Can craft brew industry success be repeated elsewhere?

Derek Thompson wrote a piece in The Atlantic on the immense success of the craft been industry of the last decade:

Between 2008 and 2016, the number of brewery establishments expanded by a factor of six, and the number of brewery workers grew by 120 percent. Yes, a 200-year-old industry has sextupled its establishments and more than doubled its workforce in less than a decade. Even more incredibly, this has happened during a time when U.S. beer consumption declined.

The boom has come in a time when overall been drinking is actually down:

Preliminary mid-2017 numbers from government data are even better. They count nearly 70,000 brewery employees, nearly three times the figure just 10 years ago. Average beer prices have grown nearly 50 percent. So while Americans are drinking less beer than they did in the 2000s (probably a good thing) they’re often paying more for a superior product (another good thing). Meanwhile, the best-selling beers in the country are all in steep decline, as are their producers. Between 2007 and 2016, shipments from five major brewers—Anheuser-Busch, MillerCoors, Heineken, Pabst, and Diageo, which owns Guinness—fell by 14 percent.

Thompson finds that much of the credit behind the success can be traced back to the repeal of prohibition, which included stringent laws against monopolies, which were seen as a thread to safe-drinking. This helped establish a three-level system of producers, distributors, and retailers.

By dividing the liquor business into three distinct groups, these state-by-state rules made the alcohol industry deliberately inefficient and hard to monopolize. “The great effervescence in America’s beer industry is largely the product of a market structure designed to ensure moral balances, one that relies on independent middlemen to limit the reach and power of the giants,” wrote Barry Lynn, the executive director at the Open Markets Institute, a nonprofit that researches antitrust issues.

If the U.S. had long ago allowed a couple of corporations to take over both the distribution and retailing of wine before the Napa Valley renaissance, Lynn told The Atlantic in an interview, Americans would be exclusively sipping three varieties of Gallo table wine. “The reason that didn’t happen 50 years ago is because you had this system that was designed to promote deconcentration, to incentivize [retailers] to go out and find the new, the different, the alternatives,” he said. “It was effective in achieving that aim.”

Thompsonsays there are 3 lessons to be learned here:

First, just as research shows that gargantuan companies are bad for innovation and job creation, the craft-beer boom shows that the burgeoning of small firms stimulates both product variety and employment.

Second, sometimes consumers have their own reasons to turn against monopolies—particularly in taste-driven industries—just as they are moving away from Budweiser and popular light beers toward more flavorful IPAs and stouts produced by smaller breweries.

Third, even in an economy obsessed with efficiency, sometimes it is just as wise to design for inefficiency. Alcohol regulations have long discouraged vertical consolidation, encouraged retailers to leave room for new brands, and more recently made it easier for individuals to introduce their own batch of beer to the market. Those are the aims the country should adopt at the national level, both to make it easier for small firms to grow and to make it harder for large firms to relax.

Arguing against efficiency seems counter-intuitive to progress. Then again, it’s also hard to make argument against an industry that has thrived like craft brewing. Can this model be repeated in other, less-regulated industries?

Read the full post Craft Beer Is the Strangest, Happiest Economic Story in America at The Atlantic

Human rides 11 story wave

Sometimes, it’s amazing to watch what some humans are capable in the face of some of nature’s most poweful forces. This video is simply amazing

A German pro surfer named Sebastian Steudtner rode a wave estimated at 115 feet high and didn’t crash or kill himself. If you watch the video, even at a larger size, it’s difficult to pick Steudtner out from the wall of the cartoonishly massive wave.

…the current world record for the largest wave ever ridden (also set at Nazaré) is 78 feet.

This is from the post Surfer rides a wave 115 feet tall at kottke.org

Universal basic income may have merits, but not a longterm solution for job displacement

On Bloomberg, Noah Smith writes about the ideas of a basic income for everyone. Opining that a universal basic income is something that “can unite socialists and Silicon Valley libertarians”, he cites one possible implementation of what effectively would be a guaranteed income:

One potentially helpful analog is the negative income tax. This is where a government guarantees you a certain minimum income, which it takes away gradually as you start earning more money on the job. Negative income tax  is not a basic income, since it’s not unconditional — the phase-out of benefits acts like an income tax, which economic theory says should discourage work. But it’s a good starting point for thinking about universal basic income, because if a negative income tax doesn’t discourage work very much, then a similarly sized UBI almost certainly wouldn’t.

Smith also cites one particularly apt example of a guaranteed payment in the way of the Alaska Permanent Fund, which has been found not to discourage people from getting jobs.

Economists Damon Jones and Ioanna Marinescu found an example of a truly universal, unconditional transfer — the Alaska Permanent Fund. Since 1976, a percent of the revenues from natural resource extraction in Alaska is paid out to all state residents. This acts just like a universal basic income. In research presented at the American Economic Association meeting earlier this month, Jones and Marinescu compared Alaska to other states, and found that the introduction of the fund had no effect on employment in Alaska (though interestingly, it did cause a small shift from full-time to part-time work).

This finding represents convincing evidence that a true UBI doesn’t discourage people from working — at least, if it’s small. The Alaska Permanent Fund dividends are usually about $2,000 to $3,000 a year — not enough to live off of. A basic income of $10,000 or $20,000 might look very different, however.

The merits of a universal basic income for certainly segments can be debated, but it’s certainly not a productive longterm solution for job displacement due to automation (or any technology). The cited study already found that a guaranteed income did not discourage those from looking for employment, and there’s no apparent reason it would be any different now. The key is developing those new jobs in a way that they aren’t continually obsolete.

Read the full post A Basic Income for Everyone? It’s Not a Crazy Idea at Bloomberg.com

Free speech & tech companies

Great look at what’s wrong with the big tech companies regarding free speech. There seems to be a growing backlash, which perhaps may influence changes. The author, Tufekci recognizes that these companies are young, and compares this to the era before auto companies even thought to install seat belts.

This idea that more speech—more participation, more connection—constitutes the highest, most unalloyed good is a common refrain in the tech industry. But a historian would recognize this belief as a fallacy on its face. Connectivity is not a pony. Facebook doesn’t just connect democracy-­loving Egyptian dissidents and fans of the videogame Civilization; it brings together white supremacists, who can now assemble far more effectively. It helps connect the efforts of radical Buddhist monks in Myanmar, who now have much more potent tools for spreading incitement to ethnic cleansing—fueling the fastest- growing refugee crisis in the world.The freedom of speech is an important democratic value, but it’s not the only one. In the liberal tradition, free speech is usually understood as a vehicle—a necessary condition for achieving certain other societal ideals: for creating a knowledgeable public; for engendering healthy, rational, and informed debate; for holding powerful people and institutions accountable; for keeping communities lively and vibrant. What we are seeing now is that when free speech is treated as an end and not a means, it is all too possible to thwart and distort everything it is supposed to deliver.

For the big companies, there’s a huge dis-incentivization to changing things, as the status quo has certainly worked in their favor. Tufekci states the onus is on all us to start this conversation  and force changes.

Read the full article It’s the (Democracy-Poisoning) Golden Age of Free Speech at WIRED

Warren Miller, Filmmaking Pioneer

Warren Miller passed away last week at 93 years old. He was truly a pioneer in the ski industry and nearly every action sports film maker owes him a huge debt of gratitude for being among the pioneers of the industry. I read his autobiography a few years ago and was surprised at the number of ups and downs in his life. Tough childhood in LA, very entrepreneurial throughout life, ended up on the USC basketball team, made surf films early on, and faced some tough financial troubles brought on by people close to him.

Much of his time was spent away from home either filming or touring, which he seemingly both regretted and felt necessary. He was truly dedicated to ski industry, and remained upbeat, driven and goofy throughout his career, driven to expose skiing to as many people as possible. He certainly was influential in exposing previously unknown ski resorts to the masses, certainly pushing more to get out in the mountains.

On Wednesday, January 24, Warren Miller, renowned ski filmmaker and outdoor industry icon, passed away of natural causes. He was 93. A California native, Miller purchased his first camera for 39 cents at the age of 12. In college at the University of Southern California, Miller pursued both academics and his passion for adrenaline-fueled sports like skiing, surfing and speed skating until he enrolled in USC’s officer training program at the beginning of WWII. From there, he joined the Navy, and at the end of his service in 1946, he jumped on an opportunity to pick up the camera once again and film his ski explorations in his home state.

from the post Reflecting on Warren Miller: Ski Filmmaker Icon at Backcountry Magazine

Walkable streets are economically more productive than car-oriented

Nevermind that walkable streets are nice for living, they’re also more economically productive.

Again and again, when we look at streets oriented toward people — that is, streets where walking is safe and enjoyable, that people are drawn to visit on foot, and where fast and extensive car traffic is not the #1 priority — we find that they are more economically productive than any other style of development. This is particularly true when we compare people-oriented places to car-oriented places

from the post Why Walkable Streets are More Economically Productive — Strong Towns at Strong Towns

Is is better to be a runner up for Amazon HQ2?

Amazon’s HQ2 “sweepstakes” is quite similar to what pro sports teams have been doing for years by pressuring governments to give them incentives. Noah Smith acknowledges some of the drawbacks of catering to large companies, including the fact that the incentives likely have little value to Amazon (or another company) in the big picture yet cost cities far greater. Many urban policy experts feel it could be harmful. On the other hand, it’s easier to see how a company providing jobs can benefit a city/region. Beyond tax incentives, companies like Amazon are looking for great people and those people demand good schools, nice parks. etc. Given an incentive to improve chances of luring a company like Amazon, many cities (including the 20 finalists) may increase resources in those areas.

But there’s a worry that the scramble to lure HQ2 will give rise to wasteful urban policies and set a bad precedent. Already there is speculation that Apple Inc. will build an HQ2 of its own, sparking a similar competition. What if this sort of industrial sweepstakes, used in the past to win everything from auto plants to sports teams, becomes the norm?Many urban policy experts are worried that Amazon-style competitions will hurt cities, by enticing them to spend too much on tax incentives and other giveaways. A recent roundup of opinions by the Penn Institute for Urban Research showed that this concern is widespread.

from Noah Smith’s article Amazon Sweepstakes Can Be Great for the Losers at Bloomberg.com