Beer, Ethanol, and Unforeseen Consequences

OK, enough is enough.

For months we’ve been hearing about how demand for ethanol (for fuel) is driving up the price of grain crops. But now it appears that even beer — sweet, delicious beer — is at risk.

Check the BusinessWeek story: Trouble Brewing for Craft Beer Makers

The small brewer’s first concern is commodity prices. Gone are the plentiful hops and cheap malt that made it possible for any basement brewer to develop a distinctive recipe and launch a brand. Just look at the list of ingredients on the label: Barley supplies have been hit by droughts in Australia, too much rain in Germany, and the rush to plant corn for ethanol, pushing the price for the grain up 100% over the past 12 months. [emphasis added]

Didn’t advocates of alternative fuels think about the full social impact of their choices? In the immortal words of Homer J. Simpson: “Homer no function beer well without.” That goes for bloggers, too.

OK, so as “social consequences” go, a shortage of micro-brewed beer might not rank very highly. But this example would serve as a good starting point for discussing the sometimes-distant and hard-to-foresee consequences of seemingly simple economic decisions, and the extent to which business (and investors) can be considered responsible for those. Discuss. Over beer.

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