The conventional Canadian view is that American beer is bad; watery and weak. Yet American breweries produce some of the world's best beers - superb brews coming out of microbreweries across the country.
What is striking about the United States is the country's level of inequality - or, to be more precise, the beer quality inequality. Countries like Germany, Belgium - the Scandinavian countries in general - have much less variation in the quality of their beer.
The question is: why? Does beer quality inequality result from other forms of inequality, like disparities in income and wealth? Or do the forces that produce income inequality also produce beer quality inequality? Is it a spurious correlation, or is the armchair empiricist's observation that the US has more beer ine-quality simply wrong?
The income-causes-beer quality inequality story is easily told. Some people are poor. They demand cheap beer, and cheap beer is necessarily poor quality. Some people are rich. They demand high quality beer, and are willing to pay for it. Hence, in theory, we would expect income inequality to produce beer quality inequality. As an empirical observation, the US has substantially more income and beer quality inequality than other rich countries, including Canada, while Scandinavian countries have some of the lowest levels of income and beer inequality in the world (here). So income inequality causes beer quality inequality: Q.E.D.
This story is plausible, and there may be some truth to it. The problem with it is that not everybody drinks beer. Take a country like England, for example. There beer was traditionally a working man's drink - the upper classes sipped Pimm's on the lawn, or perhaps a gin and tonic. If the rich aren't drinking beer, an increased concentration of income in the hands of the richest 1 percent will have no impact on the variation in beer quality.
Demand-driven heterogeneity in beer quality only reflects heterogeneity in the preferences and incomes of beer drinkers, not (necessarily) broader social inequality. In fact, what might be remarkable about the US is not so much the inequality in income, but the democracy in drinking - rich and poor alike end the day with a hard-earned beer.
An alternative theory that beer quality inequality is produced by the same factors as drive income inequality: low tax rates, low levels of unionization, lack of regulation in general.
Take Germany, for example, where the quality of beer is relatively heavily regulated. This level of regulation is a manifestation of the way that Germans conceive of the appropriate role of government vis–à–vis private enterprise. The country has traditionally been a corporatist welfare state. Governments protect businesses, businesses protect workers, the average working person has a decent standard of living, and income inequality is relatively low. (This consensus may be collapsing - but then the German beer industry is not in great shape either).
Or take Canada. As any serious student of beer labels can tell you, the major Canadian beers are union made. Canadian beer is also subject to higher taxes than US beer. These forces push up the price of bottle of beer in Canada. An American manufacturer can make money by lowering quality and upping quantity; moving vast amounts of cheap weak watery beer. This strategy does not work in Canada. Taxes and labour costs mean that it is simply not possible to produce ultra-cheap beer. Instead, Canadian brewers compete by putting more beer quality into every can or bottle - more alcohol, more flavour, and so on. Inequality in the quality of beer overall is reduced, by the same forces - taxation, redistribution, unionization - as reduce income inequality. (Empirical research finds that the inequality-reducing effect of unionization through increased wages for workers outweighs any potential inequality-enhancing effects created by the gap between union and non-union wages. For a readable but serious analysis of the drivers of income inequality in Canada, see here).
Economies are complicated. Vastly, hugely, mind-bogglingly complicated. Economists try to compress that complexity into a single number - GDP, per capita GDP, the Gini inequality index, the UN HDR ranking, and so on. But looking at those numbers, and seeing that the US Gini index is 40.8, while Canada's Gini is 32.6 and Germany's is 28.3 (here) - does not deliver a gut sense of what they mean for people's every day lives. When I want to feel get a feel for an economy, I go grocery shopping - so I can see what people buy every day, what they can afford, and what people purchase in their quests for a good life.