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Historically the feudal period has controlled the political and economic spheres longest. Capitalism replaced it gradually to become the dominant economic and political force. Some parts of the world chose a ‘communist’ path, however capitalism expanded ever more but also brought democracy in many places. A few decades ago neoliberal economics began to displace it then become part of the political world. Now capitalism is dying and neoliberalism is gradually losing its political power to be replaced by a more authoritarian and usually nationalist political economy. Europa United’s Brian Milne asks if the world going full circle back to a new form of feudalism.

Neoliberalism is a set of free market ideas that is also a deliberately determined discipline that has been growing worldwide since its ‘rediscovery’ in the 1970s. In fact, is clearly not new, being a late 20 century resurrection of 19 century concepts of laissez-faire economic liberalism and free market capitalism. In its present form it was developed by a number of economists including Milton Friedman and Friedrich Hayek.

Milton Friedman and Friedrich Hayek        

The Market

Its perhaps most important trait is that it considers competition to be a defining characteristic of all human beings, thus regards people as primarily consumers and what we call the ‘market’ to be society’s principal organising principle. The market, it informs, separates us out into a natural ‘ladder’ of success on a ladder of opportunity that places us within a hierarchy of winners and losers. Intervention in this form of ranking by politicians or those who propose alternative ideologies that reject its basic ideology, if it be called that, to intervene upsets what its ‘philosophers’ consider a natural order. I call them philosophers cynically, because there is in reality no anti-philosophy since all points of view are philosophical at one end of an intellectual spectrum or the other and remain that no matter how much one would like to call it dogma, pragmatism or attach any other label. Whatever else those people do, they think. Thus, for a long time, leading neoliberal thinkers have implied democracy is a drag on the market the world would all be better off without. That may suggest some kind of total free for all in which all individuals have equal chances in a very open economic environment. In theory we do, except that there are controls, checks and balances, that essentially make it an exclusive ‘club’ that excludes the vast majority of people. It is a vision that is not of some kind of stateless egalitarianism, but of a very tightly controlled market state of corporate rule. After the crisis and crash in 2008, neoliberals have artfully used that incomplete crisis of capitalism as their opportunity to build a post-democratic world in which the power they intend to accumulate simply falls into their hands. At present it is still displacing traditional capitalism, but its influence is reaching saturation point. Therefore, a recent discourse has begun that points out that neoliberalism is itself at risk and will be replaced slowly but stealthily over the next few years. This will be very important for the economic development of the EU where it dominates some countries already whilst others are still more tradition capitalist, some are a mixture with socialism and others are still ‘recovering’ from decades of pseudo-socialism when part of the ‘East Bloc’.

Money or power?

There is an assumption that money is the driving force and main incentive behind neoliberalism. It is indeed an important factor; perhaps we might consider it the fuel that drives the ideology. That ideology is successfully pursued as the means to accumulating power. There is only ever a limited amount of money available in the world, to posses all of that would simply be to completely impoverish almost all people, which would almost certainly trigger the development of alternatives. Therefore one cannot truly exercise absolute power over people by controlling their purse strings. That is better achieved by influencing and forming the way they think. That, in turn, shapes their behaviour on the basis of how they process what they are told, thus believe are their own thoughts. In that respect, the long term interests of that ideology are very different to the short term interests of those who formulate and steer ‘democratic’ politics.

Margaret Thatcher and Ronald Regan

The ideology has been driven and put into practice by big international central banks, increasingly monopolistic multinational corporations, by the IMF and World Trade Organisation, in fact here in Europe by the Maastricht treaty, although the EU would naturally deny that to be the case. It is the system embraced by Margaret Thatcher, Ronald Reagan and other right leaning or overtly right wing governments subsequently. This doctrine has been achieved by cutting taxes, allowing corporate and individual tax exemptions and concessions (avoidance and evasion have been consequently tolerated), ‘denationalisation’ which is to say entirely selling off, thus privatising, and outsourcing public services including essential services such as water supplies, reducing and even ending a number of public protections, reducing to the point of impotence of trade unions and then boosting itself creating new and ‘innovative’ markets where none existed. This has been boosted by the diminution or even almost entire end of political choice, so that governments, international bodies together with the wealthiest corporations and a few of the richest individuals have created a kind of totalitarian capitalism.

The death of capitalism

It is often said that capitalism is dying and there are many analyses to prove that prognosis.  Capitalism has been with us the last four hundred years of, principally, European history, born during the Renaissance with the rediscovery of double entry bookkeeping that had been established in the early medieval Middle East, particularly by Jewish bankers in Cairo in the 11 century. Its rediscovery brought us two equal and corresponding sides known as debit and credit. That gave life to the accounting equation ‘Assets = Equity + Liabilities’ that has been the methodological tool for accumulation of vast amounts of capital beginning where only very little was able. As somebody with no knowledge of accounting skills, all I really know is that that equation gave birth to the ‘rags to riches’ expression of luck and pure opportunism that has made people wealthy without the once essential asset of nobility.

Double entry bookkeeping made it much easier to keep track of the relationship between revenue and costs for a specific product or process. It generated a clearer understanding of profit as the excess of revenue over costs in production of material objects and investment, originally in exploration of trading routes and new sources of rare commodities with which to earn large profits at high risk of losing the investment. The best examples are commodities like pepper and silk for which expeditions to open up trading routes to East Asia to buy them cheaply to bring back to Europe for sale as scarce, thus valuable, commodities. Profit retained for reinvestment became capital that could be used to fund more expeditions after all the pepper was sold. The demand for pepper or silk could be met by another and subsequent expeditions funded from the capital accrued after the first expedition with some of that withheld as security for the basis of capital for future expeditions that investors could contribute to in order to increase the quantities of imports, thus increase profitability. That is effectively the history of modern capitalist economics and capitalism itself. Examining that history over time as markets grew and diversified, it is quite easy and efficient to track the growth of material wealth, even to the extent of some of the older financial dynasties.

Capitalism’s greatest claim to being the superior form of organisation for production and distribution of goods and services is that it has always been the most proficient method of accounting for costs and benefits because it simply produces that which people want and are able and disposed to pay for. Where it is showing a ‘mortal’ weakness at present is that the people who are not willing and able to pay to stop climate change are taking what have been seen as capitalist excesses at stage further. In part, this is because those who hold and control wealth are often able to obfuscate both science and the state of affairs by investing millions, perhaps even billions, to do so by effectively buying up the political process. In part, that is easily written off because the worst effect of climate change will occur well after the lifetimes of the people who actually have, or at least had, the power to prevent it. Only around thirty years ago capitalism, at least what we called market economies, was recognised as the main force that had killed off the Soviet Union, its closest partners and its central planned, pseudo Marxist economy. At some point in time between the ‘fall of communism’ during 1989-90 and the climate crisis, capitalism as it was died to be replaced by a neoliberal update. The question why that caused its death in the wake of what is considered to be its greatest success and what does that mean for the post capitalist world? One might say that Adam Smith must be spinning rapidly in his cold, Scots grave in Edinburgh’s Canongate Kirkyard.

  Adam Smith’s grave

Despite what its name implies, the ideology of neoliberalism runs counter to what is considered to be a traditional liberal economy brought into being by the creation of wealth that still maintains a degree of altruism. Capitalism can sometimes be very altruistic. Neoliberal economics is in no sense altruistic. Real manufacturing capital demands stable, balanced and functioning societies with its citizens having real purchasing power and a surplus to save or invest. Synonymously, the debt gambling richest investors and their agents thrive on uncertainty, political chaos and impecunity or poverty among and growing for the majority of citizens. It gives them more power because as controllers of money and the purchasing power of what people have, they can manoeuvre people into economic corners with promises that are only ever partially kept by their political ‘puppets’.

The imminent death of neoliberalism

Yet neoliberalism has foundered and is beginning to fail on its own terms. It has failed to create general prosperity with checks and balances within controllable bounds, for instance making impoverishment slower than it could be if they really desired, thus growth has been slower in the neoliberal era than it was in preceding decades. Far too many of its fruits have been gathered by the increasingly greedy and avaricious wealthy minority, especially those without public faces. The better known successful people, no matter how much obvious profiteering they are responsible for, tax avoidance and all else, have tended to also be generous philanthropists who are at least rhetorically not lovers of neoliberalism. So, far from stimulating an enterprise economy, it has created a gilded age for rent-seekers. Far from eliminating bureaucracy, it has started to undermine itself by being both money and power insatiable. That has created a truly Kafkaesque or Huxleyesque economic structure that is run by an onslaught of unpopular and often insane diktats and oppressive control. That is leading to economic and financial crises that culminated in the 2008 crash with social and political changes such as populism that is their child but that is no longer imparting their message with ecological crises that they deny becoming critical. Because their opponents have not found a way to produce a new, persuasive explanation of what is wrong with it, neoliberals still dominate our lives at present, but with their power beginning to decline.

For quite some time now, neoliberal thinkers have more or less claimed that democracy is a burden on the market that we would be better off without. It is their view because unlike global socialism as an alternative that would give us stateless egalitarianism, we have a market state of corporate rule. The 2008 crash enable them to use capitalism’s as yet incomplete crisis as the perfect opportunity for the creation of a post-democratic world. However, democracy is a decision making process whereby people elect political representatives to make decisions on their behalf although, at least notionally, they represent those who elect them. When that mechanism malfunctions, democracy begins to falter and eventually collapse. Worldwide democracy is in crisis or is being eroded to be replaced by neoliberalism driven authoritarian systems that are now stealing some of the rhetoric of the communist states some formerly were to break the ties with the neoliberal drivers of this ‘revolution’. Thus a new dilemma confronts us when looking at whether it is better to place democracy and management of the ongoing crisis in the hands of nationalist populists whose reactionary policies should remind us of the excesses of the last century. By and large democracy has a very ‘local’ nature because it begins at grassroots but expands into political nations. It is therefore very difficult to extend into a truly international version although the EU attempts to do this, despite an undercurrent of strong neoliberal control that limits how far that can extend and the pace at which it moves. Brexit is perhaps a good illustration of where that is failing.

Failing UK democracy (Devolved Parliament, painting by Banksy)

The management of democracy

The Brexit version of democracy is being managed like a private business that sells consumers a product. Buy our democracy to be freer, get your sovereignty back, as though those who wish that have the first idea what that actually means. It is very similar to when a private business becomes so powerful that it effectively becomes a state organisation that proclaims the motto ‘Let us run the world and it will be better (for you) because we will give you many things and advantages you have always desired’. What the ‘things’ are and the advantages will never be fully described, at best explained using abstract rather than tangible examples. Thus the notion that removing worker protection will give workers greater freedoms is an attractive lie although it essentially means the opposite to that its enthusiasts understand. Eventually a more or less commercial state that is unaccountable to democratic representatives takes control though its agents who are elected but so strongly promoted by the powers behind them it is difficult to not vote for them. As we are now finding with scandals like the Cambridge Analytica case, they use vast propaganda and surveillance apparatuses to insist on consent by even those who do not accept that model with social media having been for some years their favourite chosen tool.

They have become very adept at using people with particular skills to orchestrate crises like Brexit in order to dismantle democracy. They are more or less moving us toward a world in which there is not even a single political party but so-called business leaders who govern as proxies for the most wealthy who we sometimes think of in a science fiction like sense of being ‘dark lords’ whose favourite tool is the internet. That is exactly what people like Boris Johnson’s ‘Spad’ Dominic Cummings and Patri Friedman, the son of one of the fathers of neoliberalism, Milton Friedman, want. However, some of their powerful tools and methods have become vulnerable, so that some of them are now engaged in a scramble to wrest control back into or keep it in the hands of the people they can best rely on. The Brexit ruse is merely shock doctrine that has been set off and nurtured by some of the world’s wealthiest and most reactionary individuals in collaboration with a section of the UK offshore hedge fund investor sector and a new type of rentier. That takes us back to a type of capitalism that is being used as a model for the post neoliberal world. The origins of the term rentier are vague. It has often been said to have been used by Marxist analysts and theoreticians of capitalism, yet the actual combination of words rentier and capitalism was never written or knowingly used by Karl Marx. In some of his early work he placed the terms ‘rentier’ and ‘capitalist’ in passages to juxtapose the notions that a rentier has a tendency toward draining profits, while a capitalist absolutely needs to reinvest most of their surplus income in order to survive competition. 

Karl Marx

In Incurrent economic and political theory, a rentier state is one that receives all or most of its national revenue from the ‘rent’ (for instance, land leasing) of local and national resources to usually entirely foreign clients. One good example has come to light with the Swiss corporation Nestlé’s purchase of water sources in order to sell that water but at the price of the dperivation of local populations of that natural resource.  The term rentier state has actually only been used since the mid-20 century, mainly to describe countries rich in high value natural resources such as oil, although it also includes states with a key global reserve currency and those that offer strategic resources such as military bases. Rentier capitalism is a Marxist term now mostly used to describe the ideology of economic monopolisation of access to any kind of property that returns considerable amounts of profit without contribution to society.  Now that capitalism has been largely tamed by neoliberalism that prefers direct ownership to rentierism, the shimmer of hope that some kind of impression of democracy can be retained is in what appears to be renationalisation of foreign owned or rented property back into the hands of nations. Rather than being renationalised, these assets are now generally passing into the hands of national private corporate interests that give the impression of being an integral part of the state. In fact they are often owned by the state that is repossessing them, but rented out to those national corporations to run and earn good profits from whilst paying the rent or lease but also through taxes and, sometimes, shareholding in the corporation. An example of this is Orange in France, which appears to be a private company. It was originally Hutchison Telecom, which was the UK subsidiary of a Hong Kong based multinational, Hutchison Whampoa, that German conglomerate, Mannesmann AG, bought out in 1999, but then Orange were bought up by Vodafone when they made a hostile takeover, which they had to divest because the EU regulations did not allow them to hold two mobile licences.  In 2000, France Télécom bought Orange plc from Vodafone. Now the major shareholders of Orange are the French state through Agence des participations de l’État and Banque publique d’investissement with 22.95%, employees own 4.81%, and the company itself owning 0.58%, the rest are public shareholders. France earns a large amount of the multinational company as a shareholder, with approaching half of the market in France, thus also fiscal income. In their absorption of that looks like a partnership with the formerly state owned France Télécom they appear to be a private company that has taken over a state institution, whereas in reality they are the opposite.

Fascism or populism

This where we can begin to seriously consider fascism part of what is coming unless it can be stopped. Fascism was defined by Benito Mussolini as the coalition of state and corporations, which is the format populists taking their states beyond neoliberalism are applying. It is premature to call any state fascist as yet, but at the point when state and corporations become indistinguishable, that is gradually happening in a few EU member states, it becomes a very precise appellation. Right now this is where some of the focus of the fight between neoliberalism and what is trying to replace it can be seen by those who dare.

Benito Mussolini marching with his Facisti

It is for me astonishing how billionaire puppet masters manage to pull the wool over the eyes of millions of ordinary citizens, disenfranchise them by policies they believe are benevolent but pay no premiums for decades, then frantically demand much more of exactly the same knowing they have been cheated for years on end. Some of that trick is within the term ‘neoliberalism’ that is neither new nor liberal, but is more or less a contemporary version of feudalism masquerading as democracy behind w all of anonymous bureaucrats and murky finances, dark money as we say at present, with a set of rules for the electorate on an important public question such as a change of party in office and policy with another set of very loose to the point of nonexistent for their new generation of international but increasingly once again national feudal lords. The suggestion of ‘liberalism’ enables the neofeudal lords and their Spad manipulators who advise governments to lay into all manner of collectively earned rights and freedoms that they believe the people should not have because they threaten their power and may reduce their ability to maximise profits.

Feudalism

Before capitalism emerged in Europe, there was more or less only feudalism, a radically different system to the ones we know today in which nothing, whether land or labour, was for sale, although it may well have changed hands quite violently over time, with serfs who were neither slaves nor free tied to their feudal lords as though attached by invisible chains. Feudalism was an inhumane system that was different to capitalism’s ability to enslave by making workers dependent on incomes earned by fealty to employers who reap the real benefits of their employment. Serfs were unable to work to earn wages to pay for rent and life’s necessities such as food and clothes, but were entirely dependent on their lords for livelihoods and had only a small parcel of land on which to work to provide food for themselves. Otherwise, they were entirely dependent on their lord’s generosity or subject of his whims and fancies. Every so often, a serf who was normally permitted to work his own small plot of land three days a week had that reduced to two, thus worked on the lord’s land except perhaps a short respite to attend church, otherwise five full and long days therewith struggled to feed his family. Occasionally serfs ran away. They would sometimes meet other runaways from which we have legends like Robin Hood who recall a ‘heroic’ version of what they did. Some of the runaways who managed to remain free also left the feudal system some established their own settlements that they called communes. As free workers they developed part of a system of production and trade between communes and in time with villages, towns and cities with artisanship pushing invention and innovations that did not need to develop the same way in feudal society would eventually evolve into modern capitalism. On close examination it is very noticeable that apart from the obviousness of agriculture, much of industry began in small rural settings. Wool and cotton industries are very obvious examples, but look again to see that provision of fuel for industrial production beginning with wood then moving on to mining, similarly iron mining and other minerals started on a very small scale but grew as demand and production grew. It was originally in those same places that the original mills and later factories were first built in order to be near the raw materials. Towns and cities would have developed at a far slower pace had innovation and invention in communes growing into industrial towns and cities not happened.

  Robin Hood

There is an image of a transition from feudalism to capitalism that arrived with the French Revolution that is far from the entire story. The actual transition had been far longer and very much slower over the centuries during which a relatively small minority of serfs successfully ran away to set up something new. That was to even last until the Russian Revolution of 1905 that was a vast wave of mass political and social unrest that spread throughout much of the enormous the Russian Empire, mainly aimed at the Tsarist monarchy but also at the government. It included worker strikes, peasant unrest and military mutinies that put an end to the final hold of feudalism in Europe, although it took the 1917 Revolution to purge its last traces from Russia and discourage other parts of Europe to hang on to vestiges of the system. Post neoliberals know that history all too well, so are reversing the progression back to a less tangible version of serfdom that is tied to wages and working conditions, ideally ending worker protections that restrain controls over how those wages are earned.

Neo-feudalism, the greatest threat to democracy of all

Neo-feudalists claim they are creating wealth for all. They do nothing of the kind; in fact they prosper by creating debt in order to accrue interest and massive profits on that debt. They create enormous amounts of debt on everything from nations, through local authorities and state institutions, any and every type of private enterprise and citizens who invest or buy into their schemes. In essence, everyone is a debt slave as far as the neo-feudalists are concerned; therefore they will encourage credit that returns them the highest possible profits where ever they can. Whenever we buy anything, an ever growing share of the purchase price goes to cover the cost of debt, leaving some of the surplus to pay the workers employed in all kinds of manufacturing, business and services. The ideology is behind this is to maximise personal or corporate wealth but not wealth creation with benefits for all as we are usually led to believe. European manufacturing profits are now most often used to lower debt, using self-financed investments and buying back shares. Across Europe successful businesses are now beginning to reduce corporate debt, although the City financial centre in London is still borrowing money, not intending to invest in the future but purely to pay dividends to shareholders. It is almost certainly the real reason parts of the neo-feudal UK ruling class want to leave the EU, thus be free of restrictive regulations, legislation and rights.

This has led to conflict between the governing and entrepreneurial classes in the UK, primarily England at present, and the rest of the EU. EU policies set out to support level playing field competition by limiting the costs involved and doubts this brings about. The EU is trying to limit the scope for corporate and individual tax avoidance and unfair competition. In the USA at present, some businesses are converting to cooperative workplace models which are a contemporary equivalent of the runaway serfs who broke the back of feudalism by being industrious and innovative. Initiatives have been launched to support the development of worker cooperatives that have played a significant role in creating job and wage stability in low income neighbourhoods and depressed districts in some formerly prosperous industrial cities. Because workers are then responsible for each other and themselves, instead of a CEO and directors, that reborn model is moving away from the conventional capitalist structure, avoiding slipping into the straitjacket of neoliberalism and offers something more closely resembling a real democratic system. That is at present very small scale and may be under enormous pressure that will strangle it in its infancy.

The so-called ‘market’ is believed to be essentially free and self-regulating. It is not at all free therefore both established international and new wave national feudalists look to monopolies as a means of maximising profits. Confronting and controlling international monopolies has been a core task the EU has made some progress on coming to terms with. Those monopolies dominate vast markets in which the only ‘winners’ in a zero sum gambling environment has been de facto monopolised financial institutions collecting small fees from every transaction. The world has become so used to single dimensional lies that have been told so often and for so long they have become ‘common truths’. Neoliberalism relies on this but what is coming to replace that needs to do it better, thus what must be used to fight back against all of it is real common truths that will be believed, thus deliver control and democracy back into the hands of citizens without them falling back into a new kind of totalitarian control. We may not be able to put our hands on our hearts to call it neofascism but that is there where we have nationalist, populist governments who are drawing state and corporate interests together within their countries. Whether the cooperative workplace models will extend out into communities to progress on to being national alternatives that have a democratic basis, thus preserving and building on the participation of citizens in running states is in doubt. One of their greater problems is that where capitalism then neoliberalism has marched through, they have stripped assets that would serve new models well, are hoarding not only profits but many material and financial assets, therefore have the economic upper hand which is the one the masses depend on, thus will hold on to.

In Europe we have perhaps the most diverse and thus cumulatively the greatest knowledge and experience of totalitarianism, thus also know the means of preventing it (if we can) if it threatens. This conflict has given us Brexit and may yet present us with similar or even greater problems, however as the EU stands, even quite seriously imperfect and needing immediate attention, it does also offer solidarity that can still protect us and preserve a good degree of democracy. When reforms go beyond still very open discussions, the pitfalls and advantages of what is on offer need to be closely scrutinised with at least enough of the cooperative workplace and community model integrated to keep citizen participation alive.

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Brian Milne
A Social anthropologist who specialises in the human rights of children. In practice Brian Milne has worked on the street with 'street children', child labour, young migrants, young people with HIV and AIDS. Brian’s work has taken him to around 40 countries, most of them developing nations; at least four of them have been in a state of conflict or war, thus taking him to the front line in two. Brian’s theoretical work began with migration; working on, written and publishing on citizenship and generally best known as an 'expert' on the human rights of children. Brian has a broad knowledge of human and civil rights for all ages, environmental issues and has been politically active most of his life. An internationalist and supporter of the principle of European federalisation.

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