Entries for a collective European journal: De la crise des valeurs aux valeurs de la crise

by Jorge Vasconcelos, December 2009

European science would not be what it is without paying particular attention to the fall: Galileo, the father of modern science, used to drop balls from the leaning Tower of Pisa, Newton was inspired by watching the fall of apples, etc. Quick translation into fashionable language: the rise of European science is a narrative of falling objects.

To be sure, Antiquity was a different story: the great Archimedes was more interested on explaining why objects do not sink (i.e. why they float) and on applying the principle of leverage to lift objects. In recent years, post-modern managers and social scientists have followed a similar approach, explaining why some corporations are “too-big-to-fail” and why unlimited leverage increases shareholders’ returns. Even their proclamations after the financial disaster clearly resemble Archimedes’ statement:  “Give me a place to stand on, and I will move the Earth.” Unfortunately, such a solid place has not yet been found and therefore financial markets do not move. Economists, on the other hand, are closer to the modern scientific tradition: their current dispute is focused on the number of times economies will “fall” – just once (the v-shape) or twice (the w-shape)?

At least since 1918, “The Downfall of the Occident” is a popular topos in European culture. The downfall has a permanent companion: the “crisis of values”. This is one of the most fertile and valuable of all crises, as confirmed by Google, the most respected and accurate value meter of all times: search for “crisis of values” and you will get 48,000,000 results; search for “financial crisis” and you will get a mere 45,800,000 results. Compound all conceivable crises and you will get the “European crisis” – an impressive 75,900,000 score.

Values, like mass, do not disappear – but they change. In times of crisis, they tend to change faster. When the Paris restaurant La Tour d’Argent, established in 1582, decides to organize a wine auction for the first time in 2009, it clearly exposes a “crisis of values”: as its owner said, with incredible precision, “We are really putting our brand and our reputation on the table.” (all quotations are from a Bloomberg story published at http://www.bloomberg.com/apps/news?pid=20601088). But this crisis allows value to be created and new values to emerge. For instance, a bottle of cognac (1788 Clos du Griffier) was sold for 25,000 euros. “Another two bottles of the 1788 Clos du Griffier sold for 17,000 euros and 15,000 euros, respectively. The prices were lower because mold had rendered the original labels illegible.” The buyer of the 25,000 euro bottle – “neither a connoisseur nor an investor” – “said he paid 10 times the asking price to contribute to the charity for children Association Petits Princes, which garnered the proceeds of the sale of that bottle”. He further declared: “It’s a very good bottle, but my principal motivation was to contribute to the association (…) I did it for the kids.” There are many possible reasons to buy a bottle of cognac; doing it for the kids is indeed a rather eccentric hypothesis.

The 43-year-old Russian businessman who purchased the 15,000 euro bottle probably is not familiar with Laplace’s mot (“Je n’avais pas besoin de cette hypothèse-là”) but candidly admitted: “We Russians love cognac, and especially cognac that’s 200 years old, but we’re not crazy enough to pay extra 10,000 euros just for a piece of paper.”

It is not known whether Laplace ever tasted 1788 Clos du Griffier, but it is sure that he tasted power in 1799, although he was Minister of the Interior for only six weeks. Napoleon later on justified his removal in the following terms: “because he brought the spirit of the infinitely small into the government”.

This is exactly the same argument many people used to criticize the recent choices of the European Council for the new institutional jobs created by the Treaty of Lisbon – people who would like the selection to be the outcome of a “vintage” auction.

For sure, the procedure followed by Member States was strictly Antique, Archimedean – “Noli turbare circulos meos” (“Do not disturb my circles” ) – and the outcome was a classical  Archimedean solid, in which symmetry excludes prisms and antiprisms.  One can imagine the President-in-office of the European Council telling his peers before dinner “We are really putting our brand and our reputation on the table” and one can also easily picture the Council rushing to the BAR (Barroso, Ashton, Rompuy).

The BAR is now open – and soon it will be clear whether this is the prelude to the Happy Hour promised by the new Treaty or the continuation of the hangover initiated several years ago; whether all this is “for the kids” of Europe or “just for a piece of paper”.