Neo-Feudalism Rising (Free)

It’s common knowledge that I’ve worked on projects with Joel Kotkin and have frequently contributed to his web site New Geography. So while I frequently review books professionally, I’m too conflicted for reviewing his. That’s double true for his latest since I gave a pre-publication input on it to him.

But I’m not going to let that stop me from saying a few words here about Joel’s new book The Coming of Neo-Feudalism: A Warning to the Global Middle Class.

You’ll note a blurb from Richard Florida on the cover. Florida and Kotkin have been much friendlier of late as they’ve both focused on a similar set of problems affecting America’s cities.

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The problem is rising inequality, which is enriching a small ultra-wealthy class, squeezing out the middle, and creating an expanding an immobile lower class stuck at the bottom. This affects not just cities and not just the United States but is increasingly a feature of global capitalism.

Kotkin uses the analogy feudalism to describe this situation, particularly to the three estates in France. The key group in this would be the oligarchs, the analogue of the nobility of the second estate. These are the billionaire “masters of the universe” types in tech giants, finance, etc. They increasingly rule in conjunction with the clerisy, today’s equivalent of the clerical first estate in France. The clerisy - journalists, academics, NGO leaders, etc - control the elite institutions of culture. They supply the ideological frameworks - the “political formula” as Gaetano Mosca might put it - that legitimate the oligarchs. These two groups are sometimes friends, sometimes enemies. In general, so long as corporations embrace the clerisy’s formula’s (such as various woke initiatives), the clerisy leaves them alone or even defends them. But the clerisy clearly sees the risk that they could be relegated to a subordinate role, which is why we see the struggles between elite East Coast media and Silicon Valley over who gets the set the rules of the game on the internet, for example. What’s notably about the clerisy is that they are mostly not wealthy themselves. They just enjoy high cultural power and prestige.

The third estate then would be everybody else. This includes everyone from the poor to the middle class to the petite bourgeoisie of small business owners and many professionals. This class has very little power and has gradually been getting squeezed out and turned into de facto serfs - gig workers, for example - in the new economy.

The net result of this system is swelling wealth for the 0.1%, downward social mobility for most of the middle class, a swelling proletariat, and hardening boundaries in which upward economy mobility becomes increasingly difficult.

Joel’s book describes each of these classes in turn: who they are, what they believe, what they want, how they function, etc. You may not like his analogy to feudalism, but he’s onto something. Pretty much everybody has been talking about rising income inequality, for example. It’s obvious that something has gone wrong.

No matter what happens in our economy, it seems to reinforce these socio-economic trends. In the 2008 housing crash, for example, banks were bailed out but homeowners got foreclosed - then big investment funds swooped in and took control of vast tracts of urban housing stock.

Today Amazon and many other large corporations are large thriving while small businesses - whose owners are part of what Kotkin labels the “yeomanry” - are getting vaporized. An NBER working paper from earlier this year found that the number of active business owners in the US fell by 3.3 million, 22%, between February and April of this year.

Michigan’s governor was ridiculed for rules requiring that home improvement superstores like Home Depot and Lowe’s could not sell inessential products like plants or seeds even though they were otherwise allowed to operate. This does seem ludicrous on its face, but in some sense it exposes how the rules were stacked against small businesses. Your neighborhood florist was forced to close because it was an “inessential” business, but large grocery chains with floral sections could keep right on selling product.

The Coming of Neo-Feudalism is certainly provocative. But even if you don’t ultimately agree with Joel’s analysis, you’ll at least find it a stimulating and entertaining read.