More Soup for the Mona Lisa

Environmental activists stand in front of Leonardo da Vinci's ‘Mona Lisa’ after hurling soup at the painting at the Louvre in Paris, Jan. 28. PHOTO: DAVID CANTINIAUX/AGENCE FRANCE-PRESSE/GETTY IMAGES
Environmental activists stand in front of Leonardo da Vinci's ‘Mona Lisa’ after hurling soup at the painting at the Louvre in Paris, Jan. 28. PHOTO: DAVID CANTINIAUX/AGENCE FRANCE-PRESSE/GETTY IMAGES

Summary

Activists demanded heavier regulations on food as farmers protested the rules.

Protesters threw soup on the “Mona Lisa" at the Louvre, which fortunately was covered with bulletproof glass. Delicious bouillabaisse? Sadly no, it was pumpkin.

The episode reminded me of great investing advice I received years ago from an art major, of all people. He said investing was all about the negative space—the unseen. We all know the Mona Lisa’s inscrutable smile and eyes that follow you as you walk past, but few notice the background of the painting, the negative space. Look again: There is a winding river through a valley and a bridge, perhaps Etruscan-Roman, a connection between ancient times and the Renaissance. Britannica says the background suggests a “cosmic link connecting humanity and nature." Cool.

Her face is what we see, an example of consensus thinking vs. the negative space. But that mysterious unknown is a gold mine for those who look, and it offers a way to outthink the crowd in investing, careers, sports and more.

The soup splashers were part of the group Riposte Alimentaire, which translates roughly as “Food Retaliation." They shouted, “What is more important: art or the right to sustainable food?" Wealthy countries can have both, but never mind.

The group’s website demands “the integration of food into the general social security system" and worries about the “deterioration of our biodiversity and the impoverishment of soils." It also insists every French resident get a €150 food card each month to buy “democratically selected" meals. Wanna bet that means crickets and plant-based foie gras?

What’s in the negative space? While the soup sprayed, French farmers in tractors were blocking roads. Was this in solidarity with the foo-foos in the Louvre? Hardly. Farmers are protesting high taxes, environmental regulations and the high cost of fuel and feed. Zut alors! Government policies are the reason food is so expensive and hard to come by in France. Fortunately, the European Union caved in to many farmer demands last week.

Appropriately, it was a French economist, Frédéric Bastiat (1801-50), who wrote about the “seen" and “unseen." He says that when an economic act or law “manifests itself simultaneously with its cause—it is seen." The other effects “unfold in succession—they are not seen: it is well for us if they are foreseen. Between a good and a bad economist . . . one takes account of the visible effect; the other takes account both of the effects which are seen and also of those which it is necessary to foresee."

The negative space is the unseen, the consequences that need to be thought through, surmised, predicted, foreseen. It isn’t easy. The lazy simply look at the seen and don’t think consequences through. Bastiat pushed back at those who claimed that “public spending keeps the working class alive." He rightly noted that “public spending is always a substitute for private spending, and that consequently it may well support one worker in place of another but adds nothing to the lot of the working class taken as a whole." It’s the seen (public spending) and the unseen (private spending being crowded out). Why are we still relearning this lesson from 1850?

Seen is California raising its minimum wage to $20 an hour for fast-food workers in April, a so-called living wage. Unseen are layoffs and those not hired, especially teenagers, because restaurants can’t afford them. Also unseen at first: inevitable 10% price hikes on everything from In-N-Out Double-Doubles to Chick-fil-A waffle fries, making living costs even higher.

Today more than ever, investing is a fashion, especially in technology and biotech. Every single cycle, technological obsolescence is unseen. The new comes along and the old—mainframes, minicomputers, dial-up internet access, flip phones, homework-helper apps—get milked for too long.

Investing fads emerge, get overblown, and go out with an intense selloff. Examples are personal computers, client-server, dot-com, cloud and now artificial intelligence. Momentum investors jump in late and often get burned when something unseen sneaks in. Often it’s supply. There is currently a shortage of chips for AI, so Nvidia (57% operating margins) has pricing power. But silicon comes from sand; only capital and time are in short supply. Same with obesity drugs. There’s a shortage now, but many new versions are awaiting approval over the next several years. When pricing power disappears, margins crater. Foresee the unforeseen.

Back to the game of Masterpiece. In 2022 the Mona Lisa was smeared with custard, and in London climate activists smeared tomato soup on Vincent van Gogh’s “Sunflowers." Other climate kooks in Germany threw mashed potatoes at Claude Monet’s “Grainstacks." The unseen: No wonder there’s food insecurity in Europe. Protesters love wasting food.

Write to kessler@wsj.com.

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