In periods of rapidly rising prices such as the present, speculators sometimes make quick profits, and over time, astute collectors may reap significant financial gains. But art cannot be quantified or analyzed like other types of investments, and it should not be treated as such. Auction sales results are not like the Dow Jones industrial average. A lot of what goes on in the salesroom is theater: auctioneers egging on a lone bidder until the reserve (the seller’s undisclosed minimum price) is met; dealers paying huge prices for pieces by artists in whom they have a vested interest; art consultants who, working on commission, have every incentive to advise their clients to overspend. While one share of Google stock is the same as another, no two Picassos are alike. The tricky business of judging comparables is made all the more treacherous by today’s weak middle market and the pronounced devaluation that occurs when works fail to sell quickly. Ostensibly scientific statistical surveys, such as the Mei/Moses Fine Art Index, that try to measure appreciation by charting auction results ignore the fact that only art with sufficiently high resale value ever gets to auction. Especially in the contemporary arena, a great deal of art is not so easily resold. “Flipping” work quickly for a profit is even more difficult than holding out for long-term gains, especially when one factors in transaction costs such as commissions, storage, shipping and insurance.

We are so addicted to growth as a measure of economic success that we have been inclined to see ever-upward spiraling art prices as signs of a healthy market. In fact, these price increases—selective and erratic—are indications of an unstable market. A number of collectors, dealers and artists have benefited handsomely, but many have not. Thwarted investment hopes coupled with a string of auction or gallery failures may well lead to an overall loss of confidence in the art market. If that happens, the bubble will burst, just as the doomsayers have predicted.

On the other hand, a gradual leveling off of art prices could be beneficial, allowing a more cogent relationship to develop between value and quality. A logical continuum between the low and high ends of the market, including a solid middle market, would not only establish a more viable price structure but would also allow more collectors to participate on every level. Whichever scenario comes to pass, anything that serves to undercut the present obsession with glamour, transitory fashion and speculation will, over the long term, be good for the market and, more to the point, good for art.

Jane Kallir is co-director of the Galerie St. Etienne in New York.