Peter Svarzbein

Asher Edelman poses beside "The End of the World," by U.K. artist Christopher Winters, whom Edelman represents through his Manhattan gallery.

The Wise Men

Robert Mnuchin

Jasper Johns Dennis Oppenheim Jean-Michel Basquiat Robert Mapplethorpe Richard Prince Stunt at Sotheby’s Lands Tape Artist in Jail Dealer Holly Solomon’s Papers Headed to Smithsonian Phillips de Pury Makes Its (Small) Mark

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Well, you guarantee it or buy it. Contrary to the past, when people were skittish about a guarantee or a picture in which the house had a financial interest, these new people were excited, because they said to themselves, “The auction house put its money there, and therefore the pricing is fair.” And so they created this whole new world of pricing, which by the way, is very dangerous, because it is much too selective, it is not necessarily correct. It makes major differentiations between periods of an artist’s work and creates a silly demand for something. Richard Prince’s “Nurses,” for example, are perfectly good pictures, but we’ve seen enough of them by now.

What about estimates?

It’s the same for estimates, but estimates are less influential than guarantees and purchases. So you have this whole new game being played out there, and it has been very successful—not a game, a business strategy, and there’s nothing wrong with having a business strategy. The auction houses are in business, after all. They are not in art.

And where do you think that business strategy leads?

What happens is the auction houses cannot shy away from this procedure. Because if you’ve had 10 auctions where you’ve guaranteed $500 million and your guarantees have earned you an extra $100 million per auction—I’m just using numbers—and the 11th fails, maybe you’ll lose $30 million or $40 million in total, but in the meantime, you’ve made an extra $500 million. If the 11th works, then you’ve got the 12th where you can lose some back. You can’t afford to stop playing. You can’t afford to step off the merry-go-round, because the other guy might stay on. Or maybe he won’t stay on, but there might be a lot of money to make that you didn’t make. So you have to keep playing the guarantee and the purchase game until it’s over, and you are going to get hurt once. And both auction houses know that. But most people haven’t thought through that strategy.

In 1987 you compared the atmosphere at Christie’s and Sotheby’s to that in the Chicago hog pits.

I owned the biggest stockyard company in America then, so I was qualified to make that comparison.

By which you meant that art was being treated as a raw commodity.

But it is for them! That’s the business they’re in.

How much buying and selling do you do at auction these days?

I do more selling and placing with the houses. If I consider a picture to be a good auction picture, I will go back to my client and say, “You might do better at auction than otherwise. And I think I can get you excellent placement in the catalogue and exhibition hall and can get us the kind of sponsorship we want from the department.”

If a collector buys a painting from you—one by a living artist whom you represent—do you demand a resale agreement so that it won’t be flipped at auction?

I say, “Do whatever you want with it. It’s your picture.” And any artist who has complaints about that is just silly. He restricts his potential. There is a market. You have to face it.

I assume that in your early years as a collector, you weren’t buying art as an investment.

I bought a Jasper Johns in 1961 for $800, and I assure you I couldn’t sell it for $1 the next day. The idea of art having value didn’t occur to me until the late 1970s, and by then I had a lot of art—500 works or more. In the process of insuring it, I learned that it was worth quite a bit. That was the first time I really thought about art and money.

What do you make of today’s art-investment funds?

I don’t think there are any funds—with the exception of Bob Mnuchin’s, which he runs with his own hand, or maybe I have something quiet too—that don’t put on layers and layers of conflict and advisers and relationships with auction houses. Structurally, I don’t think we have an art market yet that warrants thinking much about investment. So then there’s only the individual who has enough money and is willing to commit to a totally—in bad times—illiquid investment. I can tell you that in the 1970s you could not sell a picture. You’ll have investors who commit to a totally illiquid business, and you’ll have varying levels of speculative investing, which is great fun. Certainly you can make money at it. But I don’t think there’s yet a structure in place for someone to say, “I’m not interested in the art. I just want it as an asset class.”