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Banksy's art stunt is economic genius

The street artist has put a clear, separate market value on the story behind the object, something notoriously difficult to do.

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The Banksy artwork's clever partial destruction (the lower part of the picture now hangs prettily out of the frame, evenly cut into narrow strips) will only increase its value, since the happening was so public and the stunned reactions of people in the auction room have been captured on video.

New York

BASED on experiments conducted by himself and others around his work, Banksy, the famous street artist, could write an economics dissertation on the monetary value of art.

In a way, that unwritten paper could be his crowning achievement.

The self-shredding stencil of a girl letting go of a heart-shaped red balloon, which made headlines over the weekend, was only Banksy's latest contribution to the empirical study of the value of art.

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With his latest stunt - a shredder embedded in the frame was turned on remotely after the hammer fell on a US$1.4 million sale - the spray-painting star tested the nature of demand at the high end of the market.

The result likely will be that the artwork's clever partial destruction (the lower part of the picture now hangs prettily out of the frame, evenly cut into narrow strips) will only increase its value, since the happening was so public and the stunned reactions of people in the auction room have been captured on video.

Now, we have the auction price before the shredding - and we'll likely see a higher post-shredding price, too, putting a clear, separate market value on the story behind the object, something notoriously difficult to do, more difficult even than pricing pure performance art.

Banksy is probably the only artist in history for whose work such a wide range of market prices, from less than zero to millions of dollars, has been documented.

When he started out, his work was sometimes seen as vandalism and painted over like any other graffiti, implying a negative value. Eventually, people started lifting Banksy work off walls and selling it, sometimes for hundreds of thousands of dollars.

But Banksy hasn't just accepted this irony of stardom as a stroke of luck or as assertion of higher justice. He's studied it.

In 2013, the artist set up a stall in New York's Central Park, where a bored senior citizen peddled signed originals, worth tens of thousands of dollars at auction, for US$60 each.

No one bought anything for hours; he made a grand total of US$420 in a day. The reason, of course, was that to the passers-by, people who had never heard of Banksy or didn't believe he'd sell his work so cheaply, there was no story behind the images.

If Banksy were an economist rather than a satirical street artist with leftist views, he might have wrapped his findings into a model - perhaps like the one described in Moshe Adler's purely theoretical 1985 paper that sought to explain "why a hierarchy in income could exist without a hierarchy in talent".

Adler wrote: "The main argument was that the phenomenon of stardom exists where consumption requires knowledge. The acquisition of knowledge by a consumer involves discussion with other consumers, and a discussion is easier if all participants share common prior knowledge. If there are stars, that is, artists that everybody is familiar with, a consumer would be better off patronising these stars even if their art is not superior to that of others."

It's not often that one finds a star willing to contribute as knowingly and creatively to this theory as Banksy does. "When you look at how society rewards so many of the wrong people, it's hard not to view financial reimbursement as a badge of self-serving mediocrity," Banksy once wrote. Contempt can be a strong motive for exploration.

In a way, it's a shame the images can no longer be separated from the economic experiments. Once upon a time, they were fresh and surprising - and made better tattoos.

Now, you'd need to be Justin Bieber to get one of the balloon girl. But perhaps it's best to accept it that Banksy's true talent is less in his painting (or, rather, stencilling) than in revealing the ways in which the world interacts with art and artists.

The body of bittersweet knowledge he's building up will be his legacy when the last of his stencils fade from walls. BLOOMBERG