Neofeudalism depends on the cultural supremacy of Neoliberalism, the belief that the social order is defined and created by markets.
I’ve been discussing the essence of Neofeudalism this week: those with access to the low-interest unlimited credit spigot of the Federal Reserve become more equal than others–the perfect Orwellian description of a Neofeudal arrangement in which financial leverage buys not just rentier assets but political power and control.
Neofeudalism depends on the cultural supremacy of Neoliberalism, the belief that the social order is defined and created by markets: if markets are free, participants, society and the political order are also free.
This conceptual framework is the perfect enabler for the dominance of credit-based, leveraged capital, i.e. Neofeudalism. In a “free market,” those with access to nearly-free money can outbid everyone who must rely on savings from earned income to finance borrowing. In a “free market” where those with access to leverage and unlimited credit are more equal than everyone else, the ability of wage earners to acquire rentier assets such as rental housing, farmland and timberland is intrinsically limited by the financial system that makes credit and leverage scarce for the many and abundant for the few.
Those with access to the low-interest unlimited credit spigot of the Federal Reserve are free to snap up tens of thousands of houses and tens of thousands of acres of productive land–the classic rentier assets that reliably produce unearned income because people need shelter and food–along with other rentier assets such as parking lots and meters, fossil fuels in the ground, and of course the engines of credit creation, the banks.
Longtime correspondent Bart D. recently summarized how this Neofeudal arrangement enables the few to control the many:
What if financial elites enter the market with their ‘free’ Federal Reserve cash and buy up a lions’ share of accommodation to keep home ownership unaffordable and force the majority to live as renters? If, in a dwindling economy, the Power Elite can’t hold power over the masses by keeping their jobs or other income streams under threat, maybe they will switch to wanting everyone to owe them rent and use the threat of homelessness as another tool to keep people under control.
It’s an extension of the food stamps concept. The system is moving towards making sure most people don’t have future access to the resources that enable them to survive and create wealth outside of the system.
I think the economy is now about controlling people. We are headed for a societal structure in which opportunities to rise economically will be increasingly stifled by those at the top. The money is irrelevant now, the real game is being played is in controlling tangible and ‘essential for life’ assets: housing, water delivery, food, clothing, energy. Those at the top want power to control everyone below them, particularly to keep them from revolting.
Thank you, Bart, for describing the Neofeudal arrangement of control based on access to credit issued by central banks. Load every person with a gargantuan student loan and an equally enormous mortgage and toss on an auto loan and credit card debt, and you have the perfect serf, too busy servicing his debt to question the arrangement, much less resist it.
People in the lower orders can resist by securing their own productive assets, but this takes effort, foresight, discipline and planning–all the characteristics that are eroded in a consumerist market economy that glorifies and promotes instant-gratification consumption.
This reduction of selfhood to consumption insures the brainwashed consumer has neither the savings nor the cultural tools needed to acquire financial and social capital. Debt-based consumerism insures the lower orders will never have the means to escape the Neofeudal arrangement.
The Neofeudal arrangement of credit-capital control is effectively enforced by debt-based consumerism, where everyone who wants to be “cool” (i.e. have a self that is recognized in a Neoliberal order) has to go into debt to be cool for at least one product cycle.
When their access to credit runs out, so does their ability to have a recognizable identity in the consumerist social order.
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