What the $179m sale of Pablo Picasso's Women of Algiers can tell us about global inequality

Pablo Picasso's Women of Algiers was sold at auction at a record price of $179 million

Women of Algiers (Version O) is a fine painting, but no finer than many others by Picasso (Getty Images)

The record-setting price of Pablo Picasso's Women of Algiers did not seem to be a matter of much excitement at Christie's, which announced the $179 million sale with a casual tweet.

That may be because art dealers expect prices to keep rising. "I don't really see an end to it, unless interest rates drop sharply, which I don't see happening in the near future," one said.

Those of us baffled by that astronomical price tag might be surprised to learn that he’s probably right – and that the rising price of art can tell us about global inequality.

Neil Irwin of the New York Times said that if the maximum proportion of wealth someone would pay for a painting is 1 per cent, there would only be 50 people on the Forbes Billionaires List who could afford the 'Women of Algiers'.

The last time the Picasso was auctioned, in 1997, it cost $12.3 billion. There are more than four times as many people who could afford to bid on the painting now. But in that same time the painting has made a 462 per cent gain.

The same metric can be used to explain the price increases of anything that is limited supply, such as real estate, cars or wine: the richer the rich get, the higher the bidding, and the greater the divide between the super rich and the poor.

Even with all the money in the world, art prices are still a matter of taste. The Picasso’s new owners must be hoping it doesn’t go out of style.