"Not for Sale," the 46-person mishmash at P.S. 1, is a thankfully rare case of "When Bad Ideas Create Passable Shows." Before we look at this slipshod exhibition, let's consider the flawed notion that created it. Alanna Heiss, the trailblazing but here totally misguided curator, writes that "Not for Sale" contains only art that can't be bought. Thus, the exhibition -- which closed on Sunday -- is composed of work that artists either kept or, in a couple of weird cases, sold then bought back. By this curatorial criterion, nearly every artist on earth could be included. Heiss compounds the problem by haughtily stating that the show evinces her "unfortunate allergy" to the marketplace.

I admire Heiss enormously. Having founded P.S. 1 in 1976, she helped invent the alternative-art movement, and has kept its flame alive. But for the director or curator of an institution that relies on the largesse of artists and dealers -- who in turn depend on commerce -- to claim an "allergy" to the marketplace is not only smug, it's deluded and hypocritical. This goes double if that curator's institution, like Heiss', is affiliated with the Museum of Modern Art, the very pinnacle of institutional power. As if her organizational premise weren't thin enough, Heiss' jokey description of her curatorial process, if you can call it that, is flimsier still. She writes, "I called artists whom I know well and who happened to be at home." Really, the show should have been called "Journey to the Center of My Rolodex" or "Friends of Alanna."

"Not for Sale" doesn't fizzle because most of the artists in it are millionaires or famous or both. Nor does it fail because more than a third of the work on view is less than ten years old and 14 of those pieces are less than five years old, making you wonder how "not for sale" much of this art actually is. No, the exhibition fails because its ideas and construction are lazy.

So how does a premise this fishy and flawed produce a passable show? Well, art moves in mysterious ways. Alongside most of the pieces in "Not for Sale," there appear statements by the artists explaining why they still own the work. These pithy descriptions allow artists' voices to come through and almost save this show from itself. Some artists have uncanny insight into their own work. Of her de Kooningesque painting of two people having sex, Cecily Brown rightfully notes, "The figures are more specific, the space more straightforward, and the clutter more articulated than in other paintings." Jeff Koons is his usual cheery self-appreciative self, writing, "I have always enjoyed the way Popeye [which appears in the painting] has a dialogue with different artists' works." Other artists flash tantalizing bits of their private lives. Dana Schutz writes of her portrait of her husband with a pouty mouth and a prominent clump of blond underarm hair, "I think he is pretty sexy." On a less sexy note, Chris Burden simply observes, "The reason it is not for sale is because it is a photocopy." Alex Katz is blunter still. About his portrait of the great downtown actress Kate Valk in theatrical blackface he writes, "I have nothing to replace it with." He neglects to mention the blackface, or that it's one of his only paintings that doesn't quite look like an Alex Katz. Not one artist in "Not for Sale" wrote what I kept thinking: "I own this work because no one wanted to buy it."

Which brings us back to the bugaboo of the market. Heiss is right: The market is an issue that needs examining. The feeding frenzy of the current moment is so invasive and pervasive, it's hard to say how it eventually will have changed the ways art is presented, perceived and produced. Is the market creating a competitive environment that is compelling artists to make good work, or is it mainly helping to foster more product? Is it a money-addled popularity contest based on greed, good luck and connections, or is it simply allowing more artists to make money from their art without having to take full-time jobs? None of these issues are addressed in "Not for Sale." Instead, Heiss kidnaps this important idea, then fails to develop it. Her purported allergy has become little more than bait.

As insider and inane as this show is, it indicates a larger problem at P.S.1: a distressing pattern of big, unfocused, iffy exhibitions assembled or commissioned, I'm afraid, by Heiss. Her follow-up promises to be sorrier still: an exhibition of the mediocre and often annoyingly sexist work of one-named Brazilian sculptor Tunga.

Heiss has organized over 700 shows over 36 years, and one bad one wouldn't be a big deal. Moreover, a handful of her exhibitions were outstanding; at least one, "Rooms," in 1976, was historic. But Heiss and P.S. 1 have to find fresh ways of being experimental. Their hippie-dippy freestyle is not only outmoded but reckless, wasteful and corrosive, especially as contemporary art in several other important New York institutions is at a dangerously low ebb. Dia has inexcusably shut down all of its Manhattan spaces for rotating exhibitions; the wonderful New Museum remains closed for construction; and except for occasional glimmers, MoMA's approach to contemporary art is static and conservative.

It's possible that Heiss might tap into herself and find a way to carry her beloved institution forward. Failing that, she might assume a much-deserved emeritus role and allow others to step in and make good on the extraordinary thing that she put in motion. Whatever happens, P.S. 1 is still too important to be squandering itself on botched exhibitions like this one.

BACKSTORY
At best, 1 percent of 1 percent of all artists -- probably fewer -- make any kind of money from their art. Yet today's fixation on the market has created two ridiculous camps: the moralists, who sneer that artists and dealers who sell a lot of art are insufficiently radical, and the idiots who believe that art that sells is better than art that doesn't. For a little perspective -- or to get a grip -- those hand-wringers might turn to that coolest of all customers, the great German painter Gerhard Richter. On Oct. 24, 1990, Richter made the following entry in his journal (a must-read, now available from the MIT Press under the title The Daily Practice of Painting) that might help untwist a few panties. "The much-maligned 'art scene' of the present day," he wrote, "is perfectly harmless and even pleasant, if you don't judge it in terms of false expectations. It has nothing to do with those traditional values that we hold high (or that hold us high). It has virtually nothing whatever to do with art. That's why the 'art scene' is neither base, cynical, nor mindless: it is a scene of brief blossoming and busy growth, just one variation on the never-ending round of social game-playing that satisfies our need for communication, alongside such others as sport, fashion, stamp-collecting and cat-breeding. Art takes shape in spite of it all, rarely and always unexpectedly; art is never feasible."

"Not for Sale," Feb. 11-Apr. 30, 2007, at P.S. 1, 22-25 Jackson Avenue, Long Island City, N.Y. 11101

JERRY SALTZ is senior art critic for New York magazine. He can be contacted at Jerry_Saltz@Newyorkmag.com.