Managerial Feudalism: The Real New World Order

     Capitalism is dead! Long live managerial feudalism!

     I see that you don't know what that is. Let me explain.

     A long time ago on this blog I used to use "corporate feudalism" to describe our economy because I believed the problem was that our society wasn't properly capitalist and needed a lot of regulation to make capitalism work better. As I fell out of the habit of writing regularly I also became more convinced capitalism was the problem and that our system was capitalist after all. When I started writing again I was long out of the habit. "Capitalism" has been my go to description of our economic disease. I have come to reconsider.

     Approximately a year ago now, Professor David Graeber wrote the simple and yet profound book "Bullshit Jobs." That's pretty direct for an academic type isn't it? I'm not going to give a recap or review of the book because I am far more interested in plugging the book's existence out of respect for the author and swiping Profressor Graeber's excellent scholarly term and using it to make my own point about the modern, post-capitalist society; naturally, also out of respect for the author! If you want to read a review of the book there's a really good one at Current Affairs!

     The main point is that in this book, Professor Graeber coined the phrase "managerial feudalism." Like any good writer I came to an immediate conclusion. "I remember I used to say something like this to say something similar, but this sounds better so I'm going to steal it!" Being neither a gentleman nor a scholar, I am too far beneath Professor Graeber for it to be socially acceptable for him to challenge me to a duel. So here we are.

     I have referred to our political system as a "stakeholder democracy" and I still think this term is good. Feudalism and a form of democracy among the aristocratic landlords who controlled the country held up far longer than it had any right to expect to last in the Polish-Lithuanian Commonwealth. This is actually an excellent model for our modern corporate society, where billionaires take the place of barons. Our constitutional government is the hapless King of Poland in this system, easily checked if a single baron chooses to exercise their veto.

     Managerial feudalism is its economic twin. When capitalism ate our social democracy in the 1970s, it died of indigestion in the 1980s and was replaced by managerial feudalism in the 1990s when Bill Clinton broke the government's half of the New Deal.

     You're still looking at me like you don't know what that is. I suppose I had better tell you then, hadn't I?

     Feudalism is a system in which economic power is based on property ownership and economic produce is controlled by landlords who own the property on which it occurs. This is actually very similar to capitalism, except property and the control of labor bound to that property matter more than ownership of the means of production. Our form of modern feudalism is managerial for the self-explanatory reason that the greatest economic power is often wielded not, directly, by the owners of the property but by employees who manage the labor. If billionaires take on the role of barons in this system, CEOs and the tight circle of high level executives around them are the knights who enforce their will. These managers have the most contact both with the labor force and the governing elite while their billionaire liege lords engage in a life of leisure and political skullduggery.

     Managerial feudalism works in simple, straightforward fashion based on the right of contract. In theory, rational individuals engage in binding agreements in a free market. Only their enlightened self interest and their means restrict their freedom. In actual fact, economic coercion forces unequal agreements in which the employer holds all the real rights and the employee has only their freedom to quit. Even then, if they do not give their agreed upon two to three weeks notice, they may not get their final paycheck on time. In a country where we are constantly a $400 expense away from bankruptcy or homelessness, not getting your final paycheck on time is a big deal.

     In effect, employees are peasants bound to their agreed upon employment until they are fired or voluntarily quit. Since employees rarely become billionaires, all these peasants do when they do voluntarily quit is to exchange one corporate overlord for another. This happens fairly frequently as alienation and tedium wear at the employees. The frequent turnover helps keep wages low and allows the worst employers to hire and fire people on regular schedules to maintain the ideal sized workforce at all times. This increases economic coercion in the whole system.

     It is this system of managerial feudalism that governs most of our day to day working lives. Small business owners are frequently involved in this system as franchise holders or "owner-managers" within a larger organization. Others exist outside it like the merchants, tradesmen and yeoman farmers of the Middle Ages, surviving as best they can through cooperation or pure cussedness. Most small business, remember, fails. If unable to maintain their economic independence their owners are forced back into the peasantry.

     There are three classes in this society, not counting the proto-bourgieousie that tries to survive outside it. There are landlords (billionaires and mega-millionaires, mostly board members and large shareholders but numbering some CEOS of particularly successful corporations as well), bosses (the various executives who fill the roll of corporate knights to the billionaire barons) and employees.

     I'm going to try to remember to be consistent in my use of this language going forward. Thanks for indulging me.