For more than five years, buyers have been paying record prices for everything from Bacon to Baselitz, Whistler to Warhol, whether at art fairs in Moscow or auctions in Manhattan. In an age of energy anxiety, it’s natural to ask what’s fueling such prodigality. The answer’s not hard to find: unprecedented amounts of cash in the hands of an unprecedented number of art collectors.

They’ve been called shoppers, speculators, even a stampede, and their taste and credulity have been maligned with every stroke of the hammer. Yet they hold the ultimate power in the art world—the power of the purse.

Over the past year, even as buyers’ numbers mounted and they swarmed to art fairs and the latest biennial, the power of the big-name collector was undeniable. Ronald Lauder, for instance, spent $135 million on Gustav Klimt’s portrait Adele Bloch-Bauer 1 for the Neue Galerie, which the cosmetics heir created to show Austrian and German art. To be fair, Lauder collected works by Klimt and Egon Schiele long before those artists became hot. Now, in part thanks to Lauder, they are among the most coveted names on the market.

Cynics claim that many collectors in the top echelon are hooked, like gamblers, although buying Warhols in this market is hardly like playing roulette. But it is a habit that needs supporting: Spending tens of millions on a single painting requires selling other inventory to stay in the game and stay liquid. Real estate investor Aby Rosen, who after a decade of collecting is among the senior members of a young breed, has said as much: “A good collector keeps rotating his art, keeps on selling. You raise your threshold, so that’s why you need to trade. That’s why you need to sell.”

For now, most collectors below Rosen’s level are just buying, albeit furiously. Are they drinking the Kool-Aid, imbibing the line that the market will only expand? Think of them rather as drinkers of root beer. Back in the early 1980s, when shopping-mall mogul A. Alfred Taubman had just bought Sotheby’s, he made the brazen statement that art was as necessary as root beer—a product he had made an earlier fortune on as the owner of A&W—and that you had to convince your potential consumers that the soft drink was worth buying. It was largely the auction houses that persuaded buyers seeking status back then to do so in the salesroom. These would-be collectors proved Taubman right and then some, taking the market far beyond what even he imagined.

Their collective action demonstrates the power of group-think. Collectors follow each other at least as much as they do dealers, auction houses or the media. A number of people with collections the public now knows guide younger buyers and also talk to their peers, who are trustees at museums. “Part of this issue is not just being the first, but you have to have a second and third to follow you to be important,” says one dealer.

What’s driving the surging market is not supply. It’s not the availability of more contemporary art than ever that sustains the infinitely expanding number of art fairs around Art Basel Miami and seemingly everywhere else. Nor is it quality. The art is no better, and the dealers are no smarter, than they were a decade ago. Rather, demand is the force behind it all. A clear indicator is that the European Fine Art Fair (TEFAF) in Maastricht raised its entry fee to €55 ($72) to weed out at least some of the gawkers who come to kick the tires and look at the jewelry. Shoppers wanted a more intimate experience, and they got it.

Those who doubt that the power is held by collectors should consider that whenever the market has faltered in the past 20 years, it has been because of a drop in demand. The most drastic contraction, in the late 1980s, was caused by two factors: Japanese corporate buyers, who were revealed to have used their purchases to hide assets and avoid taxes, retreated out of shame from the Impressionist market, which they had inflated; and other buyer-rich East Asian countries suffered an economic downturn.