Operating Under the Influence: A Summary of the British Brewery Bubble 1885-1913
Technology and policy are often at the heart of financial bubbles. In the 19th century, hot technologies were not Cloud computing and electric cars, it was bicycles , candy bars, and beer. From the years 1885 to 1913, English breweries were suspended in a unique bubble. The features that separate this bubble from others can be for the most part attributed to two major oddities. First, the bubble resulted from unintended consequences of legislation. Second, many of the companies involved were not new businesses; they were long-standing, often family-controlled breweries that incorporated to take on outside shareholders and cash. Widespread incorporation of the brewery companies was initialized by the temperance movement’s “crackdown” on the distribution of alcohol. Instead of merely limiting supply of alcohol as the politicians intended, this development caused breweries to rapidly start buying pubs in an effort to secure their ability to supply their product to thirsty consumers. Natur...