Tag: France

A Drop of Wine Goes a Long, Long Way

I try to answer why is it that the British love Bordeaux wines, and they call them claret. Red Bordeaux is called claret. It’s a very long tradition, and people have often said this is an example of British taste and culture. Well, of course, it isn’t. It’s an example of tariff policies for 400 years.

When Eleanor of Aquitaine married Henry II in France — for those of you who remember the movie The Lion in Winter with Katharine Hepburn and Peter O’Toole — everything that came out of Bordeaux was tax-free to Britain because of this marriage, because Eleanor of Aquitaine was French and came essentially from Bordeaux, and so all Bordeaux products went to Britain tax-free. As a result, the British developed an enormous liking for this wine.

https://conversationswithtyler.com/episodes/fareed-zakaria/

That’s from Fareed Zakaria’s lovely conversation with Tyler Cowen, and there is a lot else there to unpack and think about. But I hadn’t known this particular story, and reading about it took me down a lovely little rabbit hole of factoids and “huh!” moments.

First of course, is the fact that incentives matter! Claret is a word you will come across sooner or later if you read enough of British literature from a particular era – and it turns out that at least part of the reason for it’s popularity is simply the fact (as Fareed Zakaria points out) that this wine was cheaper to drink because there was no tax on it!

Although domestically popular, French wine was seldom exported, as the areas covered by vineyards and the volume of wine produced was low. In the 12th century however, the popularity of Bordeaux wines increased dramatically following the marriage of Henry Plantagenet and Aliénor d’Aquitaine. The marriage made the province of Aquitaine English territory, and thenceforth the majority of Bordeaux claret was exported in exchange for other goods. Upon the ascension of their son, Richard, to the English throne Bordeaux became the base for Richard’s French operations.

As the popularity of Bordeaux wine increased, the vineyards expanded to accommodate the demands from abroad. Henry and Aliénor’s youngest son, John, was in favor of promoting the wine industry, and to increase it further, abolished the Grande Coutume export tax to England from the Aquitaine region. In the 13th and 14th century, a code of business practices called the police des vins emerged to give Bordeaux wine a distinct trade advantage over its neighboring regions.

https://en.wikipedia.org/wiki/History_of_Bordeaux_wine

How to stop reading a completely random Wikipedia article? Or is the correct question to ask this one: why should one stop reading a completely random Wikipedia article? This particular article, about the history of Bordeaux wine, also contained this line:

“In 1855, a classification system was set up that ranked the top chateaus of the Médoc according to their market price.”

That inspired a random series of Google searches (random Google searches is what I was born to do), culminating in I discovering that there is (of course there is) a textbook called Wine Economics:

The third form of reputation originates from recognition by national or supranational authorities. The classification system of wines was started in France in 1855 by order of Napoleon III, who wanted the vineyards of the Bordeaux region to be classified in order of quality for the Exposition Universelle de Paris. In the same year the recognition of the cru classé was attributed to sixty wines (from the Premiers Crus to the Cinquièmes Crus).

The need to create a classification system of wines that clearly and simply identified the best products became even more pressing in the first two decades of the twentieth century when buyers were confused by frauds, phylloxera, and Algerian wine that was passed off as French. In 1935 the French government created the Appellation d’Origine Contrôllée (Controlled Designation of Origin, or AOC), and it established the Institut National des Appellations d’Origine (National Institute of Origin and Quality, or INAO) with the task of regulating the AOC.

Castriota, S. (2020). Wine economics. MIT Press.

How to not then go and read the Wikipedia article on the Appellation d’Origine Contrôllée?

…the INAO was created by a decree initiated by Joseph Capus and enacted on July 30, 1935. Under this law the Comité National des appellations d’origine (CNAO) was given the sole authority to rule on matters related to the quality of wine. The members of the committee included delegates of ministries of agriculture, finance and justice and presidents of viticulture syndicates. They consulted with the top wine producers in each region to define the boundaries of appellations and the rules for a wine to qualify. The CNAO was funded by a fee paid by the producers. Many small wine producers were eager to escape the state regulations imposed on bulk winemakers, and sought to join. However the CNAO enforced high standards and the percentage of French wine designated as AOC actually declined in the first years after the CNAO was formed. The first AOC laws were passed in 1936, and most of the classical wines from Bordeaux, Burgundy, Champagne and Rhône had their initial set of AOC regulations before the end of 1937.

https://en.wikipedia.org/wiki/Institut_national_de_l%27origine_et_de_la_qualit%C3%A9

And to think that all of this completely random “research” took place because I decided to traipse down an interesting little path that branched out from a little anecdote that Fareed Zakaria narrated to Tyler Cowen about writing an article for Slate.

Cheers!

P.S. One final point worth a ponder – one of my favorite songs is a song called “Done with Bonaparte”, by Mark Knopfler. It contains the lines:

“My one true love awaits me still,
The flower of the Aquitaine”.

Might this be a reference to Eleanor of Aquitaine? Maybe somebody could shed some light on this – which would be entirely appropriate, since the etymology of the word Eleanor may be related to the Arabic word”Noor”.

Steam Engines, AI and Diffusion

Steam-powered manufacturing had linked an entire production line to a single huge steam engine. As a result, factories were stacked on many floors around the central engine, with drive belts all running at the same speed. The flow of work around the factory was governed by the need to put certain machines close to the steam engine, rather than the logic of moving the product from one machine to the next. When electric dynamos were first introduced, the steam engine would be ripped out and the dynamo would replace it. Productivity barely improved.
Eventually, businesses figured out that factories could be completely redesigned on a single floor. Production lines were arranged to enable the smooth flow of materials around the factory. Most importantly, each worker could have his or her own little electric motor, starting it or stopping it at will. The improvements weren’t just architectural but social: Once the technology allowed workers to make more decisions, they needed more training and different contracts to encourage them to take responsibility.

https://slate.com/culture/2007/06/what-the-history-of-the-electric-dynamo-teaches-about-the-future-of-the-computer.html

This is the second time this quote is appearing in a post on EFE. By the way, do read that earlier post, especially if you are in academia, and please let me know how your university has adjusted to the post pandemic world – have we just gone back to a fully offline world, or not?

But to come back to why I wanted to talk about this excerpt again – it is because The Economist asks an inevitable and obvious question regarding the deployment of AI in offices the world over:

Speculation about the consequences of ai—for jobs, productivity and quality of life—is at fever pitch. The tech is awe-inspiring. And yet ai’s economic impact will be muted unless millions of firms beyond Silicon Valley adopt it. That would mean far more than using the odd chatbot. Instead, it would involve the full-scale reorganisation of businesses and their in-house data. “The diffusion of technological improvements”, argues Nancy Stokey of the University of Chicago, “is arguably as critical as innovation for long-run growth.”

https://www.economist.com/finance-and-economics/2023/07/16/your-employer-is-probably-unprepared-for-artificial-intelligence

Having technology is not the same as using it. And in fact people will take a long time to adopt to a new technology, and that for a variety of reasons. Some may be cultural, some may be about being comfortable with the “old” workflow, and some may be, well, irrational, plain and simple.

The article in The Economist gives the examples of Japan and France, and that section is well worth a read, but what is true for countries is true, of course, at the level of organizations and institutions too. Resistance to change is hard to overcome, and the diffusion of technology simply doesn’t happen as fast as some might hope. For example:

In 2017 a third of Japanese regional banks still used cobol, a programming language invented a decade before man landed on the moon. Last year Britain imported more than £20m-($24m-) worth of floppy disks, MiniDiscs and cassettes. A fifth of rich-world firms do not even have a website. Governments are often the worst offenders—insisting, for instance, on paper forms. We estimate that bureaucracies across the world spend $6bn a year on paper and printing, about as much in real terms as in the mid-1990s.

https://www.economist.com/finance-and-economics/2023/07/16/your-employer-is-probably-unprepared-for-artificial-intelligence

But other factors are at play, beyond my simple list of factors from above (cultural reasons, inertia and irrationality). There may simply be no incentive to move to a better technology, if you are a business that is doing well in a sector with no young upstarts for competition. Particularly in the western world, it may simply be a case of an aging population that prefers to not learn new tricks. Governments may be ham-handed in terms of regulating the deployment of new technologies, and society may wish not to adopt technologies that save on labor. Costs, data privacy concerns, legal compliance issues, inevitable mistakes that AI will make – all are hurdles to be overcome.

The study of how this will change in the years to come will fascinate economists, sociologists, psychologists and many other -ists.

It is impossible to say how this will play out, but it will be a fascinating topic of study, that is for certain.

Buckle up!

Further reading, if you are interested in an economic analysis of some of these issues.

Bonne Maman Jam, The Holocaust and Twitter

Twitter chose to show me this tweet the other day:

Read the whole thread, it warms the cockles of your heart.

And then I saw on of the replies:

And deeper down the rabbit hole, this:

https://twitter.com/kikibloss/status/1361285296147595271

And then because I had an impossibly long list of things to do, I stopped. But if anybody who is reading this is wondering how to spend a lazy Saturday morning… well, I wouldn’t mind being updated!

Oh and by the way, we get Bonne Maman preserves in India. I’ve had them for years, and they’re very, very good.

Links for 2nd May, 2019

  1. “I think that most capitalists don’t know how to divide the economic pie well and most socialists don’t know how to grow it well, yet we are now at a juncture in which either a) people of different ideological inclinations will work together to skillfully re-engineer the system so that the pie is both divided and grown well or b) we will have great conflict and some form of revolution that will hurt most everyone and will shrink the pie.”
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    Written from an America centric viewpoint, but the article is worth reading for the wealth of data it shares, as also for the viewpoint about the need to reform capitalism.
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  2. “The solution, Wishnatzki believes, is to make a robot that can pick strawberries. He and a business partner, Bob Pitzer, have been developing one for the past six years. With the latest iteration of their invention—known around the farm as Berry 5.1—they are getting close.”
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    Strawberry fields forever. The article is worth reading because it speaks about robots, unemployment, demographics, immigration and the inevitability of agriculture becoming ever more mechanized.
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  3. “He also had a warning to anyone who assumes it will be “business as usual” once America’s Trump fever breaks. The idea that the Trump presidency is some sort of accident, he says, is a fantasy.”
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    An interview with the outgoing French ambassador to America. Worth reading on trade, Israel, Iran and much else besides.
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  4. “The Scrabble career of Nigel Richards went from great to astounding this week, after he won the French-language Scrabble World Championships. A New Zealand native, Richards has won several English-language titles; his new victory follows weeks of studying a French dictionary.”He doesn’t speak French at all, he just learnt the words,” his friend (and former president of the New Zealand Scrabble Association) Liz Fagerlund tells the New Zealand Herald. “He won’t know what they mean, wouldn’t be able to carry out a conversation in French I wouldn’t think.”
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    Oddly depressing, for multiple reasons. Takes the romance out of Scrabble, for one, but also points to the inevitability of automation.
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  5. “What’s woefully underexplored by economists is what the prevalence of caste implies to the Indian economy. A basic premise of the free market model is the absence of entry barriers—not just for firms keen to enter markets for goods and services, but also for people pursuing career options. In theory, companies that are under the pressure of competition to perform would want to hire workers in a way that maximizes the productivity of their workforce; a caste bias would probably stymie the cause of corporate efficiency. None of it may be overtly or even consciously done, but the effects of such a tendency could add up. Caste, thus, would result in an inefficient allocation of human resources across the economy. ”
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    Worth reading if you are starting to learn economics, and aren’t quite sure what competition and barriers to entry mean – but also if you are a student of India today.