Archive for the ‘economic history’ Category

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

25 June 2015

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.

beverage-moderation-old-ad

The wizard of oz.

9 March 2013

This weekend’s opening of the Disney blockbuster “Oz the Great and Powerful” is my opening for a little shameless self-promotion. My nearest claim to fame is a book I co-wrote called The Historian’s Wizard of Oz: Reading L. Frank Baum’s Classic as a Political and Monetary Allegory. My “co-author” is L. Frank Baum himself, as the book includes all of the first Oz book, The Wonderful Wizard of Oz, with about 65 footnotes that I put in to point out various alleged symbolism. The supposed symbols have to do with the political and economic landscape of the 1890s, when Baum wrote the book.

There are several versions of Oz as a political or monetary allegory, but almost all of them focus on farm distress (opening gloom in Kansas, a hotbed of “prairie populism”), the gold standard (yellow brick road), bimetallism (silver shoes (not ruby slippers in the book) on a yellow brick road),  quest for the political power center of the nation (Emerald City), supposedly dim farmers who turn out to be quite clever (scarecrow), supposedly all-powerful president who turns out to be a “humbug” (wizard), and so on. The original allegorical interpretation, Henry Littlefield’s “The Wizard of Oz: Parable of Populism” (1964), had a symbol for seemingly every major character and incident in the book, including the name Oz as an allusion to “oz.,” the abbreviation for an ounce of gold or silver. A later version by economist Hugh Rockoff (“The Wizard of Oz as a Monetary Allegory,” 1990) added many more symbols.

The annotations in my book draw on Littlefield’s and Rockoff’s interpretations, as well as those of several others, and add a few of my own. I also have chapters on understanding the gold standard, the “Populist” farm-protest movement, and the inevitable question of whether Baum intended the book to be in any way a commentary on politics or economics. I reach a definite conclusion on that one, but I’m not going to give it away here. Besides my book, I have a freely available article in Essays in Economic & Business History that says all I have to say on the subject.

History lesson: Recessions are modern

8 May 2010

Interesting just in its own right, this paragraph from Paul Krugman:

“… the 19th-century economy had much more flexible prices and wages than later came to be the case — not, primarily, because of different institutions, but because it was still largely an economy of small, self-employed farmers. More than half of US workers were in agriculture up until the 1880s. Peter Temin has told me — I can’t find it in a quick search — that the United States didn’t start having modern recessions, with large declines in real GDP, until the Panic of 1873; Britain started having them much earlier, because it became an industrial economy earlier.”

Or possibly not even until the Panic of 1893, which at the time was known as the Great Depression.  Some economic history research that I have not seen, but which is cited confidently in this compelling column by Charles R. Morris, concludes that the 1870s contraction was actually quite mild.

Which is not to see that genuine and widely felt “hard times” never occurred in our pre-industrial, pre-1870 economy.  Financial panics and deflations were common, and any big drop in farm price surely hurt the real incomes of many farmers, as long as their prices fell more than other prices and farmers had nominally denominated debts.  Many economic historians have even said that a “depression” in the early 1770s helped set the stage for the American Revolution.  But it does seem we need to have a better understanding of what those early “hard times” were like for the people who experienced them.

Yikes

8 June 2009

G.D. vs now

From Barry Eichengreen & Kevin H. O'Rourke (h/t: Andrew Sullivan)

Lessons From FDR’s First Ten Days?

30 April 2009

Somewhat lost in this week’s media-created milestone of the first hundred days of the Obama Administration, and the inevitable comparisons to Pres. Franklin D. Roosevelt’s momentous First Hundred Days (so momentous that they became a proper noun) is FDR’s even more extraordinary accomplishment in his first ten days:  the resurrection of the U.S. banking system.  Such resurrection, as you may have heard, has so far eluded Pres. Obama and his predecessor.  Are there lessons from how FDR and his guys did it?

First, a quick timeline:  FDR took office on March 4, 1933 (after that, the 20th Amendment moved the inauguration date up to January).  On March 5, he declared the famous “bank holiday.”  On March 9, he got Congress to pass the Emergency Banking Act, to give his administration unprecedented powers over the banks.  On March 12, he gave his first “fireside chat,” assuring people that the banks were about to reopen and would be healthy when they did.  On March 13 (day 10), banks reopened in 12 cities.  By March 16, the administration’s massive audit and purge operation, more than 70 percent of U.S. banks had reopened, while others were closed.

Economic historians are in less-than-complete agreement about the New Deal’s overall macroeconomic impact, with a substantial minority in a recent survey agreeing with a proposition that the New Deal harmed the economy.  But there does seem to be consensus that the bank overhaul was a great success.  Even FDR advisor-turned-harsh-critic Raymond Moley described it in glowing terms.  With the president’s signing of the Emergency Banking Act, he wrote in After Seven Years (a classic among Roosevelt bashers), without sarcasm, “The sequence of bold, heart-warming action had begun.”

The personnel involved in the great bank triage operation, which involved some 15,000 banks (i.e., twice as many as we have now) were various Treasury and Federal Reserve officials, with Secretary of the Treasury William Woodin at the helm.  In Moley’s words:

‘ . . . as I look back at those frenzied days, it seems to me that the country has never quite realized the extent to which Woodin, [Hoover’s Undersecretary of the Treasury Arthur] Ballantine, and, last but no means least, [Hoover’s Acting Comptroller of the Currency F.G.] Awalt helped to restore the confidence of the country by a rapid and unprejudiced approximation of the equities — social as well as financial — involved in each case. . . .’

‘Capitalism was saved in eight days, and no other single factor in its salvation was half so important as the imagination and sturdiness and common sense of Will Woodin.’

Mister, we could use a man like William Woodin again.

(to be continued)