It’s What’s for Breakfast, Lunch, and Dinner

Neo-feudalism that is.

We have mentioned neo-feudalism here at Camelotkidd enough that I think an explanation is in order. Let’s start with feudalism.

My New Oxford American Dictionary, defines feudalism as: “Historically the dominant social system in medieval Europe, in which the nobility held lands from the Crown in exchange for military service, and vassals were in turn tenants of the nobles, while the peasants or serfs were obliged to live on their lords land and give him homage, labor, and a share of the produce, notionally in exchange for military protection.”

So what is neo-feudalism?

Neo-feudalism is the resort to a private-public structure of governance, where the wealthy and corporations use the government for their own devices. (The demonization of government since Reagan was always meant to obscure this)

In his masterpiece, “The Predator State“, James K. Galbraith refers to the merging of corporate and State power as that

“coalition of relentless opponents of the regulatory framework……whose major lines of business compete with or encroach on the principal public functions of the enduring New Deal. It is a coalition, in other words, that seeks to control the state partly in order to prevent the assertion of public purpose and partly to poach on the lines of activity that past public purpose has established. They are firms that have no intrinsic loyalty to any country. They operate as a rule on a transnational basis, and naturally come to view the goals and objectives of each society in which they work as just another set of business conditions, more or less inimical to the free pursuit of profit….. As an ideological matter, it is fair to say that the very concept of public purpose is alien to, and denied by, the leaders and the operatives of this coalition.”

According to Wikipedia, neo-feudalism: “is a division of labour in which the state remains a key source of security through its access to violence, while non-state resources are mobilized to establish security networks that operate according to risk management principles. Among the clearest indicators of this is the difference between the security strategies employed within the new feudal domains that the emergence of ‘mass private property’ has established — for instance the security practices within places like Disney World — and the way in which poor neighbourhoods are policed through the use of target hardening strategies by police agencies and by private security agencies contracted to state agencies.[1]

“–As such, the commodification of policing and security operates to cement (sometimes literally) and exacerbate social and spatial inequalities generated elsewhere; serving to project, anticipate and bring forth a tribalised, ‘neo-feudal’ world of private orders in which social cohesion and common citizenship have collapsed.[9]

This prescient Wikipedia depiction continues. “A primary characteristic of neofeudalism is that individuals’ public lives are increasingly governed by business corporations, as Martha K. Huggins finds:

Besides public and private property, there is now an intermediate status that Shearing and Stenning label “mass public property,” where public activities take place within privately owned facilities that are guarded primarily by private security backed up by the formal police system. […]
Whether in Los Angeles, New York City, or Sao Paulo, as increasing amounts of public space become the real or de facto property of privileged apartment owners and business-run complexes like shopping centers and malls, these areas come to be defined, adjudicated, and regulated by the laws on private property and commercial legislation and practices. With more and more public life now taking place on privately owned mass public property, the definition of “deviance” within such areas turns on the particular logic of private ownership, profit-making, and resource protection. With “security” tailored to protect such spaces, social control agents shift their attention “from discovering and blaming wrongdoers to eliminating sources of…threats in the future”. Thus, as relatively heterogeneous urban public spaces are transformed into symbolically gated homogeneous private regions, and overburdened and fiscally strapped governments transfer responsibility for protecting and regulating “mass private property” to the private security forces attached to it, a “new class of ‘offenders’ [emerges] — those who create opportunities for threats against the interests of the client”. Such special interest social control fosters regions that resemble the “free trade zones” in developing countries, where international and national industry receive generous tax and political incentives from nation-states to establish or expand their business operations. Within such areas — whether designated “free-trade zones,” or as is more common, simply city blocks and shopping malls — business and industry are the de facto government. Shearing and Stenning label this a “new feudalism” and characterize such areas as huge tracts of property and associated public spaces that are controlled and policed by private corporations. These corporations develop an extensive security apparatus there, of which “uniformed security personnel are only the supervisory tip of the iceberg.” Out of such a marriage of business and government, a symbiosis emerges between the commercial sector’s own private security forces and the local government’s police forces.”

A pre-Christmas release of FBI documents, in response to a Freedom of Information lawsuit initiated by The Partnership for Civil Justice, shows how the FBI, in partnership with the Department of Homeland Security, engaged in a crackdown on Occupy Wall Street. The FBI collusion with the nations largest banks depicts an emerging neo-feudal structure that should be viewed with alarm. “If you’ve been following the story of the official response to Occupy Wall Street, it was apparent that the 17 city paramilitary crackdown was coordinated; it came out later that the Department of Homeland Security was the nexus of that operation. The deep FBI involvement is a new and ugly addition to this picture.”

Partnership for Civil Justice executive director Maya Verheyden-Hilliard says, “The documents we’ve obtained show that the FBI was acting as a private intelligence and protective agency for Wall Street and the banks against people who are engaged in First Amendment-protected free speech activities.”

Following this revelation about how the government is working at the behest of Wall Street and the financial industry, it’s fair to ask–so who are the new nobility in our milieu of neo-feudalism?

Michael Hudson, a research professor of economics at University of Missouri, Kansas City, says that, of course, the new nobility is made up of members of the financial industry. “What’s basically wrong is that the financial system is running the government. For years, Republicans and Democrats have both said that a strong government, careful regulation and progressive taxation are markers on the road to serfdom. The politicians and neoliberal economists who write their patter say, “Let’s take planning out of the hands of government and put it in the ‘free market.’” But every market is planned by someone or other. If governments step aside, then planning passes into the hands of the bankers, because of their key role in allocating credit.”

Hudson goes on to show how they are impoverishing the rest of us in his latest series of articles at Naked Capitalism“So despite the fact that the financial system is broken, it has gained control over public policy to sustain and even obtain tax favoritism for a dysfunctional overgrowth of bank credit. Unlike the progress of science and technology, debt is not part of nature. It is a social construct. The financial sector has politicized it by pressing to privatize economic rent rather than collect it as the tax base. This financialization of rent-extracting opportunities does not reflect a natural or inevitable evolution of “the market.” It is a capture of market structures and fiscal policy. Bank lobbyists have campaigned to shift the economic arena to the political sphere of lawmaking and tax policy, with side battlegrounds in the mass media and universities to capture the hearts and minds of voters to believe that the quickest and most efficient way to build up wealth is by bank credit and debt leverage.”

Even with the “financial cliff” averted, President Obama is still calling for more deficit reduction. But what exactly does that portend for the economy going forward into 2013?

Economist, Michael Hudson explains: “Wall Street lobbyists blame unemployment and the loss of industrial competitiveness on government spending and budget deficits – especially on social programs – and labor’s demand to share in the economy’s rising productivity. The myth (perhaps we should call it junk economics) is that (1) governments should not run deficits (at least, not by printing their own money), because (2) public money creation and high taxes (at least on the wealthy) cause prices to rise. The cure for economic malaise (which they themselves have caused), is said to be less public spending, along with more tax cuts for the wealthy, who euphemize themselves as “job creators.” Demanding budget surpluses, bank lobbyists insist that austerity can enable private-sector debts to be paid.”

“The reality is that when banks load the economy down with debt, this leaves less to spend on domestic goods and services while driving up housing prices (and hence the cost of living) with reckless credit creation on looser lending terms. Yet on top of this debt deflation, bank lobbyists urge fiscal deflation: budget surpluses rather than pump-priming deficits. The effect is to further reduce private-sector market demand, shrinking markets and employment. Governments fall deeper into distress, and are told to sell off land and natural resources, public enterprises, and other assets. This creates a lucrative market for bank loans to finance privatization on credit. This explains why financial lobbyists back the new buyers’ right to raise the prices they charge for basic needs, creating a united front to endorse rent extraction. The effect is to enrich the financial sector owned by the 1% in ways that indebt and privatize the economy at large – individuals, business and the government itself.”

Welcome to neo-feudalism bitches! Eat up. But, don’t you dare protest. The FBI is watching.

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