Imagine waking up in the middle of England in the year of 1086. You’d be surrounded by feudalism, where there was a two-tiered society of barons and serfs. The barons enjoyed outsized wealth ownership in return for fealty to the King. If the King ever called on them — perhaps to do some “dirty work” — then they would oblige.
Feudalism is when economic freedom (capitalism) is diminished or disallowed.
Because a type of “census” was taken called the Domesday Book, it is known that it was a time when just 12 barons controlled 25% of all of England:
Just 190 people owned 54% of all of England, the king and family owned another 17%, and the bishops and abbots owned another 26%. You may have noticed that 97% of all of the land of England is already spoken for by these 3 numbers — leaving just 3% ownership for the masses.
The masses were people who “owned nothing.”
Under feudalism, ownership is everything. Wages are nothing when compared to the capital gains that you could receive by selling even a small parcel of land. The ratio of all held wealth to all earned income is an indicator of feudalism, and you can see that the USA has been losing economic freedom and returning to feudalism lately:
The ratio of held wealth to earned income is the highest that it has ever been — wealth being 600% of the earned income. Another indicator of feudalism is interest rates. The primary driver of interest rates is economic optimism, where venture capitalists believe that life can be made better off with products and services.
Once the new products and services make life better off, people will be willing to pay top-dollar for them. Knowing this beforehand, investors clamor for loans and bid up the rate of interest on saved money.
But without economic optimism, interest rates tank — because there is nobody there to draw out of the savings and therefore to bid up the interest rates. While a lack of savings could theoretically bid up interest rates, it’d have to be combined with economic optimism — which is absurd.
For this reason, it is the demand for loans, not the supply of savings, driving the rates.
But under feudalism, income is low and future prospects are nil. If you get a bright idea about improving people’s lives by attempting to sell them products or services, then the baron to whom you owe personal labor will take your idea and quash it. After all, he can’t afford you going off and earning a million dollars and leaving his estate.
A dropping “natural rate of interest” (referred to as “R-star”) also tracks the loss of economic freedom then, just like a rising wealth:income ratio does:
As you can see, current prospects regarding economic freedom are so dire that long-term investors won’t even bid-up the interest rate beyond 1% — as if they don’t believe that human life can be made more than 1% better off in the usual time to pay back loans, which is a requirement for them to have a positive return-on-investment.
But back in the 1980s, even longer-term investors were willing to borrow at over 3.5%, because they believed that returns on investment could surpass that, allowing them to pay back the interest and keep the remainder as profit.
When you drift away from free market capitalism by as much as the USA has, then the top 1% has too much of a stake in outcomes, and begins to control government (plutocracy: government by the wealthy). People like Bill Gates and George Soros and Klaus Schwab then have “too much of a say” over public policy.
The solution is to restore the economic freedom of the past, when hardly any government regulation existed, and the government was not the primary consumer of the economy. This means rejecting any calls for anything resembling a Great Reset: for any national policies against Climate Change, for any move toward CBDC’s, etc.
It also means that no broad “Pandemic Preparedness” initiatives ought to be engaged in, and that no government contracts ought to take taxpayer dollars and give it to industrial or medical giants. No government surveillance and censorship should be engaged in, even if carried out on behalf of government by Big Tech digital “barons.”
If trends continue, we’ll experience a new Dark Age.
Reference
[BBC report on the Domesday Book of 1086] — https://www.bbc.co.uk/history/british/normans/doomsday_01.shtml
[World Inequality Database on USA] — https://wid.world/country/usa/
[New York Fed report on the natural rate of interest (R-star)] — https://www.newyorkfed.org/research/policy/rstar