“You are mistaken, dear angel, if you think that King Louis-Philippe rules–a mistake the King himself does not make. He knows; as we all do, that above the Charter stands the holy, the venerated, the solid, the lovable, the beautiful, the noble, the young, the all-powerful five-franc piece,” Balzac wrote in La Cousine Bette. Since 142 years have elapsed, one has to allow for inflation and for the internationalization of the phenomenon–the idol is now made of paper and colored green–but the idea he tried to convey is more valid than ever. Indeed, it provides the link between a series of happenings, political, financial and cultural, that focused Western Europe’s attention in recent weeks on Paris, London and the Catalan town of Figueras.
The Franco-American Can-Can. The French, having just discovered insider trading, seem fascinated by it. At the turn of the year the headlines were almost daily full of the scandal surrounding the takeover of Triangle Industries Inc. by the state-owned conglomerate Pechiney for more than $1.25 billion. Admittedly, the story was quite exciting. In addition to the indictment of five people, including a friend of President François Mitterrand, it had all the ingredients of a classic thriller: a Caribbean connection, a Lebanese trail, the presence of financiers mixed up in Middle East arms and hostage deals, parties on Mediterranean yachts with lovely ladies and all. Only the money at stake was relatively modest. If the quick profits sounded shocking to the French, who were discovering this kind of speculation for the first time, they were penny-ante stuff to readers brought up on Ivan Boesky, Michael Milken and company.
Still, it’s a worthy tale. Last summer Samir Traboulsi, a Lebanese financier and lavish entertainer, informed his party companion Alain Boublil, chief of staff of the Minister of Finance, a Socialist, that American National Can (A.N.C.) might be for, sale. Pechiney- the world’s third largest producer of aluminum, now trying to diversify into packaging was interested. The trouble was that to get A.N.C. one had to buy Triangle, the parent company, in which Nelson Peltz and Peter May, two American “junk bond” specialists, controlled two-thirds of the voting rights. After much bargaining and one breakdown in the talks, the deal was finally signed on November 20, with Pechiney paying $56 for shares that had been quoted at around $10 in the preceding days.
The snag was that in the three days leading up to the transaction the shares had sold quite briskly, with some 323,000 changing hands. The Securities and Exchange Commission’s New York City office started inquiries at once and asked foreign institutions for assistance. The Parisian Commission of Stock Exchange Operations (C.O.B.), a rather toothless French equivalent of the American S.E.C., acted promptly on this occasion. By the end of January it had produced a report favoring criminal proceedings. Otherwise, the report did not reveal much more than the press already had. It had little to say about purchases made through Switzerland or Luxembourg. It did not indicate who stood behind the mysterious International Discount Bank and Trust, registered in the Caribbean island of Anguilla, or about the identity of who had bought more than 70,000 shares in three days through Drexel Burnham Lambert in New York City. But it did provide details of the 56,350 shares bought openly in Paris in the few crucial days, and it confirmed the purchasers’ names: Monsieur Max Théret and his associates, with 32,000 shares, made a profit of $1.48 million, minus fees; Monsieur Roger-Patrice Pelat and his family, with 10,000 shares, pocketed $390,000. A handsome pay packet for a week’s work, but not enough, in purely financial terms, to justify the hullabaloo. The real reasons for the scandal were political.
Théret, a known Socialist sympathizer, had often come to the party’s financial rescue, notably in its publishing ventures. Pelat, who had been with Mitterrand in a P.O.W. camp in Germany, is one of the French President’s few intimate friends. Boublil, who resigned from his job despite the fact that his only “guilt” so far is that of unwise association, is himself a Socialist. The conservative parties and the bulk of the press could thus argue that both sides stink alike, that we all are sinners together and that if the left has less on its conscience, it is because it has had fewer opportunities to do ill. Is avarice, then, simply the way of all flesh?
Virtuous Profiteering? The C.O.B. is now very busy, and the next item on its agenda, the abortive bid for one of France’s big banks, Société Générale, may help to answer the question. Société Générale was one of the many enterprises denationalized by the right during its years in office, 1986 to 1988. The conservative government of Jacques Chirac not only privatized, it handed property to its friends. The pretext was obvious: In order to prevent a foreign takeover of these firms, one needed a hard core of principal shareholders, legally bound to keep their shares for a couple of years and then to offer first option to their partners, In most cases the chosen few happened to be not only conservatives but also individuals closely linked to Chirac’s own party. The bias was so striking that Mitterrand, in his presidential campaign, promised to redress the balance.
But how? In the past the left had a simple answer: renationalize. Now, converted to the virtues of profit and private enterprise, the Socialists had to resort to the market and its vicissitudes. Since Socialist financiers are still in short supply, the government had to rely on not unfriendly businessmen and the backing of the powerful state-owned Caisse des Dépôts, which controls, among other funds, post-office savings. ‘ Even so, the raid against Société Générale proved unsuccessful, although some people apparently did make a killing, perhaps with the benefit of inside information. Yet the resulting indignation has little to do with morality. It is designed to remind the converted Socialists to stick to their new gospel.
Since the right has so many skeletons in its closet, the Socialists have adopted a holier-than-thou attitude. The matter, however, is one of policy rather than personal probity. Not so long ago the Socialists would have agreed with Bertolt Brecht’s argument that founding a bank is a greater crime than robbing one. Today they wish to have the blessings of the Bourse and a reputation for decency. They want the system without its vices–as if these could somehow be exorcised. What shocked the French was not that Théret broke the rules through insider trading; it was his ability, legally or otherwise, to pocket in three days what it would take the poorer half of French wage-earners more than a century to earn.
What is at stake here is not whether the Socialist Minister of Finance wears plebeian socks, or whether François Mitterrand has a distaste for money making–which he does. Mitterrand’s innocence and guilt may better be grasped by analogy. When Maurice Ravel was offered the Legion of Honor and turned it down, his fellow composer Eric Satie commented contemptuously: He may reject it, but the whole of his music accepts it. The same is true of the French President and speculation.
All Men Are Equal. Not all the moneybags are companionable chaps with a stiff upper lip. Some actually lose their temper. Taj Jamil Pasha, a Syrian gentleman residing in Houston, Texas, went berserk when his business partner offered him $1 million rather than the $3 million he had been promised as the commission on a deal. He reacted in Chicago fashion, wounding his deceiver with five bullets from his Smith & Wesson. The chase and the shooting took place in 1986, in the corridors of the Plaza Athénée, one of Paris’s plusher hotels. Perhaps impressed by the scene of the crime and the amount involved, the French judiciary proved lenient. After six months in preventive detention, Jamil Pasha was released on parole and allowed to return to Texas. He was back in Paris this January 24, explaining to the judge that “each man has his breaking point.” The bench was indulgent, and sentenced him to six months in prison (which he had already served) plus three and a half years, suspended. Jamil Pasha walked out of the courtroom free to enjoy Paris or go back to Texas. The very same day, in the same court, a North African of more humble extraction was not quite so lucky. Accused of attempting armed robbery, he had spent nine months in preventive detention. He too asked to be released on parole. In vain. Le Monde‘s witty commentator drew his readers’ attention to the contrast, concluding with the moral from one of La Fontaine’s fables: “Depending on whether you be powerful or miserable…the court will make you black or white.” Two centuries after the storming of the Bastille, and despite persistent assurances that the Revolution has done its job, it cannot be said that privilege has vanished altogether.
Shark Swallows Shark. While I was in England in January, another prospective takeover, this one incomparably bigger than Pechiney’s bid for Triangle, was capturing the imagination of the editors, if not necessarily that of the public. Sponsored by Barclays Bank and by Lazard Frères, and involving three British firms, Thomson of France and General Electric (and possibly A.T.&T.) from America, the bid was to start at somewhere around $12 billion. The target was the General Electric Company of Britain, the country’s biggest defense electronics firm, a giant sleeping on its cash. But the operation didn’t come off. At the last moment, G.E.C.’s chair, Lord Weinstock, made a deal for joint ventures in Europe with its American counterpart, thus temporarily dividing the potential aggressors. This thrust and parry, however, was neither the end of the story nor in fact its beginning. The projected takeover was itself a counteroffer, since G.E.C. and the West German company Siemens had earlier made a bid to buy Plessey, another British electronics firm. (That bid is now being examined by the British Monopolies and Mergers Commission.)
Don’t worry if all this sounds complicated. The examples are cited simply to convey the progress that has been made since Balzac’s day, to show that the sharks, having swallowed up the small- and medium-sized fish, are now taking on each other–and doing so in international waters. Or, to drop the metaphor, economic concentration, which has gone quite far in the West as a whole, is now reaching a new dimension in Europe. All the firms mentioned above, as well as Philips in Holland and G.C.E. in France, to go no further than electronics companies, are themselves the products of previous takeovers and mergers. More than ever, European governments have been prompting their national “champions” to grow strong enough for international competition, and Pechiney’s purchase fits this pattern. But “national-sized” is no longer large enough. With a unified European market on the horizon, companies are being urged to unite in order to face competition from outside the EC. At the same time, there is a temptation for U.S. and Japanese giants to climb over the wall and take over European firms.
The Battle of Britain gives no indication of which trend will prevail. The way in which G.E.C. and Siemens ganged up together suggested at first a European solution, but when the chips were down the Americans were quickly called to the rescue. All that can be said with certainty is that jingoism is not one of money’s many vices–capital knows no frontiers. Indeed, some forecasters think it may soon cross the Elbe in massive formation. Balzac, for all his grasp of the power of money, could not quite imagine the extension of its reign.
Ars Brevis, Vita Longa. So far in this story, money has had little to do with art. Back in Paris, however, the two had a brief encounter. As Daniel Barenboim was being dismissed as the artistic director of the Bastille Opera, which is to be inaugurated this year, his salary was revealed–more than $1 million. A year? No, more accurately for four months a year, because if the conductor were to work longer than that in France he would lose his position as a privileged nonresident taxpayer.
In a society in which tycoons have incomes that run into eight figures, the reader may object, why shouldn’t artists be allowed to climb into seven? In any case, the salary was secondary in this conflict. The confrontation was really over the nature of the proposed opera: Should it be run as a series of festivals for the elite, as the Barenboim project implied, or should it play all the time, combine new artists and experimental works with Carmen and Aida, and aim at a vast, popular audience? When Pierre Boulez, a backer of Barenboim, tried to argue that these two approaches were not in conflict, his critics replied that a small number of performances with superstars implied higher costs, more expensive seats and therefore a different audience.
Mitterrand himself settled the matter in the critics’ favor. When he first launched the Bastille project, he probably hoped to do for the opera what the National Popular Theater (T.N.P.) under Jean Vila tried to achieve after the war, namely, to break barriers and reach an entirely new public with both classic and modern plays. The T.N.P. tried to do so, in part, by keeping prices down and distributing tickets through “enterprise committees” in factories and big offices. The experiment was not a complete success; you don’t change your audience fundamentally without changing society. But it was an ambitious attempt. It is doubtful whether the Bastille Opera will be given a similar chance. The general climate has changed, and art must now fit into an environment incomparably more commercial.
Which brings us to the Catalan town of Figueras and the long-anticipated death of Salvador Dali. I will leave it to Arthur C. Danto and his colleagues to debate the place that should be attributed in the history of modern painting to Dali in his Surrealist period–say, up to the late 1930s. Thereafter, Dali’s career offers a portrait of the artist as a commercial man. Probably nobody in the last half-century has better symbolized the marriage of art with showmanship and money than this friend of Franco. André Breton, the pope of Surrealism, had an anagram for the renegade–Avida Dollars. For Dali’s wife, Gala, Breton had only a nickname: Tiroir-caisse. A cash register, the soul of our society?