This would have been the 12th edition of Art Basel Miami Beach: Slutty teen sister to a 33-year-old Swiss institution; North America’s largest contemporary art fair; the art world’s all-inclusive resort. The first, slated for 2001, was cancelled after Sept. 11 of that year. In retrospect, it makes too much sense.

Art Basel Miami is – to use a suitably glamorific Bret Easton Ellis-ism – the “post-Empire” fair, an illicit, hallucinatory bacchanal where ambitions are writ neon and the bottom line is lucite-clear. Last year, total sales at the fair more than doubled those of the year before. For tourism, it’s a billion-dollar boon. The last decade has seen Miami morph from a strangely sunny underworld to a demi-mondaine destination. And yet, while everybody talks about what Art Basel means for Miami Beach, and for the newly cool City of Miami, the bigger deal is what Miami reveals about the art market.

“Miami Beach was founded on the idea that people wanted to use their money to pay for their toys,” says Micky Wolfson in Fool’s Paradise, a crane’s-eye view of Miami penned by journalist Steven Gaines. “A toy city,” David Rieff called it. Joan Didion, visiting mid-1980s, described “the famous new skyline, which, floating as it did between a mangrove swamp and a barrier reef, had a kind of perilous attraction, like a mirage.”

In Miami the money has long been play money, albeit in deadly games. From the late 1970s through Didion’s ’80s, Miami was the cocaine capital of America. In the nineties, it was ground zero for the war on drugs. Through two major recessions – in the late ’70s and from 1990 to ’91 – Miami, the city reputed to have more bars per capita than anywhere else in America, built almost as many banks. A condo bubble shimmered on the horizon. Bodies piled up. In one year, there were more than 600 homicides. You can’t bury much in Miami Beach; the sand simply will not hold.

The wages of culture, wrote Fredric Jameson, are “blood, torture, death, terror.” Miami paid its way to Art Basel. Maybe even paved it: In a city of speculators and suckers, there’s always going to be something shady for sale. “Gun runners, rum runners, Cuban immigrants, coke,” says Mickey Munday, last living kingpin of the latter trade, in the 2006 documentary Cocaine Cowboys. “Miami always had something coming in.”

Now there’s a new kind of dealer in town, and not so much has changed.

“Besides drugs,” said the late critic Robert Hughes, “art is the world’s largest unregulated market.” In 2005, a Forbes article advising banker dudes on art investment quoted collector Greg Allen saying that, in his experience, “people coming from the finance world into the art market tend to be shocked by the level of opacity and murkiness.”

Well, that’s rich. And true. In what other mega-millions industry is the buyer the same person as the seller? No week goes by in which I do not read of a dealer being sued in some gargantuan amount, usually for selling counterfeit work or fixing a price. Last year, China became known as the world’s largest art and antiques market, except it wasn’t. The Chinese market – as reported widely last month – had committed a staggering $13-billion in fraud (mostly through unpaid-for, but reported as paid-for, purchases).

“It was as if one of those storybook fairies children love so much had waved her wand over Miami … and – Wanderflash! – turned it into Art Basel Miami Beach,” writes Tom Wolfe in Back to Blood, a book so truly bad, I don’t think Miami quite deserves it. “[S]wells from all over the United States, England, Europe, Japan, even Malaysia, even China, Hong Kong, and Taiwan, even South Africa, todo el mundo, came down from the sky in swarms of private planes … to buy expensive contemporary art … or to see the swells buying it… until the fairy waved her wand again ... and – poof! – every trace of sophistication and worldliness was gone.”

This is unfair confabulation on Wolfe’s part (dude, Miami has a Prada store and everything), but it accurately reflects the still-common perception that a highbrow art fair is somehow incongruous with this low-culture capital. In fact, that divide has practically collapsed, and Art Basel fits perfectly with the monied, scandalous history of Miami Beach. It also tells us something of art’s future in America, North America and beyond, as what has always been collected and commodified becomes inescapably privatized.

“In the Miami area, the most valuable art is not in museums but in [the warehouses] of wealthy local collectors,” writes Gaines. At the Wolfsonian, a privately funded, oddly patrician edifice of history in the sunbleached heart of South Beach, much of the permanent collection – like, war memorabilia – is described as “decorative propaganda.” Actually, that’s an equally apt appellation for the contemporary American art at the Rubell and the de la Cruz: two family collections, both alike in dignity, lying blocks apart in the off-fair City of Miami. I love the former, especially, during Basel. But when I look at a George Condo painting and read that one of the Rubell children began collecting Condo before age 10, I can’t help thinking: Toys.

This year, at Art Basel Miami Beach, there will be an inflatable, 6,700-square-foot “Mestizo City” and a Leviathan-sized black dog that tells your fortune at a gay club and a festival of .gifs sponsored by Milk Studios, the same people who bring you New York fashion shows. There will be a carnival ride for adults called Sugar & Gomorrah and an Airstream trailer filled with dildos.

“A certain liquidity suffused everything about the place,” wrote Didion in Miami, and the financial meaning of liquidity, now so realized in the unbelievable art market, so defined by this art fair on the beach, makes her even righter now. “The buildings themselves seem to swim free against the sky: there had grown up in Miami during the recent money years an architecture which appeared to have slipped its moorings, a not inappropriate style for a terrain with only a provisional claim on being land at all.”