In early 2020 (back in the good old days) Joel Kotkin published The Coming of Neo-Feudalism. Subtitled ‘a warning to the global middle class’ I felt it would be appropriate to investigate if one should heed his warning. The answer is a resounding yes, Kotkin uses chilling statistics to demonstrate what many people have already felt: life is getting worse for most people. With a significant experience as both an academic and journalism writer, Kotkin demonstrates what is going on and places it within a useful framework. While Thomas Piketty already warned us back in 2013, Kotkin adds a sociological analysis on to Piketty’s economic work. Much like Piketty, Kotkin is light on solutions: his ‘manifesto for the third estate’ is more an invitation to thought than a call for action.
What do we mean when we talk about feudalism?
Feudalism was a social and political system that was prevalent in Europe in the middle ages. In this system society was structured as a hierarchy based on land ownership. The great majority of people worked on the land and were obligated to provide goods and services to the land owners. In the early modern era, feudalism was gradually replaced by the capitalist system in which every individual trades goods and services on a more or less open market. Kotkin does not predict the end of the free market system but does predict a neo-feudalism with certain elements of the middle ages: wealth will become far more concentrated, making more people dependent on others, both economic and population growth will grind to a halt and openness and creativity will deteriorate across societies. Most of all, the neo-feudal world resembles the middle ages in the rigidity of its class structure: everyone will belong to one of three ‘estates’.
from chainmail to hoody
The first estate described is the oligarchy and comprises about 1% of the population. It is no secret that the big tech companies – Apple, Google, Microsoft, Amazon and Facebook, among others – have achieved a market capitalization that is astonishing to any financial analyst. These companies have huge profit margins, few employees, a tiny number of major shareholders and have reached monopolistic or at the very least oligopolistic positions. By virtue of their size it is clear that there is less space for smaller businesses. By virtue of their lack of employees these companies do not spread around their wealth that much. Because the largest shareholders are most often company founders the associated wealth is concentrated in precious few hands.
About the further sociological characteristics of this group Kotkin does not have that much to say. In fact, although the 1% can throw a lot of money around they are at the end of the day such a small group that they are not recognizable as a subculture. Kotkin makes his case less strong by singling out the tech giants. Although information technology is front and center in the business news, this is hardly the only industry. There are many members of the illustrious one percent who came there through enterprise in tourism, construction or retail, moreover, the largest part of these people simply inherited their wealth. The 1% is much more diverse than just the tech entrepreneurs. If Kotkin expects the aforementioned companies to assume ownership of all other sectors as well he does not make a strong case for that.
From cross to rainbow
The second group is far larger, comprising about 30% of the population, and also far better described by the author. He calls this group ‘the clerisy’, a term synonymous with intelligentsia or literati. These people fulfill the role that the church played during the middle ages in providing the oligarchy with its legitimacy. Members include civil servants, journalists and academics. Funnily enough, the good old clergy is still part of this group, even though it is steadily losing its relevance as it adopts all opinions of the status quo. While the oligarchy is winning in the free market, the clerisy is ‘largely insulated from the risks of the marketplace’. They enjoy higher wages and benefits than those working in the private sector and do not have to compete to survive. So far so good, but Kotkin describes a few negative developments taking part in this group.
First of all, the clerisy is becoming less diverse. Where in the twentieth century there was a lively debate between left- and right-wing elements, the 2022 clerisy seems to be in broad agreement. In the realm of economics free trade, deregulation and serious government intervention to keep the engine running are accepted as unavoidable facts of life. In the social sphere support for reforms that increase personal liberty, such as same-sex marriage and abortion, is strongly entrenched. Diverging opinions are just not there, and if they appear they are soon squashed by cancel culture. The clerisy is also becoming more impermeable to outside influence, with members mostly intermarrying and helping their children to secure a prestigious education and good job opportunities as well. Where in the previous century many young people became the first in their family to go to university, this is becoming increasingly rare.
While the members of the clerisy are mostly in agreement on political topics, they seem to be less and less interested in saying anything that runs counter to the interests of the oligarchy. The discourse on redistribution of wealth has been replaced by new moral crusades focusing on the environment and on the promotion of non-traditional lifestyles and identities. Although these new forms of idealism did not originate with the oligarchy, they have morphed into something that is nonthreatening to their interests and can even be beneficial.
Environmentalism may at first glance seem a mortal threat to big business. Environmentalists have long decried consumerism, pollution and the exploitation of natural resources: all activities indispensable to modern business. For a long time corporate policy has been to deflect, deny and ignore any problems. Luckily for them, the environmental discourse in Europe and the US has morphed into something completely different. In stead of limiting profits, governments have taken it upon themselves to provide big business with lavish financing for electrical vehicles, solar panels and wind mills. Previously titans of industry, such as Steve Jobs, Bill Gates and Jeff Bezos, got rich by delivering superior services and products to the consumer. The current corporate hero, Elon Musk, mainly got rich through subsidies.
In the field of non-traditional lifestyles a similar process is taking place. June has come to be known as ‘pride month’ with corporations exchanging their official logos for rainbow-colored equivalents. Aside from the rainbow the main pride symbol is the ever expanding array of letters – LGBTQIAP… – describing diverse identities and lifestyles. These letters seem to have little in common and hardly form a ‘community’, what they do have in common is a rejection of the traditional hetero-normative, family-unit lifestyle. It is hard to argue against more personal liberty. However, the corporate embrace of this movement probably has a more prosaic motivation. As people embark on family formation the employer misses out on the labor of the mother (or birthing person, if you will) for a significant period of time. After the initial maternity leave period both parents will be faced with responsibilities that go above and beyond those they encounter in their work. Most parents would rather spend more time at home than work harder to buy that new BMW or trip to Thailand, thereby cheating business out of both employee hours and consumer euros. When I was studying, my marketing handbook made it very clear: the ideal consumers are gay couples, they have a high disposable income and the free time to spend it. It also should not surprise any student of business that companies are willing to finance abortion trips for their employees: anything to prevent maternity leaves.
From artisan to specialist
The third group of people is divided into two. Those who are more well off are titled the yeomanry, they consist of about 30% of society. This social group was marginalized during the middle ages but became the most important and biggest group in the modern period. These people are necessary to form the bedrock of democracy. Where those above may be tempted by their superiority to exchange democracy for an aristocracy, those below have already been failed by the system and will be unwilling to rise to its defense. The yeomanry of the middle ages was made up of traders, artisans and other skilled professionals. In the modern period they profited from the transition to a capitalist economy and became business owners and skilled professionals in the private sector.
In the twentieth century most of the middle class moved into office work, forming the so-called ‘white collar’ workforce. The move from small business ownership to professional careers has been chronicled in the work of among others Sennett and Saval. But something seems to be rotten in Denmark. The ideal of home-ownership and generational wealth creation seems to have become far harder to attain, even for the most skilled workers. As Kotkin describes even the most succesful programmers who work for the tech giants are struggling financially, as their high salaries are offset by extreme housing costs. Of course there are still rich executives who are able to transform their extraordinary skill into wealth, but the path to the top is steep and slippery, and once you get there you may find out that it is quite lonely. Many skilled workers find a lucrative niche as contractors, but have to accept the fact that they are less secure when tragedy strikes. Small business owners are feeling the squeeze of competition by huge companies. Think for instance of all small stores displaced by the dominance of Amazon. The end-result is that the yeomanry is becoming both smaller and less secure: bad news for them but also for democracy.
From plowshare to rideshare
And then we get to the 50% on the bottom, the serfs. Any problem the middle class is facing when it comes to housing, inflation and job opportunities is far worse for this group. As monthly earnings are rarely more than monthly expenses this group has a net worth of zero or less. The low pay is one thing, another thing is the proliferation of economic insecurity. Where most people used to work steady jobs, the main job growth over the last ten years has been in flexible work. Perhaps the most well-known example is tech company Uber where drivers are not paid a steady wage but earn money as they transport travelers from A to B. This is a job that has all the downsides of being an entrepreneur without any of the upside potential. Earnings are low, often below minimum wage. While the current situation is bleak many of these workers also have little to look forward to. As mentioned in the above paragraphs social mobility is no longer what it used to be. It should not surprise readers that this voter block will be open to any opportunity to upset the status quo. Examples include Brexit in the UK, the election of president Trump in the US and the gilets jaunes demonstrations in France.
The manifesto
In the first 100 pages of his book Kotkin clearly demonstrates that there is a problem. A shrinking middle class is bad news for democracy, the plight of the new serfs is leading to low birth rates while a decrease in creativity and dynamism is condemning us to a new dark age. The oligarchy and clerisy are not doing a good job in their leadership and should stop ignoring what is happening below them. So what can be done?
Sadly, here Kotkin’s argument becomes very light indeed. Although the last section is titled ‘a manifesto for the third estate’, it hardly reads as such. Kotkin starts of by philosophizing about how too much time spent in front of screens undermines young people’s ability to interact in person. Although few would deny this fact, it seems to have little to do with economic inequality. Worse yet, this paragraph may cause younger readers to dismiss Kotkin (1952) with a vulgar ‘Okay boomer!’
He goes on to describe the need for property ownership to remain widespread. Society requires widespread but modest financial independence – Piketty’s ‘patrimonial middle class’ – to maintain democracy. An economy with people reliant on subsidies, welfare and universal basic income can hardly be conducive to ideals of ‘individual initiative and self-governance.’ Similarly, the decline of the family leads to a lower growth environment which cannot provide social mobility. The way we think about climate change, leading to big subsidies for the oligarchy and higher bills for everyone else, should be replaced with a stronger focus on resiliency.
Both the mainstream left- and right-wing are ill-equipped to provide these answers. The left-wing wants to pursue social justice through an even further increase in state power, increasing the piece of the pie for the clerisy while making the third estate worse off. The right-wing on the other hand has no convincing answer to the formation of monopolies and the glaring wealth inequality. Even the right-wing populist movement lacks a clear economic program and engages in counterproductive struggles based on a petty tribalism.
The verdict
Should you read The Coming of Neo-Feudalism? Absolutely! Although I personally do not identify strongly with any of the classes – the only thing I am sure of is that I am not part of the oligarchy đ – I do recognize the problems that the book is describing. If you do not recognize these problems the book may be an eye-opener to you. If you do recognize them the book can help you to back up your ideas with serious research and find a better framework to think about it. Kotkin goes into great depth on neo-feudalism, especially on the intersection with urban planning, a chapter I glossed over but which could be interesting if you are into that. Just do not expect to find any solutions.