Two bottles of wine passed across my table this autumn got me thinking about critical mass and wine. One cost $26.95 and was made just over 50 kilometres as the crow flies from my home, in Niagara-on-the-Lake. The other cost $18.95 and was made just to the south of Florence in the hills of the Chianti Classico. Each in its own way shows how size can matter, in a good way.

The 2020 Inniskillin Montague Vineyard Chardonnay is a fine and fancy white wine, with racy acidity tempered by core fruit and a touch of wood spice. It’s drawn from a single vineyard by the Four Mile Creek, which holds a place of pride for a winery. 

The 2018 Clemente VII Chianti Classico is a well and solidly-made, food-friendly red wine, with dark cherry and Mediterranean scrub notes. It’s from the biggest co-operative winery in the prestigious DOCG region. By the account of an American importer, the Castelli del Grevepesa makes 15 percent of all the wine in Chianti Classico, and this wine, named after a 16th-century Medici Pope, is one of its most popular brands.

One of my favourite themes to write about over the years is how winemaking and the tastes of wine drinkers are susceptible to fashion and trends. If you stick around long enough some of them go and come back. (Is it just me or is oak creeping back into more and more whites?) But one selling point that’s always on trend is a small, boutique, or craft winery.

If there is an area of commerce in which a lack of supply drives a greater surplus of demand than wine, then I don’t know it. This dynamic is the only way to explain how a 750-millilitre bottle of liquid that contains somewhere between 88 and 85 percent water can fetch four figures or more. The smaller the production of the winery that makes wine grapes grown in the smallest possible location, the better will be the wine.

Of course, wine like anything else is regularly—indeed, mostly—made on economies of scale. Walmart makes more money than Holt Renfrew. It’s just that the big producers don’t often brag about it. It’s hard to describe a wine as particularly special if there are a few million bottles of it made every year.

Apart from the taste, and the reasonable price, what I liked about both the Inniskillin Montague Chardonnay and the Grevespesa Clemente VII Chianti Classico is that their producers are proud to be big players and happy to tell you so to your face…or the next best thing, which these days is a Zoom call. I found this out when I talked to a representative from each winery recently.

Nicholas Gizuk was in the process of completing his second harvest as Inniskillin’s head winemaker when I spoke to him last month. Before that, he served as assistant winemaker to Bruce Nicholson at the Niagara winery for three years and spent another six years working in the cellar prior to that. In a typical year he’ll oversee the winemaking from 6,000 tons of grapes sourced from all over the Peninsula.

Half-jokingly, the South African vintner Mark Kent once told me, “Never trust a winemaker who doesn’t make cheap wine, because that’s where the mistakes go.” I am not implying that Nick Gizuk makes cheap wine or mistakes, but I do think that a winemaker who is responsible for more than a few barrels brings a certain breadth of experience and perspective to all of their wines, and maybe especially the rarer ones, which sometimes do not get made in disappointing years.

“It’s nice to work with vines that are 30 or 40 years old,” Gizuk told me, explaining that beyond his own experience he draws on the institutional memory of the winery that’s nearly 50 years old—ancient by Canadian standards—and growers that have worked with Inniskillin since the 1980s and ’90s.

“We’re a small winery and a big winery at the same time,” he added, underlying the point that Iniskillin’s bigger brands set the foundation, and give him and his team the freedom to take particular care with the boutique products like the Montague.

Paulo Nevini is the export manager for Castelli del Grevespesa and began our conversation by repeating the co-operative’s mantra and creed: “We are the largest family of Chianti Classico.”

When I complimented him on the 2018 Grevespesa Clement VII and its competitive price of $19 a bottle (in Ontario), he smiled and said, “You have to remember we are always a competitive winery, and we are always researching new techniques and looking for a higher quality of winemaking.”

Grevespesa’s history, like many of Europe’s co-operatives, can be divided into two parts. Originally they were set up to set a floor for the price growers got for their crops; a way for small landowners to combine forces to negotiate with buyers. Once the floor was set, then the emphasis was on production. The more you grew the more money you made since the co-operative guaranteed the sale.

That model only worked if consumers were willing to buy the wines the co-operatives made, and by the 1990s consumers shifted away from quantity towards quality, drinking less of the more expensive wines. The smart co-operatives saw the writing on the wall and pivoted to hiring expert winemakers and viticulturists and pooling their capital into state-of-the-art facilities.

Nevini also explained that because the holdings of Grevespesa are spread far and wide across the Chianti Classico territory they can blend and source wine from disparate sites. For instance, using more grapes from cooler, high-altitude sites after a hot summer. A bigger winery really does have more tricks up its sleeves and can maintain a high quality-to-price ratio, even in difficult years.

The dominant economic story in Canada and other Western economies over the past two decades or so has been what former U.S. Treasury Secretary Larry Summers has termed “secular stagnation.” It refers to a new economic equilibrium in which we’re stuck in something of a “two-percent trap.” The political economy consequences of this sustained period of economic slowdown have been significant. 

There may however be good news on the horizon. It’s quite possible that we look back on December 2022 and the release of ChatGPT as the moment that our economies started to get back to higher rates of productivity and economic growth.  

Let’s start with the source of the problem. There have been various explanations for the onset of secular stagnation including flat-lined business investment, aging demographics, sluggish productivity, and a lack of technological progress. The relative role of these different factors is the subject of considerable debate. So are our prospects for overcoming them. 

Nobel Prize-winning economist Paul Romer is a bit more optimistic than others on this question. He has argued that a key explanation for today’s slow growth is that we haven’t quite yet figured out how to fully realize the economic benefits of the internet and progress in computing across the economy. His main point is that there’s typically a lag between the development of a general-purpose technology and its effects on productivity and economic growth. 

In particular, he cites the past research of Stanford University economist Paul David which sought to understand the so-called “productivity paradox”: the strange fact that the modern computer revolution hasn’t expressed itself in productivity gains. David’s analysis finds a historical analogy in the story of electricity and its “diffusion lag” into widespread uses at the turn of the twentieth century. 

His key insight is that it takes time to realize the productivity-enhancing applications of general-purpose technologies like electricity or the internet. In the former case, for instance, it took about two decades to start to observe significant productivity gains from the electrification of manufacturing and other industrial processes. The 20-year lag was due to a number of factors including a lack of business knowledge about the nascent technology, the need for accompanying investments in parallel systems (including, for instance, converting manufacturing plants from water or steam to electricity), and the gradual emergence of applications for electrical technologies captured in our statistical measurements. 

David concluded from this historical comparison:

[there is] the existence of special difficulties in the commercialization of novel (information) technologies that need to be overcome before the mass of information-users can benefit in their roles as producers, and do so in ways that reflected by our traditional, market-oriented indicators of productivity. 

One cannot help but think that ChatGPT is a nascent sign that we’re overcoming these obstacles and finally on the path to reaping the productivity gains of modern computing power. The new, AI-driven prototype understands natural human language and is capable of generating detailed human-like written text based on the reservoir of internet facts and information. It seems poised to finally deliver on the much-anticipated promise of machine learning models. 

The potential for this new technology could be significant. Consider that it’s already capable of generating essay responses to exam queries that university professors say would be given full marks if submitted in an undergraduate class. In the medium term, it may replace Google as the primary means by which we leverage the internet’s infinite capacity for human knowledge because of its ability to optimize and synthesize. And, over the long term, as the technology improves, it has the potential to both augment and disrupt a wide range of sectors and professional functions. As The Hub’s executive director Rudyard Griffiths recently wrote: “It’s hard not to come away from using ChatGPT without the sense that this is something big.”

Summers agrees. He’s described ChatGPT and its underlying technology as on par with the printing press and electricity in terms of representing “a profound thing for humanity” with the potential to trigger “a profound change in the way that we are all going to be working.” 

There’s already been considerable discussion about its downsides including the risk of widespread labour disruption, the possibilities for politically-motivated censorship, and even that it will make the process of knowledge gathering too efficient. 

Yet so much of this commentary fails to reckon with its positive-sum potential. The real story here isn’t its possible negative effects on the economy and society. It’s ChatGPT’s potential to help us extract ourselves from the secular stagnation that has come to manifest itself in stagnate living standards, collective pessimism about the future, and growing political polarization. 

Higher rates of productivity and economic growth may not be a cure-all to these problems besetting the modern age but they’re a necessary condition. The practical and scalable usages of artificial intelligence and machine learning have the potential to break Western economies out of the two-percent trap and get back to an age of renewed growth and optimism. The consequences are unpredictable yet undoubtedly exciting. 

One high-profile Silicon Valley entrepreneur put it this way: “ChatGPT is one of those rare moments in technology where you see a glimmer of how everything is going to be different going forward.”

Twenty years of disappointing economic performance has contributed to a rise of nostalgia in so much of our culture and politics. Donald Trump’s slogan of “Make America Great Again” is only its most famous expression. ChatGPT represents a way out of its backward-looking, zero-sum grip.

A different future is once again visible. That’s good news for our economy, politics, and society.