Feudalism is a type of economic system where only a few own property, and property-less serfs work the land for mere subsistence.
One metric for estimating feudalism is the change in the ratio of capital gains to total wages paid out. In capitalism, total wages paid out dwarfs the capital gains made from the sale of appreciated assets.
Under feudalism, minority ownership of all assets means that sales of such assets are immensely profitable, and total wages paid out are paltry.
Another metric for estimating feudalism is the share of net worth held by the top echelon of society. A stark example is the share of wealth held by the top-5% in the UK way back in 1880: 46%.
When political leaders work together with connected cronies, they find unique ways to concentrate wealth at the top, ways which involve rights violations. The right to own or operate property was most recently curtailed during the COVID crisis of 2020, achieving its intended result:
Wealth Concentration
As you can tell from the graph, the steepest-ever rise in wealth concentration occurred during COVID. It’s the kind of rise which cannot happen naturally, and only ever occurs under heavy rights violations.
Mega-firms working alongside government officials were able to clear the field of competitors in many areas, creating a de facto monopoly. Government contracts were made in the background, resulting in enormous graft.
The chart shows the end result of wide-scale rights violations: the rich and powerful amass more riches and power. The top 1% are a group of people who are more productive than average.
As a group, they are almost 20 times more productive than average. In order to be almost 20 times more productive than average — but yet to go ahead and be able to own over 32% to 46% of all stuff — they have to engage in schemes which funnel money away from others.
They couldn’t amass such a concentration by production and trade to a mutual benefit (under a system of rights-protection), because they are not 32-or-more times as productive of value than is the average Joe. If they really could make that much more stuff to trade, they’d have that concentration when markets were more free.
The fact that they only have almost 20% of wealth when markets are free indicates that they are almost 20 times as productive as average.
Even though they make up just 1% of us, the produce up to 20% of the finished products, and would therefore have 20 times the average percent share of income and/or wealth.
Adam Smith even warned about them in 1776 when he wrote Wealth of Nations:
To widen the market and to narrow the competition, is always the interest of the dealers…The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.
As Adam Smith knew 246 years ago, the purpose of this “order of men” is to deceive and oppress, as has been exemplified by the last few years. The current wealth concentrations are unattainable in free markets, but they are attainable under systems of protectionistic feudalism, where the masses are driven into back-breaking poverty and toil.
Reference
SIMON KUZNETS. ECONOMIC GROWTH AND INCOME INEQUALITY* The American Economic Review. VOLUME XLV MARCH, 1955 NUMBER ONE. http://gabriel-zucman.eu/files/teaching/Kuznets55.pdf
Adam Smith quotes online: https://www.adamsmith.org/adam-smith-quotes