Wine critics and the dollar: a connection? (No, not that one.)
What does the 100-point scoring system and the dominance of a handful of wine critics have to do with the dollar’s top rank among world currencies?
Maybe nothing. Then again, maybe a lot.
The U.S. dollar long as been the currency of choice for nations around the world. It is “the reserve currency” they wish to own, the standard by which other currencies are valued, the safe investment for countries who distrusted the yen, yuen, British pound, Deutch mark and franc, and knew that the Almighty dollar would never let them down.
Last week the Wall Street Journal (which remains a good pretty paper, except for the abysmal op-ed pages) had a story entitled “Inevitable End to Dollar’s Reserve Role?”, in which the writer suggested that the days of the reserve dollar are ending. With the American financial markets and U.S. government in as much fiscal trouble as they’ve experienced since the Depression, “foreign countries [today] are fearful of dollar inflation, which could decapitate their own bank reserves.” As a result, they’re moving out of dollars into other, competing currencies.
In fact, there’s clear evidence that the dollar makes up an ever-decreasing percentage of the reserves of foreign countries. China has repeatedly warned that it might push for a new global reserve currency other than the dollar, and the Wall Street Journal article talks about an alternative, the SDR, or “special drawing right,” which is an International Monetary Fund-created “basket” of funds, including, but not limited to, the dollar.
Much of the drift away from the dollar seems connected, not only to objective financial patterns, but to political and cultural shifts. Some people, especially from developing countries, see the dollar as a symbol of “U.S. hegemony” and wish to see a day come when the world’s richest and most powerful nation is cut down to size, taking its appropriate place among the world’s countries. Others, such as French President Nicolas Sarcozy, have been quoted as saying that “The dollar cannot claim to be the only currency in the world” because “What was true in 1945 can no longer be true today.”
There are echoes of these arguments in the claim by bloggers, especially younger ones, that the domination of critical voices about wine by a relatively small handful of writers who use the 100-point system also is an example of hegemony. They likewise argue that it is patently unfair for the cadre of critics who rose to power in the ‘80s and ‘90s to overshadow a new, emerging class of writers, whose voices are as legitimate as those of their elders. When Dr. Chandra Mazuffar, a Malaysian peace activist and advocate of moving beyond the dollar, is quoted in the Journal as saying, “The signs indicate that we are on the cusp of major change,” she could just as easily have been talking about our system of wine reviewing.
And yet… The Journal piece admirably contains counter-arguments from experts saying the dollar is not going away anytime soon. In essence, these critical voices say, it’s easier said than done. There’s simply too much invested in the existing system, and at least one academic quoted in the Journal says that “three or four years from now, the whole discussion [of replacing the dollar] will disappear.”
We don’t know — nobody knows — if three or four years from now, critical voices on the Internet will be giving paper-based older writers a run for their money. (Some say that, collectively, they already are.) We don’t know if, three of four years from now, we’ll see “Twitter-mania” the same way we saw the dot-com mania, in retrospect, as a balloon waiting to be punctured. It’s possible.
I think the same sweeping worldwide forces that are undermining the dollar are dismantling the current structure of wine criticism. It’s not a matter of “if” but “when.” Change tends to occur more slowly than its adherents want, but change does come, and at some point we inevitably reach the tipping point at which change breaks over us like a tidal wave. Have we reached the tipping point in wine criticism, or will it be a case of Plus ca change, plus c’est la meme chose?
Wine Enthusiast Wine Star Awards Nominees Announced
I wanted you to see the brilliant list of individuals who have been nominated for our 2010 awards. The ceremony will be held on Jan. 25, 2010, in the 42nd Street New York Public Library’s grand Beaux Arts building. The winners will be announced in a few weeks.
I think if there is a move away from the dollar as a reserve currency can be managed as long as there is not a sudden devaluation of the $ vs other currencies.
Since the Euros lows of 2002 there has been a 63% rise in the value of the Euro vs the Dollar making it very difficult for many producers to compete in the under $15 retail category. If we see the euro trade near 2 euros to the dollar -it’s 1.43 now – it will further price many european wines out of a huge segment of the US market and into the luxury category.
We already have “The American Wine Blog Awards,” so I’d say “soon” is actually “now.” Folks like Tyler Colman (Dr Vino), Craig Camp (WineCampBlog), and Alder Yarrow (Vinography) seem to be doing just fine. And since Eric Asimov seems to count as a blogger, even though he writes for the NY Tiimes, I’d say your name belongs on the list also, even though your day job is with the Enthusiast. Strictly from a marketing point of view, I’d say the Enthusiast and the Spectator have nothing to fear, since they have widely read point systems, and we do love points in this business, even as we rail against them. On the other hand, the bloggers have a degree of freedom that print writers don’t, and that freedom is their ticket to influence among wine buyers. I think the distinction between wine marketer and wine buyer is important: Marketers want points; buyers want to know what tastes good.
Honestly, Steve, I wish you had never written this above piece. For the first twenty years of my professional life, I made my living as a professional economist–fortunately with the latter half of that overlapping with the first decade of Connoisseurs’ Guide. I try very hard not to mix the two because writing about wine is so much more satisfying than writing about the economy–or in looking at the economic viability of big projects as my group did.
So, now you have dragged me back into the old fold, and I am going to tell you just one story and run away as fast as I can.
My favorite professor, a man by the name of Galbraith, once said to us, “Stop worrying about the growth of the Soviet economy. If it ever gets larger than the US, so what? What will change?”
In point of fact, it never did, but so what?
His point was that the structure of the US economy was such that it existed outside of competition with Russia (read that as China in today’s world) and I would argue that it exists outside of our role as the world’s reserve currency. The Pound used to be the world’s reserve currency. I don’t see that England has picked up its marbles and blown away. If Special Drawing Rights replace the dollar, the US is not going to blow away either.
Not sure how that lesson applies to wine writers, but I will make this one prediction. Three years from now, the major wine publications will still dominate the wine reviewing world. A few bloggers will have grown more important, but reviewing thousands of wines in ethically correct situations and writing intelligently about those thousands of wines is real work. And not many folk are going to do that real work unless they are making money at it. A few might. Most will not. You and I and our brethren will still be doing what we do now–unless we retire (not you, you spring chicken, but some of us might as we are getting long in tooth).
Amen, Charlie. My favorite econ quote has always been “Americans can make a fortune with what they don’t know about economics.”
Write on!
Charlie,
A fine analysis, but may I offer this one potential fly in the ointment: when Galbraith was talking, America still had a manufacturing base. Without one of those things, which we almost don’t have at all these days, we have little if anything on which to base our economic clout. Handling monetary and information services can take a culture only so far, and history is full of failed oligarchy economies.
As for blogging vs, print: I am truly tired of this dichotomy. The way I see things, the one that produces real information is the one that will win. I leave it to the consumers to discover where the real information lies; if they fail to see the value in either, it won’t matter which one wins out.