Loving Our Debt-Serfdom: Our Neofeudal Status Quo

I have often used the words neoliberal, neocolonial and neofeudal to describe our socio-economic-political status quo. Here are my shorthand descriptions of each term:

1. Neoliberal: the commoditization / financialization of every asset, input (such as labor) and output of the economy; the privatization of the public commons, and the maximizing of private profits while costs and losses are socialized, i.e. transferred to the taxpayers.

2. Neocolonial: the exploitation of the domestic populace using the same debt-servitude model used to subjugate, control and extract profits from overseas populations.

3. Neofeudal: the indenturing of the workforce via debt and financial repression to a new Aristocracy; the disempowerment of the workforce into powerless debt-serfs.

Neofeudalism is a subtle control structure that is invisible to those who buy into the Mainstream Media portrayal of our society and economy. This portrayal includes an apparent contradiction: America is a meritocracy–the best and brightest rise to the top, if they have pluck and work hard– and America is all about identity politics: whomever doesn’t make it is a victim of bias.

Both narratives neatly ignore the neofeudal structure which disempowers the workforce in the public sphere and limits the opportunities to build capital outside the control of the state-corporate duopoly.

The book The Inheritance of Rome: Illuminating the Dark Ages 400-1000 shed some light on the transition to a feudal society and economy. While the author is a fine writer, the subject matter doesn’t lend itself to light reading. The transition from the Roman legacy of centralized governance (empire, monarchy, theocracy, etc.) to feudalism (governance by local lords / aristocracy) was complex and uneven, and the author takes pains to describe the process and many variations that arose in a highly fragmented post-Roman Europe.

(Note that the Eastern Roman Empire, a.k.a. Byzantine Empire, endured until 1453 AD. I’ve written often on both the western and eastern Roman empires: The “Secret Sauce” of the Byzantine Empire: Stable Currency, Social Mobility (September 1, 2016)

Don’t Diss the Dark Ages (October 26, 2016)

In the Footsteps of Rome: Is Renewal Possible? (July 24, 2017)

Neofeudalism is not a re-run of feudalism. It’s a new and improved, state-corporate version of indentured servitude. The process of devolving from central political power to feudalism required the erosion of peasants’ rights to own productive assets, which in an agrarian economy meant ownership of land.

Ownership of land was replaced with various obligations to the local feudal lord or monastery–free labor for time periods ranging from a few days to months; a share of one’s grain harvest, and so on.

The other key dynamic of feudalism was the removal of the peasantry from the public sphere. In the pre-feudal era (for example, the reign of Charlemagne), peasants could still attend public councils and make their voices heard, and there was a rough system of justice in which peasants could petition authorities for redress.

Of course peasants usually lost to the aristocracy and monasteries, but at least the avenue of redress was at least partially open. This presence in the public sphere was slammed shut in feudalism.

From the capitalist perspective, feudalism restricted serfs’ access to cash markets where they could sell their labor or harvests. The key feature of capitalism isn’t just markets– it’s unrestricted ownership of productive assets–land, tools, workshops, and the social capital of skills, networks, trading associations, guilds, etc.

Our system is Neofeudal because the non-elites have no real voice in the public sphere, and ownership of productive capital is indirectly suppressed by the state-corporate duopoly. Various studies have found that politicians ignore the bottom 99.5% who don’t contribute to their campaigns or crony-capitalist wealth (five quick speeches for $200,000 each is $1 million. Rinse and repeat.)

The vast majority of incumbents are re-elected, as they leverage their power to vacuum up enormous sums of campaign contributions that then buy the compliance of a cowed public.

As for ownership of assets— small business startups have been crushed by soaring costs, heavy regulations and the dominance of cartels and quasi-monopolies enforced by the state.

Income growth is now the exclusive domain of the Financial Aristocracy:

The so-called middle class owns little to no productive capital; what it “owns” is a house, which is ultimately a form of consumption. I say “owns” for two reasons: one, most households have a mortgage, so their ownership is still contingent on making monthly payments to a lender, and two, the government collects property taxes on the home regardless of the owner’s income or ability to pay.

Compare this to taxes levied on business income: if the business has no net income, it owes no taxes. Not so with property taxes–they are the modern equivalent of “rent” paid to the feudal lord.

Note that the aristocracy owns productive assets while the serfs own housing and debt. This is not a flaw in the system, it’s a feature of the system.

Democracy (i.e. political influence) and ownership of productive assets are the exclusive domains of the New Aristocracy. This is Neofeudalism in a nutshell.

“Under a scientific dictator education will really work — with the result that most men and women will grow up to love their servitude and will never dream of revolution.”

“The nature of psychological compulsion is such that those who act under constraint remain under the impression that they are acting on their own initiative. The victim of mind-manipulation does not know that he is a victim. To him, the walls of his prison are invisible, and he believes himself to be free. That he is not free is apparent only to other people. His servitude is strictly objective.”

Aldous Huxley

video interview of Aldous Huxley

source of quotes (read the entire thread)

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  • WillDippel

    As shown in this article, the overall global economy is entering a debt trap danger zone:

    https://viableopposition.blogspot.ca/2017/07/the-global-debt-trap.html

    The long period of near-zero interest rates could end up causing more economic pain than the Great Recession

  • diogenes

    The primary mechanism of neo-feudalism is SHELTER SLAVERY — rent slaves and mortgage serfs. This is the number one method of extracting most of most people income. The 80% of the cost of shelter in America is not the cost of building and maintaining it — it is the cost of maintaining landlords and mortgage and land investors. This predatory operation is entirely enabled and maintained by legal arrangements constructed by corrupt legislation by hirely legistlators.

  • Bob

    As long as people have (something that appears to be) food, cell phones, and TV, they will do nothing about their captivity.

  • ICFubar

    When people are born into and brought up within a system most cannot evaluate how that system operates as the system is their normal. Only by educating themselves on the system they live in and how it operates can they free their minds in understanding new possibilities.

    Most accept unquestioningly their indenture to a money and credit as debt system. The end consumer work away their lives to never pay off the debt plus interest of the governments they are subject to, to the corporations whose debts are included in the price of the goods they sell, and of their own debts, all debt and the interest there on all created by banks and all owed to the banks in exchange for money. Money can be used to either purchase goods and services within the economy, saved for future use or used for investment if the rate of return is greater than the inflation rate, inflation being a built in factor as the money supply must continually grow over time if the interest on debt is to be repaid, which is a mathematical impossibility with a rate of bankruptcy also built into the system. Roughly being the average rate of interest is the percentage rate of those who will go bakrupt This means that the economy must also continually grow to support new debt to pay off older debt. This is of course the definition of a ponzi scheme. When debt accumulation builds to unsustainable levels a credit crunch ensues and an economic and deflationary price crash occurs (depression) until the over hanging debt can be cleared away and the process restarted. Those with money during a depression can then but up assets at their depressed price and resell them into a recovering economy at an inflated price. If this cycle is continued over a long enough series of booms and busts those nearest to the money creation scheme eventually will own all the assets while the general population must become tenant workers to this capital owning class.

  • diogenes

    To properly grasp the import of the last bar graph, displaying holdings of the 1%, the 9% and the 90%, we need to know what proportion of total wealth is assessed in each category. The great bulk of wealth in America — 80%? — is financial paper, quasi-legally enabled “entitlements” to cash flows extracted from the labor and earnings and possessions of others. This “wealth” falls primarily into the first four categories — business equity, financial securities, stocks & mutual funds and trusts — in all of which the holdings of the 1% are above 50%.

    An apportionment of total wealth into categories will show that the 1% owns above half (50%) of all “wealth” in America, the top 2% owns more than 60%, and that the bottom 60% owns less than 1%. The one is not possible without the other: the wealthiest 2 in one hundred people can only possess 60% of everything because the poorest 60% possess less than 1%. This grossly inequitable distribution of wealth has been the case in America since finance took control of the American economy in the 1890s.

    A study in closer detail will reveal that over half of the “wealth” held by the 1% is held by the top tenth of the 1% — the 0.1%, the one-in-a-thousand, whose “share”, as it is called, of all the wealth in America approaches 30%. This is the broad mass of the American plutocracy, from which emerge the oligarchs who control the American economy and operate it for their own benefit — with devastating success.

    As usualy, Mr. Smith’s statistics conceal as much as they reveal, and in doing so, foster the system of pillage by perpetuating the ignorance of citizens at large.