An Economist versus a Foodie on Parmesan
Published December 10, 2008 by Rachel Laudan
The world is bailing out banks and car companies. Italy is coming to the rescue of parmigiano cheese.
In an effort to help producers of the cheese commonly grated over spaghetti, fettuccine and other pastas, the Italian government is buying 100,000 wheels of Parmigiano Reggiano and donating them to charity.
Though demand for parmigiano is strong in Italy and abroad, producers have been struggling for years to make money, putting the future of Italy’s favorite cheese at risk.
That’s according to the Wall Street Journal.
And now for a nice little clash of perspectives.
Skip Lombardi in his great blog, Almost Italian says “Bravo to the Italian government for their plan to subsidize Parmigiano-makers. We also promise to do our part…this is our kind of bailout.”
Greg Mankiw, Harvard economist, comments in his great blog, “An economist might suggest letting a few producers fail, so supply shrinks, prices rises, and the remaining producers become more profitable. In fact, that same logic might apply to some other industries as well.”
Anyone want to vote?
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Economics of bailouts: the case of Parmigiano Reggiano
At least the Italian cheese makers are making something that a lot of people want. Whereas, the American car makers are in trouble in large part because they have chosen to make a lot of large impractical vehicles which nobody but drug lords want to buy.
Apparently the mozzarella-makers are not too happy about the government supporting the Parmesan-makers (or so says this story in timesonline.co.uk).
No, and it’s rather a case of be wary what you wish for, I think. As I understand it the Parmesan makers were all for getting a denomination of origin. But this means such strict rules for production that it is hard to respond to market conditions.
I’ve yet to see a really good article about what’s going on.