Financing the Eurodebt
by Paul Barford
Economic doom and gloom in Yurope has the coineys over in the US rubbing their hands with glee. They have been banging on for the last couple of months about how Greece and Italy could resolve their 'eurozone' financial problems by the simple expedient of emptying their museum storerooms onto the market and letting private collectors buy the formerly state property (assets) and use the cash raised to pay off their collective debts. According to the BBC, Greece's debt is 340 billion (UK billion 000 000 000) euros. If the US has a population of 312 700 000, that means that to allow this model to function, EACH and every US citizen would have to buy antiquities or work of art to the value of 1091 euros (1453 dollars).
Also according to the BBC, Italy needs 400bn next year to "refinance maturing debt, finance the deficit and pay interest". To pay for that for this year alone, EACH US citizen would have to fork out another 1710 on antiquities and works of art from their museum storerooms.
Now I am sure the dealers in such things would be very happy if suddenly (for the problems of Greece and Italy are urgent) 700 billion euros worth of antiquities and works of art suddenly appeared on the market for them to profit from. Those collectors who already have such items in their collections (maybe bought as a nest egg investment) might not be so happy, as their value would plummet as the market is flooded with quality goods.
Of course this has been done before, for example the Bolsheviks sold off items from the state collections to finance their repressive regime, many of them ending up in US public collections where they remain to this day (Anne Odom, Wendy R. Salmond (Eds) 2009, 'Treasure into Tractors: The Selling of Russia's Cultural Heritage, 1918-1938, University of Washington Press). It seems some antiquity dealers would like to see the return of the days of the Robber Barons.
Instead of the national patrimony, perhaps the nations concerned might try to find a commodity more easily saleable, such as weapons to Third World states feeling under threat by the sort of US neo-colonial sentiments we see expressed by the US collecting lobby.
The difficulties of nations with problems in financing sovereign debt cannot be solved by selling cultural objects, so far as advocates of State ownership of these things are concerned. But the debt must nevertheless be financed in one way or another; it cannot be wished away. Here are the economic alternatives:
1) Leave the EEU and return to the nation's prior national currency, which will then be devalued to absorb the sovereign debt, either intentionally or by financial consequences of default. This will create economic hardships to that nation's citizens. An extreme example of that occurred in the Weimar Republic during the early 1920s, whose consequences included the rise to power of Adolf Hitler.
2) Raise taxes to fund the debt, which will also create economic hardships to that nation's citizens, although it can be socially skewed to place more of the burden upon the wealthy and the middle class.
3) Sell off marketable national assets such as real estate, and award commercial concessions to private corporations. This approach has been tried recently and there have been some success stories, however the potential scope for this is limited and it inevitably attracts some of the same sort of criticism for selling off national heritage as does selling cultural objects.
4) Allow foreign investors to acquire commercial assets such as businesses and privately held real estate, which tends to incur the wrath of the powerful Socialist political faction that exists in every one of the European nations with unfundable sovereign debt.
5) Jawbone Germany and France into paying for funding of the sovereign debt (this is presently being advocated by those who rationally foresee the negative international consequences of default). That would transfer the resulting economic hardships onto the shoulders of French and German citizens, whose enthusiasm for this approach is very limited. There are however so many Frenchmen and Germans that individual hardships would be much less significant than those resulting from forcing citizens of improvident nations to pay for their own follies.
It appears to this observer that 5) and 4) will first be tried, and indeed to some extent this is already underway. It won't suffice, although some degree of relief may result.
Next, perhaps, would be 3), which will start to create political turmoil and also won't suffice.
Then 2) will be tried and, depending upon how resolute political leaders are (and how much their citizens have learned about economic reality), it may possibly suffice to pay down what unfundable debt still remains after 5), 4), and 3). The result would be reduction in sovereign debt to a level the bond market can tolerate and absorb at rates that nation can afford to pay.
One can easily see that this is not a situation that has any painless solution. There will be pain, lots of it, and no one will like it at all. There will be public outcry, which always seems to center upon a perception that such pain does not fall evenly distributed. Every part of society must bear its "fair share" and apparent exemptions will be searched out, and fiercely criticized. Ultimately this scrutiny and criticism will reach every private and public institution, eventually including the costs of heritage protection. Budgets will be cut, museums will be closed or their staffs cut back, archaeologists and conservators will be laid off and priority will be given to maintaining assets that produce income, for example Pompeii.
It is hard to imagine that at some point in all this turmoil, the public in these nations will not come to understand that they are paying huge sums for countless museum storerooms, warehouses and other repositories in which tens of millions of redundant artifacts have accumulated, until there is no more room to accommodate what is dug up now. Can anyone imagine that the public will want to pay for more storerooms and warehouses? Can anyone imagine that they won't realize that the contents of these facilities have become a vast, intolerable dead weight upon society, which competes with their own personal needs and those of their families? Can anyone imagine that at some point an irresistible public demand will not arise, to reduce such artifact holdings to a more manageable level?
This contingency has been discussed for quite some time in archaeological forums. One proposed approach is reinterment, whereby redundant artifacts would be taken to designated publicly owned sites (which would have to be secured and protected against criminals who would like to dig these artifacts up and sell them on eBay) where they would be reburied.
In a way this proposal resembles the sequel to the 1922 Washington Naval Treaty, when a public weary of the arms race that led to World War I demanded disarmament. This Treaty imposed a 5:5:3 ratio of naval strength upon Britain, the United States and Japan -- and Britain's allocation included the ships of her Dominions. All these nations had meanwhile realized that ships armed with 12 inch guns had become obsolete due to development of larger shell calibers which could penetrate their armor, and it was decided to dispose of them. On 12 April 1924 HMAS Australia (eleven years old) was towed out and scuttled while a Royal Australian Air Force aircraft dropped a wreath and HMAS Brisbane fired a rolling 21-gun salute. Similar events transpired in other nations. The USA and Japan preferred to dispose of their surplus battleships as targets, systematically sinking them while intensively studying their resistance to damage.
It is certainly feasible to "scuttle" surplus artifacts, which could be sealed up in converted cargo containers filled with an inert gas and buried in a public repository where they could be kept and protected against looters, at far less cost than that of above-ground storage. But in this new form of long term storage, they would not in any way benefit society.
The alternative (which archaeologists and cultural ministry officials refuse to consider on ideological grounds) is to select surplus artifacts that are redundant to science but would have value to collectors, and sell them into the antiquities trade with provenance. This would have important social benefits, including raising significant funds to pay for archaeology and conservation, devaluing looted artifacts and educating the public. But it presumes that cultural ministry officials (and politicians who appoint them) could bring themselves to face facts and make sensible judgments. Perhaps if the perceived alternative were losing their positions, they might be more amenable to this approach.