Six Notes on Neo-Feudalism

You’re not crazy. You ARE on your way to becoming a peasant. A lifetime of wage-serfdom, crippling debt, and chronic illness. Who says? A survey of six recognized experts. (No Alex Jones, sorry).

Neo-Feudalism is Real

We break our promise not to do hot-takes. Consider this a first draft in response to comments here, and to comments in reply on other Substacks. Neo-Feudalism is real. The middle class is shrinking, globally, but especially in the USA and the West.

When the middle class diminishes, society, as Victor Davis Hanson (2021) observes, “becomes bifurcated:”

“It splinters into one of modern masters and peasants.”

Let us briefly survey some highly regarded (dare one say, “establishment”) intellectuals and scholars — all of whom have diverse political orientations, and yet all of whom recognize the emergence of New-Feudalism.

Our guest experts are Kai-Fu Lee, Thomas Piketty, Joel Kotkin, Victor Davis Hanson, Shoshana Zuboff, and Batya Ungar-Sargon. Six brief notes on Neo-Feudalism below.

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Kai-Fu Lee

Kai-Fu Lee does NOT want

“to live in a society divided into technological castes, where the AI elite live in a cloistered world of almost unimaginable wealth, relying on minimal handouts to keep the unemployed masses sedate in their place.”

But he believes this scenario the most likely outcome. Why? Artificial Intelligence (AI) and Deep Learning. Yours truly is NO Kai-Fu Lee but does have some data science credentials and experience with Machine Learning. ML can be terrifyingly good at prediction and classification. Scares the hell out of me.

Lee believes

“as deep learning washes over the global economy, it will indeed wipe out billions of jobs up and down the economic ladder: accountants, assembly line workers, warehouse operators, stock analysts, quality control inspectors, truckers, paralegals, and even radiologists, just to name a few.”

So? Well, welcome to the new global order. As Lee explains (emphasis mine):

“The AI world order will combine winner-take-all economics with an unprecedented concentration of wealth in the hands of a few companies in China and the United States. This, I believe, is the real underlying threat posed by artificial intelligence: tremendous social disorder and political collapse stemming from widespread unemployment and gaping inequality.”

So if “tremendous social disorder and political collapse stemming from widespread unemployment and gaping inequality” is not enough for you, Lee has additional concerns. To learn more, please consider his AI Superpowers: China, Silicon Valley, and the New World Order (2018).

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Thomas Piketty

Thomas Piketty’s famous inequality, r > g, “when the rate of return on capital exceeds the rate of growth of output and income,” leads him to conclude that

“capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based.”

Why? Because “inherited wealth grows faster than output and income.” We transition to a society of landlords and renters because those with inherited wealth can dominate the physical and intellectual property markets.

Piketty notes:

“Under such conditions, it is almost inevitable that inherited wealth will dominate wealth amassed from a lifetime’s labor by a wide margin, and the concentration of capital will attain extremely high levels — levels potentially incompatible with the meritocratic values and principles of social justice fundamental to modern democratic societies.”

Nor does Piketty believe that capitalism can correct itself:

“it is important to note that the fundamental r > g inequality, the main force of divergence in my theory, has nothing to do with any market imperfection. Quite the contrary: the more perfect the capital market (in the economist’s sense), the more likely r is to be greater than g.”

So as it now stands, good-bye to all of that: democracy, the middle class, civil rights, etc. Piketty does offer controversial solutions. Many excellent resources on Piketty debate, but his Capital in the Twenty-First Century (2014) remains a starting place.

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Joel Kotkin

Let’s start with some self-evident truths, as stated by Joel Kotkin:

Our society is being rapidly reduced to a feudal state, a process now being exacerbated by the COVID-19 pandemic. Millions of small businesses are near extinction, millions more losing their jobs and many others stuck into the status of a property-less serfs. The big winners have been the “expert” class of the clerisy and, most of all, the tech oligarchs, who benefit as people rely more on algorithms than human relationships.

Yes, the Covid-19 pandemic has resulted in one of the greatest wealth transfers in history — from the poor, the working class, and the middle class to the elite. But this process was underway well before the pandemic.

And Kotkin does NOT see this trend reversing. Far from it (emphasis mine):

“We are inexorably returning towards a more feudal era marked by greater concentration of wealth and property, reduced upward mobility, demographic stagnation, and increased dogmatism. If the last seventy years saw a massive expansion of the middle class, not only in America but in much of the developed world, today that class is declining and a new, more hierarchical society is emerging.”

A new edition of The Coming Of Neo-Feudalism (2020) will be out in early 2023.

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Victor Davis Hanson (VDH)

VDH wastes no time and pulls no punches on the current state of our nation:

“the American middle class has lost economic ground for nearly a half century through mounting household debt, static wages, and record student-loan burdens. … The current reality is that millions of Americans, through debt, joblessness, and declining wages, are now becoming our own updated urban and suburban versions of the rural European peasantry of the past.”

But how bad it is, really? Any data to go with that? Regarding this “new American peasantry,” VDH points out:

“millions of Americans who own little or no property. The new majority has scant, if any, savings. Fifty-eight percent of Americans have less than $1,000 in the bank. A missed paycheck renders them destitute, completely unable to service sizable debt. … [Our] twenty-first-century American ‘peasants’ — currently perhaps about 46 percent of the population — usually die with a net worth of less than $10,000, both receiving and bequeathing little, if any, inheritance.”

Increasingly, American citizens and residents are becoming dependent on the State. We have Big Government, Big Tech, and Big Pharma as our overlords. VDH notes:

A fifth of America receives direct government public assistance. Well over half the country depends on some sort of state subsidy or government transfer money, explaining why about 60 percent of Americans collect more payments from the government than they pay out in various federal income taxes, in various health care entitlements, tax credits and exemptions, federally backed student and commercial loans, housing supplementals, food subsidies, disability and unemployment assistance, and legal help.

If these trends continue, our Republic cannot long endure. We consider VDH’s The Dying Citizen (2021) as essential reading. We do NOT agree with great man on American international policy, and especially not on the Russia-Ukraine conflict.

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Shoshana Zuboff

“Surveillance capitalism,” Zuboff explains, aims “not to dominate nature but rather human nature”:

“Surveillance capitalism is the puppet master that imposes its will through the medium of the ubiquitous digital apparatus. I now name the apparatus Big Other: it is the sensate, computational, connected puppet that renders, monitors, computes, and modifies human behavior. Big Other combines these functions of knowing and doing to achieve a pervasive and unprecedented means of behavioral modification.”

Your data is constantly being collected. Every time you use your Smartphone, or send an email, or browse the Web, or — and you know the rest. Likewise, with the Bio-surveillance systems already in place, your physical movements are being recorded. All this data feeds and improves models for prediction and classification. But also models for nudging, for shaping behavior. It’s not “Big Brother” but — in Zuboff’s phrase — “Big Other,” the network of devices which is always gathering data on you.

Think of Zuboff as offering a slightly paranoid — but by no means wrong — mix of concerns expressed by Kai-Fu Lee and Thomas Piketty. She is tracking the merger of AI and 21st century capitalism already at work, and she does not like the direction. Below, adopted from Jongseung Kim’s excellent breakdown, a comparison between “Big Brother vs. Big Other”; or, Totalitarianism vs. Instrumentarianism. (Yes, that seems to be a word Zuboff made-up. When you’re a Harvard Professor ... ).

Zuboff thinks we might fight back — we must resist:

“We now have the tools to grasp the collision in all of its destructive complexity: what is unbearable is that economic and social inequalities have reverted to the preindustrial ‘feudal’ pattern but that we, the people, have not. We are not illiterate peasants, serfs, or slaves. Whether “middle class” or “marginalized,” we share the collective historical condition of individualized persons with complex social experiences and opinions. We are hundreds of millions or even billions of second-modernity people whom history has freed both from the once-immutable facts of a destiny told at birth and from the conditions of mass society.”

We are at a crossroad moment, Zuboff believes: “What is unbearable is that economic and social inequalities have reverted to the preindustrial ‘feudal’ pattern but that we, the people, have not.” Yet Neo-Feudalism seems our future if we do not effectively resist. The Age of Surveillance Capitalism (2019): not easy reading, vital.

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Batya Ungar-Sargon

Who is this nice Jewish woman with the Star Trek name? Someone who speaks Truth to Power. Of our liberal MSM, Batya Ungar-Sargon observes:

“their enthusiasm for the language of wokeness has allowed affluent white liberals to perpetuate and even excuse a deeply unequal economic status quo, with the help of the national liberal news media.”

True, but saying so publicly would make most of us persona non grata — with all the the usual slurs. Batya Ungar-Sargon, however, has raw courage, real skills, and maybe even some hard-earned connections. She continues (emphasis mine):

“This perfect alignment of journalistic and corporate interests is one of the great ironies of the woke culture war: It makes individual journalists feel like heroes while making their bosses and shareholders (and themselves) even richer. The identity culture war allowed journalists to cast our nation as hopelessly divided along partisan and racial lines, as a smoke screen for the actual impenetrable and devastating division that is happening along class lines.”

Preach it, Sister! El Melech Ne'eman!

So, more details, please on this “devastating division that is happening along class lines.” Not so different here from the very different VDH, Batya Ungar-Sargon notes:

“Since the 1970s, upward mobility for the middle class has totally stalled, even declined. In the golden era of economic mobility in the United States, from 1945 through 1973, the top 1 percent owned just under 5 percent of America’s income. The average inflation adjusted income of the bottom 99 percent of families grew by 100 percent during those years, while the average income of the top 1 percent of families grew by a third of that. But over the next two decades, the top 1 percent would come to own the majority of US income growth. The richest four hundred Americans now own more than 185 million others, or the bottom 61 percent.”

Our increasingly bifurcated American society, with a vanishing middle class. So the MSM is not just complicit and cooperative with, but also invested in and profiteering from the emergence of Neo-Feudalism. Who knew? Pretty much everyone who visits Substack, but credit Batya Ungar-Sargon for eloquently and urgently making the case.

Her Bad News: How Woke Media Is Undermining Democracy (2021), a great read.

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So, good news — you’re not crazy. Bad news, the emergence of Neo-Feudalism is real.

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