VAT: Collectibles

Art is all that is artificial, man-made. From shoe laces to buildings, trillions upon trillions of artworks abound. Artworks are generally fungible as an identical artwork can be made to replace an existing one. As such, the market price of an artwork over time tends to be a function of its cost of production. When its market price exceeds its cost of production, more artwork are made. When its market price is below its cost of production, none is made.

However, there is a relatively microscopic number of artworks that are different from all others, collectibles. Collectibles trade at prices that have no relationship to their cost of production, often many many multiple times higher than their cost of production. This price anomaly, between artworks generally and collectibles, has little to do with the inherent visual experience a collectible provides as a perfect copy of a collectible, indistinguishable by the human eye from the original, can be easily produced.

The price of a collectible is a function of its non-visual characteristics; the celebrated artists who created it, provenance, perceived store of value, self-validation (or bragging rights by virtual of its price), the “hunting instincts of collectors, belief in the greater fool theory and other non-visual factors. Hence, the price anomaly is sheer human folly, experiencing collectible artworks not with one’s eyes but with one’s ears and mind; an illusion, difficult sometimes to see as they’re covered with bullshit.

At some point, at the moment of mass awakening to divine consciousness, collectibles will trade at prices in line with artworks generally. Then, there will be a Wall Street Journal article with the headline: The Emperor Catches a Cold. Stories of emperors who purchased collectibles and found themselves out in the cold financially because they weren’t wearing any clothes.

So why buy high-priced/over-valued collectibles knowing that at some point they’ll be relatively worthless? Well, collecting is fun, mass awakening seems unlikely to happen anytime soon and ultimately, as no one is getting out of here alive, everything is worthless anyway.