I’ve got a little, make that a big, problem with contemporary art auctions. Last fall I set out to investigate it further. Beginning November 3, the day after the U.S. presidential election, I went to as many sales during New York’s big fall auction week as I could stomach. This turned out to be a half-dozen spread out among the major auction houses—Christie’s, Sotheby’s, and Phillips. I learned a lot, but the problem only grew.

Contemporary art auctions are bizarre combinations of slave market, trading floor, theater, and brothel. They are rarefied entertainments where speculation, spin, and trophy hunting merge as an insular caste enacts a highly structured ritual in which the codes of consumption and peerage are manipulated in plain sight. Everyone says auctions are about “quality.” In fact, auctions are altars to the disconnect between the inner life of art and the outer life of consumption, places where artists are cut off from their art. Auctions have nothing to do with quality. At auctions new values are assigned and desire is fetishized. Consumption becomes a sort of sacrament, art plays the role of sacrificial lamb, and the Ponzi scheme that surrounds it all rolls on.

Auctions are like stripteases: They rely on people being enticed by what’s just out of reach. The auctioneer announces the lot number, the crowd stirs, and a turntable revolves to reveal the forlorn-looking work that is frequently guarded by one of the only black people in the room. Echoing this antebellum nightmare, petite blondes in little dresses sit close by. They’re there to spot bids but rarely actually do anything. Occasionally, a handsome swain, assumedly another employee, approaches one of them from behind and whispers something into an ear. This lends a certain kinkiness to the proceedings. Of the hundreds, sometimes thousands of people in these rooms, only a tiny handful actually bid. The rest are there for kicks, networking, tracking values, and who knows what. Meanwhile the ghostly “phone bidders” buy their art in public and private at the same time.

In my season at the auctions I saw seas of white people captivated by ruby-throated auctioneers (all European, all insanely artificial in their mannerisms). These showmen gesticulate and croon their odious, melodious, mathematical songs, “I have $4 million. Do I hear 5 million?” I looked on as three-quarters of a billion dollars changed hands and silently bade farewell to works of art that will probably not be seen again in public in my lifetime. I saw a Mondrian, a Modigliani, and a Gauguin bring $21 million, $31 million, and $39 million respectively. A Johns drawing fetched $11 million, a Warhol “Race Riot” $15 million, and a Maurizio Catalan went for $3 million. I felt faint when a Matthew Barney photo in an edition of 10 that I had seen in his studio years before went for $200,000, then felt fainter as a restaurateur from a canceled reality-TV show bid up a photograph while a stunning blonde ground her pelvis against his groin every time he waved his paddle. I was dumbfounded as a third-rate painting by the second-rate Marlene Dumas broke the million-dollar mark, bought by one of her dealers. Numbers didn’t matter any longer as the crowd carried on and the tote board tallied prices in international currencies. Suddenly, Bush’s election victory seemed quaint.

What’s out of whack at the auctions, however, isn’t just the monetary values of the art, it’s the values of the people who are buying and selling it. Wealthy collectors and their spawn tell everyone they love the art they own. Then—instead of selling the top several works and being set for life and perhaps giving the rest to a museum and changing the course of that museum forever (while receiving a tax benefit for themselves)—they sell their collections at auction and everyone applauds. These collectors don’t have a clue about what it means to own art. Like the auction houses, they’re only interested in money and publicity.

The greed, stupidity, and cupidity of many of the people who buy and sell their art at auctions has created what I call the “parallel market”: artists whose auction prices far exceed what their work costs in galleries. Christie’s international co-head of post-war contemporary art, Amy Cappellazzo, ruefully admits, “Some people prefer to spend $500,000 at auction on something they could buy privately for $50,000.” She calls these people “traders.” Auction houses rely on the fact that many of their buyers either don’t know that much about art, that they’ll buy almost anything if it has the right name on it, or that they don’t care. So much for “quality.”

Art worlders continually grouse about the skyrocketing prices and privately say they hate auctions. Yet, too many of them are making too much money off the system as it is to step away. It’s becoming a vicious cycle. Recently The New York Times featured a front page “Arts & Leisure” article titled “The X Factor” about why the art of women doesn’t sell at auction for the same prices as that by men. Among other examples, it cited an Elizabeth Peyton painting that “only” sold for $300,000 while John Currin and Luc Tuymans fetched more than a million. What the article and all of us should ask is why any of them—good or bad—should sell for much more than, say, $100,000.

Auctions have always and only been commercial. By now, they’re so craven they make you see that art fairs might be ways that artists and gallerists can take back at least some of the control. When this moneyed phase ends, a lot of people are going to be making a lot of excuses or maintaining that they were never part of this. Whatever anyone says, auctions are nasty pieces of work.