The context in which one sees a picture matters; the proper response is to think about its effects on you

You couldn't make it up" read an exasperated headline in the Daily Mirror this week. The item it surmounted was very short and it reported that a nude woman had been "axed from a vintage wine label - because American feminists thought it was offensive". The story was picked up elsewhere, too, where it also served as a neat symptom of political correctness. The Times gave a few more details in its Diary: it seemed that Mouton- Rothschild had been obliged to withdraw 30,000 bottles of its 1993 vintage from America after objections to the Balthus drawing of a naked young girl which appeared on the label (Mouton-Rothschild has invited artists to decorate its labels since 1945). The Baroness was said to be surprised by the reaction: "The fragile and mysterious girl Balthus has drawn," she said, "seems to hint at some secret promise of undiscovered pleasure."

She does indeed. Clearly not a "woman", as the Mirror had described her, the pre-pubescent girl lies back, arms behind her head, and legs slightly parted. It is not an obscene pose, but it is not a modest one either (you could readily find its equivalent in any top-shelf magazine). Her impassive gaze is directed at the viewer, suggesting that she knows she is being observed and chooses not to conceal herself. To say that it is sexually inviting would be too crude, far cruder than the drawing itself. But that the picture stands on a border between innocence and experience is undeniable.

There was a certain oddity to the complacent press reaction to this story - the general assumption that the feminazis were on the march again - particularly in a week that offered a very different account of the power of images to disturb and affront. Reporting the victory of an independent newsagent in his battle not to be sent unsolicited soft-core porn by WH Smith, most newspapers were broadly sympathetic - this wasn't political correctness, it seems, but a moral stand, a proper argument about where and by whom such images should be seen. The superficial distinction is obvious - one was art (to be defended) and the other was porn (indefensible). But looked at more closely the distinction offers an X-ray of the prevailing pieties.

Usually this century's increasing liberality about artistic subject matter is read as a history of diminishing prudery. Manet's Olympia shocked its original audience but could now happily decorate a greetings card. But it would be a mistake to see this as the triumph of aesthetic values over pinched morality, a protection of art against improper advances. It actually records a retreat, a diminishment of the power of the drawn or painted image. To make something safe can mean two things: to protect it from danger or, as in the case of defused bombs, to render it harmless. It's the latter that applies in the case of art.

Some of this is because photographs have greedily absorbed our anxiety about depiction, have occupied all of the limited attention that we can give to such matters (in a finite world we must choose what worries us - and in this century photography has presented a more pressing case). The effect has been that hand-made images, by contrast, have come to carry an idea of innocence or detachment from the real world, that world in which incitement or appetite can so easily smear the purity of our contemplation. At the same time there has been an accompanying breakdown of any sense of a hierarchy of the spaces in which we look at images, from the private salon to the public gallery, from solitary inspection to mass observation.

Last year, for example, Gustave Courbet's L'Origine du Monde, an explicit open-crotch painting of a woman's genitals (head and limbs out of frame), went on show in Paris. It was protected by bullet-proof glass and a permanent guard, not, presumably, because it was thought that it might offend art- lovers, but for fear of feminist protest. Courbet himself, though, would probably have been astounded that a picture commissioned for the private collection of a Turkish erotophile would eventually be displayed before a mixed gathering of men, women and children. "Today, we cannot remain indifferent to a painting of such intensity," said the French culture minister, but the untroubled display proved precisely the opposite. There were no protests - the inert gas of connoisseurship had rendered the picture impotent.

In one way, then, those who objected to the Balthus drawing on the wine bottle actually pay more honour to his art than those who think the fuss is just a laughable symptom of a new prudery. They at least recognise that the context in which one sees a picture matters, and that the proper response to art is to think about its effects on you, not simply glance and pass on.

It's relatively easy, in fact, to restore some sense of this. Imagine that the Times and the Mirror had learnt that the manager of a children's care home had decorated the interior with reproductions of Balthus's child nudes. The first assumption would not be, I think, that this was simply an expression of good taste or a laudable attempt to bring some beauty into young lives. As it happens, Balthus's paintings are not pornography but they are not simply pretty either - they touch on a peculiarly volatile subject for our society, the sensuality of children, and, unlike Mouton- Rothschild, they do not travel well - they need to be seen in a place where proper attention can be paid to them. In that sense, the Mouton- Rothschild story isn't an account of a defeat for art, but a perverse sort of victory.