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This article discusses German beer production and Japanese milk production as being less efficient than their equivalent industries in the US as a result of leg

This article discusses German beer production and Japanese milk production as being less efficient than their equivalent industries in the US as a result of legal and cultural factors (Germans liking local beer, Japanese emphasizing freshness). It seems to suggest that more efficient industries would be more desirable; but I’d argue that freshness and variety are more important than efficiency in many regards. (I also say this as someone whose dominant regional milk distributor often distributes milk that’s already sour when opened minutes after purchase a week before the sell-by date, probably because it’s more “efficient” to produce milk a full day’s drive from a factory that’s a full day’s drive from the city; and more “efficient” not to clean their equipment thoroughly. Since few stores here carry any other brands of “normal” milk, I’ve had to start buying a more expensive “organic” brand just to get reliably drinkable milk; but plenty of people can’t afford that.)

addicted 8y ago
I want to point out that the author/speaker points out that efficiency and productivity aren’t the only metrics to consider and in certain scenarios you would want to consider other metrics as well. I personally feel that the examples effect was reduced because the values that led to a loss of productivity in the food processing industry in Japan or the beer making industry in Germany may actually be worth it. But in general they still do illustrate the point he is making about efficiency and productivity arising out of competition. That being said, the IBM/Microsoft example didn’t really work for me. Because it completely ignores Apple. Apple operates very much like the IBM thst MS vanquished but for the past decade or so it has been crushing Microsoft by any measure of efficiency or productivity. I’d argue that MS still has significantly more innovation than Apple, but is unable to convert that into productivity or efficiency. And that’s where I think there is a slight hitch in the argument. Competition appears to help with innovation. And innovation often leads to productivity and efficiency. But not always. So if you take the beer example, I would suggest that German beers are likely more innovative than American ones (by which term both the author and I are excluding the fast growing craft beer industry in the US, which is clearly less efficient than the Budweisers the author is discussing) because of the high degree of competition, but in this case, that hasn’t translated into efficiency. I find the author’s claim that this is because of strong localism hard to swallow considering that the effects of competition in other parts of the article are described as strong enough to lead to the demise and conquering of entire continents, but apparently cannot overcome local tastes. Also, the laws argument doesn’t explain why the thousands of breweries within Germany are unable to compete with each other. It seems to me that in this case American companies are more efficient because they focus on efficiency whereas the German companies prioritize having a distinct taste which disallows productivity gains from mass production and stuff like reducing brewing times by using certain chemicals etc. Further, the tremendous rise of the American craft beer industry seems to indicate that even Americans, having been exposed to better beers, are valuing less efficient methods of beer production. So it seems to me the author is making another correlation that does not necessarily stand. Which is a correlation between efficiency and becoming rich. I think the author describes the conditions under which innovation happens, but incorrectly draws a straight line to efficiency, and continues that line to making money.
- T-A 8y ago
  > That being said, the IBM/Microsoft example didn’t really work for me. Because it completely ignores Apple. Apple operates very much like the IBM thst MS vanquished but for the past decade or so it has been crushing Microsoft by any measure of efficiency or productivity. The talk was delivered on June 6, 1999.
  - addicted 8y ago
    Wow. Thanks for pointing that out. The headline was only updated with that information after my comment and I must have missed it on the page. So it’s a pretty solid talk for 1999 and has several insights which have become mainstream only recently.
nottorp 8y ago
TBH the fact that US food production is 3x more efficient does not make me want to eat US produced food... on the contrary. Bad steel is easy to notice so every industry ends up producing it at the same standards. Bad beer or chicken stuffed full of chemicals... not so much. He should have picked other examples.
- code_duck 8y ago
  It’s fairly easy to distinguish low quality food and the brands or factories that are likely to produce it, if you’re in the habit and educated about it. Many people in the US have very little exposure to higher quality food or alcohol since it’s simply not available from mainstream outlets.
  - stcredzero 8y ago
    It’s fairly easy to distinguish low quality food and the brands or factories that are likely to produce it, if you’re in the habit and educated about it. Many people in the US have very little exposure to higher quality food or alcohol since it’s simply not available from mainstream outlets. Your statement rings true. It generalizes well. "It's fairly easy to distinguish low quality news and the brands or companies that are likely to produce it, if you’re in the habit and educated about it. Many people in the US have very little exposure to higher quality news or information since it’s simply not available from mainstream outlets."
  - nottorp 8y ago
    It might or might not be easy to distinguish, but that's not the point. The point is that in the original article, the quality differences between US and EU/Japan food explain the "efficiency" difference and ruin the whole argument.
throwawayjava 8y ago
The German beer example is funny and seriously dates the article. Turns out that "how to get rich" (as opposed to stay rich) in American beer making between 1999 and 2018 was 100% to copy the German model. Regional and microbreweries soared from ~4 bbls ~22 bbls between 2004 and 2017. And that definitely wasn't the result of "government intervention". It was the result of people realizing they should be able to make and drink good beer without flying to Germany with empty suitcases...
- bitwize 8y ago
  Turns out the Germans are actually looking to revise a 500-year-old law defining beer. You see, the Americans have developed a taste for flavored craft beers, often from these same microbreweries, and exported it worldwide... Meanwhile, in Germany, beer is legally defined as being made solely of barley, hops, water, and yeast. The time-honored German beer industry can't keep up with the shifting tastes.
  - Retric 8y ago
    Labeling it as something other than Beer seems like an easy compromise.
    - istjohn 8y ago
      Barley wine, malt liquor, grain champaigne?
    - toast0 8y ago
      Heck -- label it Bier for real beer, and Beer for beer with extra crap. (Disclaimer: I pretty much dislike all beers I've tried, so I don't have a horse in the race)
  - pfranz 8y ago
    My understanding was that Belgium has always been big on a huge variety of non-traditional beer styles; lambic beers, champagne beers, dubbel, tripel, quadrupel, etc. I would think that would be a much closer and longer-term influence than the craft beer movement in the US. I've never been over there but really want visit those two countries specifically for the beer. One of the things I really like about beer is that its moderate shelf-life means it doesn't transport well. Everyone who goes to Ireland has some sort of variation of, "I don't even like Guinness, but it's amazing and completely different over there." It doesn't help that beers like Newcastle, Becks, and Heineken use clear or green bottles that ruins them more quickly. I've heard anecdotes from Australians who get their hands on American craft brews and were disappointed by off flavors--but later find out it's because it was skunked or stale in transport. I feel like that moderate shelf life keeps local beers local and makes traveling to new areas interesting.
isk517 8y ago
In terms of beers I think a lot has changed in the US compared to 1999 when this was written. Craft beers have become big enough business that the established brands cannot ignore them because there is a growing amount of consumers that are choosing quality of efficiency.
- code_duck 8y ago
  Sure, but just like in so many other industries, what the bigger corporations do is buy the largest small brands and then ruin everything about them that made them good. They also invent pseudo-craft brands that dilute the market and practically mock the entire idea of craft beer by being low quality, mass produced, nationally marketed and corporate backed. It’s noteable how subtly off their packaging and marketing is when they do this. If they understood the product they would have made it in the first place. The way these companies are not corporate controlled are an integral part of the quality of their product and experience. People passionate and knowledgeable about the product are making decisions at every step, not MBAs. I’d compare it to game studios, or especially music. When a brewery like a Goose Island gets acquired by a major brewer, it’s like they have sold out, similar to when a underground band grows and gets signed by an major label. They lose relevance for true aficionados as the quality predictably decreases along with any feeling of exclusivity.
  - nightski 8y ago
    Meh. I've had great beer from pseudo-craft brands and awful beer from small independent craft breweries. I also haven't seen this effect at all. Have some nice craft breweries been bought out? Yes. But we still have over 80 craft breweries in our metro area alone and we are far from the largest city in the U.S. The options for great beer are endless.
    - stcredzero 8y ago
      Meh. I've had great beer from pseudo-craft brands and awful beer from small independent craft breweries. I know for a fact that some independent craft brewers make an IPA, even though the brew master doesn't like them. It's obligatory. Some of this is on the knowledge and standards of the consumer. My experience with espresso in Tuscany in the 2000's, was that even ordinary corner store espresso there was better than fancy espresso in most places in the US. Why? Simply because the population in Tuscany has higher expectations.
ElBarto 8y ago
Yes. It is desirable to produce _according to specs_ as efficiently as possible. It isn't desirable to lower specs in order to improve efficiency (for some definition of 'efficiency').

addicted 8y ago

I want to point out that the author/speaker points out that efficiency and productivity aren’t the only metrics to consider and in certain scenarios you would want to consider other metrics as well. I personally feel that the examples effect was reduced because the values that led to a loss of productivity in the food processing industry in Japan or the beer making industry in Germany may actually be worth it. But in general they still do illustrate the point he is making about efficiency and productivity arising out of competition. That being said, the IBM/Microsoft example didn’t really work for me. Because it completely ignores Apple. Apple operates very much like the IBM thst MS vanquished but for the past decade or so it has been crushing Microsoft by any measure of efficiency or productivity. I’d argue that MS still has significantly more innovation than Apple, but is unable to convert that into productivity or efficiency. And that’s where I think there is a slight hitch in the argument. Competition appears to help with innovation. And innovation often leads to productivity and efficiency. But not always. So if you take the beer example, I would suggest that German beers are likely more innovative than American ones (by which term both the author and I are excluding the fast growing craft beer industry in the US, which is clearly less efficient than the Budweisers the author is discussing) because of the high degree of competition, but in this case, that hasn’t translated into efficiency. I find the author’s claim that this is because of strong localism hard to swallow considering that the effects of competition in other parts of the article are described as strong enough to lead to the demise and conquering of entire continents, but apparently cannot overcome local tastes. Also, the laws argument doesn’t explain why the thousands of breweries within Germany are unable to compete with each other. It seems to me that in this case American companies are more efficient because they focus on efficiency whereas the German companies prioritize having a distinct taste which disallows productivity gains from mass production and stuff like reducing brewing times by using certain chemicals etc. Further, the tremendous rise of the American craft beer industry seems to indicate that even Americans, having been exposed to better beers, are valuing less efficient methods of beer production. So it seems to me the author is making another correlation that does not necessarily stand. Which is a correlation between efficiency and becoming rich. I think the author describes the conditions under which innovation happens, but incorrectly draws a straight line to efficiency, and continues that line to making money.

T-A 8y ago
> That being said, the IBM/Microsoft example didn’t really work for me. Because it completely ignores Apple. Apple operates very much like the IBM thst MS vanquished but for the past decade or so it has been crushing Microsoft by any measure of efficiency or productivity. The talk was delivered on June 6, 1999.
- addicted 8y ago
  Wow. Thanks for pointing that out. The headline was only updated with that information after my comment and I must have missed it on the page. So it’s a pretty solid talk for 1999 and has several insights which have become mainstream only recently.

nottorp 8y ago

TBH the fact that US food production is 3x more efficient does not make me want to eat US produced food... on the contrary. Bad steel is easy to notice so every industry ends up producing it at the same standards. Bad beer or chicken stuffed full of chemicals... not so much. He should have picked other examples.

code_duck 8y ago
It’s fairly easy to distinguish low quality food and the brands or factories that are likely to produce it, if you’re in the habit and educated about it. Many people in the US have very little exposure to higher quality food or alcohol since it’s simply not available from mainstream outlets.
- stcredzero 8y ago
  It’s fairly easy to distinguish low quality food and the brands or factories that are likely to produce it, if you’re in the habit and educated about it. Many people in the US have very little exposure to higher quality food or alcohol since it’s simply not available from mainstream outlets. Your statement rings true. It generalizes well. "It's fairly easy to distinguish low quality news and the brands or companies that are likely to produce it, if you’re in the habit and educated about it. Many people in the US have very little exposure to higher quality news or information since it’s simply not available from mainstream outlets."
- nottorp 8y ago
  It might or might not be easy to distinguish, but that's not the point. The point is that in the original article, the quality differences between US and EU/Japan food explain the "efficiency" difference and ruin the whole argument.

throwawayjava 8y ago

The German beer example is funny and seriously dates the article. Turns out that "how to get rich" (as opposed to stay rich) in American beer making between 1999 and 2018 was 100% to copy the German model. Regional and microbreweries soared from ~4 bbls ~22 bbls between 2004 and 2017. And that definitely wasn't the result of "government intervention". It was the result of people realizing they should be able to make and drink good beer without flying to Germany with empty suitcases...

bitwize 8y ago
Turns out the Germans are actually looking to revise a 500-year-old law defining beer. You see, the Americans have developed a taste for flavored craft beers, often from these same microbreweries, and exported it worldwide... Meanwhile, in Germany, beer is legally defined as being made solely of barley, hops, water, and yeast. The time-honored German beer industry can't keep up with the shifting tastes.
- Retric 8y ago
  Labeling it as something other than Beer seems like an easy compromise.
  - istjohn 8y ago
    Barley wine, malt liquor, grain champaigne?
  - toast0 8y ago
    Heck -- label it Bier for real beer, and Beer for beer with extra crap. (Disclaimer: I pretty much dislike all beers I've tried, so I don't have a horse in the race)
- pfranz 8y ago
  My understanding was that Belgium has always been big on a huge variety of non-traditional beer styles; lambic beers, champagne beers, dubbel, tripel, quadrupel, etc. I would think that would be a much closer and longer-term influence than the craft beer movement in the US. I've never been over there but really want visit those two countries specifically for the beer. One of the things I really like about beer is that its moderate shelf-life means it doesn't transport well. Everyone who goes to Ireland has some sort of variation of, "I don't even like Guinness, but it's amazing and completely different over there." It doesn't help that beers like Newcastle, Becks, and Heineken use clear or green bottles that ruins them more quickly. I've heard anecdotes from Australians who get their hands on American craft brews and were disappointed by off flavors--but later find out it's because it was skunked or stale in transport. I feel like that moderate shelf life keeps local beers local and makes traveling to new areas interesting.

isk517 8y ago

In terms of beers I think a lot has changed in the US compared to 1999 when this was written. Craft beers have become big enough business that the established brands cannot ignore them because there is a growing amount of consumers that are choosing quality of efficiency.

code_duck 8y ago
Sure, but just like in so many other industries, what the bigger corporations do is buy the largest small brands and then ruin everything about them that made them good. They also invent pseudo-craft brands that dilute the market and practically mock the entire idea of craft beer by being low quality, mass produced, nationally marketed and corporate backed. It’s noteable how subtly off their packaging and marketing is when they do this. If they understood the product they would have made it in the first place. The way these companies are not corporate controlled are an integral part of the quality of their product and experience. People passionate and knowledgeable about the product are making decisions at every step, not MBAs. I’d compare it to game studios, or especially music. When a brewery like a Goose Island gets acquired by a major brewer, it’s like they have sold out, similar to when a underground band grows and gets signed by an major label. They lose relevance for true aficionados as the quality predictably decreases along with any feeling of exclusivity.
- nightski 8y ago
  Meh. I've had great beer from pseudo-craft brands and awful beer from small independent craft breweries. I also haven't seen this effect at all. Have some nice craft breweries been bought out? Yes. But we still have over 80 craft breweries in our metro area alone and we are far from the largest city in the U.S. The options for great beer are endless.
  - stcredzero 8y ago
    Meh. I've had great beer from pseudo-craft brands and awful beer from small independent craft breweries. I know for a fact that some independent craft brewers make an IPA, even though the brew master doesn't like them. It's obligatory. Some of this is on the knowledge and standards of the consumer. My experience with espresso in Tuscany in the 2000's, was that even ordinary corner store espresso there was better than fancy espresso in most places in the US. Why? Simply because the population in Tuscany has higher expectations.

ElBarto 8y ago

Yes. It is desirable to produce _according to specs_ as efficiently as possible. It isn't desirable to lower specs in order to improve efficiency (for some definition of 'efficiency').