The Refragmentation

Paul Graham’s essay The Refragmentation argues that today’s fragmentation represents a return to historical norms, not an anomaly.

Mid-Century Cohesion

World War II compressed income through wage controls and 93% top marginal tax rates. Large corporations created a “Duplo economy”—few giant companies dominating each market, standardizing consumer choices and culture.

Economic Compression

Unions negotiated above-market wages. Executives received below-market compensation with job security. Limited mobility discouraged extracting maximum current earnings.

The Disintegration

Multiple simultaneous disruptions in the 1970s: vertical integration fragmented, global competition challenged oligopolies, technology trumped economies of scale, deregulation removed protection.

Technology’s Role

Computing acts as “a lever” magnifying individual work capacity, inherently increasing variation in wealth creation potential. “The default tendency will be for economic inequality to increase.”

My Takeaway

Don’t view 20th-century cohesion as reproducible through policy tweaks. Those conditions were unrepeatable anomalies. Focus on symptom mitigation rather than eliminating fragmentation itself.