How much does a banana cost?

A few hours after the sale of a banana taped to a wall at the Art Basel fair in Miami for $120,000, well-known economist Olivier Blanchard, tweeted the following message : “Cost of a banana : 2 dollars. Cost of an adhesive tape : 3 dollars. Cost of a banana with adhesive tape : 120 000 dollars. Conclusion for economic research : we need a better profit theory”.

For a long time, “classical” economists, from Adam Smith to Karl Marx, thought that prices were derived from cost and the “labor theory of value”. Marx for instance considers that any product or service is made of human work and it’s precisely this work that gives it value. According to this approach, it is difficult to understand how a banana taped to a wall can be sold for $120 000. The solution was provided by Frenchman Turgot and late 19th century “marginalist” economists. For them, the value of a good corresponds to the usefulness to consumers rather than any amount of work. It is the basis of the law of supply and demand. The price is the result of a confrontation between scarcity of a good and consumer appetite. What is scarce and in demand is expensive, this is how a market economy works and it has two striking yet misconceived philosophical implications: price is based on subjective and changing appreciations and does have a moral content. Personally, I find completely stupid and immoral that someone could buy a banana taped to a wall and it seems like this stupidity and this immorality can easily be proven. But that’s beside the point.

In the case of Maurizio Cattelan, it is not the object in itself that was bought, but the idea, materialized by a certificate. This proves that speculation does not shape the entire contemporary art market. 

In fact one can speculate on a piece of art an artwork that has nothing aesthetic about it but speculation assumes the conservation of a good for resale and capital gain. One can speculate on a shark in formalin, not on a performance. The underlying motivation of the banana purchaser is to be found elsewhere, particularly in Thorstein Veblen’s works on conspicuous consumption, works that were led in response to the excesses of J.P. Morgan and other precursors of the Great Gatsby. Veblen considers there are some sales for which demand rises with the price and not inversely to the price as in the traditional market. These are goods whose possession sends a signal to the whole society on their purchaser tangible property and his alleged power. But this was towards the end of the 19th century, and since then, the relations of domination in developed societies have changed.

In our knowledge-based economy, whoever holds the power is a “manipulator of symbols”, in the words of the sociologists Robert Reich, that is whoever’s cultural capital and capacity to transform it into universal innovations will bring them wealth and prestige. Contrary to a XIXth century bourgeois, the one who wants to show or pretend that they belong to the dominant class must first and foremost prove that they are intelligent and that they admire the people from the top of their cultural capital. To paraphrase Veblen, they must possess, for instance, conceptual pieces of art – or certificates – whose instant aesthetic attraction is secondary if not nonexistent, but that show they have the intellectual keys to the world of conceptual art. To acquire buy a taped banana taped to a wall at a prestigious art fair brings the feeling of breaking into penetrating the intellectual elite to the its buyer. It is an intangible investment that, apparently, costs more than $120 000.

Translated from l'Express, published on December 18th 2019