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How the Hipster Ethic Is Revitalizing the American Economy

Let me be clear. I am no advocate of hipster culture as it is often realized in American society today. At its worst, it is contrarian for the mere sake of being contrarian, which is, of course, obnoxious. But at the same time, there are positive, even praiseworthy aspects of “hipsterism”—namely, a sincere appreciation for originality.

I am often called a histper myself because I’d rather go to a local breakfast joint than IHOP. Or because I prefer a locally brewed IPA to Bud Light. Well, it turns out I’m not the only one—and this is good news for America.

As Tim Wu of The New Yorker reports, “American craft breweries collectively now sell more than 16.1 million barrels of beer annually, outpacing, for the first time, Budweiser.”  This may not be all that surprising—we are talking about all American craft breweries after all. But consider this: in 1988 Budweiser sold almost 50 million barrels, completely dominating the market. Acutely aware of this decline, it’s no wonder Budweiser is actively trying to set itself apart from these craft brews.

“There is a certain inherent value in diversity and originality.”

Beer isn’t the only example of this trend. Wu reports that “independent bookstores have grown about twenty percent since 2009… and more than three billion dollars was spent last year on more than four thousand independent feature films.” Why are these businesses experiencing success? Wu calls it “true differentiation,” which means they have “established a product that, in the mind of the consumer, is markedly and undeniably different.” Increasingly, the hipster ethic, as I’m calling it (or the appreciation of originality), is spreading. And the demand created by its spread is fueling the rise of craft breweries, boutique coffee shops, and hole-in-the-wall bookstores across the country.

This is encouraging for a few reasons. First, an economy with a large number of small and medium sized enterprises is generally a healthy one. As the Center for International Development at Harvard University names, “In high-income countries, small and medium enterprises (SMEs) are responsible for over 50% of GDP and over 60% of employment, but in low-income countries they are less than half of that…” Furthermore, according to the U.S. Small Business Administration, “Since 1990, as big business[es] eliminated 4 million jobs, small businesses added 8 million new jobs.” It makes sense that an economy full of entrepreneurs, start-ups, and growing small businesses will be more dynamic and resistant to collapse than one dominated by a few conglomerates (look to Detroit and the auto industry as a case study).

This isn’t to say big businesses are bad. They often provide goods or services more efficiently and cost-effectively than their more limited counterparts. However, they should be accompanied by a strong base of small businesses, which help diversify the economy. As Wu writes, “[the rise of small businesses] creates an industrial upheaval important to the long-term strength of the economy. It suggests an economy that is alive and reinventing itself, that is mutating from within, that is engaged in the never-ending process of creative destruction.”

Beyond economics, there is a certain inherent value in diversity and originality. Almost nothing makes me think “brave new world” like a sterile, uniform strip mall full of chain stores—which is why I try to avoid suburbs like the plague. Something about it seems like an offense to human creativity and individuality. I love my neighborhood in D.C. because nearly every establishment is unique, even quirky. There is something very human and right about it being that way. I’m not saying everyone needs to become a hipster, but it seems there is some undeniable truth in what they stand for.

Whatever your opinion of hipsterism, its ethic is spreading. And as a result, more and more small businesses are popping up in America. This is a good thing, and it didn’t even require government intervention to make it happen.

About a year and a half ago, the big local news in D.C. was that Walmart planned to open several stores within Washington city limits. The City Council passed a bill to force Walmart to pay a “living wage” of $12.50, and others in the community worried that the megastore would crowd out small businesses. Eventually, the opponents failed and Walmart opened its doors on H Street NW and Georgia Avenue NW.

Fast forward to today. Walmart is open for business, providing inexpensive goods to people who care most about low costs or simply can’t afford pricier goods. Meanwhile, drive east down H Street and you’ll find a thriving neighborhood where new restaurants, bars, and shops are opening up monthly. Many patrons of H Street’s Ethiopian restaurant or customers who pay $6 for a slice of pie at a shop down the road wouldn’t dare set foot inside a Walmart.

And this is the beauty of a free market. Human preferences—increasingly, of the hipster variety—create the demand that fuels a vibrant economy where everyone can be happy.

In the end, I’m glad that Walmart exists to provide cheap goods. But I’m also glad I’m not the only one with hipster tendencies, so that I can enjoy a slice of chicken pot pie made from scratch and sip peach pumpkin ale—and America’s economy becomes more vibrant and evolving than it otherwise would have been.

  • dave

    I remember back in the early 90’s when the economy was in a slump, although far less serious than the current one. What I noticed was people cut way back on major purchases like homes, autos, expensive vacations, etc., but treated themselves to things like Ben and Jerry’s which was new at the time. I was always baffled that people would spend as much on a pint of B&J as a half gallon of Breyer’s, but eventually figured out it was a way to live the “good life”, but in a small way. I think that’s what we are seeing today also. And yes, I’m happy that I know of at least four craft beer breweries turning out fantastic IPAs, porter and stouts right here in my home state of RI.

  • Carl Fales

    All the liberals who rail against Wal-Mart must make a pretty comfortable living. I know that every penny counts for me, which is why I shop at Wal-Mart at least two or three times a week. But I guess that makes me an evil person.

    • Tyler Castle

      By no means are you an ‘evil’ person for shopping at Walmart. I completely respect your decision to shop there in order to save money. Like I say, I’m glad that Walmart and other big businesses exist for that reason. However, I’m also glad that people have preferences (and yes, enough wealth) to fuel the growth of small, unique businesses. Our economy is stronger when both the Walmarts and the local stores exist.

      • Carl Fales

        Exactly – what we need is more of a truly capitalistic free market, instead of the bastardized crony capitalism that we have now. The guy who founded Home Depot said there is no way he could have launched that company today – which is pretty scary, when you think about it.

  • hughmcgrath

    Why does Walmart always seep into these type of stories? And who cares who is a ‘hipster’ or not? And where are all these people getting the cash to buy expensive snacks and beer? And to the beer, craft beer is not new, it was popular in the early 90’s too. The distribution has improved. Gluten free is indeed new, dumb, but new.

  • skeets11

    What this writer fails to realize or mention is that every massive corporation of today started out as a small mom and pop. Someday his little breakfast joint might be as big as IHOP.

    • Tyler Castle

      Indeed! And that’s not a bad thing at all. If it does, I just hope there are another few small stores that pop up in its place.

  • xhare

    My observation is that every Walmart I have ever seen has many smaller stores nearby. Rather than shutting everyone down, Walmarts promote growth around them. Granted, trying to directly compete with Walmart is something even giants like Target, K-Mart, and Meijers, have a tough time doing, it would be even tougher for a small mom & pop store.

    So the small business owner has to find a niche. Better service, different products, cooler atmosphere, etc are keys to success. It also doesn’t hurt to try to get your city council to ban Walmart outright or to force Walmart to pay higher wages. Crony capitalism is for everyone, right? Of course, as this article gets to, marketing to the arrogant uppity types who are more concerned with the social implications of being seen at Walmart (or seen with a Budweiser in their hand) than with the amount of money in their bank accounts is a pretty sure fire path to success too (in big cities anyway). Done right, these folks will even free themselves of their money at very un-hip large corporate entities who craft their image in such a way as to appear hip and non-corporate. Trader Joes and Whole Foods come to mind.

  • Martin Green

    It is not the things that they choose to spend their money on (which are often pretty good) that makes “Hipsters” annoying, it is the “cooler than you” attitude so many of them have. It’s the reason I’ll never own an iPhone, I just don’t want to associate myself with expensive mediocrity for the show of it.

  • Wise King

    The problem with the hipsters (ie gentrifiers) is that they only support businesses which other hipsters support or are owned and operated by gentrifiers like themselves. This is why we witness the demise of authentic family owned businesses in hipster neighborhoods which ultimately are replaced by inauthentic, higher priced versions of the same. This breeds in-authenticity and results in hipster enclaves becoming EPCOT versions of what they have replaced.

  • Avi Marranazo

    Great article!

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