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Alcohol, Drugs, Tobacco: Economy and Culture

Class slides for the students of Kozminski University
by

Małgorzata Adamczyk

on 15 January 2016

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Transcript of Alcohol, Drugs, Tobacco: Economy and Culture

Alcohol, Drugs, Tobacco: Economy and Culture
Most importantly: what to do to pass the class?
Activity
Exam
Who have used any psychoactive substances
today?

spiritual rituals
medecine (e.g. psychiatry, pain management)
military
fun
When did we start...?
Alcohol:
produced and consumed by humans since the Neolithic Era (10,200 BCE to 4,500 / 2,000 BCE)
Mariusz Jastrząb, Ph.D.
Department of Social Sciences
jastrzab@kozminski.edu.pl

Małgorzata Joanna Adamczyk, MA
Department of International Management
mjadamczyk@kozminski.edu.pl

(and other psychoactive substances)
...this weekend?
...this week?
...month?
...year?
Psychoactive drugs by Thoric. Some rights reserved (Creative Commons Attribution-Share Alike 2.5 Generic license). Source: http://en.wikipedia.org/wiki/File:Pyschoactive_Drugs.jpg
cocaine
crack
methylphenidate (Ritalin)
ephedrine
MDMA (Ecstasy)
mescaline
LSD
psilocybin (dried Psilocybe cubensis mushroom)
Salvia divinorum
diphenhydramine (Benadryl)
Amanita muscaria (dried mushroom cap )
Tylenol #3 (contains codeine)
codeine containing muscle relaxant
pipe tobacco
bupropion (Zyban)
cannabis
hashish
Picture by Jan Jerszyński. Some rights reserved (Creative Commons Attribution-Share Alike 2.5 Generic license). Source: http://pl.wikipedia.org/wiki/Plik:Kawa_%281%29.jpg
Salvia divinorum by Phyzome. Some rights reserved (Creative Commons Attribution-Share Alike 3.0 Unported license). Source: http://commons.wikimedia.org/wiki/File:Salvia_divinorum_-_Herba_de_Maria.jpg
Recommended readings
Legal situation
A young Kava plant (Piper methysticum). Some rights reserved (Creative Commons Attribution-Share Alike 3.0 Unported license). Source: http://en.wikipedia.org/wiki/File:Youngkava.jpg
International treaties
International Opium Convention (1912)
Agreement concerning the Manufacture of, Internal Trade in and Use of Prepared Opium (1925)
Convention for Limiting the Manufacture and Regulating the Distribution of Narcotic Drugs (1931)
Agreement for the Control of Opium Smoking in the Far East (1931)
Lake Success Protocol (1946)
Single Convention on Narcotic Drugs (1961): prohibiting production and supply of narcotic) drugs and of "drugs with similar effects"
Convention on Psychotropic Substances (1971)
United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988)
licence for specific purposes: research, medical treatment
Picture by Mark Sweep. Public domain. Source: pl.wikipedia.org/wiki/Plik:Roasted_coffee_beans.jpg
Picture by André Karwath. Some rights reserved (Creative Commons Attribution-Share Alike 2.5 Generic license). Source: http://commons.wikimedia.org/wiki/File:Chocolate.jpg
Picture by André Karwath. Some rights reserved (Creative Commons Attribution-Share Alike 2.5 Generic license). Source: http://commons.wikimedia.org/wiki/File:Tea_bags.jpg
Shennong, the legendary inventor of tea
"to drink bitter tea constantly makes one think better"
Hua Tuo, 3rd century CE
nutmeg nuts
What is a drug?
When / why use it?
What is a recreational drug?

Liquor store in Breckenridge Colorado, by David Shankbone. Some rights reserved (Creative Commons Attribution 3.0 Unported license). Source: http://commons.wikimedia.org/wiki/File:Liquor_store_in_Breckenridge_Colorado.jpg
alterating mood, perception, consciousness, cognition, and behavior
stimulants
psychoactive substances
What makes a man a man and
doesn't suit a lady?

weight and diet
1929; the same year as "Reach for a Lucky Instead of a Sweet"
1955: sexologist John Money introduces the terminological distinction between biological sex and gender as a role and social construct
Art. 33: The Parties shall not permit the possession of drugs except under legal authority.
PL:
Ustawa z dnia 29 lipca 2005 r. o przeciwdziałaniu narkomanii (Dz. U. z 2005 r. Nr 179, poz. 1485) --> wykaz środków odurzających i substancji psychotropowych
Ustawa z dnia 6 września 2001 r. Prawo farmaceutyczne (Dz. U. z 2008 r. Nr 45, poz. 271)
Tobacco smoke enema device, allegedly helping to cure gut pain, cold and drowsiness, and in resuscitation of nearly-drown people. Medical textbook published in Berne, Switzerland, 1776 (public domain).
January 4, 1954

advertisement published in more than 400 newspapers in the US, aimed at arising, among an estimated 43 million readers, doubt whether scientific research truly is linking diseases and smoking

1915
1881: James Bonsack invents the cigarette-producing machine

1930s: increased lung cancer rates are observed in UK and USA

first modern anti-smoking campaign: when & where? the concern for the „master race”

1948: first major publications of Richard Doll
1950: he links smoking and lung cancer in an article in the British Medical Journal
1954-2001: British Doctors Study

1964: Smoking and Health: Report of the Advisory Committee to the Surgeon General of the United States (based on over 7000 scientific articles)
1980s: United States Surgeon General's Report on Smoking and Health confirms the link between smoking and cancer, suggested earlier

Volenti non fit injuria?
<-- what about problems of second-hand smoke or smoke-free laws?

1595: Anthony Chute discusses alleged tobacco's health benefits, repeating earlier arguments of his predecessors

1604: „custome lothsome to the eye, hatefull to the Nose, harmefull to the braine, dangerous to the Lungs” – king James I about tobacco use in A Counterblaste to Tobacco

1633: sultan Murad IV bans smoking in the Ottoman Empire; punishment for disobedience: death penalty

1861-65: American Civil War: slavery is no longer the source of the labor force on tobacco plantations in US

And what about alcohol and its damaging effects?
And what about alcohol and its damaging effects?
http://www.pnas.org/content/early/2014/11/26/1404167111
http://news.sciencemag.org/biology/2014/12/ability-consume-alcohol-may-have-shaped-primate-evolution
http://www.iflscience.com/plants-and-animals/our-ancestors-were-consuming-alcohol-10-million-years-ago
Iron law of prohibition:
the harder the law enforcement, the harder the drugs or alcohol
Richard Cowan, 1986
US prohibition: people shifting from beer to wine to hard liquor
Alchian–Allen effect
: shifting toward the higher-grade product when there is fixed-per-unit price increase
(Armen Alchian and William R. Allen, "University Economics", 1964)
Women's Christian Temperance Union
Volstead Act
The ammendments to US Constitution: no. 18 & 21
Section 1. After one year from the ratification of this article the manufacture, sale, or transportation of intoxicating liquors within, the importation thereof into, or the exportation thereof from the United States and all the territory subject to the jurisdiction thereof for beverage purposes is hereby prohibited.

Section 2. The Congress and the several States shall have concurrent power to enforce this article by appropriate legislation.

Section 3. This article shall be inoperative unless it shall have been ratified as an amendment to the Constitution by the legislatures of the several States, as provided in the Constitution, within seven years from the date of the submission here to the States by the Congress.

Section 1. The eighteenth article of amendment to the Constitution of the United States is hereby repealed.

Section 2. The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.

Section 3. This article shall be inoperative unless it shall have been ratified as an amendment to the Constitution by conventions in the several States, as provided in the Constitution, within seven years from the date of the submission hereof to the States by the Congress.

What type of document is it?
What style is it written in?
Why is it written this way?
Who wrote the document?
Why was the document written?
What is the connection between the 18th Amendment and this document?
Does it characterize prohibition as a success or a failure? Why?
http://www.pbs.org/kenburns/prohibition/watch-video/#id=2082716385
Working with the original documents
Options vs.
costs & benefits

Torches of Freedom, Lucky Strike

Lucky Strike, 1942

The Reynolds Tobacco Company, „The Camels are coming!”. Slogan used since 1914

Reynolds Tobacco Company: „The Camels are coming” (2 page ad in Saturday Evening Post, December 1914)
Reynolds spends $2 million on advertising in 1916 and $6 million in 1920
Major changes in advertising:
Unique Selling Proposition (USP) – a slogan instead of densely worded paragraph
Key role of visual materials


Cigarette advertising

Cigarette consumpiton in US in 1924: 73 billion (600 per person, children including, 18 times more than 25 years earlier)

Growing consumption

1895-1921: 14 states outlawed cigarettes: over ninety bills limitting or banning production were under consideration
Smoking restricted according to location, age, gender
Industry responded by offering bribes to legislators on state and local level

Changes in legal regulations

Cigar sales (contrary to fears of their producers) doubled in US between 1890 and 1920 but then began to decline
Sales of plug (chewing tobacco)declined from 1880 and product gradually went out of market

Changes in tobacco market

Machine that required one operator and two feeders produced 12.000 ciratettes per hour which was the output of 50 skilled hand-rollers
The amount of labour needed to produce $ 1.000 worth of tobaco products using hand techinques could now send to market $ 20.000 worth of cigarettes
Machine-produced cigarettes became uniform in taste and appearence

1881: James Bonsack builds cigarette-making machine
Machine: „poured a flow of shredded tobaco through a feeder device and onto a thin stripe of paper. The stripe was rolled into a single long tube. As the tube came out of the machine a rotating knife cut it into pieces”

In the US: cigarettes popular among soldiers during Civil War
After the war: majority return to pipes and cigars

British solders picked up habit of smoking cigarettes during Crimean War (1850s) from Russians and Turks
Scotsman Robert Gloag sets up first cigarette factory in Britain

Cigarettes gradually ascended the social ladder
Before 1800 became popular in Portugal, Italy, France, Russia
Got their name in France

First companies to manufacture cigarettes: Seville, Spain, 17th century
Cigatrette: by-product of a cigar

Camels’ share in US cigarette market: 35% in 1919 and 45% in 1920
Cigarette companies spend up to 20% of their revenues on ads
Ads directed at women
1923: 6% of smokers in US – women
1931: 14%

Cigarette advertising

„More doctors smoke Camels than any other cigarettes”, 1946

Camel, „I would walk a mile”, since 1920-1921

Lucky Dtrike has gone to war, 1944

Camel, 1930

Marlboro, „Ivory Tips protect the lips”, 1935

Chesterfield, „I really don’t know if I should smoke”, 1933

Lucky Strike, „I’m a lucky girl”, 1929

Lucky Strike, „Reach for a Lucky instead of a sweet”, 1920s

„Blow some my way”, early 1920s

Companies change brand policy:
American Tobacco Company put on packages anuncements that read: „These cigarettes are manufactured on Bonsck Cigarette Machine”
Brands become masculine „Rough and Ready” instead of „Bon Ton”, „Cloth of Gold” or „Opera Puffs”
Invention of safety matches and their free distribution additionally boost sales of cigarettes

Changes in Cigarette Branding

By 1927 legislation banning or limitting sales of cigarettes repealed in all 14 states that had introduced it
No new legal initiatives to restrict use of tobacco
1922: cigarettes overtake cigars as the most popular form of tobacco in US

Changing attitudes toward cigarettes

1892: cigarettes declared public health hazard
Late 1800s : public hygiene movements
1897-1901 cigarette sales declined (trend not obsevable again until 1960s)

Changes in Public Opinion Attitudes towards Cigarettes

With automation output of American ccompanies raises from 9 to 60 million cigarettes a year
Cigarette becomes by far the cheapest tobacco product
Prices in 1890s in the US:
Cigar: 2 cents
Pack of 10 cigarettes: 1 cent
Cost of 10 roll-your-own cigarettes: 2-3 cents

Cigaretts associated with memories of war lack of virility and Spanish decadence
Diminutive name
Association with France

Prices of tobacco falls from 31 to 9 cents a pound between 1928 and 1931
Cigarette sales:
1930: 124 billion
1931: 117 billion but climbed next year and continued to climb in following years

Prices and sales

Before Great Depression average American family spent 4% of its disposable income on tobacco, during the Depression – 7%
Buying „loosies” instead of packs

Cigarettes and Great Depression

Smokers gradually switched to cigarettes
Advantages:
Cheaper than cigars
easier to light and kept lit,
Easier to carry than other tobacco products
consumable within fraction of time demanded by pipe or cigar
„Milder in taste but more of a kick” (higher nicotine content)

Changes in tobacco consumption

Lucky Strike, Do you inhale?

Marlboro, „Ivory Tips protect the lips”, 1935

Chesterfield, „I really don’t know if I should smoke”, 1933

Lucky Strike, „I’m a lucky girl”, 1929

Lucky Strike, „Reach for a Lucky instead of a sweet”, 1920s

„Blow some my way”, early 1920s

Torches of Freedom, Lucky Strike

Lucky Strike, 1942

The Reynolds Tobacco Company, „The Camels are coming!”. Slogan used since 1914

Companies change brand policy:
American Tobacco Company put on packages anuncements that read: „These cigarettes are manufactured on Bonsck Cigarette Machine”
Brands become masculine „Rough and Ready” instead of „Bon Ton”, „Cloth of Gold” or „Opera Puffs”
Invention of safety matches and their free distribution additionally boost sales of cigarettes

Changes in Cigarette Branding

By 1927 legislation banning or limitting sales of cigarettes repealed in all 14 states that had introduced it
No new legal initiatives to restrict use of tobacco
1922: cigarettes overtake cigars as the most popular form of tobacco in US

Changing attitudes toward cigarettes

1892: cigarettes declared public health hazard
Late 1800s : public hygiene movements
1897-1901 cigarette sales declined (trend not obsevable again until 1960s)

Changes in Public Opinion Attitudes towards Cigarettes

Cigar sales (contrary to fears of their producers) doubled in US between 1890 and 1920 but then began to decline
Sales of plug (chewing tobacco)declined from 1880 and product gradually went out of market

Changes in tobacco market

Cigar makers fear competition
They spread false information about cigarettes:
Content of opium and morphine
Made of slumps picked up by tramps
Cigarette paper produced by Chinese lepers


Competition

Machine that required one operator and two feeders produced 12.000 ciratettes per hour which was the output of 50 skilled hand-rollers
The amount of labour needed to produce $ 1.000 worth of tobaco products using hand techinques could now send to market $ 20.000 worth of cigarettes
Machine-produced cigarettes became uniform in taste and appearence

Advent of Mass Production

Bonsack machine

Bonsack Machine Model

Cigaretts associated with memories of war lack of virility and Spanish decadence
Diminutive name
Association with France

Reasons for limited popularity of cigarettes

In the US: cigarettes popular among soldiers during Civil War
After the war: majority return to pipes and cigars

Popularity of cigarettes

British solders picked up habit of smoking cigarettes during Crimean War (1850s) from Russians and Turks
Scotsman Robert Gloag sets up first cigarette factory in Britain

Popularity of Cigarettes

Cigarettes gradually ascended the social ladder
Before 1800 became popular in Portugal, Italy, France, Russia
Got their name in France

Changes in tobacco consumption

First companies to manufacture cigarettes: Seville, Spain, 17th century
Cigatrette: by-product of a cigar

Beginnings of cigarette production

Consumption of cigarettes and other tobacco products in the USA (in billions of cigarettes/ cigarette equivalents)

Prices of tobacco falls from 31 to 9 cents a pound between 1928 and 1931
Cigarette sales:
1930: 124 billion
1931: 117 billion but climbed next year and continued to climb in following years

Prices and sales

„More doctors smoke Camels than any other cigarettes”, 1946

Lucky Strike, Do you inhale?

Lucky Dtrike has gone to war, 1944

Camel, 1930

Reynolds Tobacco Company: „The Camels are coming” (2 page ad in Saturday Evening Post, December 1914)
Reynolds spends $2 million on advertising in 1916 and $6 million in 1920
Major changes in advertising:
Unique Selling Proposition (USP) – a slogan instead of densely worded paragraph
Key role of visual materials


Cigarette advertising

1895-1921: 14 states outlawed cigarettes: over ninety bills limitting or banning production were under consideration
Smoking restricted according to location, age, gender
Industry responded by offering bribes to legislators on state and local level

Changes in legal regulations

With automation output of American ccompanies raises from 9 to 60 million cigarettes a year
Cigarette becomes by far the cheapest tobacco product
Prices in 1890s in the US:
Cigar: 2 cents
Pack of 10 cigarettes: 1 cent
Cost of 10 roll-your-own cigarettes: 2-3 cents

Impact of Mass Production

Until late 19th century cigarettes made by hand
Problems:
meeting (even limited) demand
Finding enough employees
Ensuring uniformity of the product

Cigarette Manufacturing

Durham, North Carolina

http://commons.wikimedia.org/wiki/File:North_Carolina_in_United_States.svg

North Carolina

Before Great Depression average American family spent 4% of its disposable income on tobacco, during the Depression – 7%
Buying „loosies” instead of packs

Cigarettes and Great Depression

Smokers gradually switched to cigarettes
Advantages:
Cheaper than cigars
easier to light and kept lit,
Easier to carry than other tobacco products
consumable within fraction of time demanded by pipe or cigar
„Milder in taste but more of a kick” (higher nicotine content)

Changes in tobacco consumption

Camels’ share in US cigarette market: 35% in 1919 and 45% in 1920
Cigarette companies spend up to 20% of their revenues on ads
Ads directed at women
1923: 6% of smokers in US – women
1931: 14%

Cigarette advertising

Camel, „I would walk a mile”, since 1920-1921

Cigarette consumpiton in US in 1924: 73 billion (600 per person, children including, 18 times more than 25 years earlier)

Growing consumption

Some anti-smoking measures (like a ban on smoking in trains) seldom enforced
Many others – minimalistic: minors could not smoke in public but they could buy tobacco products
Tensions within the Nazi hierarchy about anti-tobacco policy. While some senior representatives of the party were in favour of a wide-ranging media campaigns, others were against it

Limits of anti-smoking policies

Postwar poverty cut tobacco consumption
Tobacco use returned to its prewar level in the mid-1950s
Many authors of pre-war anti-tobacco undertakings either did not survive the war or lost their jobs for collaborating with the nazis

Smoking in Germany after the war

Robert Ley, the leader of the German Labour Front, attested personally to the benefits of not smoking
„Brother national socialist, do you know that your Fuhrer is against smoking and thinks that every German is responsible to the whole people for all his deeds and omissions, and does not have the right to damage his body with drugs?".

Role models

Advertisements could not give the impression that smoking had any "hygienic values”
tobacco manufacturers could not represent the use of tobacco as a sign of manliness nor ridicule opponents of tobacco
Advertisments could not appeal to women or people interested in sports
Representations of smoking drivers could not appear in the media

Control over advertising

Propaganda against smoking was also disseminated by the Hitler Youth and the League of German Girls
Summer 1942: Federation of German Women launched a campaign against tobacco and alcohol abuse

Propaganda against smoking

Popular health magazines contained warnings against the dangers of smoking
Journal Die Volksgifte (The Popular Poisons) devoted exclusively to the campaign against alcohol and tobacco
General interest magazines also published articles against smoking

Health promotion

The 1938 annual report of the Public Health Service (Offentliche Gesundheitsdienst):
"the nervous disorders of every sort which are being reported in increasing numbers from nearly every part of Germany are for the largest part due to excessive indulgence in tobacco and alcohol".

Investigation of health efects other than lung cancer

Leonardo Conti, the Reich Health Fuhrer, established the "Bureau Against the Dangers of Alcohol and Tobacco" in 1939
In 1942 an "Institute for the Struggle against the dangers of Tobacco" was established at the University of Jena

Organizations

In 1939, Franz Muller, from Cologne, presented the earliest epidemiolgical study, showing the link between smoking and cancer
In 1939 Fritz Lickint coins a term „passive smoking” and proves its harmful efects

Scientific research on smoking

Accusations about the health damaging effects of smoking
From late 1920s publications proving association of smoking (or inhalating somebody else’s smoke) and lung cancer

Scientific research

Medical lectures for soldiers to discourage them from smoking
At the end of the war: number od soldiers not smoking at all: 12,7%
Average soldier smoked 23,4% less than before the war

Tobacco consumption by the military

During the war German soldiers received cigarette rations but number of cigarettes limitted to 6 per day
Extra cigarettes sometimes available for purchase but also limitted (to 50 per month)
Alternative products (chocolate, extra food offered to non-smokres)

Tobacco consumption by the military

November 1941: Tobacco taxes raised to a level higher than ever before (80-95% of retail price)

Tax policy

Restaurants and cafes forbidden to sell cigarettes to women customers
Teachers prohibitted from smoking at school and expected not to smoke outside school to set an example for pupils
Criminal negligence if a driver caused an accident while smoking

Bans on smoking

1939: Himler announces smoking ban for all uniformed police and SS officers on duty
Goerring barrs soldiers from smoking on the streets, on marches and on brief off-duty periods
Minors under the age of 18 forbidden to smoke in public

Bans on smoking

Smoking prohibitted:
In post offices, in rest homes, in many workplaces and on board of German planes (1938)
In the NSDAP offices (1939)
In air raid shelters (1941)
On city trains and busses (1944)

Bans on smoking

Tobacco companies exercised a great deal of economic and political power
Industry portrayed itself as an eager supporter of the regime
Manufacturers neutralized early criticism (e.g. Sturmzigaretten)

Importance of tobacco industry

Tobacco taxes 1/20 of all government tax incomes
Tobacco and tobacco related business provided 200.000 jobs

Importance of tobacco industry

Smoking rates in Germany rose during early years of nazi rule
German per capita tobacco use between 1932 and 1939 rose from 570 to 900 cigarettes a year, whereas French tobacco consumption grew from 570 to only 630 cigarettes over the same period



Use of tobacco in Germany

Smoking is: "the wrath of the Red Man against the White Man for having been given hard liquor."

Hitler on smoking

Long before the Nazis came to power (1933), Germany was a leader in policies against smoking
The restrictions were primarily designed to reduce the risk of fire but there was also a strong undercurrent of morality, with smoking by women seen as socially unacceptable

Limits of anti-smoking policies

Racial hygiene movement:
Tobacco as a „genetic poison”
Struggle against smoking: part of a campaign for the general improvement of the „Aryan race”

Racial hygiene

In 1943, a paper prepared by German scientists Eberhard Schairer and Erich Schöniger at Jena University confirmed Muller’s study, and convincingly established for the first time that cigarette smoking is a direct cause of lung cancer

Scientific research on smoking

smoking may have functioned as a kind of cultural resistance to nazi rule
"American style" advertising campaigns waged by the tobacco industry

Why did so many Germans smoke?

tobacco provided an important source of revenue for the national treasury
In 1937-8 German national income from tobacco taxes and tariffs exceeded 1 billion Reichsmarks
By 1941 tax revenues on cigarettes doubled (also as a result of annexation of new lands)

Importance of tobacco industry

The coming of cigarettes

Psychoactive substances and undemocratic regimes

After the war demand exceeds production
Prices go up to reach their peak in 1954
In the 1950s and 1960s new initiatives to regulate the market:
„gentelmen’s agreements” (to prevent the drop of prices at the beginnin of the year)
Coffee Study Group (agreement of Latin American coutries on reduction of coffee exports)

Recovery

Coffee protection plan (initiated by the State of Sao Paulo in 1925)
Etablishment of Coffee Protection Institute that offered loans to coffee growers
Purchasing and warehousing coffee by the State
State supervision of coffee export

Intervention by public authorities

Throghout most of the 19th century growth in coffee production was matched by the growth in demand
Prices began to fall in 1890s due to growing production

Prices

Volume of world coffee trade (tonnes)

Mid 19th century: Coffee rust (a desease caused by a fungus) devastates coffee plantations in the Far East. Brazil becomes the largest coffee producer in the world
Cheap slaves, availability of bank credit
Brazil’s share in the world’s coffee export before WWI: 70%


History of coffee production

Until the end of the first quarter of the 19th century coffee production remains low
During the Napoleonic Wars production of beetroot sugar developes in continental Europe due to continetal blocade that cuts off supplies of sugar from Brazil
Brazilian sugarcrane growers switch to coffee


History of coffee production

French officer, Gabriel-Mathieu de Clieu, brings a coffee plant to Martinique which marks the beginning of coffee cultivation in America
First harvest: 1726
2nd quarter of the 18th century: beginning of coffee cultivation in Brazil

History of coffee production

Coffee tree grows fruit after 3-4 years (robusta) or 4-5 (arabica)
Growers have relatively little impact on the yield
Problem of warehousing: coffee cheapest in the first months of the calendar year
Poor growers have to sell their produce soon after harvest, contributing to price volatility
Poor growers tend to sell more when prices go down

Coffee growing

Demand: more or less stable in a short term because drinking is a habit (exception: general economic downturn)
Supply: variable due to weather conditions
Frost or draught can reduce harvest (e.g. 1975 frost in Brazil reduced yield from 22.4 million units to 6.6 million)

Supply and demand for coffee

200 million people (mostly in poor countries) live on cultivating coffee plants
In many Latin American and African countries (Columbia, Guatemala, Salvador, Uganda, Ethiopia), export of coffee accounts for 25% or more of foreign trade revenue

Importance of coffee market

Coffee: the most important agricultural commodity on the world market
On the market of unprocessed goods the volume of international trade in coffee second only to trade in crude oil

Importance of coffee market

In Italy coffee market does not grow any longer
Coffee roasters and coffee machine producers can grow thanks to growing export
70% of professinal coffee making machines produced in Italy
2007: Gaggia moved production from Milan to Romania

Recent changes

Funded in Seattle as a coffee shop in 1971
1987: Howard Schultz takes over and transforms the company into a chain of coffee bars
1987: Starbrucks owns 17 bars, in 1997 – 1.412, 1 July 2012 - 17.651

Starbucks


1971: brothers Sergio and Bruno Costa establish a coffee roasting company in Britain
1980: Costa Coffee starts franchising coffee shops to Italian emigrants

Italian caffees outside Italy

Cafes serving espresso appear also in continental Europe (especially in Germany) and in the US
Initially: both owners and clients are Italian
In West Germany ice-cream shops run by Italian imigrans selling also coffee become popular

Italian cafes abroad

Italians or people of Italian origin run many bars and restaurants in Britain
Until the 1980s their clients: working class people drinking tea rather than coffee
1980s: more interest in Italy, more customers buy coffee, bars start buying coffee machines

Italian caffes outside Italy

Moka Bar, Soho, London

A few national coffee roasters (Lavazza, Illy, Segafredo)
Bars still operating on an idependent basis

Coffee Market in 1970s

Advantage of a bar: coffee that could not be reproduced at home
Clients: price sensitive
Convention of consumption: standing at the
counter, encouraged by price controls that allowed proprietors to charge more for service at a table

Changes on a coffee market

Steam
Speed
Modernity
Coffee as imported luxury

Why espresso became popular?

Caffè Borsa, Venice, early 20th century

Coffee: markets and drinking habits

What are the arguments to support market intervention?
What are the results of state intervention?

New efforts to regulate the market

Disagreements about quotas
Promotion
Diversification Fund
Controls System (Verification of Stocks)

International Coffee Organization

When earlier interventions proves futile, in 1962, 72 countries sign International Coffee Agreement, establishing International Coffee Organization and containing provisions on export quotas
Market prices continue to fall until the frost in Brazil damages plantations in 1969
The problem of exceesive supply remains unsolved

New efforts to regulate the market

Great Depression strikes
Large quantities of coffee (equivalent of 2,5 year world consumption) are burned to prevent further downfall of prices
During WWII export to Europe becomes impossible
In 1940 USA sign an agreement with Brazil and other exporting countries: export quota established to stablize the maket

Coffee in the years of crisis

High prices created an incentive to expand production
Market prices fall even lower
Loans are not repaid and the Institute runs out of money

Effects of state intervention

1906: earliest state intervention into the market
Authorities of the state of Sao Paulo:
buy coffee at prices higher than market ones to sell it when market conditions improve
restrict the growth of new plantations
Similar interventions repeated in 1917/1918 and 1921/22

Intervention by public authorities

Transformation of Italian pattern
Take away caffees in disposabble cups
Larger portions
Milder taste
Names of drinks are to sound Italian

Starbucks

Sirocci Bar, London, Gaggia coffee making machine

Transformation from rural into industrial society
migrants flood into the cities
Bars catering to these new workers appeared

Italy during the 1950s

Social changes


Pavoni and Victoria Arduino two espresso machine brands that dominated the market between world wars



Pedavena Bar, Salsomaggiore


Turkish style coffee arrived in italy in the 17th century

Coffee houses: meeting places of the elite

The Ideale made by La Pavaoni of Milan

Vertical boiler: 1.5 atmospheres

Patent for first espresso machine (1905)

Most coffee roasters small businesses
Espresso blend: beans form 5-10 sources
Use of local images in advertising, sponsorship to local sports clubs
Variety of tastes

Local blends

Coffee Processing in Italy

Certified Italian Espresso

What you need

Italian Espresso National Institute

Amount of ground coffee required: 7 g ± 0,5
Temperature of water leaving the unit: 88°C ± 2°C
Temperature of the drink in cup: 67°C ± 3°C
Water pressure: 9 bar ±1
Water hardness: 9 °F
Percolation time: 25’’± 2,5’’
Millilitres in cup (cream included): 25 ml ± 2,5

Italian style coffee served:
As an exotic beverage in nightclubs that stayed open after the pubs had shut
In fashionable department stores
In ‘continental’ cafès that amalgamated elements from all over Europe
In bars for young people

Beginnings (1950s)

Italian coffee outside Italy

Gaggia (1948):
Spring piston, operated by a manual lever, to extract hot water from the boiler and force it through the coffee
Preassure: 9 atmospheres
Denser drink topped by a mousse: „crema caffe”

Technological change

Faema E61

1961: the Milanese firm Faema launched the E61, first semi-automatic coffee making machine (barrista used a switch to start and stop the flow of coffee)
Automatic machines: (start switch, flow stops automaticly
Super automatic (incorporating milk frothing)
Supra-automatic (with grinders)


From semi to supra-automatics

Psychoactive substances, social rebellions and counter-culture

In a democracy, people should have the freedom to make their own choices and be responsible for their actions. If they want to indulge in destructive personal behavior, that's their business, not the governments.

vs.

A democratic government is made up of its citizens and a major responsibility of government is to guarantee equal opportunity for all. The government has a duty to alleviate social ills and guarantee that no one is in need.

In an effort to protect young people from overstimulating their young bodies, the Food and Drug Administration is considering a ban prohibiting children under 18 from buying energy drinks.
Why would people pass these laws?
What benefits do these laws provide to people?
How might people be negatively affected by these laws?
What are the short and long term benefits and consequences to society of passing these types of laws?
Why would people pass these laws?
What benefits do these laws provide to people?
How might people be negatively affected by these laws?
What are the short and long term benefits and consequences to society of passing these types of laws?
Why would people pass these laws?
What benefits do these laws provide to people?
How might people be negatively affected by these laws?
What are the short and long term benefits and consequences to society of passing these types of laws?
Why would people pass these laws?
What benefits do these laws provide to people?
How might people be negatively affected by these laws?
What are the short and long term benefits and consequences to society of passing these types of laws?
Why would people pass these laws?
What benefits do these laws provide to people?
How might people be negatively affected by these laws?
What are the short and long term benefits and consequences to society of passing these types of laws?
Why would people pass these laws?
What benefits do these laws provide to people?
How might people be negatively affected by these laws?
What are the short and long term benefits and consequences to society of passing these types of laws?
Several city council members are concerned about the increased number of bicycle riders on crowded city streets. They are considering enacting an ordinance that would fine any bicycle rider not wearing a helmet on city streets.
Concerned that individuals might compromise their health and hoping to avoid black marketeering, the federal government is looking to ban organ donations for profit. No person will be allowed to sell his or her organs to organ banks. People can donate organs only when they are deceased.
Several members of Congress want to repeal a law that would require households to use only energy-efficient light bulbs instead of traditional incandescent light bulbs.
Several states are considering repealing laws requiring the wearing of seat belts in motor vehicles.
A school board is considering a ban on cell phones owing to their suspected link to brain cancer and the disruption they cause in class.
What arguments for and against drug prohibition can you find?
Rolling Stones, the Beatles, Bob Dylan, Free Love and Drugs
harm reduction vs. war on drugs
non-intoxicating fruit-juice for home consumption
liquid and semi-solid grape concentrates called wine bricks or wine blocks, sold with a warning "After dissolving the brick in a gallon of water, do not place the liquid in a jug away in the cupboard for twenty days, because then it would turn into wine."
sacramental wine
smuggled liquors
speakeasies
How do you get a drink?
Fair trade movement and its critics
http://www.tubechop.com/watch/4696206
Slavoj Zizek on Starbucks and fair trade philosophy
(watch from 0:10 till 3:26)
for our semester together, and good luck with all the exams!
Full transcript