In Illiquid Assets #8: The Great Social Atrophy, we painted a pretty bleak picture. We looked at the data on “solitary socializing,” the rise of AI-driven isolation, and the way our modern world has systematically stripped the friction out of every interaction. We argued that between the iPad-kid phenomenon and the Work-From-Home revolution, the “Third Place” was effectively on life support.

If you read that post and felt like we were headed for a Wall-E style existence where we all float around in chairs staring at screens while robots bring us nutrient shakes, I don’t blame you.

But there’s a funny thing about humans: we are terrible at staying in one place. Whether it’s a stock market bubble or a cultural trend, we have a biological inability to avoid overcorrecting.

Today, we’re making the counter-argument. We’re going “Long Humanity.”

Because if there’s one thing we know about markets, it’s that the most crowded trade is usually the one that’s about to break. And right now, everyone is “Short Fellowship.”

It’s time for the Mean Reversion of the Soul.

The Pendulum and the Pivot

Most markets, driven by human behavior, spend 90% of their time swinging toward extremes and only 10% of their time in the “rational” middle. Human behavior itself is no different.

For the last decade, the extreme has been “Efficiency.” We wanted our groceries delivered without talking to a clerk. We wanted our meetings on Zoom so we could wear pajama bottoms. We wanted AI to write our emails so we didn’t have to think.

We got exactly what we asked for. We removed the friction. But in doing so, we removed the “social lubricant” that makes life worth living.

The “Great Social Atrophy” was the swing to the far left. But the snap-back could be a coiling spring. You can’t yet see it in the data. But anecdotally, you see it with the pushback and NIMBYism of data centers. Most people are somewhere between indifferent and hating the growth of AI. It’s not often we see society shift in a way that a majority of people hate—at least not without power-hungry rabble-rousing political leaders taking us there. People are realizing that “efficiency” is a great way to run a warehouse, but a miserable way to run a life.

We are genetically programmed for interaction. You can’t patch out 200,000 years of tribal evolution with a few software updates. At some point, the “Covid Kids” we discussed in IA #8 are going to wake up and realize they are starving for something a screen can’t provide. They are going to come out to play. I have regrets about not being social enough in my younger years… and I could tell ridiculous stories about my younger exploits long enough to drink a brewery dry.

Brewery Nostalgia Of The Future

There’s a specific brand of nostalgia that hits when you reach your 30s and 40’s. You start looking back at the places where you felt safe and connected.

For the Gen X crowd, it was the mall. For Millennials, it was probably the coffee shop or the dive bar. But for the generation currently entering the workforce, their childhood “Third Place” was often a brewery. Not as a drinker, but as the generation of children that grew up during the great brewery boom.

Think about it. These are the kids who were dragged to taprooms on Saturday afternoons while their parents shared a flight of IPAs. They played LEGOs on wooden benches and watched the world go by while their parents talked to neighbors. At the time, they probably had their heads buried in a tablet or a coloring book.

But nostalgia is a hell of a drug.

As these kids grow up in an increasingly digital, sterile world, they aren’t going to crave more “digital-first” spaces. According to recent reporting from CNBC regarding the “Analog” shift, Gen Z is already showing a massive desire to get offline, trading their smartphones for “dumb phones” and seeking out physical, small-business hubs. They are going to crave the smell of boiling hops, the sound of a heavy keg hitting a concrete floor, and the sight of people actually laughing in person.

The breweries again could become the “Public House”—a term that has existed for centuries for a reason. It’s the secular church. It’s the community center that doesn’t require a membership. It’s the place where you go to be “among” people, even if you aren’t “with” them. I still see my customers doing something that I have done dozens of times: sit at the bar and make a new connection that may become a new friend. I have hundreds of “beer friends,” and most of my closest friends developed directly from that connection.

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Presence as “Proof of Work”

This is where the AI pushback vs. dystopian future gets interesting.

In the crypto world, “Proof of Work” is what gives a token value—it’s the literal energy expended to prove something is real. In a world dominated by AI and remote work, Physical Presence is the new Proof of Work.

When an AI can generate a perfect video of a sunset, the actual sunset becomes more valuable. When an AI can write a heartfelt letter, the hand-written note becomes a luxury good. And when AI can simulate a “conversation,” sitting across a table from a human being and seeing their pupils dilate when they laugh becomes the ultimate status symbol.

AI makes digital content infinite and, therefore, worthless. It commoditizes “connection.”

But you can’t digitize the “vibe” of a Friday night at a local spot. You can’t download the feeling of a cold pint glass or the ambient noise of a crowd. That friction—the very thing we tried to eliminate for a decade—is now the “moat.”

If you want to prove you’re actually living, you have to show up. You have to put skin in the game.

The WFH Backlash and the Search for a “Second Place”

The Work-From-Home movement was sold as the ultimate freedom. No commute! No “forced” socialization at the watercooler!

But for many, it turned out to be a gilded cage. Without a “Second Place” (the office), the boundary between “Rest” and “Work” evaporated. People are now working in the same place they sleep, eating lunch at the same desk they use for Zoom calls, and realizing that they actually missed the “forced” interactions of the office.

This has created a massive vacancy in the human psyche. I see it in my wife, who generally works remote. When she gets the call for a work happy hour in person, the excitement is real. You can only vent so much over Slack. It’s not the same as bitching about some idiot you all deal with in person where there isn’t a trail for your IT guy to read later.

Since the office is no longer the “Second Place” for millions of people, they are over-indexing on the “Third Place” to fill the void. The brewery or bar isn’t just a place to get a drink anymore; it’s the place where the “Work-From-Home” tribe can go to remember they are part of a society.

We are seeing a mass existential crisis where people are realizing that “Independence” is just a polite word for “Isolation.” The snap-back is the realization that we don’t want to be independent; we want to be interdependent. And it’s coming. Over-indexing and mean reversion is what we do.

The Bottom Line: Only the Real Survive

Not every business is going to survive this shift. The “commodity” bars—the ones that offer nothing but over-priced booze, backless steel stools, and super-mid super-expensive tacos—might still continue to shrink.

But the physical spaces that lean into community, fellowship, and face-to-face interaction are building a moat that Big Tech can’t touch (other than Google Maps changing our listed hours every other week for no reason).

As much as the Silicon Valley crowd wants us to live in our headsets and use data centers for every human need, they are fighting against our DNA. You can’t undo millennia of genetic programming with a Vision Pro or whatever the next stupid wearable is.

We aren’t headed for a dystopian mess where we all forget how to talk to each other. We’re just in the middle of a massive mean reversion. The “Great Social Atrophy” was a warning, but the “Great Social Snap-Back” is the opportunity.

Only the strong will survive in the hospitality business. But those who do will be the keepers of the one thing AI can’t replicate: the human spirit.

Long Fellowship. Short Isolation.

Dave

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Illiquid Assets

The Great Social Snap-Back