Does Damien Hirst’s auction at Sotheby’s mean the end of the gallery?

    There’s a hell of a lot of money in art – but the artists don’t get it,” grumbles Damien Hirst, giving himself a thoroughly good scratch through the faded brown T-shirt he has decided to wear to Sotheby’s today. “What I find is unfair is the Van Gogh thing. The artist doesn’t make any money, but everyone else does.” That, at least, was how it used to be before Hirst himself entered the lists. Now the ratios appear to be changing. If things go according to plan – and most of the ridiculous stunts Hirst comes up with work out surprisingly well – then, a fortnight from now, the old way of making pots of money from art will look as out of date as last year’s winner of the Turner Prize.

    To understand what Hirst is doing by putting 223 new works up for auction at Sotheby’s, I suggest you go along to one of the presale viewings – daily until September 15, admission free – and search out his latest shark piece, The Kingdom. It’s a huge black case featuring an 8ft tiger shark suspended, as always, in formaldehyde. The hideously pointy mouth is wide open, as if it is going to eat you, and its evil little piggy eyes search you out with that terrifying one-directional stare sharks have. Tiger sharks, remember, can bite through the shell of a marine turtle. If they are feeling particularly peckish, they even eat each other.

    Once you have found the shark, imagine that it represents Sotheby’s. No, go further than that. Imagine that it represents the entire art world and the manner in which it pursues its business. See how predatory it is, how cunning, how fixated on its prey, how implacable and ruthless. Now stand in front of this evil killing machine, look it straight in its piggy little eyes and start flicking V-signs at it. Go on. Dance around in front of it, wiggle your behind at it, stick your tongue out between your lips and blow raspberries at it. That, more or less, is what Damien Hirst is doing to the art world by putting 223 new works up for sale at Sotheby’s.

    The art world, you see, doesn’t do things this way. The way it is supposed to happen is that new art is sold by dealers in galleries, and only when it has been around the houses a few times does it turn up again in the auction rooms, to be resold for a profit. That is how it has always been. Sotheby’s has been around since March 11, 1744, when a certain Samuel Baker auctioned a selection of rare books “in all branches of Polite Literature” at his office in London, and not once in the intervening two and a half centuries has the company sold new work by a living artist direct to the public.

    “Yeah, but if you don’t like the rules, change the rules,” chirps a noticeably chipper Hirst as he leads me through the extraordinary labyrinth of sharks, butterflies, bulls, skulls, scalpels, gold bars and diamonds he has somehow managed to cram into the formerly elegant Sotheby’s galleries on New Bond Street. The plush spaces were created for the display of 42-piece Sèvres tea services, not for full-size zebras in glass cases, so the art sometimes seems too big for its surroundings. But the resulting claustrophobia merely adds to the splendid London buzz of it all. Anyone seen the recession? Not in here, mate! Squeezing your way through these remarkable sights is a bouncy and exciting journey. Hirst has forced Sotheby’s to get in touch with its inner branch of Accessorize.

    “I was indoctrinated by the gallery system – that you don’t do auctions,” he admits with another bout of happy scratching as we stand in front of a very convincing unicorn created by appending a narwhal horn to the forehead of a snow-white pony. “But who says you have to do it this way and not some other way?”

    It’s a good question. Indeed, it’s an important question. As far as I know, there is no actual rule written down anywhere stating that auction houses are not allowed to sell new work. Like so much of the art world’s behaviour, the traditional division of the spoils between the auctioneers and the dealers has been governed instead by nods and winks, gentlemanly handshakes and mysterious exchanges of glances.

    The way it used to work, Hirst expands, happily spilling the beans on the furtive aspects of the art world’s behaviour with a Dennis the Menace peskiness that I adore – and which only really powerful people can risk – is that an “unofficial arrangement” was in place ensuring that the auction houses only sold work that was five years old or more. Anything newer than five years old was the preserve of the dealers. Recently, however, as the big auction houses began deriving more and more of their income from contemporary art, the dealers found themselves being squeezed. First, the dealers’ window was tightened from five to two years. Now, with this sale, it has been banished altogether.

    Hirst is far too canny a diplomat to admit publicly what all this could mean for the art world, so let me admit it for him. If this auction works, the dealers are stuffed. There is absolutely nothing to stop any artist anywhere selling their work direct through the auction houses. Bang goes the dealer’s 50%.

    It was Sotheby’s who approached him about the sale, not the other way round. In fact, it is always on the phone asking for unsold pieces to be put up for auction. His answer has always been yes – if it takes new work. But that has been the sticking point. Because of the unwritten arrangement with the dealers, Sotheby’s has never been prepared to sell new pieces by him. Until now.

    Everything in this sale has been made specially in the past two years. That in itself is an astonishing achievement. These days, Hirst runs no fewer than six studios, divided between London, Devon and Gloucestershire, and each of them has been working like the clappers to produce this much art in these sorts of sizes in this kind of timescale. Not only is the huge selection of offerings the largest exhibition Sotheby’s has ever put on, it forms the largest Damien Hirst show there has ever been.