[continued from previous message]   
      
   > For a good comparison, in 17th century England, historians estimate that   
   > beer and ale could account for as much as 10-25% of a laborer’s cash   
   > outlays. This wasn’t because England was populated by inveterate drunks   
   > or fantastically irresponsible people, but because there was no point in   
   > saving the marginal unit of money in a rigid, hierarchical system in   
   > which the barriers to true social advancement were too high. DoorDash   
   > culture is the digital version of that.   
   >   
   > If this sounds a bit like feudalism, it is because that is exactly what   
   > it is. Or more precisely, it’s a hybrid of feudalism and the type of   
   > pre-Weimar detachment that arises when wages don’t match prices, the   
   > currency is being debauched, and the future is profoundly uncertain and   
   > ominous.   
   >   
   > To take the analysis a step further, think of the US economy as not just   
   > a post-middle-class economy but a post-growth economy. Let’s run a   
   > simple comparison of two different eras.   
   >   
   > The 1960s were a time of growth driven by manufacturing, industrial   
   > innovation, infrastructure, and rising productivity; GDP gains largely   
   > reflected the expansion of real-world economic activity; markets   
   > functioned without hand-holding by central banks; debt levels were   
   > manageable; high interest rates rewarded saving. Housing was affordable   
   > for working families.   
   >   
   > The 2020s are a time of growth driven primarily by financial services,   
   > asset inflation, and debt-fueled consumption, with government spending   
   > and central bank liquidity the primary engines rather than real   
   > productivity gains; central banks engage in all manner of gimmicks to   
   > prop up a system that no longer self-corrects. Asset prices are   
   > inflated; housing is unaffordable, while real wages are declining.   
   >   
   > These days, there just isn’t much growth, and whatever there is has to   
   > be squeezed with great exertion as if out of an empty toothpaste tube.   
   > And it takes a whole lot of debt to even attempt the squeeze. The US   
   > economy managed to expand at a clip of 2.4% in 2024 – hardly an   
   > impressive figure – but it did so with deficit spending reaching a   
   > staggering $1.8 trillion and by vastly understating systemic inflation.   
   >   
   > It also bears keeping in mind that the 2.4% figure is already distorted   
   > because GDP makes no distinction between organic growth and the growth   
   > created by debt-fueled consumption.   
   >   
   > This brings us back to the notion of feudalism. This is the type of   
   > system that coalesces in one form or another when an economy exits a   
   > growth phase and enters zero-sum mode. Periods of economic expansion are   
   > dynamic and tend to reshuffle the cards. Avenues appear for upward   
   > mobility, new elites are created, and savings can be deployed to   
   > productive endeavors. In the post-growth world, by contrast, the main   
   > mechanism defining economic relations becomes rent rather than production.   
   >   
   > The period from about 950 to 1250 in Europe was very economically   
   > dynamic. The heavy plow became widespread, which allowed northern   
   > Europe’s heavy soils to be brought under cultivation. The three-field   
   > system replaced the two-field system, which increased yields. The horse   
   > collar, horseshoes, and windmills all appeared or spread widely during   
   > this period. These were incremental but transformative innovations.   
   > Deforestation and reclamation advanced. Lots of forest and swamp were   
   > converted into farmland across France, Germany, England, and Poland.   
   > Europe’s population roughly doubled between the years 1000 and 1300.   
   >   
   > The great cathedral-building boom of the 12th and 13th centuries was a   
   > direct expression of this surplus. The Reconquista in Spain, German   
   > eastward expansion, and the Crusades all represented outlets for surplus   
   > population and ambition.   
   >   
   > By the late 13th century, however, the limits of this expansion were   
   > being reached. Virtually all arable land had been brought under   
   > cultivation. Marginal lands were being farmed, temporarily increasing   
   > output but with falling yields. Population growth began to outstrip food   
   > supply.   
   >   
   > It was this world of economic stagnation after a long period of   
   > expansion that produced the feudalism of the High Middle Ages.   
   > Hierarchies hardened and social structures rigidified as mobility and   
   > opportunity shrank.  The feudal pyramid “froze”: a static hierarchy of   
   > rent-seeking landed elites presided over a peasantry with declining   
   > freedom. Cities and noble courts were often fiscally overextended and   
   > clung tenaciously to existing structures because change felt dangerous.   
   >   
   > We are exactly at that point, except the feudalism of today isn’t   
   > recognizable to us. But how different are things, really? In the   
   > rearview mirror are the dynamic post-war decades. Now, meanwhile, we've   
   > settled into a system where the elites own the scarce assets while   
   > everyone else pays ever more in participation costs while securing less   
   > ownership. Perpetually rising asset values are a perfect defense against   
   > those rising participation costs – if, that is, you’re fortunate enough   
   > to be part of the asset-owning class. What’s 8% inflation and 15% higher   
   > childcare costs if your stock portfolio is up 25% and your home is now   
   > worth nearly $2 million?   
   >   
   > Asset prices are always rising because the system is designed to   
   > prioritize preserving balance-sheet stability. Markets are always too   
   > big to fail and a disorderly decline in asset prices is treated as a   
   > systemic emergency requiring intervention. But this means that losses   
   > are socialized on the downside whereas gains remain private. The result:   
   > asset prices trend upward over time almost by definition.   
   >   
   > Like everything else, protests in the US are a business   
   > Read more Like everything else, protests in the US are a business   
   > To put it bluntly, central banks and governments guarantee that asset   
   > prices stay ahead of inflation – an updated form of the old noble   
   > privileges dished out by medieval kings.   
   >   
   > We can extend the analogy. Power is tied to control finite resources,   
   > not so much land but financial claims and, maybe even more importantly,   
   > access to credit. Whereas average people who need funding pay 25% on   
   > credit card debt, too-big-to-fail banks get to post underwater bonds as   
   > collateral at full face value – not to mention a full bailout if things   
   > go awry. This becomes even more perverse when you realize that this   
   > abundant and essentially free credit provided to certain institutions is   
   > being used to bid up asset prices even more.   
   >   
   > Elites, meanwhile, protect their assets via political capture, while the   
   > rest of society pays rents rather than shares in growth. In medieval   
   > feudalism, power was decentralized: nobles had their own justice   
   > systems, militias, and taxes. Today, corporations and asset-holders   
   > function like mini-sovereigns. Hedge funds and private equity control   
   > housing and employment structures. The list goes on.   
   >   
   > However, this is not the feudalism of the Arthurian legends that can   
   > exist in a state of bucolic stasis for centuries. This version is   
   > perched precariously on a highly financialized economy that itself is   
   > kept afloat by unsustainable debt levels. It is a system that is both   
   > highly unstable and quite rigid at the same time, however paradoxical   
   > that sounds.  And Generation Z senses both sides of that equation. This   
      
   [continued in next message]   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)