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Episode 0025:
Wine Reads – November 24, 2021
Although I can not say Thanksgiving is uniquely American, as our Canadian neighbors celebrate Thanksgiving at least a month or so before those of us in the United States, the holiday does possess a uniquely American mystique, with art, music, movies, cartoons, and other cultural motifs proliferating our celebration of this day throughout the world. Considering some of our largest listenership comes from folks outside the U.S., it’s pretty clear that there are hundreds of people listening who won’t be sitting down at a table tomorrow to eat turkey, say a prayer of thanks for the blessings in their lives, and dig in to a large meal and hopefully, lots of really cool wines. Additionally, although I understand it can be really helpful, I kind of get tired of all those lists with the “Great Thanksgiving Pairings” in the title. So, in light of our own Thanksgiving holiday in the U.S., and the fact that every culture has some holiday they celebrate that generally involves the ritual of gifting a bottle of wine, I thought I’d share this thought provoking piece from Mike Veseth, over at the WineEconomist blog, at WineEconomist.com. I share my own thoughts after reading the piece, but his article, dated November 23, 2021, and titled “An Economic Theory of Thanksgiving Wine,” combines economics, wine, and the spirit that really captures the multidisciplinary approach we take here.
For today’s special Thanksgiving Wine Reads, here’s Mike’s post:
https://wineeconomist.com/2021/11/23/thanksgiving-wine/
Thursday is Thanksgiving Day here in the United States and many of us will gather with family and friends for the holiday feast. If you have been invited to share Thanksgiving with others (and if you are interested enough in wine to be reading this column), then you must confront a perennial problem: what wine should you bring?
Deadweight Loss?
Why is the choice of a gift wine an economic problem? Well, it isn’t much of a problem if you plan to drink it all yourself. Then you should just buy what you like — but don’t expect to be invited back next year!
Since the point will be to share the wine with other guests, the choice is more difficult because just as you can’t be sure exactly what dishes will be served, you cannot be certain what wines the other guests will like the best.
There is a pretty good chance that you will experience what economists call a “deadweight loss” which is more or less where the benefit that the guests derive from your wine is less than what they’d have gained from a simple cash transfer. The story (which is possibly true) is told about the time Malcolm Forbes threw himself an extravagant birthday party where the guests were served some of the rarest, most expensive wines on the planet. Forbes went from guest to guest pouring the evening’s show-stopper wine. Finally he came to Warren Buffet. Wine? said Forbes with a smile. No thanks, Buffet replied. I’ll take the cash!
Warren Buffet understood the concept of deadweight loss and wanted nothing to do with it!
The Problem of Other People’s Money
The problem is asymmetric information. You know your own preferences and budget situation pretty well and so you have a fairly good idea of what you are giving up when you buy an expensive bottle of wine as a gift. But you don’t know the preferences of the other guests very well or whether they would prefer your wine or a simple cash payment to be spent on something else. You can’t be sure that their gain is greater than your loss.
This leads (I hope you are following along) to the conclusion that you are most efficient when you spend your own money on yourself because you can fairly well calculate both the gain and the opportunity cost. You are less efficient (in terms of deadweight loss) when spend your money on others. You are even less efficient when you spend other people’s money on yourself. And you are hopelessly inefficient when you spend others people’s money on other people.
What do you think?
So it would seem like the most efficient thing to do would be to decline that dinner invitation and stay home with your wine. How sad! No wonder economics is called the “dismal science.”
It’s Not About the Wine
But here’s the notion that saves the day. Thanksgiving is not really about the wine (or the turkey or the green bean casserole), it is about the sharing. Thanksgiving is more public or communal good than private good. And so, if you do it well, the particular elements of Thanksgiving including the wine will play a secondary role to the general warmth of the shared experience.
I used to get frustrated when wine wasn’t the centerpiece of gatherings, some of which were actually organized to celebrate the wine. But then I got over it. Wine is doing its job when it makes everything else better. Don’t you agree?
This fact changes a bit how you might approach your choice of a Thanksgiving wine to share. Cost is nearly irrelevant. Picking a wine that draws undue attention to you (and your fine taste or great wealth) almost defeats the purpose. A modest wine that makes everyone smile — maybe something with bubbles? — will serve very well. And then you can concentrate on what Thanksgiving is really about.
That said, no one will complain if you bring a nice Port, Madeira, or Sauternes to savor at the end of the meal.
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Happy Thanksgiving, everyone. Enjoy the wine and the feast and most of all each other!
I must say, I couldn’t agree with Mike more. Thanksgiving is, my personal favorite holiday. Yes, it is a day of some indulgence, but if that indulgence stops with food or wine, you have missed the point of life. It is a day that is set aside as special. You wear a nicer shirt, you may even throw on a sports coat. You put out your finer china, the special family set you only use a few times a year. You honor the tradition of generations past you may have never met, while your kids run around making memories that they will carry with them and share with generations you’ll never meet. Importantly, based on your family tradition, you share the same meal. Each family has their own special side dishes, prepared in their own special ways - that one specific dish that if you went to someone else’s Thanksgiving they may not have, and even if they did, would be made in a different way. These are the things that create a family culture, and as a country, though we lose some of the finer touches that happen at each individual table, we share as a national culture by trimming our work hours, trimming a turkey, and sitting together with the one’s we love.
Wine is an important part of all of this. It is the lubricant of conversation, the complement to our hard work in the kitchen, and the reflection on time and place that make this life worth living.
As for my Thanksgiving pairing suggestions, I’d be a bad businessman if I didn’t say to pair your dinner with a Missick Cellars wine. Although, of course, they’d be great! I would be a worse winemaker, and a worse host, if I didn’t say, find a wine that means something. A place you and your family have visited. A flavor profile that reminds you of your childhood that you can share with your family. A year or vintage that has some deeper meaning to those around the table. Thanksgiving is a time for meaning, and the most important wines on your table aren’t those that merely taste the best with turkey, or cranberry, or potatoes, or some vegan vegetable protein for those that don’t eat meat - it is the wine that tells the story of some part of your family, your history or your place. It is about the story of something you connect to. Thanksgiving connects us as a people that exist in a place that is not just merely lines on a map, but reminds us that we Americans are a nation. We need that right now. We can also use wine to remind those around us of the great times we’ve shared, as we enjoy a moment together where we make new memories.
I must admit, I studied political theory as an undergrad, and no small part of those studies were dedicated to economic thought. As an actual economist, Mike nails the point here. Bubbles, a fun dessert wine, and something not too ostentatious capture the spirit of the day. I always encourage American wines on such an American holiday, and there are so many great places in the US making wine today. Grab one, or few, of those bottles...but also think about a bottle that ties your family to the American narrative. Open a bottle that provides an emphasis on your own family story. Whether your national roots are English, Belgian, Italian, French, Brazilian, Mexican, or Lebanese, or any of the great places that make wine in between - enjoy the holiday, open a bottle of summer in a glass, and study, remember, and cherish the faces around you. This, is what life is all about.
Happy Thanksgiving everyone.
S2 EP0025 - Wine Reads - Thanksgiving Wine Economics