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America's economy used to be modular, like it is in Europe.  People centered themselves around towns, since travel was difficult and lengthy.  Each town had stores where the locals could buy supplies.  This lasted throughout the 50's, 60's, and even into the 70's.

My grandmother grew up and lived most of her life during this time.  Her husband, my grandfather, ran a local auto repair stop/gas station and she was the town's postmaster.  I remember how whenever it came time to buy a new appliance, my grandmother would always buy from the local appliance shop, even if she could have gotten that same Zenith television at Sears for a hundred bucks cheaper.  She knew this, but bought from the local guys anyway because she cared more about supporting local businesses and the community than getting the best price.  All the businesses downtown had done favors for my grandparents over the years, and my grandparents gladly reciprocated.  My mother, however, is exactly the opposite.  She is a deal hunter and will drive the lengths of the earth to save every penny she possibly can.  She didn't grow up in a small town, but near inner city Detroit.

This modular, small-town economy became threatened in the 1980's with the rise of Wal-Mart and other big box retailers.  The prices in the city became lower than those in the towns, and people in those towns forgot about "mom n' pop" on Main Street and made the 50, 60, or 70 mile trek to the big city to get their televisions, clothes, and gas grills at rock-bottom prices.  Throughout the 80s and 90s, our retail economy went from being modular to monolithicaly centralized.  As specialized small town stores went out of business, sprawling mega-marts took their place in population centers.  Ma and Pa's Bike Shop became the sporting goods section of Wal-Mart.  One-stop shopping became the primary consumer choice.

So what do gas prices have to do with all this?  The centralized retail economy depends on one thing: cheap oil.  The American system itself depends on cheap oil.  That's why the majority of our middle-class population lives in sprawling suburbs instead of the inner city like in other countries.  When the average family bought a house in the mid-20th century, they didn't care that they weren't within walking distance to the schools, the doctor's office, or the drug store.  Gas was cheap, so they could just drive everywhere.  We didn't build up much of a public transportation system because oil was cheap and everyone owned cars.

Today, oil isn't cheap.  It's getting more expensive by the day.  Even when adjusting for inflation, we are seeing the highest prices for fuel we've ever seen in this country.  The higher the price of fuel goes, the less sense it will make to use half a tank of gas to save $50 on a DVD player.  Driving habits will change.  Consumers will consolidate trips, meaning fewer trips to the all-encompassing centralized retailers.  The shops on Main Street will look at lot more appealing than the Mega-Mart 50 miles away as people will start taking fuel costs into account over those lower prices.  Sure, large retailers like Wal-Mart move in to rural areas all the time, but they can't open a store in every small town.  Higher oil prices may in fact return us to the days where towns and villages were nearly cut off from each other, making the small town business once again a necessity.