Consolidation, the Machine Behind Wealth Inequality
A Ridiculous Story to Highlight a Ludicrous Problem
To talk about capitalism’s baked-in consolidation of wealth, I am going to take a chance. I’m going to tell you the story of a ridiculous competition. A competition that I hope will highlight the ins and outs of the “free market.” I am aware that a race or competition isn’t exactly a new metaphor for capitalism, but bear with me, I hope you’ll find this little bit of ridiculousness helpful.
“Metaphor for Capitalist Consolidation Snow-Rolling Competition”
For this contest, we’ve lined up a thousand competitors in the starting gate. For simplicity’s sake, we will give capitalism an unearned benefit of the doubt. Everyone will begin our contest from the same point. In a system built on a centuries-old foundation of slavery, colonialism, and outright theft, we all know this is an unearned generosity. But sometimes we have to focus on one problem at a time.
It’s a blustery, winter day, and the goal of our “Metaphor for Capitalist Consolidation Snow Rolling Competition” is to build the biggest snowball possible before crossing the finish line. However, before the starting gun goes off, let’s add one little twist to make our contest a bit more realistic.
A flat course doesn’t present many opportunities for the true “free marketer” to shine. So, right in the midst of our course, let’s drop a giant snow-covered hill. We’ll call it Mount Consolidate. Seems appropriate.
The First Quarter
On your mark. Get set. GO!
For the first quarter of our contest, we see the capitalism of lore. Our spectators are treated to all manner of techniques, triumphs, and even a handful of early snowrolling tragedies. A few frontrunners, using various mixtures of ingenuity, hard work, and no small measure of luck, begin to open up slight leads on the rest of the competition.
As we near the end of the contest’s quarter post, the contestants still find themselves, if not neck and neck, at least well within sight of each other. Here, the capitalism of textbooks still holds sway. Some members of the peleton learn from those a bit further in front and close the gap. And amongst the leaders, the incremental innovation borne of competition is starting to create some decent snowballs.
One of those innovations, however, is about to usher in the race’s first period of consolidation.
The Second Quarter
As the second quarter begins and the leaders (with the pack hot on their heels) approach the starting slopes of Mount Consolidate, the Capitalism that we know and loathe is about to rear its ugly head.
When the slightly-in-front group of five or so frontrunners looks ahead at the second quarter’s steep slopes, it occurs to one of them that the best way to make a giant snowball is to have someone else do it. Let the consolidation of labor begin.
In this phase, through a combination of backroom rule changes, psychological warfare, and promises they have no intention of keeping, the early pacesetters whittle the contest drastically. When they are done, our race, which began a thousand strong, is left with just a hundred; a hundred that fall roughly into three categories.
The Leaders
The first category, the leaders, is our smallest group. We’re going to dub them the WAC-jobs (a name derived from a mashup of the fact that they see the competition as Win at All Costs and their dubious claim that they “create jobs”).
Using the power purchased with their early good fortune, they convince many at the back of the pack that a small piece of someone else’s big snowball is better than all of their own smaller snowball. In other words, the WAC-jobs persuade 800 or so fellow competitors to abandon the competition and work for the WAC-jobs instead.
The Cooperators
Our second group, we’re going to call them the cooperators, sees both the writing on the wall and the power of consolidation. However, they also have a near-clairvoyant ability to see the destruction the WAC-jobs will cause.
This group, about 20 or so, recruits about a hundred of the remaining solo competitors to join them in their snowball-rolling efforts. However, in contrast to the WAC-jobs, these rollers form cooperatives, groups of rollers who collaborate to create a snowball that is bigger than any one of them might’ve rolled alone, but crucially, one that is shared equally amongst the team.
The Independents
Our final and still largest group, the independents, is a group of competitors, about 75-strong, who hold on to the idea of winning on their own. They are laughed at for their “go-it-alone” attitudes, but they understand that the point of the contest isn’t the finish line but the contest itself.
The Steepening Slopes
As the slopes of Mount Consolidate grow steeper, the WAC-jobs begin to open up a commanding lead. Promises of “Snowball-sharing” and “Snow beyond measure” drive 80% of the contestants (AKA the Labor) to widen the gap considerably between the WAC-jobs and their pursuers. The peak drawing ever nearer.
Finally, here, atop Mount Consolidate, Textbook Capitalism completes its transformation into Actual Capitalism. And, surprising no one, ushers in a second round of consolidation.
The Third Quarter
The summit kicks off the third quarter. And here, incredibly, the leaders ponder the inexplicable question: “Is winning enough?”Spoiler Alert! In their eyes, it is not.
With this “revelation,” the WAC-jobs set in motion what will become the second wave of consolidation. Leveraging the influence that the consolidation of labor has brought them, they will now consolidate expertise.
To paraphrase Uncle Ben, “With great snow comes great power,” and the WAC-jobs use this power to tremendous effect. Regulations meant to ensure proper safety and compensation to snow-rollers? Gone. New barriers for independent and cooperative rollers to navigate? Definitely. A media campaign vilifying the few who dare defy the snow-rolling elite? Snow well spent.
By the time they’ve coasted to the bottom of Mount Consolidate, they will have all but eliminated the “losers” who are just now struggling to the summit. As the third quarter draws to a close, the second round of consolidation begins in earnest. The WAC-jobs, knowing that the primary reason for their lead isn’t brainpower but rather manpower, poach the exhausted expert snowrollers from amongst the independents and the cooperators.
Before long, only a couple of cooperatives and the slightest handful of independents remain. The WAC-jobs have swallowed up the rest of the competitors. If you’re keeping track at home, three-quarters of the way through our contest, the WAC-jobs now control more than 95% of all snow-rollers.
The Final Quarter
As the finish line rises over the distant horizon, the third consolidation, the consolidation of profit, begins.
Blaming market forces that they created, the frontrunners begin to distance themselves from anything that eats into their profits. Methods include: laying off snow-rollers; automating snow-rolling; and going back on earlier promises of snow-sharing and other glories of the podium.
However, these broken promises pale in comparison to one final innovation, the of Advanced Snow-rolling Systems (ASS). The ASS maximizes the collection of snow in the short term (as a bonus it does so while at the same time minimizing labor inputs), but at a tremendous cost. The ASS creates environmental conditions that make future snow rolling impossible.
In short, by combining the power of extreme consolidation with dangerous short-term thinking, the WAC-jobs have ensured that the inaugural “Metaphor for Capitalist Consolidation Snow-Rolling Competition” is also the last “Metaphor for Capitalist Consolidation Snow-Rolling Competition.” Consolidation for the Win!
And believe it or not, they aren’t done yet!
As the snow disappears and the finish line flaps a few feet away, a final, cannibalistic consolidation commences. The WAC-jobs turn on each other, and in the end, we, the spectators, are left to watch a single ego-maniac nudge his gargantuan snowball across the finish line.
In this, his moment of “triumph,” we are expected to ignore the destruction he has left in his wake and praise his genius. In a feat of Orwellian hubris, the giant of snowrolling industry tries to convince us that the poverty, snow destruction, and utter lack of any other snow-rollers at the finish are simply inevitable aspects of the snow-rolling system.
Don’t believe him!
Conclusion
If you’ve made it this far, I thank you. When I started writing about consolidation, I had no idea I would channel my inner Aesop and spin such a ridiculous fable. That, I guess, is the beauty of writing. Sometimes, the writer spins the story, and sometimes the story spins the writer.
Let me know what you thought of the “Metaphor for Capitalist Consolidation Snow-Rolling Competition.” And come back next week as we dissect in a (probably) less ridiculous way, the power of communication has to bolster the Billionaire Support Economy.