A new book by the economist Douglas McWilliams, The Flat White Economy, suggests that hipsters, and the ecosystem surrounding them, represent the future of British prosperity.
Cereal Killer is a café on Brick Lane in east London that serves breakfast cereal. It opened last December to a fusillade of indignant fury. What kind of fool would pay £3 for a bowl of something when they could go to a supermarket and buy two boxes for the same price? A reporter for Channel 4 asked the café’s owners, bearded Irish twins Gary and Alan Keely, whether it was sensitive to open such a ridiculous restaurant in Tower Hamlets, one of the poorest boroughs in the country.
More than anything else, however, the new café was seen as the latest high-water mark of hipsterism, a sign that the specialisation of leisure pursuits in east London had gone too far. Twenty-first-century hipsterism can be hard to define, but you know it when you see it. Beards, plaid, tattoos, thick glasses, fixed-gear bicycles, artisanal breads (artisanal anything, really), Apple products, cold-pressed juices… these are some of the outward signs. But a new book by the economist Douglas McWilliams, The Flat White Economy, suggests that hipsters, and the ecosystem surrounding them, represent the future of British prosperity. Not only are they greener and more ethical than the rest of us, but the industries in which they work are driving our economy. We mock them at our peril.
At the last census 150,000 people in London were reported to be working in the flat white economy
Perhaps fittingly the book has had a choppier passage to publication than your average pop-economics number. The chairman of the Centre for Economic and Business Research (Cebr), and a free-market conservative who has advised George Osborne, McWilliams was in the news last week when he announced that he was taking a sabbatical in the wake of allegations that he smoked crack cocaine at a house in Hornsey. It was unfortunate timing, a fortnight before the book’s release.
Named after the favourite drink of the fixed-gear generation, the flat white economy is a portmanteau phrase for an “amazing phenomenon that has surreptitiously changed the whole nature of London – and to some extent the UK economy”. From Cebr’s offices in Old Street, McWilliams had a front-row view of the changes during the past decade. What was once a hub for artists and bohemians has become the European centre for a creative, internet-driven new wing of the economy. With the reputation of the financial services in tatters and more traditional industries continuing their decline, this new source of growth has appeared just when the country needed it. To walk from Old Street roundabout to Shoreditch High Street is to see an extraordinary mix of open-plan offices and galleries, Asian restaurants with fat queues outside and cafés that will mend your bicycle, sprinkled with shark-eyed estate agents and a few resilient kebab shops. It breeds resentment and satire – none more prescient than Charlie Brooker’s Nathan Barley, a decade old this year – precisely because it is dynamic and interesting.
The flat white economy is driven by online retail and marketing but it comprises many different businesses: McWilliams argues that it is mainly defined by the types of people it employs. At the consumer end this leads to cafés and niche shops, such as the shipping-container Boxpark in Shoreditch. The new trendsetters don’t have as much money as their “loadsamoney” forebears from the financial services in the 80s and 90s, and as a consequence their spending patterns are driven by novelty rather than cost. “They can’t price their styles out of the market, so to keep ahead their styles have to keep changing,” McWilliams told me, when I spoke to him before last week’s allegations. “They also drink an awful lot of coffee.” (The stats bear him out. Since 2007, coffee sales have risen by 50% while sales of champagne have fallen by a quarter.)
Neither do they have much space. “They share flats and often share bedrooms,” he said. “They don’t have space for cups and saucers and dining rooms, so it makes more sense to head out to a café for breakfast. They save on ownership and travel light. They wear skinny jeans instead of suits. They have one or two expensive electronic products, but on the whole they are less materialistic than their parents’ generation. They buy bicycles rather than Porsches.”