Chris Dillow at Stumbling and Mumbling wrote a very interesting article that is worth digging into, Back to Pre-Capitalism? It follows after Paul Mason’s article, The End of Capitalism Has Begun. I’m all for an optimistic take on the future. But if history shows us anything, it is that the power elite are really good at warping society to their purposes. What’s more, the power elite are usually willing to sacrifice their own absolute status in the name of maintaining or increasing their relative status. Thus — contrary to Milton Friedman — they are more than willing to trade their own economic gain if the net result is that their economic status gets better relative to the rest of society.
I’ve long argued that we are moving in the direction of feudalism. The nature of unfettered capitalism is that the winners of the economic system will have more power to distort the political system. This is a positive feedback, which means that it is unstable: the more power the rich get, the faster they gain further power. The end result of this is not some kind of libertarian utopia but rather a kind of feudalism, where people aren’t necessarily slaves, but they also aren’t free. It’s kind of like the conservative’s idea of freedom of speech: you can say anything you want to, so long as you don’t.
Dillow offers three aspects in which he thinks that we are moving toward a pre-capitalist era. This starts with the fact that people are turning into generalists. Capitalism was all about specialization: factories with trained people making the one thing that they could make most efficiently. But now, few companies are willing to pay enough to get and hold onto trained workers. So we end up with a situation where workers have to hold down two or three jobs — maybe someone works at McDonald’s by day and drives for Uber at night. No special skills in those jobs. People doing it are like the serfs of old.
The second aspect is a turn against globalization and toward the local economy. At it’s worst, this is represented in hostility toward immigrants. “You can see all these as recrudescences of feudalism — a cleaving to community and belief that one’s fate should be tied to where one was born.” I’m not convinced that we are actually seeing this, however. I think the anti-immigrant movement is based upon the fact that Americans are seeing their standards of living going down. It is always easier to lend an open hand to others when you aren’t worried about your own survival.
Dillow’s third aspect is secular stagnation, which he blames on the replacement of the entrepreneur with the bureaucracy. I like this idea very much. For conservatives, bureaucracy is this thing that is associated with the government. But in my life, the bureaucracies that most interfere are those of private companies. The big companies are not like free-wheeling revolutionaries; they are staid bureaucrats. What creativity they have is exhausted on manipulating the political system and taking more money for the top management and owners, and away from the workers. The net result is slower overall growth, but excellent growth for those at the top: secular stagnation.
The main thing that Dillow is getting at is that our economy is becoming more hierarchical. And that goes against the idea of capitalism and very much toward the idea of feudalism. As soon as I’m done writing this article, I’m going to write one about the lack of a labor market in the modern American economy. (It won’t necessarily be published after this one, but I’ll try.) And I would say that this is all inevitable. If there is no governmental check on a capitalist economy, it naturally works itself to feudalism. But it might be just as accurate to say that if democracy is not allowed to hold in check any economic system, it will naturally become something very much like a feudalism.
