New feudalism seems to forget about the capitalists

It’s Wednesday and I am now more or less settled in my new office which has the sun coming in from the north-east. I was talking to someone yesterday about various things and the topic of neo-feudalism or new feudalism entered the conversation – as you might expect (-: I am deeply suspicious of adding ‘neo’ or ‘new’ to any conceptual term for reasons I will explain. And if you don’t want to know about that then just skip to the end and listen to some great music, as I have been today while working.

I am always a bit suspicious of adding ‘neo’ or ‘new’ to any well-established concept or idea.

For example, the dominant paradigm in macroeconomics is still New Keynesianism, which an innocent person might think is a ‘new’ form of Keynesian economics.

Of-course, ‘Keynesian’ itself is a loaded term because – John Maynard Keynes – himself, would have disavowed an association with that school of thought given that it reflected on a small part of Keynes’s views and ommitted all the important aspects of Keynes’s – General Theory of Employment, Interest and Money.

The point is that there were several strands of ‘Keynesian’ thinking which I discussed in some detail in this early blog post – Those bad Keynesians are to blame (November 5, 2009).

When we consider the essential building blocks of New Keynesian economics, there is no cross-over to the work of Keynes and so the terminology is a misnomer.

Similarly with the term – Neo-Feudalism – or New Feudalism.

Just like the task of describing Keynesian economics, trying to nail down New Feudalism is a tricky exercise.

I have read most of the substantive literature on the topic and at times I am wondering what all the fuss is about.

There are several common threads that do run, however, through the literature which focus on how “individuals’ public lives are increasingly governed by business corporations.”

And those business corporations are largely from the IT-technology sector.

We learn that workers are increasingly forced to work at multiple jobs on low wages to meet their subsistence needs – referring largely to the rise of the precariat in the gig economy.

One strand considers the nature of modern technology and production equipment as being ‘capitalist in origin’, which means that the power relations of capitalism and the control mechanisms are embedded within them and in the way they operate.

I hardly consider this to be a new thing.

The move to large-scale assembly line production processes, for example, combined with Taylorism might be seen in the same way.

I wrote a lot about this in my early careerand I reflected on the idea in this blog post – Reclaiming our sense of collective and community – Part 1 (August 21, 2018).

When I was a post graduate student I was often thinking about the idea that technology is more than an engineering capacity – it also has an ideological dimension.

The debates in those days (and the great Austrian writer – André Gorz – was central to them) often were centred on whether a socialist state should use ‘capitalist’ mass production technology and ‘Taylorism’, which alienated the worker from their product.

André Gorz knew that these innovations were the key to the capacity of early capitalists to take control of production from skilled labour and increase the exploitation rate.

In turn, it spawned the push for mass consumption, so that the profits from the increasing surplus value could be realised.

Workers were de-skilled by these technologies but as consumers gained a vast array of objects that we were told made us happy.

The question then was whether a socialist state should seek to deploy the same strategies.

The USSR clearly thought so although their attempt at mass consumption proved to be somewhat less successful.

I recall being at a seminar (at Monash University in Melbourne) where two high-ranked Soviet economists were visiting the university (in the late 1970s).

During the Q&A session of the seminar with the Soviet economists, who were not short on talking the USSR up, I asked a question which was along the lines of what is the difference for a worker in Clayton (where Monash is situated and historically a major manufacturing area) who gets up in the depth of Winter and goes to the plant, earns a wage on a mundane, mass production line, and a worker in Russia who does the same.

The answer given was that the two processes were identical for the worker on one level – the mass production technology used by both the capitalist firms and the socialist state were identical and the degree of alienation was the same.

But on another level – the surplus was alienated from the worker and captured by the capitalist in Australia, whereas the surplus was ‘socialised’ in the USSR and used to advance the well-being of everyone.

So same input generates different outcomes – one for capital, the other, a progressive outcome, for all.

I wasn’t convinced about that and considered that the organisation of production and the type of techniques used, including the human oversight (supervisory arrangements, etc) really matter.

Which still is a topic of curiousity relevant to the thinking I am doing about new feudalism.

In the new feudalism literature, particularly the work of Michel Luc Bellemare (who wrote Techno-Capitalist-Feudalism, which was published in 2020), the manipulation of the technology and production processes serves to advance the interests of the 1 per cent by maintaining the rest of us in a state of controlled precarity.

The 1 per cent – or those who control the technology – have, according to this view become the new ‘feudal’ lords subjugating the rest of us in order to maintain their hegemony.

They do this through their corporate structures, which increasingly compromise the political class and the rest of us have become serfs, highly indebted and poorly paid.

Relatedly, some writers talk about new feudalism as ‘techno-feudalism’ (for example, Yanis Varoufakis) and deliberately distance it or differentiate it from capitalism as a system of production.

Apparently, this new era is dominated by a small number of people with immense wealth who manipulate market outcomes as they see fit – which is not a characteristic of traditional capitalism.

I think that is a stretch – and as I write more about this topic in the future, I will explain why.

Capitalism was always evolving towards a concentrated state – just re-read or read if you haven’t already done so – Paul Baran and Paul Sweezy’s book – Monopoly Capital (published in 1966).

They argued that the early organisational and competitive structures of capitalism had given way to a dominance of large corporations that control the way wealth is accumulated through the appropriation of surplus value.

They demonstrated that big corporations have immense price setting power and can also suppress worker activism and thus suppress wages growth.

And because the imperative to continually be accumulating private wealth outpaces the ability of the private markets to generate the necessary largesse, these corporations have to rely on the state through procurement and other contracts and assistance to maintain sufficient economic growth to allow the surpluses to be realised.

So we have already been ‘there’ well before the new feudalism literature emerged.

But the other problem with the ‘techno feudalism’ narrative is that it directs our attention away from ‘capitalism’.

The big corporations in the IT-techno sector are still intrinsically capitalist in nature.

The ‘techno feudalism’ narrative seduces us into thinking that capitalism is gone and a new era, with a striking resemblance to or a modern form of feudal relations has replaced it.

I liked the take on this question by Michel Luc Bellemare:

… just because the old capitalist bourgeoisie has embraced digital algorithms and invasive surveillance technologies as its own, and abstracted itself at a higher-level of socio-economic existence, away from the workforce/population, whereby, it now appears invisible and increasingly distant from the everyday lives of workers, does not mean the old capitalist bourgeoisie has vanished into thin air, or has been usurped by a strictly technological aristocracy.

He considers the “logic of capitalism, capital profit” remains pivotal in this techno age and that technology has morphed into a sort of super-control system.

But whereas he is critical of the ‘techno feudalism’ advocates, I consider he also misses the point.

In invoking the term feudalism to describe the current system where a small powerful elite is likened to the feudal lords, Michel Luc Bellemare and others extinguish the essential difference between the capitalist mode of production and the feudal system.

I also wrote a lot about this early on in my career.

In trying to understand the essence of the feudal economy, a good place to start is the work of American sociologist – Michael Burawoy – who in his 1978 research article posed the question:

Why is control necessary?

Full Reference: Burawoy, M. (1978) ‘Toward a Marxist Theory of the Labor Process: Braverman and Beyond’, Politics and Society,
8(3&4): 247-312. If you have access to Sage Publications you can download the Full Paper.

The answer is to be found in the observation that the objectives of workers and firms in capitalism are rarely – substantively – the same.

Marx considered the relations between those who sell labour power (the workers) and those who buy it (the capitalists) to be fundamentally “antagonistic” or adversarial.

We might summarise this basic conflict by assuming that workers will typically desire to be pay more for working less and capitalists want to pay the least for the most flow of labour services.

That basic conflict still pervades labour markets in modern monetary economies and has to be understood.

This is not to say that business firms do not provide good working conditions and seek to reward their workers in many different ways.

The point is rather that they do that without jeopardising their control function or their capacity as purchasers of labour power.

In that context, Micheal Burawoy suggests that:

… the essence of capitalist control can only be understood through comparison with a noncapitalist mode of production.

And it is here that we really see why using the term ‘feudalism’ to describe the current evolution of capitalism is misleading.

Burawoy argued that in order to understand the true nature of the capitalist labour market a student has to have some appreciation of historical arrangements for labour prior to the onset of capitalism.

His main comparison is in detailing the transition from Feudalism to Capitalism.

His comparison between these two systems of production allows the student to highlight the differences and the purposes of these differences in relation to the basic challenge of capitalism – to extract labour services from purchased labour power in a conflictual context.

Under feudal relations, the worker (a serf) tills the land their lord has provided them with for some part of the week.

They are allowed to consume the production that arises from that work.

This production allows the serf to survive and provide for their family.

For the remaining days in the week, the serf tills the lord’s land and all of the labour expended can be considered surplus to that required to maintain the survival of the serf and his/her family.

The goods and services produced in this part of the week are expropriated by the Lord for his/her own use.

Burawoy noted the crucial characteristics of this system of production are that:

• Necessary labour (that required to maintain survival of the worker) and surplus labour are separated in both time and space.
• The serfs have possession of their own means of subsistence as they work – that is, they farm and consume their own product.
• Serfs undertake this work independent of the lord.
• Surplus labour (that is, the work expended on the Lord’s own land) is transparent and the lord expropriates it through extraeconomic means (that is, by dint of his status in the system as lord).

The contrast to the capitalist mode of production, which in historical terms succeeded the feudal system is stark.

The essential characteristics of that system are:

• The necessary and surplus labour are not separated in space and time. The worker appears to work say an 8-hour day for a certain hourly wage, which blurs the distinction between the two types of labour.
• The workers do not possess the means of production and hence the means of subsistence. A defining feature of capitalism is that the capitalist owns the productive means and the worker, while free to choose which capitalist to work for, has to work to survive. Survival requires the worker agree to work for, say 8 hours to get the wage which might be equivalent to 5 hours of production.
• The capitalist controls the work process and the worker has to provide labour services within that control system.
• The surplus labour is conjectural – that is, there is no extraeconomic authority based on feudal politics, social position etc to ensure that surplus production occurs. The creation and expropriation of surplus labour becomes an economic struggle that unfolds within the workplace

All of this is going on within the labour market.

Every day, workers are producing goods and services which consumers and firms desire, but in doing so they are producing both necessary and surplus labour.

The production of surplus labour, which manifests as profits if the surplus value embodied in these goods and services is successfully sold, maintains the capitalist social relations.

It allows the owner of capital to retain his/her position of power and at the same time ensures the worker has to return each day in order to survive.

Under feudalism, the lord remains so as a consequence of the manorial politics (the extraeconomic means) irrespective of the surplus output.

The final point to appreciate in this overview is that the hidden nature of the surplus labour under capitalism creates the need for managerial control, which aims to ensure that surplus value is created but that the system does not make it obvious that workers are working longer than necessary to maintain their existing living standards.

So in trying to label the current situation where the large tech firms dominate the landscape as somehow a return to feudalism ignores the fact that the way these tech giants generate profits is via the capitalist surplus mechanisms, which are totally at odds with the way in which accumulation occurred under the manorial system of feudalism.

I will write more about this in future posts.

Music – Red House

This is what I have been listening to while working this morning.

This is one of the classics – Red House – by one of the best bands ever – The Jimi Hendrix Experience.

The song appeared on his first album – Are You Experienced – which was released on May 12, 1967.

I acquired this album when it first came out in Australia (1969) and it certainly changed the way I viewed the electric guitar as an instrument. We were still at high school and my friends all wanted to play like that.

One reviewer at the time said the album “shook the world … leaving it forever changed” – which is fairly accurate.

The song was, in fact, recorded first in 1961 by another great electric blues guitar player – Albert King – under a different title (‘Travelling to California’), although I struggle to see the similarity other than a 12-bar pattern.

That is enough for today!

(c) Copyright 2023 William Mitchell. All Rights Reserved.