If I told you that this was by far and away the best book yet about the modern-art boom, I wouldn't be saying much, but it is also an excellent, vivid, wittily written book in its own right, a Robert Altman-esque panorama of what Robert Hughes has rightly called the most important cultural phenomenon of the last 10 years. It has faults - sometimes it is a little meandering and there's a timidity about really criticising the art world - but the characters are tightly drawn, the events covered are important, and the aphorisms come thick and fast.

We have been going through an unprecedented growth in contemporary art. Some people have cast it as a golden age, in which geniuses such as Damien Hirst and Jeff Koons bestride the earth. Others see it as the development of an art industry like the fashion industry, in which each season people spend millions following new trends. Some regard it as just another asset bubble, where the grotesque bonuses made by the speculators who have brought the world economy to its knees are spent.

Sarah Thornton trained as an anthropologist, but here she shows herself to be a fine essayist and observer of modern life. She has spent five years following the art world, a period in which art grew from a £2.2 billion industry to a £6.1 billion one, and where prices for some artists' work increased by factors of between 20 and 80. Her book's chapters are each dedicated to a different part of the art world - an art auction (at Christie's), an art school (CalArts), an art prize (the Turner), a biennale (Venice), an art fair (Basel), a magazine (Artforum), and a visit to an artist's studio (Murakami).

Each location is superbly chosen. The auction is the one in 2004 where Udo Brandhorst paid £8.4m for Warhol's Mustard Race Riot, a market-making price that kicked off the modern-art frenzy, established Warhol as the benchmark of the contemporary-art market, and led to astronomical prices being paid for his work (culminating in £40m for his Green Car Crash last year). Similarly, Thornton's visit to an artist's studio is a trip inside the world of Takashi Murakami , the Japanese pop artist, who is second in productivity and fame only to Hirst.

Here, we find ourselves in the centre of what distinguishes this moment in art history. Thornton observes Murakami's spotless workshops in New York and Japan, where teams of white-gloved assistants apply layers of numerically coded colours or dab a platinum coating onto large fibreglass casts of the artist as a cartoon buddha or on round balls of flowers. This is the aesthetic of our age - art that does not look like it is made by hand, but is meticulously fabricated bycraftsmen and technicians, art with the easily digestible, often childish content of a comic book or billboard, but manufactured with the precision and refinement of a Rolex.

The book is full of good characters, providing one-liners that capture the contradictions of art chat in all its glory - the passion and the vanity, competitiveness and teamwork, intelligence and pretension, and the fun. “They'll be praying to this thing in 500 years,” exclaims the LA museum curator Paul Schimmel as he looks at Murakami's six-metre-high Oval Buddha. As Thornton zooms across the Venetian lagoon to the Biennale in a speedboat with British ceramics artist and cross-dresser Grayson Perry, he exclaims, “Heat is the enemy of drag.”

Thornton also sneaks in some critique of the culture in subordinate clauses and in comments buried in conversations, and makes reference, too, to the rampant speculation that now dominates the market.

But anyone expecting reflections on the ethical and economic issues of the contemporary- art boom will be disappointed. Thornton writes fleetingly of “a spectacle where the dollar value of the work has virtually slaughtered its other meanings”. But there is no pervading sense of moral outrage in her book at the insane cost of mediocre art nowadays, in which a few butterflies stuck on a piece of cloth painted with Dulux costs half a million quid, while a couple of square metres of canvas painted in the same colour can cost £10m, if painted by Yves Klein. The enigma - and perversion - of the contemporary-art boom was brought home as never before by Hirst's auction at Sotheby's on September 15th and 16th: at a time of some of the worst financial news since 1929, collectors spent £111m on contemporary art. Sotheby's hailed this as a success, and it was - but the sale was underpinned by Hirst's primary dealer Jay Jopling, who bid on an estimated 44% of the lots in the big evening sale.

The modern-art boom is about more than the fact that there are lots of billionaires and there's been a shift in taste towards contemporary art. Its big attraction is that the lack of rules makes it ideal for speculation and manipulation. As a consequence, art has become nothing more than a hotly traded commodity. The boom seems the ultimate symbol of the greed of the rich in the globalised economic good times of the last decade.

Still, considering the art world can be like a police state, these are unfair quibbles. Thornton gains amazing access and revealing interviews. I would far rather have to read between the lines of her careful formulations, than not have her book at all - in fact, I'm hoping for a second volume.

Seven Days in the Art World by Sarah Thornton

Granta £15.99 pp274

Available at the Sunday Times BooksFirst price of £14.39 (inc p&p) on 0870 165 8585 or here

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