Joel Kotkin

Throughout the West, particularly the Anglosphere, housing costs are ravaging the middle class. Homeownership, long the key to social mobility, is on the decline, particularly among younger generations and minorities. According to the Organization for Economic Cooperation and Development, house prices in high-income countries have been rising “three times faster than household median income over the last two decades,” causing the standard of living “to stagnate or decline.” Unlike previous housing crises, this one is not primarily caused by mass displacements due to wars or natural disasters or population growth.

Few developments have more cheered progressive activists than the perceived resurgence of labor unions. This has been sparked by largely symbolic efforts to unionize in places such as Starbucks and Amazon, as well as more sizable wins by the Writers Guild of America and the Screen Actors Guild and United Auto Workers, the country’s most important private labor union. In 2022 strike activity more than doubled from the previous year. Yet ultimately these wins may turn out to be largely Pyrrhic.

Over the years since the financial crisis, economic power and wealth has become ever more concentrated in fewer hands. This is something leaders have acknowledged, and policymakers have tried to do something about. And yet, despite brave talk of breaking up mega-giant companies, anti-trust efforts have been anemic, as most recently demonstrated by the failure to stop Microsoft from swallowing game maker Activision. The future looked a little brighter in the immediate aftermath of the pandemic. There were signs of a grassroots resurgence, with a strong uptick in new business formations in the United States. But since then, as interest rates have risen and regulatory pressures have increased, there has been a slackening off of new firms.

The last few decades have seen the emergence of two rival economies: an older analog one built on the actual production of goods, and another that profits from financial transactions, images and customer surveillance. The contest between the two has been rather one-sided, with the “laptop economy” the big winner, particularly during the pandemic. But while lockdowns made this one-sidedness clear, recent developments have been an unwelcome reminder that the pain suffered in the analog economy still matters. Whether through inflation, energy shortages or supply chain issues, we are getting an uncomfortable lesson in the enduring relevance of the material world. Sadly, the needs of the analog economy aren’t taken seriously enough in Washington.

"Young people do not degenerate; this occurs only after grown men have already become corrupt.” — Montesquieu, The Spirit of Laws, 1748. The great test of a generation is whether it leaves better prospects for its descendants. Yet by virtually every indication, the baby boomers, and even the Gen Xers, are leaving a heritage of economic carnage — as well as a growing social and cultural dissipation that could shape our future and the fate of democratic self-rule, and not for the better. This legacy comes not from outside forces, but the investment bankers, tech oligarchs and their partners in the clerisy who have weakened their national economies and undermined the chances of upward mobility for most young people.

We bemoan autocracies in Latin America, the Middle East, Africa, Russia and China but largely ignore the more subtle authoritarian trend in the West. Don’t expect a crudely effective dictatorship out of Orwell’s Nineteen Eighty-Four: we may remain, as we are now, nominally democratic, but be ruled by a technocratic class empowered by greater powers of surveillance than those enjoyed by even the nosiest of dictatorships. The new autocracy rises from a relentless economic concentration which has engendered a new and fabulously wealthy elite. Five years ago, around four hundred billionaires owned as much as half of the world’s assets. Today, only one hundred billionaires own that share, and Oxfam reduces that number to a mere twenty-six.