It’s the end of the world as we know it, and Phillip Simmons feels fine. Well, maybe not fine, but better than many.
Simmons is the long-time owner of Mr. C’s Bar & Grill – what he calls a dive bar – at the edge of Atlanta’s Buckhead neighborhood. A safe haven for domestic macro brews and low prices, Mr. C’s is also mildly Instagram famous for its unpredictable letter sign that amuses and perturbs passersby on busy Howell Mill Road. Mr. C’s sign has opined on Kavanaugh and Epstein, but mostly announces things such as, “the only Gym here is Beam,” or, “another day has passed, and I didn’t use algebra.” Most recently it was, “Don’t shake hands, everyone is out of toilet paper.”
Last week,Simmons’ landlord called to acknowledge the difficulties he must surely be facing due to the mandatory closings caused by coronavirus, offering to defer April’s rent. “If it’s okay with you, I’ll just go ahead and pay it,” Simmons responded.“I’ve saved for a rainy day and this is what it’s for. I can’t do this forever, but I’m OK for now.”
COVID-19 exposed the fragility of our economic system. Warren Buffett said, “Only when the tide goes out do you discover who’s been swimming naked.” Simmons has his trunks on, but other much larger companies do not. Cheesecake Factory, Mattress Firm, and Bloomin’ Brands, an operator of Outback Steakhouse locations,recently announced to their landlords they won’t be paying April’s rent.
The tide is out, and globalism is exposed. In its place, watch for the rise of localism. This won’t be some Jeffersonian agrarian world where we’re all threshing our own wheat, but a complex, locally–adapted system that is vibrant and resilient because it’s interconnected but not centrallycontrolled. Our current supply chain and financial system evolved by using standardization to create efficiencies. Finding “synergies” led to geometric growth of certain companies, lowering nominal costs for customers and concentrating decision-making among few. For example, four companies are now responsible for 70% of the pork production in the U.S.The sticker price might appear lower at the grocery store, but hidden costs exist.
Think of it this way:A $4 Mr. C’s hotdog sounds like a deal, but it comes with the low-probability kicker that if a virus/terrorist/cyber-attack occurs, we might be sheltering in place for an extended period of time and our economy could go down the toilet along with millions of jobs. Now consider a locally–sourced hotdog that costs $5, $6, or even $15. Localism would likely result in higher nominal cost, but if localized decision-making, supply chains and finance prevented being shut-in at home, hoping centralized governments and corporations can avoid being overwhelmed, what is that worth?
We all have a natural bias to the local – I haven’t seen any GoFundMe’s for Dollar Tree, for example – and on the upside, this crisis is exposing the true cost of globalism. We’ve seen the ingenious local adaptations of entrepreneurs – small distilleries converting to produce hand sanitizer, restaurants transforming into to-go markets and fitness studios streaming classes.
Globalism’s standardization is all-pervasive – it’s largely the reason all the new apartment buildings look the same, stores in a chain all sell the same stuff, and independent films have a rough time getting financed. It’s formulaic sameness sucks the vibrancy from our world, against our nature – we’re far more likely, for example, to photograph an open-air market in an Italian hill town than a typical American supermarket.
Some things are better managed at scale, just not ALL things. By pushing most decision-making to the locally-dispersed, what Nassim Nicholas Taleb calls “fractal localism”, we can maximize customization, adaptation, and responsiveness while still keeping those systems and institutions that are most effective across locales. Gone could be the zero-sum liberal/conservative rants, replaced with linked but self-supporting local systems.
Many Italian towns survived the 14th century plague by simply closing their gates. Life could go on within the gates because the towns were self–sufficient. We can now do one better by connecting our local ecosystems through the power of the internet. With the many costs of globalism exposed, we can re-imagine our world through the many benefits of fractal localism – one where a Mr. C’s hot dog might cost a lot more, but the doors are open and the booze is flowing. You’llprobably know the farmer that produced the hot dog, and since the farmer lives locally,he decided not to place an environmentally hazardous industrial feedlot next to the water system he shares with you. And maybe the farmer is buying a round for you because he got hyper-rich from the worldwide licensing of his proprietary autonomous seeding technology.
Mr. C’s will open again. When it does, be sure to introduce yourself to Phillip Simmons – we can all learn plenty from him. And don’t forget his primary service to the community – as his sign once read – if you’re “currently in the planning stages of a hangover? We can help”.
Eric Weatherholtz has been involved in the retail real estate industry since 1992 and leads JLL’s retail initiatives in the Atlanta region. He is a founder of Healey Weatherholtz Properties, an operator and developer of mixed-use properties and long-time supporter of ULI. Eric is a member of the Urban Land Institute and ULI’s Commercial and Retail Development Council (Silver).