Scotch

Scotch is pretty simple when it comes down to it.

Differences in locality make for unique elements that go into the production of the beverage. Local water, local weather conditions, local peat, distinct shapes of stills and other unusual aspects of a distillery all end up making for a single malt which has its own character, distinct from others, though sharing characteristics of its region.

Lagavulin for instance, has long had a warehouse on the seaside and during storms, breakers come in and crash up against the walls of the warehouse. Leaving barrels in this warehouse for 16 years allows for very slow diffusion of the local environment into the cask. This is one contributor to lending Lagavulin a specific flavor that is not easily emulated.

Supply, demand and competition

The longer you age a scotch in the barrel, generally the better character of the final product. Harshness is tamed, and the environment as well as the wood and what used to be in the cask beforehand (often sherry or bourbon) will diffuse into the scotch lending it additional character and flavor.

Scotland however is small, and the world is large.

In Asia over the last 15 years, whiskey in particular underwent a surge of popularity, but also worldwide. There is a status element associated with fine scotch as well as its natural place as the fact that it’s simply an excellent product. 

Older scotches took off in price, becoming out of reach in a lot of cases, and scotch makers had also a problem in that manufacturing a product which takes 18 years of aging has a distinct disadvantage compared to rum, vodka, tequila and others that started making “high end” products and nipped at the heels of premium scotch… those others, six years may be quite old and in the case of vodka you can probably bottle it as soon as you distill it and throw in some flavoring and as long as you market it correctly you can charge whatever you want. Maybe the contents of a bottle of premium vodka cost pennies to manufacture, dollars to market, and rake in tens of dollars of profit. Whereas the manufacture and aging of scotch whiskey is a much more expensive and time consuming process.

So when the supply/demand curve moves, the prices move, but in the case of whiskey the demand has risen so massively that you have a problem of non-existent supply.

Enter the marketing department

For a long time we were told (correctly) that the longer you age a scotch, the more refined the character. This however painted the marketing department into a corner: what they want is to be like vodka. Make an arbitrary product, brand it, and sell it on image. This removes the constraint on the cost of materials, and also removes constraints on price. 

If you brand a scotch as an 18 year old, like it or not it sets a band of pricing that the consumer will accept as well as setting your minimum costs because it is no small feat to store and age a scotch for 18 years. By the time you get around to selling an 18 year old scotch, there might be a world war, or a financial crisis, or maybe your currency doesn’t even exist anymore. 

So, the solution from the marketing department is to remove the age statement from scotch and then hype up the various finishes and distract consumers as much as possible. Where in the market we used to have 12, 18 and 21 year old Macallan scotch available to buy, now we have 3,147 different spins on the Macallan brand. The goal of scotch marketing now is simply to establish a pricing spectrum so that where you want to spend, there is a product available to you to buy. 

Color used to be a nice interesting thing to observe, but the marketing department has been able to impress on people that color is something they should pay for. Color can be controlled by simply mixing in a bit of sherry or any other process and once the marketing department has its hands free from age statements then it is free to invent whatever it wants. So now you can pay a thousand extra dollars for a Ruby Scotch, which is something you obtain with an ounce of sherry mixed into a scotch. All of this is within the control of the marketing department. 

The shackles are off.

But the core of the problem remains this: due to demand, and due to lack of resources, old aged scotch now exists in very small quantities. Single malts of age are now being replaced almost universally with these branded blends with no age statement. Over time, the amount of old scotch in them will reduce and the amount of young scotch increased, while taste will be controlled by computers and mass spectrometers and the direct injection of necessary taste elements. All of this simply replaces age and time in the cask with a controlled delivery of a simulated, manufactured product which has little difference in the end to coca-cola other than that it is insanely profitable to sell a bottle of scotch for $5,000 vs. a bottle of coke for $2.00.

What the hell does this have to do with swords

The aspects above to think about are:

  1. constrained resources vs. demand: in the case of scotch the resources are renewable but demand has far outstripped the supply of the raw material (old scotch) necessary to make a fine product.
  2. blending high quality resource with low quality resource: the scotch manufacturers will sell you a blend of 73 year old and 13 year old scotch but the blend is probably 1% to 99%, and they don’t want to label it as a 13 year old but they want you to think only of the brand and how it’s marketed to you. Similarly the 21 year old may be mixed with a 3 year old and a very fancy label put on it and then maybe in the notes it’s explained as a blend of scotches between 3 and 21 years old. How much 21 year old goes into that blend? You will never know, but expect it to be less every year.
  3. sliding customer expectations: customers above are being marketed a feeling of the label, they are told that the color is one of the important aspects (you don’t drink color), and the quality of the bottle as these manufacturers team up with crystal manufacturers (you can’t drink the glass either)… all of this is a distraction from the core issue of the age and quality of the beverage. They are the actions of a master magician, slight of hand distracts you from what is really going on: the quality of the product is being downgraded while the price is maintained or else increased.

Furthermore, in the internet age, it’s possible to buy as many product placements as you want, send your marketers out to “inform” writers about how the age really doesn’t matter at all but all these other aspects do. Just trust us, buy the taste, buy the blend, buy the color, buy the fancy bottle, buy the label. Age doesn’t matter. The more articles they can buy, and the more people they can sell this idea to, the more profitable a model they can put in place for production. Vodka did it, tequila did it, and scotch has now done it. 

Swordsmiths in the koto period had the same problem.

This is where we move into speculation, so bear with me, these are my thoughts.

Koto and local resources

When you made swords in the old periods, you went to where you had resources or you went to where you had customers. If you were lucky you had a combination of both. You need a river for water and iron sand, you need forests with good hardwood for charcoal, and from there you applied sweat and got a sword out. If you were not close to water, sand and wood, then you had to have it brought to you.

When we look at the koto period we see things like the Ko-Ichimonji production site gradually coalescing in Fukuoka town, then for some reason it transumutes to be centered on Yoshioka and then in Katayama and in Iwato. What I think is that these moves have a lot to do with exhausting local resources of wood and sand, not complete exhaustion, but the best quality of these resources would likely be cherry picked and over the period of decades you’d have to range farther to get the quality of what you want. Eventually it just makes sense to move the forge closer to where the resources are. 

In Kamakura, we see smiths drawn from abroad to set up forges and eventually develop the Soshu tradition. Older Soshu swords have brilliant steel that looks like the best Yamashiro steel… but this lasts from around 1280 to about 1340 then the steel starts losing its liveliness. 

By the time of the smiths who make flamboyant hitatsura (Hiromitsu, Akihiro and Hasebe), the steel looks like a cousin of the steel used by Norishige, Go, Yukimitsu and Masamune. I speculate that the rise of hitatsura is associated with the loss of the quality of the raw material. That is, I think the best local materials got used up over time and the most natural expressions of activity in the hada that you see with the top smiths stopped arising as a side effect of the manufacturing technique, and like the scotch manufacturers faced with shrinking raw materials, these middle period Soshu smiths may have mixed the high grade, rare materials with lower grade materials which lessened the quality of the steel. Then, hitatsura may have been developed as a flashy new feature, much like the scotch marketers trying to sell us on crystal bottles and color instead of taste. Also, hitatsura has the side effect of forcing nie activities into the ji and compensating for what might have been naturally ocurring chikei and yubashiri and other beautiful aspects of Soshu jihada.

Now, don’t get me wrong, I myself love hitatsura and Akihiro, Hasebe and Hiromitsu are all top class smiths with excellent work. But there is no denying that it is a grade below Masamune, Norishige, Go, Sadamune, and Yukimitsu. And I think that these guys were adequately taught and the details of the hitatsura show they were master craftsmen, I just think that they didn’t have the same luxury of raw materials because the generation before used them up.

So, you blend, and then you try to differentiate the product in other ways.

After Akihiro there really are no more highly talented Soshu smiths though sword manufacture stayed in this area until the end of the Muromachi period. 

Soshu is first a gentle fall from Masamune but after Akihiro it’s a nosedive. A few standout blades exist from time to time but nobody will mistake them for what came before. 

Over time, when the raw materials eventually run out, the techiniques that worked with that raw material won’t work with the wrong substitutes. So first you run out of raw material, and you compensate by shifting techniques and blending in lower grade material, then eventually you lose the techniques because they just don’t have any effect anymore.

We can see similar things that went on with anyone manufacturing gold coins, from Rome to the Tokugawa Shogunate, everyone starts with high purity and over time they debase the coinage with silver, make coins smaller, and so on. The same as with scotch, the high grade material is slowly reduced in its percentage and lower grade material added. This robs value from the product. People are not so dumb with gold coins though and you can’t fool them for long that the coinage has been debased. The result of that is inflation.

It happened to every country in the 1900s that used silver in their coinage as well. Coins got debased, silver eventually got phased out, and at the same time governments dropped the gold standard. Now, we are even moving out of paper money because it’s too expensive and replacing it with plastic bills that last longer. Gold coins are for collectors and hoarders, as are silver, and even copper is now too expensive to use for pennies… so pennies have been eliminated in some countries.

I think this process is a universal process, as in some ways it is efficient to try to substitute low quality materials for higher quality materials (plastic replaces paper which replaces gold, elimination replaces copper, nickel replaces silver).

Wherever supply is constrained and demand increases relative to the supply you will see this. Swordsmiths in the koto period surely faced this issue, of using up their high quality local resources, and then must have faced one of two solutions:

  1. debase the raw material
  2. move to where you can find better raw materials

An alternate solution happened in the Shinto period which was to just completely bail out of production of raw materials and buy them from a supplier. Let the creation of your materials be someone else’s problem.

We see this in the modern period as it is possible to build an iPhone by yourself if you are patient enough and can contact enough suppliers of Chinese raw materials. So what the Shinto smiths did was something very modern: you are responsible for finishing the product while supply up to a certain level is outsourced. 

Overall by ditching the manufacture of the lowest level of your components, whether it be a sword, a phone or scotch, it makes you more competitive and reduces the cost of your product and increases the profitability. But what it doesn’t do is make the product better. It just makes it more efficient to produce.

In the modern period now we are seeing Apple with its market dominance start to take manufacture back in-house. Instead of buying chipsets, Apple is now designing and manufacturing its own. Screens they have always bought from suppliers like LG and Samsung but the next generation of MicroLED they will attempt to design and manufacture in house. 

By returning to the raw materials and building from the ground up, they will be able to further distance their product from everyone else’s. 

We saw that in the Shinshinto period as smiths tried to rediscover koto processes and even in the modern period, it’s written often that smiths will try to find things like old nails and old iron to throw into the mix to try to add some distinctive magic to their product. 

This usually ends up being a pendulum where we pass from one approach to the other. But at the end of the day nobody is immune from supply and demand, and if you depend on local resources that can be used up, you don’t have many other options but to adapt.

Sometimes in the koto period I believe that ends up explaining why schools of incredible ability went into the twilight quietly and part of the mystery about why we can’t replicate them now.

 

 

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