Beer And Neoliberalism

I already knew about how America has the Carter Era (Carter’s personal responsibility is a matter of some dispute) to thank for craft beer because I read about it back in 2010, but I was glad to see recent posts on the issue from Tom Philpott and Erik Loomis because it puts some of this summer’s controversies over neoliberalism in a more concrete light.

Here’s Loomis, who notes that America used to have tons of craft breweries but then they were put out of commission by Prohibition. When legal beer came back into existence, it was controlled by a handful of large firms:

By 1979, most of these local brewers were no more. I remember a few from growing up in the Pacific Northwest–Henry Weinhard, Olympia, Rainier, Lucky. Friends of mine a bit older could remember beers like Great Falls Select. But most were gone. However, in that year, President Carter deregulated the beer industry, allowing the sale of malt, hops, and yeast to home brewers. Thus began the microbrew revolution. From the perspective of Miller executives, this sucks because they have to produce an ever-increasing number of beers to keep control of the market. I mean, if everyone just drank piss, we could make so much money!

From my perspective of course, this is an unadulterated good. Not only has it allowed the United States to become second only to Belgium in the production of quality beer (and I’ll take an argument that the US is #1), but it has opened the minds of even people who would normally be happy to drink crappy beer. I mean, Shock Top and Blue Moon are not good beers, but they are better than Bud Light.

So here’s the thing. You may not like Miller or Bud Light, but Miller and Anheuser-Busch both run unionized breweries. And as Loomis notes, one consequence of the cartelization of the American beer brewing industry was to generate monopoly profits for the large breweries. This was good not just for “Miller executives” but for all the stakeholders in the enterprise. When a unionized firm is in a non-competitive marketplace, the union is in a strong position to force the firm to share some of the monopoly rents with the workforce. When the market becomes more competitive, not only does the unionized firm lose market share but the union in general loses leverage. The craft breweries are basically the charter schools (or foreign-built trains) of the beer world. Personally, I don’t think that’s a good reason to maintain a non-competitive market in beer any more than I oppose charter schools or imported trains. But I do hear a lot more from people who think of themselves as being “to my left,” who seem to me to spend a lot more time talking about the desirability of being more supportive of labor unions than they do talking about what concrete steps they want to take to achieve this mission. In a highly competitive market, there’s not much surplus for unions to get a share of.