By Nicholas Wapshott

(Reuters) - Hearing that the official hired to sort out Detroit's financial mess has asked for a valuation of the celebrated collection in the Detroit Institute of Arts, perhaps with a view to selling off its Van Goghs, Picassos, Matisses, Rembrandts and the rest, brought to mind remarks by former British Prime Minister Harold Macmillan about then-Prime Minister Margaret Thatcher's privatization program.

"It is very common with individuals or estates when they run into financial difficulties to find that they have to sell some of their assets," he said in his inimitable aristocratic drawl. "First the Georgian silver goes. Then all that nice furniture that used to be in the saloon. Then the Canalettos go." Finally, even the "two Rembrandts that were still left" are put under the hammer.

Detroit is bust and about $11 billion in debt. The city owns the DIA and its fine collection of art, which is priceless. Estimating the value of such a cache of world-renowned pictures and sculptures is impossible as all its masterpieces are unique. Nonetheless, some guess a fire sale would raise about $2.5 billion.

The man charged with balancing the books says it is premature to talk of selling the art, but claims city creditors, who will be asked to take cents on the dollar in lieu of what is owed them, are bound to demand that all the city's assets, including the DIA collection, are sold before they will agree terms. Phooey! To send in the appraisers is to invite creditors to demand the sale.

There are a number of significant practical details about selling a large public art trove. Under the federal bankruptcy code's Chapter 9, neither a judge nor creditors can force the city to sell its assets, so another prolonged and expensive legal battle would likely ensue. A 2012 tax millage, in which residents in three Detroit neighborhoods agreed to pay extra taxes to support the collection, may have to be rescinded.

There can also be stiff legal inhibitions against a sale in the donors' deeds, which would entail elaborate and costly court hearings to unpick. That happened at the Rose Art Museum, in Waltham, Massachusetts, in a battle between its owner, Brandeis University, and art donors over the sale of its important modern art collection, including paintings by Jasper Johns, Roy Lichtenstein and Robert Rauschenberg. That dispute was only just settled after four expensive years, with the university abandoning the effort to sell its art, which has been described as "the finest of such collections in New England," to pay down its debt.

There is a problem, too, about dumping too many high-quality pictures like Van Gogh's self-portrait, Brueghel's The Wedding Dance and Matisse's The Window onto the market at the same time. Even more troubling, for it would also entail destroying the integrity of the DIA's building, would be the removal of the extensive mural cycle by Diego Rivera, which he painted to adorn the museum's lobby.

To maximize the price, the city would have to drip-feed the collection to the auctioneers to give private collectors and art museums time to collect their breath - and find the asking price. It would be anything but a quick fix.

Practicalities aside, does it make good financial sense? If you want to pay down debt without delay and can gain legal access to the pictures, selling off what Macmillan called "the family silver" has its attractions. Like gold, you might argue that important and rare pictures and sculptures are "stores of value" to be cashed in at times of need.

However, even if the estimates reflect only half the money that may be raised, it is only going to provide half the money the city needs to become solvent. If there were no other considerations apart from monetary, however, putting a collection of publicly owned art up for auction would be a sure, if undignified, way of raising cash.

Economically, however, it would be a disaster. Art is not like gold, which has few uses except as a store of value. Sell gold and you can buy back gold. Sell rare masterpieces and they can rarely, if ever, be recovered. Fine art has a value way beyond its mere price. To liquidate the DIA's art would be a short-term fix that would soon redound on those who say they have Detroit's best interests at heart.

Imagine if Greece, with all its financial difficulties, sold off the Acropolis. Or if the Madrid government auctioned the treasures of the Prado. Or Italy pillaged its classical and Renaissance inheritance to fix a temporary lack of funds. It would destroy overnight the tourist trade that provides such a sure source of revenue and would destroy the politicians who dare sign off on such a cheap, shortsighted deal. Even repo woman Angela Merkel, the German chancellor, has not yet suggested plundering the Mediterranean countries' cultural monuments to gain her pound of flesh.

If Detroit is to survive well into the 21st century the city must attract the best and the brightest. A vibrant arts community is already developing. Highly talented and skilled people will only be tempted to relocate to Michigan and meet the challenge of reviving the city's fortunes if they feel they are moving to a sophisticated metropolis that can match their high aspirations. Few aspects of a city more accurately reflect the quality of life that can be achieved than the excellence of its public art.

To sell off the DIA's collection in a hurriedly arranged fire sale would send a clear signal that Detroit is washed up, a dead end, an urban experiment that did not survive the rigors of the market. Could Detroit endure a long and virulent campaign by art lovers all over America portraying the Motor City as the broken-backed capital of philistinism? Investors would conclude that Detroit is finished and take their money elsewhere.

Once the art is gone, even if only the most valuable works are sold, the DIA will find it impossible to attract high quality art experts, museum administrators and donors. Why would they bother to contribute to a sinking venture? The DIA collection, an acknowledged jewel among America's top art museums, will become a tragic memory, like New York's demolished Penn Station — a constant reminder of a wrong turn taken by unimaginative philistines.

It is not only the economics of a sale that makes little sense. Art collections are a social good, a notion seldom taken into account by economists of the worst kind who too often appear to know the price of everything and the value of nothing. Art enhances the dignity of a community, educates its citizens and provides pleasure and entertainment that directly appeals to the mind and the senses.

You need only fight the crowds in any major art museum at weekends to see that the appreciation of art has become as important to many as an act of worship. Indeed, to some the adulation of art and artists has become an inspiration to an enhanced spiritual life.

Are there lessons for other cities in Detroit's dilemma? Yes. If Detroit gets this wrong it may earn a place in history as the first city to condemn itself to a lingering death because of a failure to understand the value of art to its residents. Any board members of a collection similarly owned by a state body rather than an independent trust should put their institution on a self-determining footing without delay lest the moneygrubbers come for their art.

As Tom Campbell, director of New York's Metropolitan Museum, put it, "Even in the darkest days of New York City's fiscal crisis of 1975, and the national economic meltdown of 2008, the cultural treasures closely identified with our own city were never on the table — never considered an asset that might be cashed-in during a crunch to bridge a negative balance sheet."

Selling the Brooklyn Bridge to a gullible visitor is a standard gag among worldly wise New Yorkers. But if Detroit starts a trend, Central Park and Grant's Tomb may find themselves under the hammer.

Anyone want to buy the Statue of Liberty?

(Nicholas Wapshott is a Reuters columnist but his opinions are his own.)

(Nicholas Wapshott is the former New York bureau chief of The Times of London. Previously, he was editor of the Saturday Times of London, and founding editor of The Times Magazine. He is a regular broadcaster on MSNBC, PBS, and FOX News. He is the author of "Ronald Reagan and Margaret Thatcher: A Political Marriage" (2007). His "Keynes Hayek: The Clash That Defined Modern Economics" was published by W.W.Norton in October. )

(Nicholas Wapshott)