Vermont maple syrup, it turns out, can tell us a surprising amount about surprising things. Before reading Stephanie Hanes’s cover story this week, I might not have thought that merquén-infused maple syrup would offer insights into the sense of uncertainty that has gripped so many workers in the West. Or that it would elegantly trace the arc of opportunity and caution for free market economies in the 21st century. But it does.
The recent upheaval in Western democracies has several causes, but perhaps the greatest is this: How are they coming to terms with their shifting role in the global economy? The answer generally has been that globalization has brought huge net benefits, yet it has created a clear class of people for whom the benefits have been sharply lower. These are the Western working classes. The jobs they once did are now being automated or done elsewhere, and in the United States in particular, workers have been left almost completely unprepared for the transition.
Now, what does this have to do with maple syrup? The Vermont maple syrup industry is showing us, in real time, how this happens – and, perhaps, a different way to look at it.
One rule of free markets is that technology and collaboration drive growth. Technology is perpetually revolutionizing how we do things. Inexorably, processes become more efficient and profitable. Collaboration creates bigger markets and a bigger positive feedback loop for innovation. In other words, it’s always better to have a billion consumers and problem-solvers than a million.
In Vermont, technology has revolutionized sugaring. A decade ago, the main characters in Stephanie’s story started a sugaring operation with 28,000 taps – a number considered delusional by local farmers. By 2015, a hedge fund firm started an operation to tap 200,000 trees. Technology had changed the game, expanding the economic opportunity by orders of magnitude.
But what happened? New players – like the hedge fund firm – jumped into the game. The farmers who had previously defined the Vermont industry were significantly overshadowed, almost overnight. They should have been the new “losers.”
But here’s where the story gets interesting. So far, no group of producers has had to close its sugar shacks. Why? Because the giant of the global maple syrup industry – Quebec – essentially runs a maple syrup cartel that often forces Quebec producers to produce less to keep prices stable. This wouldn’t happen in a truly free market. The result: The system has spread benefits among many maple sugarmakers, even those in Vermont. The losers in this scenario have been the consumers, who pay more.
Does this suggest the Quebec maple syrup federation is a model? No. But even the staunchest supporters of globalization have begun to realize that the pendulum might have swung too far toward unfettered markets with too little thought for the consequences. What Stephanie’s story shows is that economies can do different things depending on how they’re shaped. The real question is this: What do we want to shape our economies to do?