One of the more important trends in post-Cold War America is the great consolidation that is going on all areas of life. This past Christmas shopping season, for example, was great for a small number of giant retailers. Amazon certainly had a good shopping season, as well as some giant operators like Walmart. For the small local retailers, Black Friday was not the start of their boom time, but a continuation of a decline that started in the 1990’s and continues unabated.

An adult in 1985 would probably have done business with a dozen different retailers during the season, in order to get the gifts and supplies he needed. He would have gone off to a mall to walk through dozens of shops. He would have hit the bigger retailers, of which there were many. That mall would have had two or three big stores, in addition to many small retail chains. Most people had access to two or three malls, in addition to small retailers operating in older strip malls.

This past Christmas, many people will have done all of their shopping on-line and some of those will have done their business with just one company. You can buy just about everything you want from Amazon. If they are not the direct seller, they are operating as a fulfillment company for others. They also operate storefronts for those who just a few years ago would have had their own web store. Amazon and Walmart are close to owning the entire on-line marketplace in the United States.

Consolidation is, of course, a feature of capitalism. An important thing libertarians always miss is that markets naturally seek to consolidate. No matter what set of rules are agreed upon in the market initially, dominant players will emerge and seek to consolidate their grip on the market. Eventually you end up with a few players that control the supply side of the market, thus turning the market into the modern version of the Bronze Age palace economies.

This tendency toward consolidation is not just turning up in the retail side of the American economy. It is occurring in the wholesale side as well. The industrial supply sector has seen a great consolidation in this age. Regional players have been backed by investment bankers toting unlimited credit money, so they can buy-up the smaller players. The supply chain has also seen a similar consolidation, where local operators are displaced by global operators.

The relentless drive toward consolidation is not just an economic trend but a cultural and political one as well. For the first time in a very long time, the children of middle-class Americans can expect a lower standard of living than their parents. One reason for that is the consolidation in the professional ranks. That great consolidation in the economy has meant relatively fewer jobs in the middle and upper management ranks of American business and in the professions.

That’s something that has gone completely unnoticed. In the 1980’s, going to a top-25 law school meant an upper-middle class life, even for the slacker. If you could not cut it at one of the elite firms, you were going to land in regional or local firm, where you could expect a comfortable life. There is a now a great consolidation in the law that will accelerate in this decade. Not only will the number of spots in the elite get smaller, but the next levels down will disappear entirely.

Another area where this will happen is higher education. In a way, higher education has been a relief valve for the children of the top-10%. Those unable to get into elite law schools or cut it in the law of finance, could land a comfortable life in a university either as an administrator or professor. The number of tenured professors and senior administrative staff continues to shrink relative to overall staffing. Of course, the college finance system is about shrink the whole system.

What we are seeing is something no one worried much over in the 20th century and that is the collapse of the upper-middle class. The focus was always on the working class and the great solid middle. While the working class has been obliterated as a social unit, the middle-class has struggled on. Where there is a crisis is in the upper middle, the class of people who served as the staff for the ruling class of American society in business, the professions and politics.

The great consolidation at the very top, is going to mean a great consolidation in the class that serves the top. In a world of ten thousand local guys like Jeff Bezos, there was demand for ten thousand top assistants. In a world of one Jeff Bezos, there is only one aid and maybe a support staff for that top man. That’s a bit of an exaggeration, but it reveals just how much damage consolidation at the top does to the next strata of society that exists to serve the elite.

There is another consequence to this great consolidation. The children of professionals, who are unable to find a spot in their class, tumble into the next class. This changes the that class. The radicalization of the white middle-class we see happening is due, in part, to this consolidation. All over in dissident politics are men who would have been in management tracks, partner tracks and tenure tracks. Instead they are working outside that system and exercising their minds in dissident politics.

This will have consequences. One way of viewing the revolutions set off by the Enlightenment is that they were the result of idle smart people. The American Revolution and the French Revolution were led by smart fractions. In a world of global oligarchs, where the smart fraction is coalescing outside the ruling fraction, the result will be increasing social unrest. The great populist revolt of the past decade is probably just an appetizer for what lies ahead in the new world order.

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