by Heather R. Darsie

Happy New Year, everyone! My very best wishes to you for a prosperous 2019! 

Pieter Bruegel the Elder, “The Wedding Dance,” c. 1566, via Wikimedia Commons.

When asked about trades which had a large impact upon economic development and government interests during the Renaissance, twenty-first century observers might instinctively point to the wool trade between England and the Low Countries, the influx of exotic items from the New World and desire to control those products, or the Reformation. Beer is not considered, possibly because people in the twenty-first century no longer rely on beer for survival. This is a stark contrast to daily experience five hundred years ago. Beer was a necessary part of the daily diet of all individuals, from the young to the old. Regulation of beer brewing, importation, and exportation, among other elements, was important to local, regional, and state governments. This historiography will review recent scholarship concerning the impact of beer brewing on German and Dutch economic and state development.

Richard Unger performed a substantial amount of research on beer and the economy. His two publications, A History of Brewing in Holland, 900-1900: Economy, Technology, and the State, released in 2001, and Beer in the Middle Ages and the Renaissance, released in 2004, are two leading English-language monographs concerning the impact of beer brewing on governments. Following these, Johan Swinnen edited a collection of essays published in The Economics of Beer which was released in 2007, and a work called Beeronomics: How Beer Explains the World which he co-wrote with Devin Briski in 2017. These works taken together provide a clear picture of economic development and innovation that led to government-wide influences in response the beer brewing industry.

Beer brewing can be traced as far back as ancient Egypt, continuing through Mesopotamia, before becoming an activity mostly carried out by monks and women in the 8^th to 10^th centuries. Swinnen and Briski, authors of Beeronomics, agree with Unger’s analysis. Swinnen and Briski borrow heavily from Unger’s work, though it would be difficult not to rely on Unger’s analysis. Unger uses tax records to track economic and legal changes in the Low Countries and Germany, creating broad coverages of beer brewing and its economic implications for burgeoning governments, particularly in the Low Countries, Germany, and England. He looks at the early history of beer brewing, explaining how from roughly the 8^th through 12^th centuries, monks were the mass-producers of beer in the Low Countries and Germany. Monasteries were purpose-built to accommodate the duel creation of items necessary for life, namely beer and bread. The two products shared ingredients such as barely, wheat, oats, and rye, along with yeast.

Issues in stabilizing and preserving the beer made it economically unadvisable to brew more beer than could be consumed by the monastic community within a reasonable time because the drink would go bad quickly. Monasteries began brewing beer with very high alcohol content which allowed the beer to be stored longer, and flavored the beer with spices. Excess beer was sold to the community, making monasteries the first large-scale brewers who contributed to the local economy.

Beer itself was a vital drink during the Renaissance because it provided necessary calories and vitamins to a person’s daily diet. It was prescribed as medicinal in some instances, too. Overtime, governments became involved in taxing the various components of beer. Unger spends a substantial portion of Beer in the Middle Ages and the Renaissance discussing what became known as gruitrecht. The gruit itself, which had many different spellings due to local dialects and lack of standardized forms or spelling of German and Dutch, was a collection of dried herbs used to flavor and marginally preserve beer. It is unknown which herbs comprised gruit, as the majority of documents referencing the ingredient relate to taxation of gruit or are documents generated for the government. Gruit likely included bog myrtle and wild rosemary, both of which were abundant .

Before and during the 13^th and 14^th centuries, the Holy Roman Emperor granted local dioceses gruitrecht. The gruitrecht was a right to tax gruit, and was quite lucrative. It is postulated that the purpose of giving dioceses the gruitrecht was to ensure loyalty to the Holy Roman Emperor instead of, or along with, the pope. The individual people or individual governmental bodies assigned the gruitrecht were tax farmers. As tax farmers, the individual was allowed to keep a portion of the tax monies. Since just about everyone drank beer as a safe, inexpensive form of beverage and nourishment, there was very little danger of there being little to no benefit from gruitrecht.

Taxes were placed upon the ingredients for beer, too, creating an economic rent. Barley, oats, and wheat, depending upon location, were all taxed to varying degrees. Again, like gruitrecht, being a tax farmer for these ingredients was lucrative and stable before and partially during the 13^th and 14^th centuries. These taxes will hereinafter collectively be referred to as “gruitrecht,” as the ingredients suffered similar fates.

In some areas of the Low Countries and Germany, breweries increasingly became large-scale operations as opposed to domestic ones because of the gruitrecht. Depending on the tax farmer’s preferences, the gruitrecht had to be paid up front before the necessary ingredients were disbursed to the brewer. Domestic brewers did not always have the capital necessary to purchase items under gruitrecht, and so it fell to larger community breweries to make quantities of beer which could be purchased.

Urbanization also led to the shift away from domestic brewing to a brewing industry. Urbanization combined with technological advances for beer brewing in the 13^th and 14^th centuries, further bolstering beer brewing as an economically viable way for a family to make a living, if the family could produce the initial investment capital. Two of the most important technological advances were the introduction of hops to the brewing process and of implementing large copper kettles. The hops plant, indigenous to the Low Countries and Germany, was not a new ingredient. It was bitterer than gruit but had the advantages of preserving beer and required a lower ratio of grains-to-additive for beer production.

Hops as an additive did not become popular right away in the Low Countries and Germany. The introduction of hops was most important to Hanseatic cities such as Hamburg. Brewing beer which could withstand overseas shipping meant increased trade with far off places such as the Nordic countries, whose climates did not allow for the production of beer, and England. Hamburg experienced an increased economic benefit from the new brewing technology. Along with the increased economic benefit came controls put in place by the government which adapted with brewing, storing, and shipping innovations.

The combination of brewing with hops and an expanded beer trade led to the introduction of more taxes on beer. Due to the aforementioned reduction in ingredients needed to brew hopped beer, taxes on hops and grains were eventually rolled into the gruit taxes. As international and long-distance trade became more and more prevalent, import taxes were applied in Germany and the Low Countries to protect domestic brewers, and export taxes were applied because of the lucrative nature of beer brewing. The taxes placed on beer served as a stable form of government revenue because beer was an inexpensive drink that was a safe alternative to water during the Middle Ages and the Renaissance.

Government interests in beer production extended beyond taxation to quality control. Local and regional governments wanted to ensure the quality and consistency of beers, which in turn would ensure the continued demand for the product. However, beer brewers were still using questionable additives in their brews, such as mushrooms and animal products, the consumption of which proved dangerous to public health. In response, the principality of Bavaria passed the first law concerning what may be in beer. This law became known as the Reinheitsgebot, or Purity Law.

The Reinheitsgebot, created in 1516 by Herzog Wilhelm IV stated that the only ingredients allowed in brewing Bavarian beer were barley, hop, and water. Yeast was not recognized as necessary for beer brewing yet. An essay written by Unger in The Economics of Beer states that some concessions were made for traditional Bavarian forms of beer, such as wheat beer, but non-Bavarians wishing to sell beer within Bavaria which did not comply with the Reinheitsgebot were unsuccessful. This was a control put in place by the government to ensure the quality and safety of Bavarian beers, making them more attractive on the international market while protecting domestic brewers from international trade within Bavaria.

Swinnen and Briski discuss how the Reinheitsgebot was used to protect Catholic interests in the 17^th century. The Hanseatic cities, like Hamburg, became Protestant, while Bavaria, which was close in proximity to the Holy Roman Imperial capital of Vienna, remained Catholic. By 1600, a Bavarian-style weissbier or white beer was popular, and the new ruler Maximilian obtained the rights to this style of beer. The Counter-Reformation was in full swing, and during the run-up to the Thirty Years’ War, Maximilian sold weissbier licenses only to pro-Catholic cities. Part of the purpose of providing these licenses to Catholic cities was to subsidize the cost of building Catholic churches and cathedrals through regulations applied to weissbier.

Other economic implications which benefitted local economies came into play as a result of continued urbanization and the formation of guilds. Breweries in the Low Countries and Germany needed to be on a river or canal, with land prices along rivers and canals being much higher than already high-priced land within cities. If a brewer could not afford to own the actual building and equipment, then the owner of the building would make a profit from the low-labor, high-capital industry by leasing the building and equipment to the brewer. Having beer breweries within city limits also called for more government regulation, such as how close to the city center or far from a market the brewery could be and controls on pollution levels in the water source used by the brewery.

Breweries in the Low Countries frequently relied on peat as a source of heat to prepare the wort for beer, whereas German breweries more often used wood. Brewing techniques necessitated high heat, which occasionally resulted in fires. If a brewery that caught fire was too close to other important buildings, the damage to a town could quickly become catastrophic. Government regulations surrounding where breweries were located and how much they could brew improved safety for urban areas while implementing yet another form of government control on production.

The most peculiar role of government and early states in the production of beer was twofold: first, brewers were commonly in the upper echelons of society and involved themselves in government and second, government-controlled brewer’s guilds. These two factors caused a constant push-and-pull effect between a government and its brewers by at times implementing economic or legal strategies backed by the brewers while still maintaining tight control over brewing practices which allowed for very little freedom to the brewers. This was in contrast to other guilds, for example carpenter’s guilds, which more-or-less were allowed to create monopolies in their specific areas and were self-governing. The economic interest in beer production, import, export, and general taxation was too high to allow the brewers to go entirely without government oversight.

A case study in German brewer’s guilds further illustrates views, reactions, and strategies of burgeoning governments. Once such example of a brewer’s guild comes from Cologne in the mid-15^th century. Diana W. Thomas explores whether economics or politics drove regulations surrounding beer brewing in the City of Cologne leading up to the year 1461. Specifically, she looks at the struggle of the industry moving forward because of heavy regulation. Thomas’ argument is that, “De facto deregulation was eventually achieved [in Cologne] due to dynamic factors.” She reviews what is known as the “transitional gains trap framework” and its functioning alongside the “political loser hypothesis.”

Thomas discusses the importance of gruit and the gruitrecht, and that the ingredients of gruit were specific to each region and served as an economic barrier to non-local brewers. If a non-local brewer did not make beer with the local gruit, then the brewer could not sell the product within the targeted locality. Gruit was so important to Cologne that both Unger and Thomas agree that the recipe for Cologne gruit was kept secret. Specifically, in 1420, the officials in Cologne, “directed a knowledgeable woman to teach a certain brewer, and no one else, how to make [gruit].”

The City of Cologne became a Free City within the Holy Roman Empire at the end of the 13^th century, with the gruitrecht originally granted to the Archbishop of Cologne before transferring to the city council as a result of political upheaval. Throughout the 14^th century and first two-thirds of the 15^th century, the city council sold the annual gruitrecht to those able and willing to pay the most. In 1461, the Cologne Brewer’s Guild pooled resources and purchased the gruitrecht. Before 1461, the brewers were subject to higher production costs for no other reason than the person who held the gruitrecht controlled the price of the gruit. As mentioned before, Cologne beer brewers were required to include Cologne gruit in any beer produced and sold within Cologne. The gruitrecht monopoly also prevented the use of hops in beer, and specific to Cologne, delayed the introduction of hopped beer to the market by as much as 100 years. Due to the heavy regulation in Cologne surrounding gruit, the brewing industry within Cologne was unable to take advantage of technological changes.

Politically speaking, change was more difficult to achieve within Cologne than other German cities in the Holy Roman Empire. Due to its nature as a free city with a city council, brewers had to convince more than just the local bishop or Herzog to allow the brewers to embrace innovations. The city council of Cologne was comprised of many individuals, and unlike similarly situated German and Dutch cities, the Cologne city council did not always have a large number of brewers on the city council. Thus, a great deal of capital needed to be raised in order for the brewers to push for political change. Once the situation became untenable and the Cologne brewers secured a lease on the gruithaus, they effectively privatized gruit. As such, the brewers were free to either use the gruit or transition on a large scale to brewing beer with hops. However, the gruit regulations did not disappear as easily.

Thomas shows that, “the grut regulation remained stable as long as transitional losses to the gruit licensor together with the transaction cost of lobbying for political support among the council members exceeded the potential benefit to the brewers from switching to the new production technology.” The bishop and clergy, then followed by the city council, were not in favor of any form of deregulation because it led to a loss of economic rents or tax revenue to the local government. Once the opportunity cost of still brewing with gruit outweighed the political cost causing change in brewing regulations, brewers in Cologne caused change by pooling their resources to deregulate brewing.

The case study of Cologne is a logical step toward understanding the arguments of Unger and Swinnen that governments had to adapt their economic rent or taxation schemes along with innovations in brewing technology. The Hanseatic cities, such as Hamburg, illustrate adaptations in economic rent seeking activities effected by the government. The combination of brewing capacities becoming exponentially higher with copper kettles and hop-brewed beer lasting longer created the economic opportunity for governments to regulate imports and exports.

Sheilagh Ogilvie looked at the general economic impact of German proto-industries and guilds or associations stemming from these industries. Ogilvie specifically looks at the Württemberg worsted industry during the Renaissance. The Württemberg worsted industry created its own guilds and associations, and its own statutes and charters within those guilds and associations. The various Württemberg-area guilds administered low fines for violations of quality control, resulting in a multitude of violations: the cost of violation was simply not high enough to deter the member of the worsted guild to stop engaging in bad behavior. Ogilvie surmises that this is because, “self-regulating professional associations suffer from disincentives to offend or penalize their members.” This contrasts starkly with beer brewing guilds in general because through the oversight of local, regional, or state governments, punitive measures were much more serious for brewers and could include losing necessary licenses.

Beer brewing began declining in the 17^th and 18^th centuries for a combination of reasons. First, exotic drinks were coming from the New World and in higher demand than beer. Second, the consistent introduction of more and more government-imposed regulations, fines, and taxes on beer brewing caused the profession to become cost prohibitive to all but the wealthiest brewers, forcing smaller breweries out of the market. Finally, the increasing and fluctuating costs of grains used in brewing proved too unsteady to support the continued large-volume brewing scheme that developed during the Renaissance.

While the economic history of beer is broad and deep, this historiography isolated points upon which historians agree that beer brewing caused entwinements between economies and governments during the Renaissance. The case study of Cologne illustrated the strong hold which government had on aspects of brewing regulation, and how the brewers adapted to forward their own economic benefits. The brief example of the Hanseatic cities like Hamburg shows how governments then continued to maintain a firm grip on revenue from the brewing industry by instituting new tax schemes. These different experiences for Hamburg and Cologne illustrate the interest which local, regional, and state governments had in beer brewing.

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Sources & Suggested Reading

1. Ogilvie, Sheilagh. “Guilds, Efficiency, and Social Capital: Evidence from German Proto-Industry.”The Economic History Review 57, no. 2 (2004): 286-333. http://www.jstor.org/stable/3698609.
2. Ogilvie, Sheilagh. 2011. Insitutions and European Trade: Merchant Guilds, 1000-1800. New York: Cambridge University Press.
3. Swinnen, Johan. 2011. The Economics of Beer. Oxford: Oxford University Press.
4. Swinnen, Johan and Devin Briski. 2017. Beeronomics: How Beer Explains the World. Oxford: Oxford University Press.
5. Thomas, Diana W. “Deregulation despite Transitional Gains: The Brewers Guild of Cologne 1461.” Public Choice140, no. 3/4 (2009): 329-40. http://www.jstor.org/stable/40270926.
6. Unger, Richard W. 2001. A History of Brewing in Holland, 900-1900: Economy, Technology, and the State. Brill.
7. Unger, Richard W. 2004. Beer in the Middle Ages and the Renaissance. Philadelphia: University of Pennsylvania Press.