May 18 (Bloomberg) -- A young, struggling Andy Warhol, so the story goes, sought advice as to what kind of art he should make. Something he truly loved, was the reply. So Andy produced a picture of dollar bills.

Whether that anecdote is true or not, the Pop-Art icon would surely have smiled as the hammer came down at Christie's International on Wednesday for his 1963 work ``Green Car Crash.'' Even Warhol's prolific silk-screening factory never produced enough notes for the $71.7 million record price.

What should the rest of us should make of this -- or the news that a 1950 Mark Rothko abstract, ``White Center (Yellow, Pink and Lavender on Rose),'' sold for a shade more, $72.8 million, at Sotheby's a day earlier? These prices, for works by artists who within living memory were struggling bohemian eccentrics, are phenomenal. Has the art world gone crazy?

Perhaps, but it isn't anything new. There are those who would say art prices parted company with sanity some time ago. As long ago as 1984, critic Robert Hughes composed a Jeremiad on the subject. What we are seeing in the last years of the 20th century, he wrote, is a kind of environmental breakdown in the art world.

The cause, he argued, as is common with such catastrophes, was a combination of exploding population and shrinking resources. The prognosis was evidently grave -- and that was in the balmy days when art was cheap. Hughes related how the government of Australia had been shaken in the 1970s by the purchase of Jackson Pollock's ``Blue Poles'' for about $2 million by the National Gallery of Australia.

Going Fast

Last year, a Pollock -- and a less celebrated one at that -- changed hands for $140 million. So should we be worried? Essentially, Hughes's diagnosis is correct. These prices are generated by more and more, richer and richer collectors chasing fewer and fewer examples of blue-chip, modernist art.

The prices of works of art are a function of supply and desire, as with the cost of any commodity. We now have a lot of extremely wealthy people around. Warhol looks very affordable to a hedge fund manager earning $300 million a year.

On the other hand, most celebrated masterpieces are now in museums. That helps to explain why these headline-grabbing bids are attracted by what you might call good, above-average works.

The Warhol car crashes are generally regarded as one of his best series. The critic Clement Greenberg averred, rightly, that 1950 was a vintage year for Rothko. But in neither case, nor last year's record Pollock drip painting, are we talking about the artists' greatest efforts. It's more a case of the best that's now available.

Filthy Lucre

Even so, I doubt that anyone need worry that much, possibly not even the lucky squillionaires signing those checks. Of course, prices can go down as well as up. That's always true, and not only of art. Rich people always have bought art for sums that made others blink, though in retrospect the amounts tend to seem quite small.

There is, inevitably, the shock expressed by those who feel that the crudity of finance sullies the purity of art. Hughes again: ``The monetary value of museum art has moved to the forefront of people's experience.'' Masterpieces ``have been invested with a spurious authority, like the facade of a bank.''

The appropriate response to such concerns is phooey. It's perfectly easy to look at Michelangelo's Sistine ceiling without brooding on its potential value if the pope were to scrape it off the plaster and put it up for sale.

On reflection, the only clear losers from the current bull art market are those with less-than-gigantic fortunes who imagined that they might buy major works by world-famous artists. To them I say: serves you right.

The correct point to have bought that Rothko was 1950 -- or at the latest 1960, when its previous owner, David Rockefeller, bagged it for $8,500. Now you'll just have to find something else. There's good art around to suit every pocket. That's the way it works.

(Martin Gayford is a critic for Bloomberg News. The opinions expressed are his own.)

To contact the writer of this story: Martin Gayford at martin@cgayford.freeserve.co.uk.

Last Updated: May 18, 2007 01:55 EDT