The Beeple NFT was bought by a pair of Indian blockchain entrepreneurs using Ethereum, one of the many currencies that are also created on the blockchain, the most famous of these being Bitcoin. The New York Times headline from the Christie's auction reads like one of those headlines you look back on 50 years from now and chuckle. JPEG file sells for $69 million as NFT mania gathers pace. So what is an NFT? Well, I mean, an NFT can be anything. It could be a painting.

It could be a photograph of a painting. Anything that's on your iPhone camera roll. In fact, I made a comment that everyone and their grandmother is going to be selling NFTs now. And then I ended up making an NFT of my grandmother and sold her. I think I let her go a little bit too cheaply. That's Kenny Schachter. I am an artist, a writer, a professor, and a curator, and I sell art also to make a living. If you had to describe the Kenny Schachter brand, how would you describe it?

Pain in the ass. Troublemaker. For me, it's just one thing. Art, art, art, art. The digital image Kenny Schachter made of his grandmother, Blanche, went for a few thousand dollars. Other NFTs have brought substantially higher prices. Video clips of LeBron James playing basketball, the first tweet from Twitter co-founder Jack Dorsey. But it isn't just cultural curiosities that have been selling. It's contemporary art, too. And many of those NFTs are being sold by artists working without gallery representation. In the first half of 2021, digital art, NFTs, as well as film and video art, made up 12% of all art sales. It's not the traditional art world collectors that were fueling the market. The audience of buyers for this NFT world are tech people that have already been well-attuned and comfortable living in technology. And these people don't

know Larry Gagosian, the world's biggest art dealer, or David Zwirner. Not only do they not know who these people are, they don't aspire to know who these people are. They don't care who these people are. There is a caveat. NFTs are typically bought and sold with Ethereum, a cryptocurrency that has risen steeply in value like many other cryptocurrencies. But there hasn't been much you could actually buy with Ethereum outside of Ethereum-generated NFTs. Imagine you had all this cash and there was no Bloomingdale's, and then all of a sudden

a department store opened and you could buy 7,000 cashmere sweaters with this wealth that had just mushroomed. So that's really what happened. There's this crazy pent-up wealth where hundreds and hundreds of millions into the billions of dollars have been created virtually from thin air, but there's been nothing to spend it on. Then all of a sudden, in 2018, comes the NFT market, whether it's for collectibles, for moments of sports, and there's a torrent of pent-up demand that's just exploded. You can imagine how the circular nature of this type of transaction might cave in on itself eventually. But if you look at

the art market as a whole, there are a number of other functions that NFTs might serve. Here again is the economist Canis Prendergast. Many of the NFTs have one very desirable feature, which is that it can be shown anywhere by anybody. You can download it, you can show it. It's trying to democratize art in a way that happens very rarely. And you like that. I do. Blockchain, on the other hand, I feel like is swatting a fly with a hammer. And our other art economist friend, Magnus Resch. Digital art has historically been absolutely irrelevant.

Nobody bought digital art. That's why it's so good that right now, digital artists really getting the recognition that they deserve. Right now, it's cool to be a digital artist. Then you can actually make some money. Will it be lasting? And will we see a new record price

for a digital artwork NFT? I highly doubt that. Will digital artworks be the new paintings? I also doubt that. But, Resch says, on balance, it's a good development. And museums are paying attention too. Our stance is that we're seriously interested in how the NFT world works. That's Glenn Lowry, director of the Museum of Modern Art in New York. It wouldn't surprise me if we started doing some pilot projects to see how good a fit the minting of NFTs would be for us. I saw that the Uffizi is creating NFTs from some of its masterpieces.

They recently sold a Michelangelo NFT for $170,000. I would think that if this were a priority for your museum, MoMA, that your collection is full of potentially billions of dollars worth of NFTs. At the moment, I'm as interested in them from a cultural perspective as I am from the point of view of their marketability. I am interested in the way in which they might help institutions make their collections more widely accessible and at the same time, create new communities of users and generate some capital along the way. Although the capital for me isn't the single most important driver in the way in which NFTs can operate. Right. But since you and I are friends now, Glenn, I'm sure that if you decide to do some, let's say, Matisse NFTs, that you'll give me first shot. Absolutely. As long as you agree to match Beeple's 69 million, we're in. There's one more way in which NFTs or other digital tools may revolutionize the art market. In part two of this series, we discussed how artists rarely profit when their work is resold at auction, often at prices much higher than they were originally paid. There have been some attempts to remedy this in the form of

artists' royalty laws, but such laws are rare, and when they do exist, they're hard to enforce. NFTs could change at least the last part of that equation. Here again is Kenny Schachter. So NFTs are issued in Ethereum because you can state the parameters. It's like a digital certificate of authenticity, which also trades as a currency. What differentiates Ethereum from Bitcoin is that Ethereum has a programmable smart contract that piggybacks on the currency itself. In the past, you would buy like Dan Flavin made sculptures out of fluorescent light fixtures. With that sculpture, you would get a certificate of authenticity. The artist would sign the piece of paper and it would say, you have this piece called XYZ from 1962,

and it's an edition of three, and it is the evidence of your ownership. Very often, people would have the sculpture on their wall for 20 years, 30 years, and they would lose the certificate because it was just a sheet of paper. So now, this whole notion has been turned on its head, where the certificate of authenticity is what's embedded into the blockchain for perpetuity. This empowers artists to take back control away from the traditional gallery system, and it enables the artists themselves to have more of a say in the commercialization of their art. Many other markets have already been disrupted by the blockchain, the internet, the digital revolution generally. Longstanding frictions have begun to be eliminated. Just think about something as simple as how you now order a food delivery,

or how you buy books, if you still buy books, or whatever you buy on Amazon. The art market, as we've been hearing throughout this series, has so much friction, much of it intentional, or at least self-inflicted, that it is plainly ripe for disruption. And there's one last change worth mentioning. We've had a massive geographic disruption. Amy Capilazzo again. This used to be largely an American and European event, but truthfully now it's a global marketplace and Asia is just a huge and enormous participant. It sounds like you're talking about the buy side,

but what about artists as well? have a very thirsty audience in Asia wanting masterworks. And as a net result, there's a little bit more interest in the West and what are the important artists from, you know, the 80s in China or the 50s in Japan or the Dan Sang Kwa movement in the 70s in Korea. Amy, let me ask, if you could own any one piece of art, and if neither money nor history nor maybe a museum already owning it were a barrier, what would it be? Well, I will tell you that my feeling on this topic changes frequently. Like of late, I'd love to own a great Basquiat, like a masterpiece of Basquiat would really speak to me. My time in New York, the short-lived genius of this person that just hit on exactly... Basquiat's existence gives meaning to BLM and everything

we're going through, right? He is the visual representation of that. Basquiat understood in his short lifetime that people loved black culture more than they loved black people. He's just a cipher of so many things. And like a god. There are moments where I feel moody and contemplative where I think having a Rothko would be among the most soothing things I could do for myself. So does this mean you don't own a Rothko or a Basquiat? Oh no, I don't own either of them. I did have chances to buy Basquiat drawings and I tried to bid on them, but they got away from me and probably they're too expensive for me to ever

consider owning now, but I do love them. I'm sorry. It's a little bit like unrequited love. Like it's hard, but yeah. Well, let me just promise that if I ever somehow walk into someone's house and there is a Basquiat or a Rothko and I think I can get out with it under my coat, I'm going to grab it for you. Okay. I just don't want to own something that's stolen, but I appreciate that. Thanks. Meanwhile, back up in Boston, Dr. James Deneen has had the fortune of living with a piece of art he truly loves. The portrait of him that Alice Neel painted in that New Jersey backyard. Alice Neel, whose work never sold for much when she was alive, but now in death, is having her moment. What does James Deneen think about Alice Neel's posthumous second act?

She would be much more interested in the impact of her paintings on people's behavior. Not the commercial side. She was really a pioneer, just way ahead of her time, and she clearly embraced people who were poor and not famous. And here's Alice Neel herself from an interview a few months before she died. I could have been a great psychiatrist, but it's more fun being an artist. I see what's there. I don't look for anything. I just look. Neil then recalls going to see a show of Paul Cézanne paintings years earlier

at the Metropolitan Museum. And I was surprised at all the psychological acumen that his portraits had, he said, I love to paint people who have grown old naturally in the country. And I say, I love to paint people torn to shreds by the rat race in New York. Now that Alice Neel herself has had a retrospective at the Metropolitan Museum, and now that some of her paintings have sold for millions of dollars, is

James Deneen tempted to sell the last painting she made? It doesn't tempt me to sell it. It tempts me to remind the six children that we have that this is perhaps valuable. And I would hope they would probably sell it and donate the proceeds to some charity that Alice would embrace. That would be my hope. I don't want them to think of this as a gold mine that they can harvest and then buy a

bigger condo or whatever, which is not a necessary part of life. He and his family have talked about the painting in his bedroom. The family keeps kidding me about, you should be getting it, you know, insured and you shouldn't be doing this and that. We did have somebody from Skinner's come by and look at it and confirm it and appraise it and everything else. Skinner is an auction house, but James Deneen wasn't moved. I like it in my bedroom, and I don't at all get excited about the commercial value. It's the experience.

The memory is where its value is. You know, life is really the summation of all your experiences and memories, and this is one of the great ones. It's been said that an economist is someone who knows the price of everything and the value of nothing. As we've explored the art market over these past few episodes, it's been tempting to think that the same holds true there. But as James Deneen proves, there are exceptions. I hope you've enjoyed listening to this special series, The Hidden Side of the Art Market.

We certainly enjoyed making it. Thanks to all the artists, economists, gallerists, museum folks, and others who spoke with us. If you have some feedback to share, our email is radio at Freakonomics.com. I'd really appreciate it if you spread the word about this series or any episodes of Freakonomics Radio you've liked. That is the single best way to support the podcasts you love. Coming up next time on the show, a special episode of one of our spinoff shows, Freakonomics MD. As you may know, we've been expanding the Freakonomics Radio universe,

kind of like the Marvel Cinematic Universe, but with fewer superpowers. Our other shows are People I Mostly Admire, hosted by Steve Levitt, No Stupid Questions, hosted by Angela Duckworth and me, and FreakonomicsMD, hosted by Bapu Jena. Next week, Bapu helps us decide, in the age of COVID, whether to throw our annual Freakonomics Radio holiday party. I mean, you could greet everybody from outdoors. You could be the bouncer, basically. That's a really good idea. Say more about that. So first of all, you'd have to put on about 60 pounds.

You'd stand outside and just, you know, air shake everybody's hand as they walk in and you'll be good. That's next time on the show. Until then, take care of yourself. And if you can, someone else too. Freakonomics Radio is produced by Stitcher and Renbud Radio. This episode was produced by Morgan Levy. We had research help from Lyric Bowditch and Alina Kullman, and additional help this week

from Jeremy Johnston. Our staff also includes Allison Craiglow, Greg Rippin, Zach Lipinski, Ryan Kelly, Mary DeDuke, Emma Terrell, Jasmine Klinger, Eleanor Osborne, and Jacob Clemente. Our theme song is Mr. Fortune by the Hitchhikers. All the other music was composed by Luis Guerra. As always, thanks for listening. I think you've had more coffee than me today. Can you tell? Can you tell? Jesus, slow down. You're exhausting me.