On Virtual Feudalism

During the Age of Enlightenment people believed that the reasoning of men could free them of their ills, and lead to peace, security and good government. It was believed that reason would ensure the progress of humanity, and change the corrupt environment of the 18th century. The Enlightenment thinkers introduced questioning and critical thinking to replace the dead weight of tradition and challenge the blind faith in institutions, and sought to advance the public good. This period coincided with the rise of the ‘nation state’ thus one of the issues explored was what constituted the proper relationship of the citizen to the monarch or the state. It was believed that truth and freedom would enable individuals to build a better world.

To the Enlightenment writers, feudalism symbolized everything that was wrong with a system based on birth privileges, inequality and exploitation. Voltaire denounced feudalism as being a system exclusively dominated by aristocrats who possess all the financial, political and social power. Historian, Peter Gay, asserts that the Enlightenment broke through ‘the sacred circle’ whose dogma had circumscribed thinking. The sacred circle is a term he uses to describe the mutually reciprocal relationship between the hereditary aristocracy, the leaders of the church, and the text of the Bible. The interdependence manifests itself as kings invoking the ‘Devine Right of Kings’ to rule. Thus the church sanctioned the rule of the king and the king defended the church in return.1

The church was the dominant institution in the 18th century, while in the 21st century the corporation is the dominant institution. The aristocrats of the 18th century have been replaced by the investment-bankers of the 21st century. The text of the Bible has been replaced by the writings of Hayek and Friedman. Their followers accept unquestioningly every word of their writings that support laissez faire economics. Friedrich Hayek claimed that human cooperation, social order, and economic prosperity are only possible where human freedom is maximized, subject to the restraints of a legal and moral code. Milton Friedman believes, “A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.” These new ideas are incorporated into the ideology of minimal governments and deregulation of the past four decades.

Actual feudalism was based on the immobile resources of property with an economy marked by extreme exploitation and a wide gap between the rich and poor. In medieval and Renaissance periods, the state was restricted by the need to work through a host of intermediaries. This system existed because of poor communication, where localism thrived in return for loyalty to some central organization. On the other hand, virtual feudalism is based on the rapid movement of money and information around the world, and on corporate ownership of abstract forms of wealth. Large companies now have more wealth and power than small states. Like actual feudalism, virtual feudalism has in common the exercise of public power by private partners. This includes some powers of government (justice and defense) that are now controlled by private contract. Privatization of previous public services is proliferating – schools, pensions, water treatment plants. Those without negotiable skills will become impoverished in this world of overlapping jurisdictions while the economic divide between the wealthy and the rest of society continues to grow.

All elements of the elite establishment of the 21st century are aligned with the existing political hierarchy. Richard Moore observes that the Western leadership class has been systematically alienated from its popular constituencies by the process of globalization – the leaders now identify with their role in relationship to the shadowy global elite, and view their (voting) constituency as a flock to be managed. The visible Western leaders are dependent on this upward relationship (with the bankers) for their political survival, just as third-world dictators are dependent on foreign backers. The investment banker has emerged as the new royalty. Like the aristocrats of the 17th century they are for the most part a non-productive parasitic class – the super-rich use the vast amounts of virtual capital they withdraw from the production for purchasing and privatizing all tangible resources and assets of the planet. But unlike the aristocracy of old, it knows how to maintain its tentacles of power in the face of changing circumstances. This is seen in the ability of corporations to misappropriate buzzwords – sustainable development, renewable energy, and green technology.2

The dogma of deregulation and minimal government feeds the growth of globalization. Corporations are increasingly relying on outsourcing, acquisition and mergers, relocation of plant and equipment, and aggressive money management – all made possible by computer communication technology. As the power of the nation state declines, sovereign power will come to be exercised by corporations – the welfare and security of individuals will depend on contracts with these organizations. These arrangements now mirror the political economy of the Middle Ages – ushering in virtual feudalism. The consequences of this virtual feudalism is a middle class under attack with a growing economic gap between the wealthy and the rest of society, and half-way around the world workers toil at wages that provide a subsistence living while they manufacture goods for the West.

The new aristocracy around the world is returning to a feudal social structure to the benefit of Wall Street. This is a more insidious servitude than that of the 17th century. The global corporations through virtual feudalism have engineered the economic decline of many individuals. Medieval feudal society was founded on the concept that at various levels men would control large groups of people by providing them security. The serfs relinquished certain liberties in exchange for the security provided for by the barons. Security for the individual today is not a component of virtual feudalism.

Nietzsche observed, “Convictions are more dangerous enemies of truth than lies.” Dogma is the unshakable belief that something is true regardless of proof. Even in the face of convincing evidence that should give reason to pause, “dogmatic people will not,” as Churchill said, “change their mind or change the topic.” They simply refuse to see things any other way, and fail to consider the possibility they might be wrong.

Dogma as an unchallenged belief puts many constraints upon our knowledge. Not only does it prevent us from realizing the possibilities of other worlds, but also it even changes the way we perceive the world we are in, and what we regard as truth. Simplifying decisions is an essential part of our nature; we are unable to cope with the vast amounts of information at any one time. Facts are not isolated objective things, but exist relative to our values and within a vast web of associations. We recognize that theories are only one way out of many structuring our world, and assumptions behind them restrict our viewpoint considerably. We now see that selected facts can bias our understanding and lead to prejudicial actions based on dogmatic values.

How can we ensure our thoughts are valid? Truth or falsity is just opposite ends of a continuum of probability, with most concepts somewhere between, neither true nor always false. Dogma can be seen as a constraint on our knowledge, a portioning of the world by axioms that are valued in only restricted circumstances. We can view our belief system as a bubble selecting and enclosing those concepts of interest to us, but excluding at the same time many other possibilities.

We need to square the circle – to find a good solution to a problem when that seems impossible, especially because the people involved have very different needs or opinions about it. The facts are as income inequality increases social mobility decreases. In squaring the economic circle we need to address wealth distribution and the freedom of individuals to reach their full potential. The solution involves softening the social consequences of deregulated global competition. This means moving closer to the Northern European model with its emphasis on stability, social consensus, and regulation.

We go through our daily lives feeling pretty confident in our knowledge and understanding of the world, but that confidence is mostly an illusion. Daniel Boorstin (1914-2004), American historian, observed, “The greatest obstacle to discovery is not ignorance, it is the illusion of knowledge.” Beliefs and new ideas must be met with questioning and skepticism to keep them from becoming dogma. We need a new Enlightenment to question the workings of society and government, explain the purpose of government, and describe the best form of it to create a new middle class wealth boom.

1“The Political Revolution” https://www.boundless.com/u-s-history/american-life-during-the-revolution-1763-1789/the-political-revolution/the-political-revolution/

2Moore, Richard K.  “The Enlightenment and the Industrial Revolution.” http://www.serendipity.li/capitalism/enlightenment_and_industrial_revolution.htm

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