A taste for temperance: How American beer got to be so bland

This new article of mine in Business History has nothing to do with the economic and financial crisis, but it’s gotten more press than any previous article I’d written, so I thought I’d post a link here.

The link will take you to the abstract and the first page only. If you would prefer to read the full, 31-page version, then here is the deluxe link. (If for some reason it does not work, you can email me — ranjit dot dighe at oswego dot edu.)

The article in brief: This article examines the historical origins of bland American beer. The US was not strongly associated with a particular beer type until German immigrants popularized lager beer. Lager, refreshing and mildly intoxicating, met the demands of America’s growing working class. Over time, American lager became lighter and blander. By the 1880s, there was a distinct “American adjunct lager” that used rice or corn to minimize the bitterness and heartiness of the malt and hops. For the next century it would get blander still and would extend its dominance of the beer market. Why? This article emphasizes America’s uncommonly strong temperance movement, which put the industry on the defensive. Another factor was the American labor market in the late 19th and early 20th centuries, with long hours (and meals often consumed at saloons between shifts), negligible union protections, and a substantial “reserve army of unemployed” from which a tipsy worker could easily be replaced. Even before Prohibition, pale pilsners were some 85-90% of the market. (And yes, Prohibition was really bad for hearty beers.) Brewers consistently pushed their product as “the beverage of moderation,” and consumers increasingly sought out light, relatively non-intoxicating beers. The recent “craft beer revolution” is explained as a backlash aided by a changing consumer culture and improved information technology. The paper’s derives its conclusions from data on beer styles, production, and content (alcohol, hops, and malt), as well as articles and editorials in trade publications.

Alright, Hamilton!

The latest currency news is that Treasury Secretary Jack Lew is going to put a woman’s face on US currency for the first time. That is good news, of course, and way overdue. But the devil is in the details, and so far the details are not good. I say this as a believer in women’s equality and in modern economics.

First, the bill in question is the ten-dollar bill. Why the tenner? Of the four bills we use regularly — the one, five, ten, and twenty — this is the most redundant and the one we see the least of. You need those ones and fives to make change and pay for drinks, and twenties are what come out of the ATM. If you didn’t see a ten spot for a whole month, would you even notice? So it reeks a bit of tokenism to put a woman on our least important of the top four bills. The names that have been mentioned are fine — Harriet Tubman, Eleanor Roosevelt, Sojourner Truth, etc. — but Lew’s suggestion that there might be multiple ten dollar bills, with different women’s faces, seems to compound the tokenism. There’s not one woman in US history who’s important enough to warrant her own bill?

The other big problem is that the current occupant of the ten-dollar bill is the perhaps the most deserving American of a spot on our currency: Alexander Hamilton. As one of the authors of The Federalist and then as the first Treasury Secretary, Hamilton consistently advocated for the building blocks of a modern, functioning economy, as opposed to the feudal system of slave agriculture that dominated the South or the “nation of small farmers” that Thomas Jefferson idealized (despite being a rather large slaveholding farmer himself). Hamilton’s was a lonely position at a time when about 90% of the American population lived in rural areas and was engaged in farming. And Jefferson, then as now, was the more popular, inspirational, romantic figure of the two. But Hamilton eventually prevailed, as the nation industrialized and adopted a modern system of banking, including two central banks which finally eventually evolved into the Federal Reserve System in 1913. When a central bank does its job properly, recessions, deflation, and financial panics are less severe. Their track record is far from perfect, to be sure, but that’s a debate for another thread. Jefferson opposed a central bank, as did his fellow Founding Virginian and successor, James Madison, who had the bad timing to let its lease expire just before the War of 1812, when the nation could have really used a central bank. Madison relented after the war and Congress chartered a new central bank, but its lease was allowed to expire in another bit of ill timing, just before the Panic of 1837.