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Matt Yglesias writes about experiencing a minor panic when suspecting that his favorite bar may be on a widely-publicized list of DC’s best, then bemoans the inelasticity of overall bar supply. I think he’s confused two things.

If bars as a category are crowded, then more bars will help. And, in general, allowing the market to set the relative quantity of bars in any given neighborhood, city, urban area, etc, is probably a good thing. If people want a new bar more than a new pharmacy, there’s no reason to prohibit the former. Taxes and regulations can and should be used to account for any public health and neighborhood nuisance that a successful bar can engender.

But that’s not going to help at all if your favorite bar gets on that list. That’s because there’s an intangible, unregulateable quality of bars called coolness. It goes in a cycle, something like this:

-New bar opens, preferably in emerging neighborhood or on fringes of emerged neighborhood
-A few savvy people discover said bar and start hanging out there
-Word of mouth spreads and more people start hanging out at the bar [this is when peak cool occurs]
-Someone busts the bar wide open – major newspaper or magazine article for example.
-Bar gets crowded
-The original set of people who made the bar successful stop hanging out there
-Rinse and repeat

Note that this cycle will happen regardless of the overall number of bars in your city and neighborhood. Everyone is chasing the cool. But, by definition, the cool can’t be where everyone already is, otherwise it’s not cool. Cool is inherently positional and zero-sum, and there is a precarious balance to it – if I’m literally the only person in the bar, it’s not cool, and if the bar is packed to the gills with random party people every night, it’s not "cool" – it’s that liminal moment when there is still the thrill of knowing something others don’t, sharing an open secret, being part of something special and unique and distinct with a limited and exception set of others. You can’t force it, recreate it manually, or recover it once it’s lost.

Generally speaking, positionality is a hugely important factor in economic decision-making, one that tends to throw off a lot of models which are based on individuals making decisions in an absolute sense and don’t account for the ways that people act and consume and produce in ways deliberately designed to mimic, anti-mimic, exceed, match, or even sabotage others.

Any bar can serve good booze and have nifty decor. Humans pursue status and rank. That’s what a truly cool bar is about.

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