Two Good Books, from Richard Owen

February 21, 2014 |

 I read two great books lately. The first was Milady Vine, The Autobiography of Baron Philippe de Rothschild and the second was The News: A User's Manual by Alain de Botton

The Rothschild biography begins an ending chapter with a quote from Laurence Sterne:

"His opinion was that there was a strange kind of magic bias which good or bad names, as he called them, irresistibly impressed upon our characters and conduct. How many Caesars and Pompeys, he would say, by mere inspiration of the names, have been rendered worthy of them? And how many, he would add, are there who might have done exceedingly well in the world, had not their characters and spirits been totally depressed and Nicodemus'd into nothing"

Philippe de Rothschild was a French family member with lineage in the arts, society and agriculture rather than the banking franchise which other cousins inherited. The quote captures the burden upon (and rocketship beneath) Baron Philippe as he goes about his adventures. His principal asset becomes Chateau Mouton which, alongside Chateau Lafite is one of France's premier wine estates.

The quote possibly also applies to the author of The News: Alain de Botton is son of Gilbert de Botton, formerly president of Rothschilds in New York and founder of asset manager GAM. de Botton is a specialist in the application of classic philosophy to modern situations and to quote him "somebody who has made a few stabs at trying to bring elite culture into the wider culture".

This is manna to the broadsheet newspapers and possibly why many reviewers of his work try and unfold a psychoanalysis of de Botton's background, rather than taking his writing on its merits. In the case of The News, however, we at Daily Specs can legitimately hope something of de Botton Snr's financial genius was channeled from the ether into de Botton Jnr's assessment of the media's reporting of Economics, Politics and beyond. But nonetheless, de Botton Jnr's flair - like Barron Philippe's - is fully self-made.

But first, back to Barron Philippe. The biography is an efficient and entertaining one, with plenty of salacious content covering Philippe's love life and - perhaps uniquely for a Rothschild biography (albeit I speculate with limited data) - some detailed analysis of his private parts.

It also contains several interesting lessons on business and wealth. Every man is ultimately self-made, and this is no less true for Philippe. One of the themes is how much unhappiness, isolation, and jealousy can come from privilege. High birth has its own unique challenges: Philippe has a very difficult relationship with his mother who openly mocks him as a child in front of friends, until Philippe finally snaps and runs away to live with an Aunt. He then doesn't speak to his mother for many years.

Nonetheless, he inherits his principal asset from his mother: Chateau Mouton. At the time that he takes the estate over, it is in heavy disrepair and loss making. Indeed, a key staff-member has been siphoning off the profits to build his own estate and has even stolen the vines. Barron Philippe is remarkably sanguine about this discovery and doesn't pursue the thief, reasoning that they deserved what they got as negligent landlords. The book is full of examples of the difficulties of managing a large estate and the various dissipations that occur. When his father passes away, many assets cannot be properly traced or tracked.

Philippe's key business success is vertically integrating Mouton as wine producer. At the time he takes over, wine is not fashionable, having taken a backseat to cocktails. Mouton takes the wine only as far as the barrel, and wine is bottled, wholesaled, and retailed via a complex supply chain. Philippe takes out the middleman, and begins bottling on-site. This gives much higher control of the vintages and prevents any interference or fraud by the bottlers.

Baron Philippe has an instinctive understanding of luxury goods with a commodity input. He forms a combine between five elite wine estates who all begin bottling on site. He manages the quality ruthlessly, and happily disposes of 90% of the vintage if it isn't up to spec. This creates supply squeezes and heightens emotional desire through occasional withdrawal. Philippe hires famous artists such as Warhol to provide unique labels each year. Philippe perfects the protection of brand equity whilst delivering a more accessible product: he forms a junior brand "Cadet Mouton" which has a price point accessible to all. This creates a virtuous circle, cementing the name with the public whilst bolstering the inaccessibility and privilege of the elite brand.

Perhaps the most interesting part of the book is Barron Philippe's experience during WWII. Despite a decade of run-up, much political data on the horizon, and plenty of financial resources to prepare, when the moment comes, Philippe has zero assets offshore, has made no preparation for escape, and is rendered an everyman (well almost) by the Vichy government.

Philippe socialises with wealthy French families who sympathise with the Nazis and, having listened to them delivering excoriations about the "jews and freemasons" being responsible for societies ills, he is graced with a caveat that - of course though - they don't mean Philippe: he and the Rothschilds are different.

Ultimately, Philippe has to escape alone on foot to Spain, Portugal, then England. His wife refuses to leave. Albeit she is protected somewhat by membership of an old Catholic French family, the mental hysteresis of uprooting to England is so great that she prefers to face danger at home.

Such is the lack of preparation of his affairs that, had Philippe's estate not been focused upon a hard asset like Mouton (which is commandeered by the Germans), and France not liberated, his financial losses may have been total.

The book is entertaining, Philippe writes very well (albeit he has a ghostwriter), and did I mention the bit about (to adopt own terminology) his cock?

 Now onto The News: A User's Manual by Alain de Botton

de Botton's book is an fascinating essay on the modern media. His ambition, well realised, is to answer "what should the news ideally be? What are the deep needs to which it should cater? How could it optimally enrich us?". de Botton moves by category, and we can contract the answer to his questions as:

- Celebrity News should let us draw inspiration and insight;
- Disaster News, a sense of our ephemeral lives and a gratefulness for our blessings;
- Consumer News, a sense of which goods might best assist us in answering our underlying aspirations for a fulfilled existence;
- Political News should help to create a rounded, tolerable nation;
- World News should open our eyes to the nature of life in foreign countries above and beyond their moments of crisis; and
- Economic News should evoke the human realities that lie beneath the data.

de Botton makes a good case for why we are drawn to celebrity ephemera over serious news. And like Freud, having dawn the underlying neurosis from his own experience, makes us feel more normal for having experienced it too.

Perhaps most interesting for Daily Specs readers are his chapters on economic news. de Botton states *"to assess a nation through its economic data is a little like re-envisaging oneself via the results of a blood test, whereby the traditional markers of personality and character are set aside and it is made clear that one is at base, where it really counts, a creatinine level of 3.2, a lactate dehydrogenase of 927, a leukocyte (per field) of 2 and a C-reactive protein of 2.42". Amen. And this is before adding the Camp Kinder layer of obfuscation that our Daily Specs Chair comments upon regularly.

de Botton even provides a chapter specifically on Investor News, which again to quote him: "investors are like pilots flying high over a landscape at night. For navigation, they rely on only a few beacon signals and visual cues: the nuclear power station on the peninsula, the main north-south motorway and the medieval city, glowing like an encrusted diamond ring at the foot of the mountains. But there is no need to worry about the discussions in the apartment block near the piazza; the dilemmas of the lorry driver at the service station or the dreams of the technician in the turbine hall."

This seems correct, albeit that extending oneself to discover clues in the latter non-standard, non-quantifiable minutiae is possibly a sign of profitable maturity in ones financial analysis.

Overall, the book is perhaps utopian in its aims: to create a news media that serves to enhance us rather than just capture our clicks and attention. But I am sure de Botton well realizes this. One must always have a mighty target on the horizon in order to appropriately set nearer, more realistic goals.

de Botton makes cogent points on the personalisation of news streams available with modern technology. That we risk confining ourselves to informational cul-de-sacs to our own detriment. Indeed, he proposes, "only after extensive self-examination, perhaps with the help of a psychoanalyst, would they be adequately prepared to set the dials on their personal news engines, aware of the sorts of stories that were needed to challenge their defences, expand their horizons and excite in them the right sort of envy."

Or perhaps, as the Chair cogently advises, we should all stick to the National Enquirer.

In sum, an efficient and educative read, and did I mention that there is no bit about (to adopt my own terminology) his cock?


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