Art and money have always been inseparable. As Andy Warhol declared almost four decades ago, “Business art is the step that comes after Art.” During the past several decades, however, this relationship has been transformed by the appearance of a new form of capitalism: finance capitalism.

In previous forms of capitalism -- agricultural, industrial and consumer -- people made money by buying and selling labor and material goods; in finance capitalism, by contrast, wealth is created by circulating signs backed by nothing other than other signs. When investment becomes more speculative, the rate of circulation accelerates and the floating signifiers, which now constitute wealth, proliferate.

The structure and development of financial markets and the art market mirror each other. As art becomes a progressively abstract play of non-referential signs, so increasingly abstract financial instruments become an autonomous sphere of circulation whose end is nothing other than itself. When the overall economy moves from industrial and consumer capitalism to finance capitalism, art undergoes parallel changes. There are three stages in this process: the commodification of art, the corporatization of art, and the financialization of art.

Virtual Versus Real

At the end of these interrelated trajectories, the real seems to have become virtual and the virtual appears to be real. But just when the circuit seems to be complete, the system implodes and the real returns.

When Warhol proclaimed art to be business and business to be art, he was acknowledging the overwhelming importance of postwar consumer culture. Not only had the center of the art world shifted from Europe to New York, but the U.S. had become the world’s dominant economic and military power. The work of many of the most influential artists of the era both reflected and promoted American values and power at home and abroad. Warhol’s artistic appropriation of the images and icons of consumer culture put on display both the machinations of consumer capitalism and commodification of art that was so vigorously promoted by the burgeoning gallery system.

With increasing economic prosperity, art, whose collection and exhibition had long been limited to the church and aristocracy, became the social marker for individuals aspiring to rise above the middle class. But even Warhol could not have anticipated the explosion of the art market by the turn of the millennium.

According to reliable estimates, by 2006, the private art market had reached $25 billion to $30 billion. Christie’s International and Sotheby’s, the two leading auction houses, reported combined sales of $12 billion, and more than two dozen galleries were doing $100 million in sales annually.

This phenomenal growth in the art market was not limited to the U.S. Global capitalism created a global art market. From 2002 to 2006, this market more than doubled, from $25.3 billion to $54.9 billion. This astonishing growth was fueled by emerging markets in Russia, China, India and the Middle East. The price of individual works escalated as quickly as the purported value of the financial securities with which they were being purchased. In 2006, Ronald Lauder, honorary chairman of the board of the Museum of Modern Art, purchased Gustav Klimt’s “Portrait of Adele Bloch-Bauer I” for $135 million, which at the time was the highest price ever paid for a single painting. One year later, Jeff Koons’s “Hanging Heart” sold at auction for $23.6 million, which was the highest price ever paid for a work by a living artist.

Flower Puppies

Koons is the poster boy for this frenzied commodification of art. What began in Warhol’s Factory in the 1960s ends in Koons’s factory, where his cast of assistants fabricates whatever he imagines. Whether pornographic figurines or cute flower puppies, remarkable craftsmanship characterizes Koons’s art. Just as Warhol, reacting to abstract expressionists, removed hand from work, so Koons further mechanizes the means of production.

There is, however, a critical difference between Warhol and Koons. Neither Koons nor his art gives any hint of the irony and parody that lend Warhol’s art its edge. While Warhol’s work unsettles, Koons’s art is crafted to reassure. Unapologetically embracing banality and freely admitting his ignorance of art history, Koons sounds more like Joel Osteen than Marcel Duchamp: “I realized you don’t have to know anything and I think my work always lets the viewer know that,” he once told a reporter. “I just try to do work that makes people feel good about themselves, their history, and their potential.” What is surprising is how many seemingly intelligent and sophisticated people have been taken in by this erstwhile stockbroker.

Having learned his trade on the floor of commodity exchanges, Koons does not move beyond the commodification of art. His exquisitely crafted works have become precious objects whose worth is measured by their rapidly rising exchange value. The next stage in the development of the art market -- the corporatization of art -- can be understood in two ways.

First, in the past two decades, many major corporations have appropriated the age-old practice of attempting to increase their prestige by purchasing and displaying art. In many cases, companies hire full- or part-time advisers and consultants to develop their collections. Second, and more interesting, a few enterprising artists have transformed the corporation itself into a work of art.

High and Low

The most interesting example of the corporatization of art is the work of the Japanese artist Takashi Murakami. Like Warhol and Koons, Murakami collapses high and low by appropriating images from popular culture to create oversized sculptures and his signature “Superflat” paintings.

But he has also expanded his artistic practice to create a commercial conglomerate that is functionally indistinguishable from many of today’s media companies, advertising agencies and leading corporations. In 2001, he created Kaikai Kiki Co., which currently employs some 70 people. According to the company website, the goals of this enterprise “include the production and promotion of artwork, the management and support of select young artists, general management of events and projects, and the production and promotion of merchandise.” The products marketed range from more-or-less traditional paintings, sculptures and videos to T-shirts, key chains, mouse pads, cell-phone holders and even $5,000 limited-edition Louis Vuitton handbags. His 2007-2008 exhibition, “© Murakami,” at the Los Angeles Museum of Contemporary Art included a fully operational Louis Vuitton boutique.

Having formed a hybrid of a media corporation, advertising company and a talent agency, Murakami dubbed his for-profit corporation a work of art. One of the primary functions of this novel entity is the organization of a biannual art fair in Tokyo, “GEISAI,” which allows clients (young artists) to exhibit their work for a fee. As the artist and photographer Walead Beshty has observed, “the delirious intricacy of Murakami’s unrepentant entrepreneurialism” is hard not to appreciate. Kaikai Kiki’s “tentacles extend into a network of alliances spanning the entertainment industry, corporate image consultation, toy manufacturing and high fashion -- this aside from the production of art objects. His ability to mold productions (and services) to varying scale into an ornate constellation is as mesmerizing as his willingness to almost selflessly dissolve his own business complex.”

Yet Murakami’s corporatization of art does not express the fundamental economic transformation that has taken place since the late 1960s. As financial capitalism expands, the production of tangible goods is increasingly displaced by the invention of intangible products. This is as true in the art market as it is in the stock market.

(Mark C. Taylor is the chair of the Department of Religion at Columbia University. This is the first of two excerpts from his new book “Refiguring the Spiritual: Beuys, Barney, Turrell, Goldsworthy,” to be published March 20 by Columbia University Press. The opinions expressed are his own. Read Part 2.)

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To contact the writer of this article: Mark C. Taylor at mct22@columbia.edu

To contact the editor responsible for this article: Michael Newman at mnewman43@bloomberg.net