With The Square, writer-director Ruben Ostlund finally lives up to the potential seen in his previous films. The 43-year-old Swedish director’s fifth feature is a biting satire of the contemporary art world and a quantum leap forward from his 2014 breakout hit Force Majeure, both in terms the material’s scope and the artistic vision.

Ostlund, who based the English-language screenplay on his own experience of submitting an installation to a museum in 2014, sets up the film’s chief concern in the opening minutes. In an awkward interview with an American reporter (The Handmaid’s Tale star Elisabeth Moss), Christian (brilliantly portrayed by Claes Bang) attempts to explain the jargon-heavy curatorial note for an exhibition titled Exhibition/Non-exhibition. For a minute, Christian, the handsome and charismatic curator of the X-Royal Museum in Stockholm, appears unsure of himself. Then he explains the meaning of the meta-installation: If you place an object in a museum, does it make it art?

Like most people around him, Christian doesn’t really know what he is doing.

While being about a range of things – political correctness and the limits of free speech, modern marketing methods, gender politics, the shallowness of the elite – The Square keeps returning to its central theme. What constitutes art? What are the boundaries in which it must operate?

Many artists explore the meta-narrative of art in ways that are sometimes seen as too clever for their own good. Ostlund avoids the trap by imbuing his rambling narrative with sharp-edged humour. He treads the same uncomfortable territory as Michael Haneke and Lars Von Trier, both of whose influences are writ large over his film, but with many more jokes.

The film takes its title from an art installation that is an empty space located in the museum’s courtyard with the message: “The Square is a sanctuary of trust and caring. Within it we all share equal rights and obligations.” Christian and other members of the elite stratum he occupies often act in diametric opposition to The Square’s idea in their daily lives. Discussions about art are frequently interspersed with scenes of urban poverty. The marketing campaign designed by a pair of millennial marketers for the museum’s latest show is deeply insensitive. Ostlund and his cinematographer, Fredrik Wenzel, create crisp and clean imagery whose sheen lends a touch of artifice to everything that unfolds – as though the world of the museum operates separately from the one outside.

The director’s ability to create comedic set pieces is best exemplified in the movie’s standout sequence, which takes place at the show’s launch party. The lengthy sequence features Terry Notary, whom Ostlund cast after seeing his audition tape for the rebooted Planet of The Apes trilogy, as a performance artist pretending to be an ape who interacts with the rich, mostly middle-aged crowd and then becomes steadily more aggressive and difficult to contain.

The witty script has the vibrancy of the 2014 Argentine comedy Wild Tales. No one comes out looking good, and Ostlund skewers everyone and everything the film touches.

At times, The Square remains as inscrutable as the lead character. In the moments when the mask slips, it comes alive.

The Square.