Capitalism keeps everyone on their toes - come up with a new idea or a better way of manufacturing an old idea and you can be the next Microsoft. Unfortunately, many large business entities use their political power to write legislation that ensures this will never happen. They partner up with their cronies in the legislature and write laws that set the bar of entry too high for anyone but other people like themselves.
Warren Meyer writes about one such example in Coyote Blog:
My Nomination for Corporate State of the Year: Napa County, California
Last week I went on a wine-tasting tour in the Napa Valley with a bunch of friends who are passionate about wine. It was an odd experience, because I am not passionate about wine and do not have the tasting ability to discern many differences between the wine. I could tell it was a red wine, and maybe if it was dry or fruity, but hints of tobacco and blackcurrent? Not so much. It was also weird to be in a place where I really was not very passionate (wine is behind both beer and cocktails in my drinking hierarchy) but I was surrounded by people with a an excess of passion -- by people who seem to build their whole life around wine.
And Napa County in particular:
Anyway, at each tour we typically got the whole backstory of the business. And the consistent theme that ran through all of these discussions was the simply incredible level of regulation of the wine business that goes on in Napa. I have no idea what the public justification of all these rules and laws are, but the consistent theme of them is that they all serve to make it very hard for small competitors or new entrants to do business in the county. There is a board, likely populated by the largest and most powerful entrenched wine makers, that seems to control the whole regulatory structure, making this a classic case of an industry where you have to ask permission of your competitors to compete against them. There are minimum sizes, in acres, one must have to start a new winery, and this size keeps increasing. Recently, large winemakers have started trying to substantially raise this number again to a size greater than the acreage of any possible available parcel of land, effectively ending all new entrants for good. I forget the exact numbers, but one has to have something like 40 acres of land as a minimum to build a structure on the land, and one must have over 300 acres to build a second structure. You want to buy ten acres and build a small house and winery to try your hand at winemaking? -- forget it in Napa.
And he concludes:
This is why the Napa Valley, to my eye, has become a weird museum of rich people. It seems to be dominated by billionaires who create just fantastically lovely showplaces that produce a few thousand cases of wine that is sold on allocation for 100+ dollars a bottle to other rich people. It is spectacularly beautiful to visit -- seriously, each tasting room and vineyard is like a post card, in large part because the owners are rich enough to care nothing about return on capital invested in their vineyards. The vineyards in Napa seem to have some sort of social signalling value which I don't fully understand, but it is fun to visit for a few days. But in this set-piece, the last thing the folks who control the county want is for grubby little middle-class startups to mess up their carefully crafted stage, so they are effectively excluded.
I know zero about wines, but from other industries this seems to be a recipe for senescence. It would surprise me not at all to see articles get written 10 years from now about how Napa wines have fallen behind other, more innovative areas. I have never been there, but my friends say newer areas like Paso Robles has an entirely different vibe, with working owners on small plots trying to a) actually make a viable business of it and b) innovate and try new approaches.
This is just an excerpt - there is more at the site and an interesting postscript. Napa County is a microcosm of what is wrong with civilization today. Too much regulation. Writer Harvey Silverglate published a book back in 2011 called: Three Felonies A Day: How the Feds Target the Innocent which goes into great detail on how much bad and fuzzy legislation is on the books. Time for some sunset laws.
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