(links and images still need to prettify’d, but the text is set)

(|ARCHIVE|) The fifth installment in a series of six readings and interpretations from The Geography of Beer (https://www.amazon.com/Geography-Beer-Regions-Environment-Societies/dp/9400777868) , Part III - Societies. The abstract of the current paper, ‘Neolocalism and the Branding and Marketing of Place by Canadian Microbreweries’ by Derrek Eberts (mailto:ebertsd@bradonu.ca?subject=Neolocalism%20%26%20Canadian%20Microbreweries%20%7C%20EndlessPint%20Write-up%20) , Neil Reid and Michael S. Moore, may be read on Springer (https://rd.springer.com/chapter/10.1007/978-94-007-7787-3_16) .

The Obtuse Knowledge of Insobriety

If we set our textbooks down for a moment, rub our eyes to be rid of the myopia, we provide ourselves a chance to think about what we read versus what we see and experience in our lives. For decades our economics teachers have presented the parable of the rational consumer, to whom all knowledge related to his own behavior and that of others in the market is total and instantaneous. Each homo economicus (http://www.investopedia.com/terms/h/homoeconomicus.asp) has been made out to be part man and part god, all knowing with respect to the transactions of the market place and their ability to rationally maneuver this terrain. Using this model we are lead to believe man is irrational in his behavior when not acting in accordance with the model (Predictably Irrational (http://danariely.com/books/predictably-irrational/) , by these rules) when it should be quite clear to anyone who has bought so much as a pack of gum that the high priests of these models are the irrational ones, hiding behind a veil of obfuscating mathematics and world-clearing assumptions that divert and exhaust the questioners but never satisfy their concerns.

Some of the more levelheaded of these dismal scientists (Hayek (http://www.econlib.org/library/Essays/hykKnw1.html) !) have on occasion attempted to pull back this curtain and help expose their associates to the sunlight. These revelations did not show the masses anything they did not already practice but the ivory tower mathematicians were too busy in their dark rooms practicing allegiance to their toy models, ever looking to equilibrate the numbers, rather than tune the models to the reality outside their windows and the many people acting within that reality. Getting caught up in the standard economics parable raises scholastic questions, such as why the behaviors of consumers do not fall inline with what the standard economics model expects. We can cut loose of this spider web of confusion and leave questions of how many Nobel Laureates can dance in time to a pinhead idea for another enquirer and time. These distractions offer the imagination too much without any satisfaction, a sort of mental masturbation without resolution.

It is immediately obvious from walking down the street and interacting in the world that we each inhabit a realm of infinite ignorance. The known and unknown unknowns (https://youtu.be/GiPe1OiKQuk) are enough to make Rumsfeld’s head spin (http://www.slate.com/articles/news_and_politics/low_concept/2003/04/the_poetry_of_dh_rumsfeld.html) . For the most part we ignore this fact, pay it no mind, and get on with our day. That is all for the best. Let idle minds dwell on the physics and metaphysics of the situation, we have a pack of gum to buy, perhaps a pint at the bar. What little we do know is no small thing and through action, attention, and realignment of expectations many of us are blessed with the ability to get on with making a living and gathering our necessities, plus an occasional something extra now and then (ahem, perhaps a pint at the bar). All of our knowledge together, all the little pieces locked up in our heads and the interactions among us, constitute the knowledge of society. This knowledge may be less, incomplete, or faulty compared to the desired or total of what may be hoped to be known but the tautology remains.

It is this dispersal of knowledge and the sheer lunacy of what it would require to have it all sucked up and centralized for one omniscient board, perfect economic actor, or supercomputer to make the optimum decision about what should be created that warrants skepticism. This optimum is the objective of a mathematical worldview that would see the world as fully ordered when “the marginal rates of substitution between any two commodities or factors must be the same in all their different uses.” A maniacal obsession with bringing the world to stasis, exhibiting it pinned and framed like a symmetrically beautiful butterfly. Meanwhile we live, actually alive and unpinned, in a world of change whose only constant is that very feature (no stepping in the same river twice (http://www.iep.utm.edu/heraclit/) ).

Economic planning, and there is no question of such planning taking place, just ask the butcher, the baker, and the beer maker, is best left to as decentralized an arrangement as possible in order that people with the requisite knowledge, experience and expert intuition can act most quickly and appropriately. This begins to accord the appropriate admiration to “how valuable an asset in all walks of life is knowledge of people, of local conditions, and special circumstances.”

Big corporations and Big Beer included want to remove this complexity from the environment. It is good business to do so. A large corporation is after, and in some instances able to accomplish, concentrated and integrated knowledge about its functions and the market. There are plenty of examples of this not being the case and in the long run one could argue it never lasts (witness S&P 500 turnover (https://www.inc.com/ilan-mochari/innosight-sp-500-new-companies.html) ). The reality on the street is that knowledge is dispersed, incomplete, and contradictory. To assume, or have as an objective, the centralization of this knowledge “is to assume the problem away and to disregard everything that is important and significant in the real world.”

Craft beer can provide a parable of its own with respect to planning. Craft beer’s advantage in starting small is that by necessity the establishments operate on a local scale, addressing the ignored tastes of the people in their respective areas. Moreover, it is this intimacy and appreciation of local customs, history, and identity that make the product as appealing as the successful craft brewers have in the US, North America, and continuously the world.


Dennis S. Hurd

Our neighbors to the north have a similar brewing business history to our own. The pattern of behavior is an echo of what we experienced in the states. Steady consolidation from WWII up through the 1980’s. Following a change in legislation and consumer preferences micro breweries took off, gathering strength in the 90’s, and never looking back. Similarly to the US, the ‘Big Three’ (Labatt, Molson, and Carling O’Keefe), eventually the Big Two (Molson buying Carling O’Keefe in 1989), prioritized consistency and the removal of idiosyncrasies.

Canadian beer was deemed indistinguishable to such an extent that the industry was used as a proxy to measure differences in regional productivity. All things being equal, in this case the beer deemed interchangeable, the amount of a good manufactured could be used to calculate productivity. With such an impressive level of commoditization we can view the 1980’s Canadian beer market as a close approximation to centralized, monopolistic (duopolistic, at least), planning. With enough information centrally hoovered the ability to best allocate resources could be considered. This turned out to be a false hope and artificial arrangement, witnessed in no small part by the industry development following legislation changes.

The Canadian microbreweries that came about then, since, and around today show a distinctive bend towards leveraging local identity. This is clear from the brewery names, the small firms disproportionately naming themselves after regional, local, and occasionally street specific references. The skew is less obvious for individual beer names when compared to the Big Boys but this is only due to the naming practice changes made by the latter in response to the effectiveness of this local focus and their losing market share in the high end market and hitting back. This has proven to be less effective for the Canadian Big Boys, despite the company’s retaining most outposts of previously acquired brewing facilities; their production remained dispersed but their knowledge acquisition was narrower. This was the original opening the micros walked through and filled, something increasingly obvious with their presence and astute leveraging of placeness.

Beyond the general naming of beers we see similar actions to the US around special event beers with a philanthropic bend, tourism via “Ale Trails”, brewery tours in general and direct community involvement and economic development. Often times just the presence of a brewery in an area helped to create the necessary anchor that turned around a previously dilapidated or industrial area into trendy and much sought out real estate. The use of local knowledge that can act immediately and honestly by being authentic, familiar and connected to place, showcases the very elements of neolocalism and the power of distributed decision making.

The same processes and apparatus that help bring about the predictable plenty, mechanization, outsourcing, conglomerate building, mass media, large distribution channels too often, and by its nature if not by design, also look to streamline the final element in the process, the customer. Full integration, vertical or otherwise, would include a customer base as homogeneous as the products themselves. At that point the giant breweries could concentrate on making one beer for one customer. It is this drive of Big Beer, and other large businesses, that make their customers eventually bristle and push back at the creepiness of it all. How? Money talks and price dictates.

The success of craft beer ultimately comes down to sales. The market has told these producers that it is willing to pay more for a better product and to do so repeatedly and in growing numbers. This information is communicated via an extraordinarily simple and effective means, the price system. This is the flip side of decentralized planning. No idealized entity can hold all the facts on what should be produced and no local entity can know what the whole of society values and in what arrangement. Price brings together disparate actors each working with partial knowledge and helps coordinate what should be done by signaling worth.


Edward Simpson (CC rights (https://creativecommons.org/licenses/by-sa/2.0/) )


This is real life. There is no end, much less a happy one.

The Big Boys are relentless and are looking to take in the dispersed, incomplete and contradictory knowledge of the market in perhaps the most rational way available: not by beating these smaller players at their own game, they already tried and failed with faux craft offerings, and not by buying out all input ingredients and distributors, though lord knows they would if they thought they could get away with it from a regulatory standpoint, but by playing to their own strengths and acquiring the breweries that have leveraged local knowledge into effective businesses.

This is what Big Beer is after globally through consolidation (http://us14.campaign-archive.com/?u=2bcb7588e60b55d3de7f33b21&id=d912663fce) . We now also see in the US/Canada global brewers (they are no longer American nor Canadian) picking off quality micro/craft breweries with a proven track record and portfolio.

You can say it is just beer but it is also a way of organizing society through productive means.




Intiaz Rahim (CC rights (https://creativecommons.org/licenses/by-nc-nd/2.0/) )