Bottleneckers. William Mellor
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sellers to taxi drivers—co-opt the power of government to their own advantage; how government officials themselves become bottleneckers; and how it is that only through the persistent efforts of individuals like those introduced in this book are bottlenecks able to be broken open and people freed to earn an honest living in the ways most fitting to their gifts, talents, and interests, unburdened of onerous government regulation.
The term bottleneck originated not as a way to describe obstructions or obstructionists but as a metaphor for something narrow—a bottleneck harbor, for example—drawn from the physical properties of, well, the neck of a bottle. Applied to economic markets, the metaphor and its origin are particularly apt, for, as chapter 1 illustrates, the quintessential bottleneckers dominate an industry whose stock-in-trade is captured in bottles.24
How Bottleneckers Got Their Name
Sitting atop her tractor, Juanita Swedenburg bounced along a dirt path, seething with anger.1 Earlier, the sixty-something-year-old Virginia farmer had been flipping through a new issue of a magazine delivered to her house when she stumbled upon an article that started her slow burn. According to the article, she—a card-carrying Daughter of the American Revolution—was allegedly a criminal, a felon.
In 1976, Juanita and her husband, Wayne, had retired from careers in the US foreign service and bought a 120-acre farm in bucolic Middleburg, Virginia. Both were raised on farms, and they drew on their experience to raise cattle on their new property.2 Although they never entirely abandoned this pursuit, they soon shifted their efforts to a crop that was ideal, though then sparsely grown, in their slice of Loudon County: grapes. Prompting this course of action was Juanita learning that Thomas Jefferson thought that Virginia’s soil was like that of France, known, of course, for its wines.3
With experience only as wine consumers, Juanita and Wayne set out to start a winery specializing in the type of wine they had enjoyed while serving in Saigon in the foreign service. “In those days, it was the Paris of the East, and I was so much a wine novice,” Juanita recalled. “We drank really good 1948 and 1949 Bordeaux and cabernets. It taught me a lot about good wine.”4 Juanita and Wayne immersed themselves in learning the craft of wine making. After copious reading, workshops, trial and error, sharing of notes with neighbors, and years of physical labor,5 they planted their first grapes in 1982 and opened the Swedenburg Estates Winery in 1988.6
Their chardonnay, cabernet, and fruity Riesling began drawing a following, and they shipped cases to customers all over the country who wanted something different from what was available in their neighborhood stores.7 In any given year, mail-order sales amounted to somewhere between 10 and 20 percent of the two thousand cases they sold8—that is, until that fateful day when Juanita was alerted of her criminal ways.
Always looking to grow her skills as a winemaker, improve the business, and stay abreast of the industry, Juanita read wine publications religiously. It was in one of these magazines that she discovered her crime9—the laws of twenty-four states made it illegal for Juanita to ship wine from her farm in Virginia directly to consumers in the respective states.10 At first she ignored her new realization and continued shipping out wine,11 but her conscience—pricked by a pocket copy of the US Constitution she carried with her everywhere—got the better of her. When out-of-state customers visited her tasting room and asked for cases of alcohol to be shipped to their homes, Juanita’s reply became, “Sorry, I can’t.”
Three thousand miles away, the owner of another small family winery was also coming to the realization that he had been breaking the law for years. Only, in his case, he had learned of his criminality from threats of prosecution rather than a magazine. David Lucas had also started in the wine business later in life, after years spent serving the United States abroad. Raised in an agricultural family in California, as a young man David served in the peace corps, first growing rice in remote parts of India and then serving as a peace corps director in Iran. After leaving the peace corps, he worked in the fruit-and-vegetable canning industry, saving his money to buy some land and build his dream business—a winery.
He began his wine making as a sideline while still in the canning industry. His first wines tasted much like other popular wines in the United States—sweet and fruity with plenty of alcohol. A few years into his part-time wine-making pursuit, he landed a position with a company that would alter his wines and the course of his life—the Robert Mondavi Winery. As head of global research and joint ventures, David worked closely with Mondavi for sixteen years, learning the business and traveling around the world. Along the way, he tasted some of the world’s great wines and made a painful observation: his own wines were embarrassingly bad.
Making full use of his position at Mondavi, David became a student of wine making, paying close attention to how the world’s great wineries crafted their products. He abandoned his earlier efforts and began making wines that were food friendly, refined, and restrained and whose taste reflected the vineyards from which they came.
By the time David left Mondavi, his business was small but thriving; so much so that his tasting room was regularly full of out-of-state customers asking for his wines to be shipped to their homes. Although such shipments would never represent a large percentage of his business, they were nevertheless important to it. David only sold his wines directly, not through supermarkets, big-box stores, or other retailers. He was, therefore, all too happy to fulfill individual customer requests for shipment.
A concern, however, nagged him. He knew other wineries in his area shipped to out-of-state customers—it was common practice, in fact—but he wondered occasionally if there were restrictions on interstate alcohol shipping. All doubt was laid to rest when he received the first in a series of cease-and-desist letters from state liquor commissions. Like Juanita Swedenburg, David Lucas, a small-business owner and veteran public servant, was a felon. Or so said the laws of various states—laws intended not to protect the public from harmful perpetrators but to guard a powerful private interest from competition using government power. The origins of such laws can be traced to one of history’s leading industrialists—John D. Rockefeller Jr.
THE ORIGINS OF PROTECTIONISM
At the turn of the twentieth century, Rockefeller, and other industrialists like him, believed America had a problem—a “liquor problem.”12 It was a belief that had been building around them for decades in the form of the temperance movement.13 In the early nineteenth century, physicians, ministers, and employers had grown increasingly concerned about the drunkenness of workers and servants. Throughout the first half of the century, this concern mushroomed into a mass movement, encompassing more than a million people across a broad spectrum of the middle class who committed themselves to complete abstinence from alcohol.14 The 1840s saw the first state attempts at prohibition, followed in the 1880s by a second wave of attempts. Although most of these laws were overturned, a few survived into the early twentieth century as a new prohibitionist organization—the Anti-Saloon League—came to dominate the movement.15
The league operated with a level of sophistication not known before. It hired lawyers to write model laws, built up a war chest of funds, and collected political favors subsequently used to expand the number of elected officials beholden to it.16 First working state by state, the movement wielded those resources to achieve prohibition of alcohol in twenty-three states by 1916 and seven more by 1919.17 It also came out for a federal constitutional prohibition in 1913, working to achieve it in Congress in 1917, and then achieved a final ratification in Nebraska in 1919. The Eighteenth Amendment—commonly called Prohibition—went into effect a year later.18
Throughout this period, the league’s efforts were bankrolled by Rockefeller—a lifelong teetotaler—and fellow industrialists. Like early temperance adherents, they believed alcohol undermined the morals of their workers and hampered productivity.19 Moreover, the league thought that by enacting Prohibition, saloons would become unavailable as meeting