The Indicator from Planet Money - An Economist Walks Into A Bar

There's a long history of bars playing a vital role in innovation and economic growth. What happens when they all close down?

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Content Keywords: Mike Andrews inventions NPR

I am late. I am sorry. No worries.

Alex Rossi from Atlas obscura gastro obscuro so we should explain where we are. We are at a bar in Brooklyn the bearded lady. I'm your sitting outside a girl socially distance, but we are we are at the store for very particular reason because it is apropos. We are here to talk about your ideas Innovation invention and that leads us somewhat surprisingly to the bar. Was it a bar jokes with the hangout spot for all the econ grad students at the University of Iowa including for Mike. What does it look like? They got beer check the light boxes.

As a grad student Mike, I'm really interested in Innovation and new ideas thing that gets me excited. I want understand where do new ideas come from.

The central question in economics because Innovation new ideas its fuels economic growth think about things like the combustion engine the light bulb the computer the internet smartphones. How many jobs those inventions have created how much money they have generated how much they've changed our lives how we work. Mike was spending all this time studying pakdata pens are the paperwork people file when they want to lock down an infection make a claim to it as their own. I guess and just sort of brainstorming things you could look at it and I think it was an accounting grad student Steve might my buddy Steve said, hey, you should look at if people come up with more ideas out at bars do bars Foster Innovation. Good question. There is a long history of bars and Innovation and ideas.

Is Steve Jobs and Steve Wozniak the co-founders of Apple before they were at the Steve's before they were famous. They were part of a group of computer happiest called The Homebrew Computer Club and they would meet up at a bar and restaurant in Menlo Park, California and Shark Week parently all were ideas sparked over beers at bars as a mic that is drinking at bars with friends like one of the keys to having great Innovations.

This is the indicator from Planet Money. I'm Stacey Vanek Smith and his research into patents and beer and today we'll be talking with him about what the connection is between bars and great ideas.

A lot of us are working from home. So we want to do some boots on the ground research. That is why we are here and Alex are the bearded lady who specialize in front of fancy cocktails and you got one of the fancy cocktails, where'd you get called the bedford-nostrand the drink has micallef, which is very tasty. It's frozen. I went with the less sophisticated route.

Hey, Greg, newsletter feedback have been loving your newsletter as of late all they want you to switch to a serif font people can subscribe at NPR. Org / Planet Money newsletter NPR. Org / point of money newsletter.

Mike Andrews is an economics professor at the University of Maryland. But a few years ago. He was a grad student with an idea what role do bars play in Innovation. There was a really easy way to measure this Mission Rite Aid 18th Amendment which witch went into effect a hundred years ago last January actually prohibition lasted for more than 10 years in the US all of the bars were shut down all across the country and don't Michael did patent applications before prohibition and then after prohibition it started to see if shutting down all the bars have had an effect on ideas and Innovations. I found was Franklin's pretty striking see a drop and pans by depending on exactly how you measure things 5 to 15% So it's a large it is really large that makes us that the same drop-off happened during the Great Depression the Great Depression unemployment hit 25% people were starving and living in their cars at that time patent.

Dropped by 15% if you close the bar somewhere. That's basically you have cost to patent recession in terms of impact. Are you saying that the secret sauce for Innovation is like beer sauce. This is not a story about alcohol. In fact, that that's something I can look at in the data. So across the u.s. All the prohibitions were not created equal some counties just closed down bars. They were dry. But people could still have alcohol at home and selling alcohol wasn't necessarily illegal alcohol entirely. These were bone dry counties. And so if beer was the secret sauce convention, we would have seen less invention of those places. If you were patents the places that still had some booze would have been more intensive and Innovative, but there was no difference. So it wasn't that alcohol at the bars. There was keeps new ideas.

Really the conversation. I I think it's the fact that there's this setting where people are able to get together right there right there off the clock. There's no one setting an agenda. You can just Mingle2 companies have her to manufacture this kind of setting with with some success Bell Labs at which invented the laser the cell phone Unix operating system. I also apparently beefiness least of these really long hallways in their buildings. And the reason they did that was so the people would stop and chat and it would spark ideas for right now. We are not chatting among highways with her co-worker is on her way to the bathroom. I have had no water cooler conversation in months and we are not striking up conversations in bars and coffee shops, or at least not nearly as much that might lead you to be very pessimistic or are very worried about this involuntary shift to remote work.

But I think there's also an optimistic way to think to look at these results did not actually recovered after about 5 years, but hadn't started rolling in again because people started finding other places to unwind and chat and congregate other water coolers instead of going to the bar and maybe you'll go to the church picnic or I figure out where the speakeasies open up and were able to rebuild those informal social networks and really recover sure things like this are disruptive but people are resilient and people are creative and and they can figure out ways to work around and come back after disruptions like this. So right now a lot of people have been finding ways to do this online Zoo.

You know, it's funny that you mentioned zumack. I've been on countless virtual happy hours over the last six months and to me it's been a very poor substitute for in-person interaction. There's the worst nothing. I don't know. I'm 100% with you Stacy. I mean, I I think the spontaneity is is the key thing that you lose, you know, it's tough to have side conversations just evolve into people talking over one another. I think they are a poor substitute for the kind of things that happens in places like bars or coffee shops, but you know online conversations as imperfect as they are all we have for a really long time. I mean offices are starting to reopen but a lot of people are going to keep working remotely places like Twitter Pinterest Facebook and slack they are basically play.

Turning on having a huge chunk of their Workforce work from home indefinitely.

Mike says it'll take a while before we can actually use data to answer this question. There's a lag between Innovation that happen and his Pasadena so we'll have to see Alex we decided it was very important that we come here to the bearded lady and have some cocktails and discuss ideas for the economy. It's the least we can do to the economy and Alex you all kinds of other people stories people should check out at Gatherings here at Harley and worship. Oh my gosh, we're going to have to discuss this over drinks.

This episode of the indicator was produced by Brittany Cronin who is currently here having a beer and relax double fact check by Chantelle Danya. The indicator is edited by Patty Hearst and is a production of NPR.
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