Sara Friedlander, the 27-year-old head of First Open Sale at Christie’s in New York, has a startling view of American art history. “Nothing good was made in the 19th century, nothing really good was made in the 18th century and American art in the 20th century for the first three, four or five decades was very elitist.”

There was, in this view, no American Titian or Picasso, Raphael or Matisse. And then, suddenly, on July 9th 1962, there was. That was the date of the first solo show by Andy Warhol, the 33-year-old son of Slovakian immigrants. It was at the Ferus Gallery in Los Angeles and it consisted of a series of 32 paintings of Campbell’s Soup Cans, one for each flavour—beef, clam chowder, cheddar cheese, etc. The response was underwhelming. Five sold for $100 each, but the gallery owner bought them back to keep the series intact.

Nevertheless, by the end of that year, Warhol had conquered New York, the capital of the art world, and America had the artist for which she had been waiting. “He reached a public”, says Friedlander, “that no artist was able to do before him. Because he was able to accomplish what nobody else had done and in the way he was able to influence what came after him, I think that makes him, I would guess, the greatest artist of the 20th century.”

There is nothing unorthodox about this claim. Almost unanimously, today’s young art fans adore Andy as earlier generations adored Pablo Picasso or Jackson Pollock. “To the under-45s”, says Georgina Adam of the Art Newspaper, “Warhol is what Picasso used to be to an older generation…and, like Picasso, he has become a man for all seasons.”

This vast fan base has been reinforced by the shrewd licensing arrangements negotiated by the Andy Warhol Foundation for the Visual Arts, established under the terms of the artist’s will. There have been Warhol skateboards, Warhol editions of Dom Pérignon champagne and countless Warhol fashion lines, including Pepe jeans and Diane von Furstenberg dresses. But, in a wider sense, Warhol’s colours and styles—especially his use of pop style—pervade the culture. Any city street shows evidence of the astonishing power and durability of his imagery.

The market backs the enthusiasm of the young. Those original soup cans are not for sale: bought by the Los Angeles dealer for $1,000, they were sold to the Museum of Modern Art in New York in 1996 for $15m, a deal that promoted Warhol to art’s first division. In 2008 a 12-foot-wide Warhol painting entitled “Eight Elvises”, made in 1963, broke the $100m barrier, putting him in the same lofty bracket as Picasso, Pollock, Willem de Kooning and Gustav Klimt. The highest auction price, meanwhile, is $71.7m for “Green Car Crash” (1963). To put these dizzying prices in perspective, Titian recently achieved his highest ever auction price—$16.9m for “A Sacra Conversazione” from about 1560. This is an important picture by an artist many regard as the greatest painter that ever lived. But the market says that Warhol is more than five times better.

Warhol is now the god of contemporary art. He is indeed, it is said, the “American Picasso” or, if you prefer, the art market’s one-man Dow Jones. In 2010 his work sold for a total of $313m and accounted for 17% of all contemporary auction sales. This was a 229% increase on the previous year—nothing bounced out of recession quite like a Warhol. But perhaps the most significant figure is the rise in his average auction prices between 1985 and the end of 2010: 3,400%. The contemporary-art market as a whole rose by about half that, the Dow by about a fifth. “Warhol is the backbone of any auction of post-war contemporary art,” says Christopher Gaillard, president of the art consultants Gurr Johns. “He is the great moneymaker.”

Some glee in the market is understandable—and not just because of the money. Warhol believed in fame and wealth: they were intrinsic to his aesthetic. The auctioneers are co-creators, carrying on Warhol’s work post mortem, and the salerooms are extensions of the galleries. “How he would love it all!” says Sara Friedlander of the current frenzy. “I can see him at an auction, seated at front and centre with his Polaroid camera and his fright wig…I think of him in every sale we do.”

Before Warhol, the believers argue, there was sterility; after Warhol there is a ravishing, visual cornucopia. Without him, they say, there would be no Jeff Koons, no Richard Prince, no Banksy, no Takashi Murakami, no Damien Hirst. Many of the fashionable artists in the world emerged from beneath Andy’s fright wig.

There would also be no fun without Andy. The starting point for any assessment of his legacy is his instant accessibility: nobody need ever be puzzled by a Warhol—his lavish colours, his epic simplicity, above all his subject matter. “Andy always painted famous things,” says the artist Michael Craig-Martin, “whether it was Liz Taylor or a Coke can.”

“Even children love him,” says Gul Coskun, a specialist Warhol dealer in London. “They stop their parents outside my shop. His pictures are big, colourful, they are not taxing academically. But they are taxing financially now.”

All of which raises the question: is this a bubble—critical and financial—that will soon burst? In market terms, it seems likely if only because the rise in values has been so extreme. But the problem is that the market conceals more than it reveals. There are, it is said, 10,000 individual works—the exact number will only become clear when the vast catalogue raisonné is completed by the Warhol Foundation. They have just started work on Volume Four of this mighty project, but there is no current indication of when it will be finished.

About 200 Warhols come on the market each year. A large percentage are always bought by José Mugrabi, a New York-based dealer-collector who turns up at auctions in jeans, black T-shirt and baseball cap. Mugrabi made his money in textiles in Colombia. He moved to New York in 1982 and began collecting art. He likes to be seen to be buying and he is now believed to own 800 Warhols, some of them first-rank. Last year he is said to have bought more than 40% of the Warhols that came on the market. This scale of participation distorts the market and entails a risk of a swift collapse if Mugrabi were to withdraw. “The question is,” says Noah Horowitz, author of “Art of the Deal: Contemporary Art in a Global Financial Market”, “what value would those works sustain if and when the market sees some sort of correction?”

Probably only the Andy Warhol Foundation, which also oversees authentication and commercial exploitation of the works, has more Warhols than Mugrabi. The gallery-owner Larry Gagosian has a few too: in 2008 he spent around $200m on 15 to 20 Warhols from the collection of Ileana Sonnabend, an early fan. It would not be quite true to say that Mugrabi, Gagosian and the foundation control the market, but nobody doubts their combined ability to push up prices by sheer brute force. And the prices are further bolstered by museum demand. Few museums with aspirations to represent contemporary art want to be without one of Warhol’s pictures. But this demand is subject to critical fashion. It is safe, therefore, to assume the prices are higher than a strictly open market would allow.

On top of that, the foundation always has the last word on what is and is not a Warhol—which can be tricky given that the work in question may be no more than a Brillo-pad box. Its authentications have not always been accepted. Joe Simon, an American film producer, has been fighting a long war with the foundation over the authenticity of a self-portrait he bought for $195,000 in 1989 (for a full account, go to myandywarhol.com). Later, wanting to sell, he submitted it to the foundation, which pronounced it inauthentic, stamping it “denied”. A further resubmission resulted in another stamp—he had, in the jargon of the trade, been “double-denied”. The two marks, Simon feels, have ruined the painting. He now plans to sue the foundation. “This is not just my fight,” he says, “it’s a fight for the integrity of Andy Warhol’s work.”

“The problem is”, says Georgina Adam, “that the foundation wants Andy Warhol to be a high artist with high ideals, they want him to be like Leonardo da Vinci. They don’t want to think that he just signed a lot of stuff without even looking at it, but he did.”

If the works aren’t always what they seem, neither are the auctions. “These sales are no longer auctions,” says Allan Schwartzman, an art adviser. “To attract material at the top end, auction houses pre-sell the material to ‘irrevocable bidders’. They are deliberate, orchestrated events.” Irrevocable bids are guaranteed, pre-saleroom offers that ensure a work does not go unsold. But they also ensure that the price at auction may not strictly be a transparent meeting point between supply and demand; at times the auctions are little more than a theatre of private deals. Such arrangements are commonplace throughout the market, but they are especially important in the case of Warhol because of his absolute ascendancy and because of a market that is active while still being surprisingly narrow.

Christopher Gaillard does not think this is a problem. “Warhol is a global commodity now. His work is certainly supported by some key players we read about in the papers, but it’s my belief that this is much more far-reaching than that. Warhol is the most powerful contemporary-art brand that exists. Picasso is another. It’s about sheer, instant recognition and what comes along with it is a sense of wealth, glamour and power.”

Whatever the hidden truth of the market, Warhol’s ascendancy is out there in plain sight. And it is a perennial truth of the art business that high values tend to attract critical endorsement. “If you look at art history and criticism,” says Julian Stallabrass of the Courtauld Institute in London, “a lot of it is promotional literature.”

It is almost inevitable, therefore, that Warhol should be critically as well as commercially acclaimed. But the question is: does he deserve it? The answer begins with a pair of shoes.

In 1886 Vincent van Gogh painted a pair of very worn boots. It was a small painting—18 inches by 15—but a powerful one. It remains one of van Gogh’s most familiar images. It is also one of the most densely discussed. Both the philosopher Martin Heidegger and the theorist and critic Frederic Jameson have pondered these boots. What they both conclude is that, in Jameson’s words, “the work in its inert, objectal form is taken as a clue or symptom for some vaster reality which replaces it as its ultimate truth.”

The painting is not simply an arrangement of pigments, nor even, primarily, a representation of something. It is, rather, a statement about a world that lies beyond the painting—the hard life and work of the peasant who wore these boots. It is a portrait of the man and his life painted in his absence. The painting is a window through which we see not just these boots but their place in a world of toil and struggle.

That, in fact, is exactly how people usually look at art, as a physical embodiment of wider meanings. What other reason is there to look at all? But Jameson goes on to compare van Gogh’s boots with a Warhol print from 1980-81, “Diamond Dust Shoes”. This work, says Jameson, “evidently no longer speaks to us with any of the immediacy of van Gogh’s footgear; indeed, I am tempted to say that it does not really speak to us at all. Nothing in this painting organises even a minimal place for the viewer, who confronts it at the turning of a museum corridor or gallery with all the contingency of some inexplicable natural object.”

That, in a nutshell, is the entire history of Warhol criticism. It all pivots on the meaning of the word “meaning” when applied to the visual arts. Warhol, a far more intelligent man than he liked to appear, understood this perfectly. “The more you look at the same exact thing,” he said in 1975, “the more the meaning goes away and the better and emptier you feel.” He also said: “Always leave them wanting less.” He was in pursuit of an art that meant nothing.

The context in which his anti-definition of “meaning” appeared was that of a culturally triumphant post-war America. New York had usurped Paris as the capital of the art world and had given birth to its own art movement to rival those of the old Europe. Abstract expressionism (“AbEx”) was widely seen as a statement that the United States need no longer suffer from any kind of cultural cringe. It has even been argued—though, in detail, also disputed—that these artists were financed and promoted by the CIA as ambassadors of freedom.

AbEx was a highly romantic version of modernism. It was a heroic confrontation between the artist and the canvas. The result, in the words of the critic Harold Rosenberg, was “not a picture but an event”. Jackson Pollock laid his canvases on the floor and dripped paint on them. Mark Rothko’s shimmering veils of paint yearned romantically for the beyond. Morris Louis and Barnett Newman barely disturbed the blankness with their marks. Willem de Kooning embraced chaos as he stabbed at his just-about-figurative images. These were existential heroes of Bohemia, not of the saleroom; their quest was limitless, spiritual and meditative.

The AbExes found their voice in Clement Greenberg. An incisive, highly intellectual critic, he explained the artists to themselves and the world. Primarily, he told them that a painting was not a window on the world; it was a world, a wholly distinct, two-dimensional event. The viewer and the artist both engaged with paint and canvas, not with some external realm, like the life of the peasant that lay beyond van Gogh’s boots. Painters were not even required to engage with three-dimensional space, such was the primal truth of the canvas.

Meaning in abstract expressionism lay in the heroic act of the artist. In Rothko it lay in a form of spiritual contemplation; in Pollock it emerged from the carefully contained workings of chance. The personality of the artist was crucial. The paintings were windows that looked inwards to psychology rather than out to the world. They were hermetic, recognisable only as elevated forms of introspection. As Sara Friedlander puts it, they were “only interested in themselves”.

AbEx was the orthodoxy of the 1950s, but it was a paradoxical posture, curiously opposed to the spirit of the age. The post-war boom was getting under way and new machines and goods were raining down on consumers. The world was entering the image-soaked future foreseen and described by Marshall McLuhan. And yet this was precisely what these world-conquering artists were not painting.

Warhol was as soaked in images as anybody. Through the 1950s he was a successful commercial artist, known, among other things, for his advertisements showing highly distinctive blotty ink drawings of shoes. But he was also a devoted gallery-goer, determined to break into the citadel of high art. In fact, though he is often talked about as the godfather of pop art, he was beaten into the citadel by several other aspirants, notably Roy Lichtenstein who, from 1961, produced his giant blow-ups of comic book images. Desperate, Warhol turned to Muriel Latow, an adventurous gallery owner. According to Tony Scherman and David Dalton in their book “Pop: The Genius of Andy Warhol”, he said to her, “Just tell me what to paint.”

In return for a $50 cheque, she told him “to think of the most common, everyday, instantly recognisable thing he could”. He thought of his doting mother, Julia Warhola. Warhol had been, according to the philosopher and critic Gary Indiana, her “tantrum-prone, acne-riddled, albino lion cub”, a difficult and sick child to whom she gave maximum attention. He was spoilt—the family’s “moody, tyrannical centre-piece” who “shaped weaknesses into weapons for rejecting anyone he didn’t like and avoiding anything he didn’t want to do”. Julia lived in the basement of the Manhattan town house he had bought with his money from his advertising commissions. She used to give him soup for lunch—Campbell’s soup.

The cans he exhibited in Los Angeles emerged both from his mother’s menu and from a love of the colourful world of consumption. So they were not quite as impersonal as is often claimed. “Warhol’s approach to pop culture”, Scherman and Dalton argue, “was far from purely aesthetic: from childhood on, he loved its products and worshipped its heroes and heroines.”

But his psychology played no part in their reception: they were seen as works devoid of introspection, shocking statements of the obvious. Whereas innocent viewers could stand in front of a Pollock and get no answer to the question “What is it?”, they would get an immediate answer standing in front of a Warhol. “It’s a soup can.”

“It seems”, wrote the artist Donald Judd of a 1963 Warhol exhibition, “that the salient metaphysical question lately is ‘Why does Andy Warhol paint Campbell Soup cans?’ The only available answer is ‘Why not?’ ”

The 1962 Los Angeles show was followed, a few months later, by New York exhibitions which featured the massive “Marilyn Diptych”—50 versions of a photo of Marilyn Monroe, 100 Soup Cans, 100 Dollar Bills and, even more momentously, a pile of Brillo boxes.

Arthur Danto was a professor of philosophy at Columbia at the time. Interested in contemporary art, he visited the Stables gallery and saw the boxes. “I was working on a five-volume work on analytical philosophy,” he tells me, “my head was full of Descartes and Russell and all the other tough thinkers and, when I walked into the Stables, I suddenly thought that art has finally caught up with philosophy and Andy did it. I was stunned and I changed the whole direction of my work. This was a completely new way of thinking about art.”

Danto—who is now the grandest pillar in the edifice of Warhol appreciation—was preoccupied with how we evaluate our perceptions. From Descartes he inherited the mystery of how we could tell the difference between waking and sleeping consciousness. How did we know which was more real? Warhol’s boxes asked the same question by replacing “real” with “art”. How did we know which was more “art”, a van Gogh or a Brillo box? “Andy showed that art and non-art cannot be told apart just by looking at them.”

Marcel Duchamp had done this decades earlier, in 1917, by taking a urinal, signing it, exhibiting it and calling it “Fountain”. But there was still something timeless—and, therefore, arty—about a urinal. Warhol hardened the theme by choosing something that was utterly contemporary and ephemeral. The following year he made the movie “Sleep”, showing a man sleeping for five hours and 20 minutes. He had also, by then, founded the Factory, the defiantly named Manhattan location that became his headquarters, production line and studio. Its flamboyant radicalism made him a hero of the young, often with catastrophic consequences.

“I had a couple of students, actually my best students,” Danto says. “They decided to go down to the Factory and they were ruined, completely ruined, as thinkers. They got druggy. I had imagined they would be serious philosophers but that never happened.”

The defiance of the name lay in the idea that art could be produced in a factory, like any other consumer good. Warhol’s art was not supposed to be a matter of emotion, introspection or spiritual quest; it was to be an image, pure and simple. “During the 1960s,” he wrote knowingly in 1975, “I think, people forgot what emotions were supposed to be. And I don’t think they’ve ever remembered.”

This pursuit of affectlessness was what outraged—and still outrages—some critics and artists. According to Gary Indiana, de Kooning screamed “You destroyed art!” in Warhol’s face.

In a crucial passage in his book “American Visions” (1998), the great critic Robert Hughes summarised Warhol’s aesthetic: “It all flowed from one central insight: that in a culture glutted with information, where most people experience most things at second or third hand through TV and print, through images that become banal and disassociated by being repeated again and again and again, there is a role for affectless art. You no longer need to be hot and full of feeling. You can be supercool, like a slightly frosted mirror…Warhol...was a conduit for a sort of collective American state of mind in which celebrity—the famous image of a person, the famous brand name—had completely replaced both sacredness and solidity.”

Clement Greenberg, meanwhile, realising that Warhol had flung a pot of vinyl paint in the face of the AbExes, was dismissive. “I find his art sappy. The big-screen portraits and all these things. Who cares about them?” He knew the critical basis of his entire career was being assaulted by pop.

“The whole of pop art”, explains Stallabrass, “was a reply to Greenberg.” Greenberg was defending art as a specific category, something set aside from the ordinary world. But, as Danto saw, Warhol created art that was an arbitrary aspect of the ordinary. There was no special category, girded by a language of depth and meaning; there was just what was defined as art at any given time. Being famous and making money was as legitimate a goal for the artist as self-exploration.

Ever since, the central theme of anti-Warhol sentiment is that he sold out, not just himself but the whole idea of art. The philosopher Roger Scruton argues that he had nothing to say: it really was all about money. “It is worth pointing out that there is neither beauty, nor elegance nor style in anything that Warhol did, and that the very media he chose were reflections of the moral emptiness within him. But since the result (like the silkscreens of Marilyn Monroe) convey that emptiness, there is nothing in them to understand; in no way do they present a challenge to the observer, other than the challenge to his chequebook. And if you are extremely rich, extremely stupid and morally vacant, why not write a cheque to prove it?”

The pro-Warhol response to that is that it misses the point. The chequebook is the aesthetic. “I think the argument one could well make”, says Noah Horowitz, “is that in some sense his whole thing, his MO, his method of production was totally tied into that [the market], and it’s one thing to analyse and criticise and do something aesthetic with that structure but Warhol embraced it and made it his aesthetic.”

So either Warhol was an empty product of money or he made art out of money. Take your pick.

Valerie Solanas was a radical feminist who believed in the violent creation of an all-female society. In 1967 she asked Warhol to produce her play “Up Your Ass”, but he lost the script and Solanas started demanding payment. Finally, in June 1968, she turned up at the Factory and shot him in the chest. It was a grievous wound—Warhol had to wear a corset for the rest of his life to, as he put it, “keep my insides in”—and he only just survived.

Solanas was imprisoned, though only until 1971, and she died in 1988. But she was not forgotten. In 1996 a film of her life—Mary Harron’s “I Shot Andy Warhol—appeared and some feminists still claim her as a hero of the cause. But she is also remembered as a key player in the history of contemporary art. The shooting was a creative as well as a medical turning point for Warhol. The experience seemed to intensify his own sense that his life was not quite real. “Before I was shot, I always thought that I was more half-there than all-there—I always suspected that I was watching TV instead of living life…Right when I was being shot and ever since, I knew that I was watching television. The channels switch, but it’s all television.”

Most now agree—even in the midst of the current frenzy—that the shooting marked the start of a steady decline in the quality of Warhol’s work. Nothing more vividly demonstrates this decline than two self-portraits, nearly 20 years apart, currently on display at Tate Modern in London. The picture from 1986, the year before his death, shows the now gaunt features in red, topped by his fright wig. It is striking and beautifully composed, but it is a poster, a one-liner. The picture from 1967 is haunting, powerful, with layers of vibrant colour that demand close examination.

When the average cultivated punter now thinks of a Warhol, they will almost certainly be thinking of a Marilyn Monroe, a Jackie Kennedy, an Elvis Presley, a soup can or even an electric chair made between 1962 and 1968. What they will not be thinking about is the ten portraits from 1980 entitled “Jewish Geniuses” or his endless pursuit of the rich, famous and powerful as patrons and subjects—Michael Jackson, Mick Jagger, Liza Minnelli, John Lennon, Diana Ross, the Shah of Iran. One thing nobody can really claim Warhol has in common with Picasso is lifelong inspiration and creativity. After the shooting he slowly ground to an aesthetic halt.

But perhaps it can be said that Warhol’s legacy is more wide-ranging than Picasso’s. Arthur Danto’s conviction is that he changed everything he touched, that his influence is universal. “Even Picasso was a more limited kind of figure, a great artist for sure, but he was an inventor of styles. I think what Andy was was an inventor of no styles at all.”

Warhol’s posture of opposition to meaning and the idea of the specialness of art was constantly being extended. In movies he subverted all artifice, not just by showing a man sleeping, but, later, by filming random scenes of anti-acting by his cast of “superstars”. In “A Novel” (1968) he took apart fiction by using straight transcriptions of the conversational ramblings of his friends. And, by adopting the Velvet Underground, he created the most savagely nihilistic rock band of them all. He even took on the philosophers—“The Philosophy of Andy Warhol (From A to B and Back Again)” (1975) consists of transcriptions of his spoken thoughts. But, though such things undoubtedly leave traces in the culture, they are dead ends in ways in which his best paintings were not. Nobody needs to do a mindlessly transcribed novel again or even read one, but many need to plunder the genuine riches of the pre-shooting Warhols.

Finally, Julian Stallabrass makes a crucial point about Warhol’s current stature. “You know this work really engages people in the art world. Maybe what has really changed in the last few years is that people have been finding out, essentially through publishing their own works on social networking sites, that making things that look a bit like art isn’t at all hard and that is very demystifying and empowering.”

Warhol now endorses a way of life. One simple technology—silk-screen printing—dominated his career. But it was enough to show today’s technology-laden, hyper-connected youth that they could do it too. With the instant publication of digital pictures and videos, anybody can become a cyber-Warhol, swimming in the great ocean that pop imagery has become. Apple’s Photo Booth software reduces the whole thing to a single click—just by selecting “pop art” under “effects” you can change your face into a very credible Warhol multiple self-portrait. Andy, in death, is a generation’s mentor.

The Andy Warhol Foundation and the market may want him to be Leonardo or Picasso, but the young want him to be what Arthur Danto says he is, the overthrower of all such pretensions. It is in this balance of aspirations that Warhol, the god of contemporary art, now exists. In time this phase will pass and the idea that Warhol is a greater artist than, say, Robert Rauschenberg or Jackson Pollock will be seen as the absurdity that it is. The bubble will burst, prices will fall and the drinker of all that Campbell’s soup will be restored to his rightful place—as a briefly brilliant and very poignant recorder of the dazzling surface of where we are now.

The intellectual excitement of his attempt to destroy meaning is also close to its sell-by date. Prompted by Warhol, conceptualism—art driven by ideas rather than sensuous and emotional engagement—has ruled the art world for more than 20 years. It is a machine aesthetic, a desire to make art that is beyond human, and Andy always wanted to be a machine. But, though all art is in constant, self-questioning flux, one thing never changes—the longing to define, synthesise and express the human condition. In the absence of religion, it is art’s job to do this. For six years, despite his claims to the contrary, Warhol was an artist, a generator of meanings. Valerie Solanas and his own social ambitions put an end to this. Now it is time for us, and the market, to adjust to the fact that it is over.