As the empire deliquesces into a fetid slurry of economic failure, we
stand ankle deep in the rising swamp waters witnessing the futile battle of
the giants, Walmart and Amazon.
Neil Howe, co-author of The
Fourth Turning, wrote this week that “[t]he Amazon-Walmart rivalry
will determine the future of retail.” Well, it seems that way, perhaps, and I
understand why a lot of people would imagine it, but I would draw some
different conclusions. What we’re seeing is more like the battle between
Godzilla and King Kong, two freaks of nature produced by a toxic culture,
fixing to finish each other off.
The condition that will flavor events going forward is scale. Everything
organized at the giant scale is going to fail. We have made all the systems
of daily life too large and they will not function in the long emergency (and
the fourth turning), an age characterized by universal contraction. This is
true of corporations, institutions, schools, hospitals, farms, governments,
virtually all organized enterprise. Retail is currently just the most visible
example at the moment, since it is a commercial battleground that doesn’t
enjoy public subsidies. The organisms on that field are exquisitely sensitive
to economic reality, and the salient reality these days is the impoverishment
of their customers, the former middle class.
This has been a sensational year for retail failure so far with a record
number of brick-and-mortar store closings. But it is hardly due solely to
Internet shopping. The nation was vastly over-stored by big chain operations.
Their replication was based on a suicidal business model that demanded
constant expansion, and was nourished by a regime of ultra-low interest rates
promulgated by the Federal Reserve (and its cheerleaders in the academic econ
departments). The goal of the business model was to enrich the executives and
shareholders as rapidly as possible, not to build sustainable enterprise. As
the companies march off the cliff of bankruptcy, these individuals will be
left with enormous fortunes — and the American landscape will be left with
empty, flat-roofed, throwaway buildings unsuited to adaptive re-use.
Eventually, the empty Walmarts will be among them.
Just about everybody yakking in the public arena assumes that commerce
will just migrate to the web. Think again. What you’re seeing now is a very
short term aberration, the terminal expression of the cheap oil economy that
is fumbling to a close. Apart from Amazon’s failure so far to ever show a
corporate profit, Internet shopping requires every purchase to make a journey
in a truck to the customer. In theory, it might not seem all that different
from the Monkey Ward model of a hundred years ago. But things have changed in
this land.
We made the unfortunate decision to suburbanize the nation, and now we’re
stuck with the results: a living arrangement that can’t be serviced or
maintained going forward, a living arrangement with no future. This includes
the home delivery of every product under sun to every farflung housing
subdivision from Rancho Cucamonga to Hackensack. Of course, the Big Box
model, like Walmart, has also recruited every householder in his or her SUV
into the company’s distribution network, and that’s going to become a big
problem, too, as the beleaguered middle-class finds itself incrementally
foreclosed from Happy Motoring and sinking into conditions of overt peonage.
The actual destination of retail in America is to be severely downscaled
and reorganized locally. Main Street will be the new mall, and it will be a
whole lot less glitzy than the failed gallerias of yore, but it will
represent a range of activities that will put a lot of people back to work at
the community level. It will necessarily entail the rebuilding of local and
regional wholesale networks and means of distribution that don’t require
trucking.
If you think we’re just going to switch the trucking industry over to
electric vehicles or engines that run on bio-fuels, hydrogen, compressed air,
or natural gas, you will be disappointed. Ain’t going to happen. We’re going
to have to come up with something else, starting with the basic idea of the
walkable community. This implies that we’re going to have to revive the
existing towns and small cities that fit that description. And it also
implies that a great deal of American suburbia will have to be abandoned. The
capital will not be there to reform it. In any case, commerce later on in
this century is not going to be anything like the Blue Light Special orgy of
recent decades. And the transition will get underway with a speed that will
make your head spin.
Great Summer Reading… JHK’s new book!
“Simply the best novel about the 1960s.”
Read the first chapter here (click) on Patreon
Buy the book at Amazon or
click on the cover below
or get autographed copies from Battenkill
Books
Other Books by JHK
