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Sunday, January 28, 2018

Distribution of wealth: neo-feudalism confirmed again

Distribution of wealth: neo-feudalism confirmed again

An extreme version of feudalism might mean that the sovereign owns everything in his or her domain, particularly all the land. This is still exemplified in the British system of land ownership, i.e. freehold land is actually defined as a 999 year lease from the Crown. While in modern Western economies land is still a key aspect of ownership, there is of course an overlay of other instruments of wealth, e.g. control over production, banking, media and natural resources.

However the reality of traditional feudalism always meant that a small class of so-called aristocrats owned and controlled much of the wealth generated by them and all the classes below them. Classes of slaves and serfs were eventually replaced by the working classes, giving rise to the modern wage economies.

Inequalities in wages are a popular topic of discussion amongst the working classes: compare the minimum wage in Britain with a $300,000 weekly wage for a top footballer and jaws drop. Obviously, if the footballer is clever enough he will use his income to create personal wealth but even in doing so he will fall far short of those who either inherit vast wealth or create it from scratch by entrepreneurial endeavour, rising to corporate elites, and in turn accumulate vast amounts of assets.

Data (2014) from the German Institute for Economic Research (as quoted by Der Spiegel) confirms the status quo:

0,0001% of the German population in 2014 (which makes for about 45 of the richest families in Germany) own almost double the wealth of the 50% of the poorest population.

That Germany is leading the race to the top is further exemplified by comparisons to France and Spain, which have very similar trends but not as pronounced as in Germany.

How can this happen?

The strange theory that some 90% of the populations (owning only some 35% of the total wealth) are complicit in this state of affairs is invariably supported by confused liberals who, while they condemn this type of vulture capitalism, they blame the victims. This is sadly illustrated by an article in the liberal Guardian about a Turkish liberal author, Elif Shafak, who lists her favourite books, such as Naomi Kleins’ This Changes Everything: Capitalism vs the Climate, but also Eric Hoffer’s The True Believer, which she believes explains crazy fundamentalists (like Jihadists or people who voted for Trump) in these terms:

“The less justified a man is in claiming excellence for his own self, the more ready he is to claim all excellence for his nation or his religion or his race or his holy cause.”

It is easy to blame those who vote for their insane masters or blame the women who get sexually assaulted by men or blame the poor for being so useless. Eric Hoffer’s idea that personal ‘excellence’ defines an individual human being, and lacking it will turn him or her into a mad fundamentalist, is of course a mad idea in itself.

It is much more useful to investigate how the 10% or the 1% of the population can manipulate the 90 or 99% of the population into submission. As I keep pointing out there are two seminal books that Elif Shafak should read:

1.     Wilhelm Reich’s Mass Psychology of Fascism
2.     Chomsky & Herman’s Manufacturing Consent

Both volumes explain succinctly how it is done.

Modern media, voter and market manipulation is predicated on highly accurate statistical matching algorithms, allowing for unprecedented forecasting and thereby resting assured that the outcomes will favour the proprietors. All the while the 90 or 99% are living the dream that is preprogrammed for them: you too can be an excellent person by worshipping those few who are truly excellent.

Who would have thought that Germany is again leading the race? That the current German elites (the 0.0001%) can claim the high moral ground as capitalists with a human face - in view of various kleptocracies that run most of the rest of the world - is very alarming indeed. If the German model is the new ‘normal’ then we are truly lost in the quagmire of neo-feudalism.

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