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.

This Post Has 7 Comments

  1. Feudalism is a noun that takes us back to the middle ages in europe.
    In the middle ages, all land would be in the hands of a few individuals.
    There were vasts stretchs of land owned by the king, other by the nobility and the rest by the church.
    Everyone else would be slaves, hired labour and some merchants.
    Hired labour was without any pay.
    There were those who would be “given” a small portion of land to cultivate and would have to pay a big chunk of the crop to the landlord, leaving the farmer fighting to survive.
    There were those who would be seasonable labour, working only when there was need, like the harvest time. Most of these would have no wage, working only for the food the landlord would give them during the working day (in Portugal, some regions had this kind of labour until 1974).
    All that is slowing coming back, as everything (not only land, but energy, communications, the media, everything) is getting monopolized again, in the hand of a few.
    That’s what I understand by neo-feudalism.
    Once all gets privatized and finantialized, we all will be deep in debt, working to pay interest to banks, over all that we “own”: house, car, tuition and even to pay for the holliday.
    Aren’t migrants fleeing from África, because their countries are working now to pay interest to the world bank and the imf?

  2. I wonder if the coiners of the term neo-Feudalism have an understanding of what Feudalism was to begin with.

    Feudalism is now gone, in most of the World anyhow, and few people, if any, can really understand it.

    My understanding is that feudalism is a non-monetary (or mostly non-monetary) system of production. A lot of land was owned by lords or the Church but not necessarily. Peasant, the vast majority of the population could also own land and the means of production. Common property was also very common (in large parts of Castile, for example). The point was that feudal lords or the Church had the right to extract a surplus from labourers. For example, peasants would pay a tithe, 1/10th of their production to the Church. Supposedly in exchange for protection.

    I think we are still in a monetary economy with large corporations owning means of production, distribution channels, brands, etc. That has a name: capitalism, of a more ruthless, kind, but capitalism after all.

  3. It is pretty weird that people have this desire for the modern world to be new and different from the past—and then they focus on the things that haven’t changed when theorizing about modernity.

    Take tech for example. There are some engineering improvements separating disk arrays from cloud storage (or computing clusters from cloud computing), but what really sets them apart is the economic logic. Expensing versus capitalizing for consumers (which seems to have less to do with good business planning and more to do with business ideology); and providers investing in the equipment, facilities, and utilities to make large-scale leasable computing. Or more bluntly, tech has gone from hobby to business, so what made sense for ordinary computer usage in 1980 has no resemblance to how computers are used today, and that has almost nothing to do with processors or disk controllers (much less with work in academic computer science).

    To state the obvious, through various means, capitalists control nearly everything. In the US, austerity has meant the withdrawal of public funding from universities, so besides jacking up tuition, the research grant situation is a lot more precarious. There’s still federal money from places like NIH, NSF, and DOE, but outside that, an awful lot of grant funding comes from the Rehabilitating Some Dead Billionaire’s Public Image Charitable Trust. This inherently biases research toward, as you said, distracting people away from the realities of capitalism.

    When you add on the question of what’ll get promulgated outside the ivory tower, then we’re looking at news media and mass market publishers. To me the iconic recent demonstration of the media was the way they handled Occupy Wall Street—where the reporting was just, “I dunno what they’re talking about, they should really settle on a coherent message”—to Black Lives Matter—an actually ideologically mushy protest that was nonetheless celebrated or vilified (depending on party alignment) without a care in the world for what anyone was talking about.

    The other thing I find fascinating about academia, by the way, is the fact that a wedge has been successfully driven between academics and normal (i.e., blue collar) people. Such that, for the most part, the ivory tower has become an oubliette, where people who might think about the reality of capitalism are hidden away and forgotten. I think you’re the rare exception to this. Or maybe this is just an American thing.

  4. Very interesting clarification. For me perhaps what grates most at the soul regarding Capitalism is the experience of alienation. Even more than exploitation of surplus value. The dehumanizing experience of capitalist production methods. The profound satisfaction of seeing something produced beginning to end for your use is lost. The reduction of people to units of labour. The tyrannical managerial control systems that libertarians perversely seem so keen to support. How to build a socialist alternative that is both productive and respects the human spirit?

  5. “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.”

    I think the final line above is a simplification. Under feudalism, the surplus output is inevitably used by the lord in the course of manorial politics, including in the ability to purchase favour, purchase military power, etc, and the efficient deployment of those resources will be a factor in addition to less material political manoeuvres. Also interestingly, greater surplus output also probably makes the particular feudal title more attractive to takeover by other political participants.

    That doesn’t take anything away from your core point of course which I think is right: the current mode of production is capitalist.

    I would conjecture (not having read the literature) that these “New Feudal” types are focussed on changes in the political machinery that maintains the “lords” which are more changeable. As well as changes within the economic structure of the lords and generally (greater inequality). I think most people associate great inequality with feudal times (though I suspect it is more complicated than that).

  6. I agree that the “neo-feudal” analysis is technically wrong as outlined in this post. I suspect that its currency in public discourse is a sort of narrative power by which it evokes the sense that the gulf between ordinary people and the “techno-barons” has become so vast as to render the divide somehow qualitatively different rather than merely quantitatively different from the post-war era when the CEO’s multiple of the average worker’s income was more like 35-1 than the 400-1 (or more) that it is today. It’s also suggestive with respect to the implications for individual political influence of a tiny strata of capitalists as opposed to the broader class interests among their merely wealthy “peers” — at what point do they cease to be in the same class?

  7. bill,

    It’s obviously named so for propaganda purposes, but would anyone care if it didn’t? Platform capitalism just draws shrugs.
    But I think you’re also selling short what at least Yannis is trying to say – a mere handful of companies can maintain a veneer of worker independence on a free market, while extracting value from most work (enterprise and professional software, clouds), interactions (communication, promoted content including news), and even rest (sleep data, media consumption data, product searches, health, food, and exercise), extracting a tithe from every other company that needs their means of production to remain viable. The feudalism analogy to me, well before he had wrote anything, is the explicit and rigid hierarchical super-structure. Which is now very clearly promoting the MIC and the tech-priests to be at the top. I find it interesting how the circulating conspiracy theories are so close to getting at the heart of it, and yet hitting the completely wrong targets – but that it’s not really by accident at all is my conspiracy theory.
    Of course, it’s still fundamentally capitalist. How could they resist to profit from the rope that will hang them, as it turns out nature and our resource providers don’t have any love for it?

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