American Feudalism - Part 1

Regressive Taxation

Feudalism has a bad name these days, but it’s important to remember that all political and economic systems have their pros and cons, and systems which evolve organically based upon physical constraints and indigenous cultures tend to be more resilient than utopian ones which are established from the top down (as is the case with Marxism). There is a great deal of beauty and justice in the feudal age which is lost when we look back and consider the lot of the serfs or the internecine wars of the kingdoms. Subsistence farming and wars have been regular features of human life for 10,000 years. At least feudalism never tried to collectivize agriculture (killing tens of millions) or control the minds of it subjects.

Feudalism was an imperfect reaction to poverty and poor technology and its ugly features have as much to do with the aggressive and suspicious character of human psychology as they do with the particular arrangement itself.

We have rather fewer excuses for establishing such an ugly system, though. Aggression, selfishness, groupthink are all still aspects of our brains and therefore our culture but we have access to unimaginable technology, wealth many orders of magnitude greater than medieval citizens, and a written and accessible (although rarely learned) record of history which stretches back thousands of years. Our feudalism is not an imperfect social reaction to the harshness of our environment. It is an artificial and self-replicating ideology which exists because it empowers a very small number of Americans and doles out trinkets and favors to many more.

The situation appears even more flagrant when one considers that we have an elite which claims to value equality as a central principle. They value it so much that they have largely replaced the word ‘equality’ with ‘equity’ (which means bureaucratically managed and enforced equality, regardless of the gifts or efforts of the people involved). They value equality so much they are willing to see a fall in the quality of doctors and lawyers and pilots to achieve it. On the other hand they do not value equality enough to improve the schools or communities of struggling Americans but that is a topic for another day. They are (frankly) obsessed with privilege and marginalized groups. Surely these leaders and thinkers would sculpt the most just and liberal and egalitarian system in history… right?

American society is complicated and many-faced and so I would never call our social arrangement purely or even mostly feudal. Those discussions are pointless. Let me tell you the features of our society which ARE feudalistic and the ways in which our progressive elites create and maintain and defend those policies:

A diagram of a feudal system; the text is very small but I believe that nonwhite people, gender and sexual minorities, neurodivergent people, etc. are all described in the captions and one moves toward the top of this hierarchical scheme depending on how many of these categories one claims. Social status, job opportunities, credibility, and even legal clemency (sometimes) are the signs of favor which are doled out by our Lords and Ladies, as they see fit. Our Lords and Ladies themselves remain at the top of the pyramid and their stations are largely hereditary, as we will see. One could say that their level of privilege is ordained by God, which may be why they never cede any.

Part 1 - Bleeding the Peasants to Protect Power & Privilege

We have an income tax system which actively redistributes income from richer to poorer taxpayers. If you make around $50,000 annually (and less with kids) you effectively pay no taxes and if you make significantly less than that you are entitled to direct government subsidies. As one’s income gets lower and lower and/or a family gets bigger and bigger the range of benefits increases: health care, rent support, monthly payments for food, etc. None of this has eliminated poverty in our country but our poverty is such that almost every poor CITIZEN (illegal immigrants are different) can afford televisions and smartphones and nice clothes and restaurant visits. In other words, they’re not actually poor at all (compared to the global poor). But ‘poor’ is a partly relative concept and so we DO have poor people in the American context. We also have overworked contractors or business owners or maids or factory hands. Those people are entitled to much less in the way of government subsidy (as a whole) and their tax burden is higher but when we look at the INCOME tax system we must conclude that it is broadly progressive. So far so good, right?

No. Income taxes are one way which the government taxes citizens. Tariffs, sales taxes, capital gains and value added taxes, and more, are all ways in which the government collects taxes. Many of these means are sharply regressive (falling disproportionately heavily on poorer people). The sales tax takes a MUCH higher percentage of the incomes of the poor than that of the wealthy. That is a regressive tax. Why would our elites want to tax the poor every time poor people buy their bread or their shoes? Because they use concern for the poor to erect a vast administrative apparatus. Most of the people in that system (private OR public employees) are primarily concerned with their jobs and incomes, as most everyone is. In this context we see that the taxes exist to increase government power by taking wealth away from the poor and distributing it to clients and contractors and employees, which are dependent on the government and therefore supportive of it. Much of this spending goes to ‘causes’: sex ed for public school students, services for homeless people, studies on emissions and environmental impacts. All of this activity (trillions of dollars worth) almost never fixes and often doesn’t even ameliorate the problems to which they’re ostensibly dedicated but that is not the point. The PROGRAMS are the point: the funding, the jobs, the studies, the conferences. Doubtless most of the people involved in this activity believe that they are helping society… but when they’re not actively harming they are usually wasting a great deal of money. And they are doing it with trillions of dollars taken from the poorest citizens and consumers. Sucking the wealth from the poorest level of society to maintain the power and priorities of the lords and ladies is a feature of feudalism.

The share of wealth being doled out to nonprofits increases steadily, as you can see. This is not all government spending but it mostly is. Is our society becoming healthier and more functional as nonprofit spending increases? I’ll let you decide. The fact is that these are often organizations which generate studies and rent offices and hand out goods or services… but they PRIMARILY exist to pay the wages of their directors (who are often extremely wealthy) and to hire legions of college graduates and office workers. If homelessness vanished as an issue tomorrow the billions of dollars spent on homelessness would not be returned to the people who earned it. Rather, not having a front porch or a basement would suddenly become an urgent issue in need of study and rectification. Porchlessness = Homelessness! This is called mission creep and it is a fundemntal tendency of these programs, just as ensuring their own survival and growth before all else is a fundamental feature. By funding education and activism many non-profits are actively harming society. Most are just wasting a great deal of money. Some are doing good work. That’s all besides the point for the government-solving problems is not why taxes are collected. They are collected to spend on the projects and priorities of our landed nobility.

One particularly egregious example of this kind of parasitism is the gasoline tax in California. California spends hundreds of millions of dollars to inculcate Leftist values in public school students (if you look at the people who are the most enthusiastic about these lessons they’re all Leftists… draw your own conclusions). They spend money on clinics and outreach centers and studies. Some of this is worthy work but most of it could be better provided by the private sector (just ask an economist-I’m pretty sure she’ll agree) funded by the government. They are busy promoting a new energy philosophy which currently relies on slave labor in China and Africa for its installation and maintenance (talk about feudalism) although they have been much less enthusiastic about actually building the features of their new system (it’s easier to just tax and regulate the economy into compliance). All of this, and more, represents the priorities of the California state government. To fund their priorities, they have established one of the most regressive taxes I’ve ever seen: the fuel tax. This is so burdensome that it is (anecdotally) contributing to thousands of poor and working class people leaving the state. Due to these taxes gas is often 2-2.5x more in the state than it is anywhere else in America. As poor people (and drivers and truckers and salesmen-working class people, in other words) must spend a much higher share of their wealth on gasoline this functions as a regressive tax, which is often not spent on the things that the government claims it is (highway patrol, road repair, etc.). California is now losing residents in the aggregate each year. The legislature could, of course, reduce spending or streamline their programs by limiting themselves to direct funding (and not vast and inefficient bureaucracies) or they could take that wealth from richer citizens. The first two options would reduce their power, so they are non-starters. The third (sucking the wealth out of the poor to maintain the power and priorities of the elite) is unpopular… and who cares? The real victims of these tax policies are poor. They don’t have any power. Tax ‘em! Sucking the wealth from the poorest level of society to maintain the power and priorities of the lords and ladies is a feature of feudalism.

I haven’t even mentioned the most punishing and economically damaging form of wealth confiscation upon the poor: inflation. Inflation occurs when the money supply increases faster than the total amount of goods and services in an economy. More money is chasing relatively fewer goods and so the prices of those goods rise. As an (extreme) illustration, imagine that everyone in your town became a millionaire TODAY. The stores and possessions and cars and houses didn’t change, but everyone suddenly had millions of dollars to spend on whatever they wanted. Well, they still need groceries and fuel… but they can afford to pay more (everyone can!) and they’re competing to buy those goods from other people who can afford to pay more, and the stores know this. You would see an immediate and steep rise in prices (although even if the prices were held down this would not increase the number of products available and it would KEEP businesses supplying more, which is why price ceilings lead to shortage). In effect, a dollar in your town would be immediately worth less, because everyone would have so many more of them… but the actual wealth of the town (all the things and skills and tools and buildings) remains unchanged. Each dollar is now worth much less, for dollars can really only represent real things to buy and sell (ultimately). The stores and hotels that raised their prices would briefly see a jump in profit from the higher prices (for goods that they paid a lower price for) but the suppliers of those goods would see what was happening and THEY would raise their prices too. That immediate jump in profit for sellers would vanish, but companies would still see an increased profitability for that quarter. It’s not that they’re making more from high prices-it’s that they did for a short window as the adjustment moved down the supply line and they temporarily benefitted. That is why economically illiterate people often look at higher corporate profitability during times of high inflation and conclude that companies raising their prices are CAUSING inflation. If companies could raise their prices and have people pay the increase, they would do it. EVERY company gets the most money they can for their goods and services. That is not inflation. Inflation is an increase in the money supply relative to the total wealth of a country, causing a decline in the value of the money (i.e., higher prices). Individual companies cannot create inflation. Only the government can.

As we already saw, some people can briefly benefit from inflation, which is the case for virtually every economic shift or political event. Some people can even benefit from an earthquake or a war. Retail companies, as we’ve noted, briefly see a modest jump in profits from high inflation. People who owe a fixed sum of money benefit GREATLY from inflation. This means that people who loan money (banks) are more reluctant to do so, which slows the economy. Buying a house and starting a business becomes harder and harder. This is called a vicious cycle. There are a lot of terrible effects of inflation. Poor people are particularly hard hit by inflation. They have a smaller (usually none) of their wealth in the market so it doesn’t grow like (some of) the assets of the rich. If you own a house worth $100,000 and inflation rises by 100% you now have a house worth $200,000. It’s the same value for you in terms of purchasing power but at least you haven’t lost anything. If you have $100 (in cash or an account) and inflation rises by 100% you now have $50. Every dollar in the economy is worth less, and we see this in the form of higher prices.

Our government has run a budget deficit every year for more than 25 years now and it increases dramatically every year. We are now at the point in which a budget deficit of trillions of dollars during a non-recession year is almost normal. We are borrowing against the lives and incomes of our children, and their children. This has other negative effects (and eventually will cause certain social collapse if it’s not arrested) but it also drives inflation. The difference in taxes collected and the money spend by the government (the deficit) is created by the federal government printing more money. When subsidies are issued this causes inflation. When student loans are forgiven this causes inflation. When big contracts are paid this causes inflation. Only the federal government (through its mint and through the banking system) has the power to create money in this way. That is why state governments must be more restrained or they develop a debt so huge that a significant share of all taxes collected simply go towards servicing it.

What we are seeing in our fiscal (the federal budget) and in our monetary (the amount of money printed by the government) policy is the government indirectly taxing the poor at a higher relative rate to fund its programs and maintain its power, rather than taxing the wealthy or cutting spending. Our deficits are contributing to historically alarming rates of inflation and this is coming down hardest on the people with the least amount of money. Inflation is, effectively, the act of government sucking the wealth from the entire economy to spend on its priorities. This wealth disproportionately comes from the poor. Sucking the wealth from the poorest level of society to maintain the power and priorities of the lords and ladies is a feature of feudalism.

Part 2: Hereditary Privileges & Natal Hierarchies

Part 3: Fealty - Ensuring the Submission of the Peasants

Part 4: ‘Discipline & Punish’ - Law & Justice Under American Feudalism

Coming soon…

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