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The Neofeudal-Neoliberal Arrangement: Since We Own What You Need, We Own You

Tyler Durden's picture


Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Neofeudalism depends on the cultural supremacy of Neoliberalism, the belief that the social order is defined and created by markets.

I've been discussing the essence of Neofeudalism this week: those with access to the low-interest unlimited credit spigot of the Federal Reserve become more equal than others--the perfect Orwellian description of a Neofeudal arrangement in which financial leverage buys not just rentier assets but political power and control.

Neofeudalism depends on the cultural supremacy of Neoliberalism, the belief that the social order is defined and created by markets: if markets are free, participants, society and the political order are also free.

This conceptual framework is the perfect enabler for the dominance of credit-based, leveraged capital, i.e. Neofeudalism. In a "free market," those with access to nearly-free money can outbid everyone who must rely on savings from earned income to finance borrowing. In a "free market" where those with access to leverage and unlimited credit are more equal than everyone else, the ability of wage earners to acquire rentier assets such as rental housing, farmland and timberland is intrinsically limited by the financial system that makes credit and leverage scarce for the many and abundant for the few.

Those with access to the low-interest unlimited credit spigot of the Federal Reserve are free to snap up tens of thousands of houses and tens of thousands of acres of productive land--the classic rentier assets that reliably produce unearned income because people need shelter and food--along with other rentier assets such as parking lots and meters, fossil fuels in the ground, and of course the engines of credit creation, the banks.

Longtime correspondent Bart D. recently summarized how this Neofeudal arrangement enables the few to control the many:

What if financial elites enter the market with their ‘free’ Federal Reserve cash and buy up a lions' share of accommodation to keep home ownership unaffordable and force the majority to live as renters? If, in a dwindling economy, the Power Elite can’t hold power over the masses by keeping their jobs or other income streams under threat, maybe they will switch to wanting everyone to owe them rent and use the threat of homelessness as another tool to keep people under control.


It's an extension of the food stamps concept. The system is moving towards making sure most people don’t have future access to the resources that enable them to survive and create wealth outside of the system.


I think the economy is now about controlling people. We are headed for a societal structure in which opportunities to rise economically will be increasingly stifled by those at the top. The money is irrelevant now, the real game is being played is in controlling tangible and ‘essential for life’ assets: housing, water delivery, food, clothing, energy. Those at the top want power to control everyone below them, particularly to keep them from revolting.

Thank you, Bart, for describing the Neofeudal arrangement of control based on access to credit issued by central banks. Load every person with a gargantuan student loan and an equally enormous mortgage and toss on an auto loan and credit card debt, and you have the perfect serf, too busy servicing his debt to question the arrangement, much less resist it.

People in the lower orders can resist by securing their own productive assets, but this takes effort, foresight, discipline and planning--all the characteristics that are eroded in a consumerist market economy that glorifies and promotes instant-gratification consumption.

This reduction of selfhood to consumption insures the brainwashed consumer has neither the savings nor the cultural tools needed to acquire financial and social capital. Debt-based consumerism insures the lower orders will never have the means to escape the Neofeudal arrangement.

The Neofeudal arrangement of credit-capital control is effectively enforced by debt-based consumerism, where everyone who wants to be "cool" (i.e. have a self that is recognized in a Neoliberal order) has to go into debt to be cool for at least one product cycle.

When their access to credit runs out, so does their ability to have a recognizable identity in the consumerist social order.


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Fri, 06/13/2014 - 14:05 | 4854149 Headbanger
Headbanger's picture

Oh pleeze..

Cause the reality now is that central banks are now at the mercy of the serf's ability to pay them back!


Fri, 06/13/2014 - 14:09 | 4854188 sessinpo
sessinpo's picture

Headbanger   Oh pleeze..

Cause the reality now is that central banks are now at the mercy of the serf's ability to pay them back!


It's amazing you can say that after taxpayers were forced to bail them out. Even more amazing after history has shown, the banking system goes on.

Fri, 06/13/2014 - 14:14 | 4854210 kchrisc
kchrisc's picture

Maybe it's high time that people, especially the American people, see to it that the fraudulent-reserve banking system does NOT go on.

Guns and guillotines will get it done.

Fri, 06/13/2014 - 14:29 | 4854284 simplejack
simplejack's picture



how did people let banks become so powerful in the firrst place?

Fri, 06/13/2014 - 14:47 | 4854369 NidStyles
NidStyles's picture

By not understanding the difference between money and currency. 

Fri, 06/13/2014 - 15:11 | 4854467 Stuck on Zero
Stuck on Zero's picture

Yeah.  I felt sorry for the poor souls who lived in "company towns" in coal country.  Forever indebted, worked like slaves, and forced to buy at inflated prices from company stores.  Now I realize we're there: Company Town USA.


Fri, 06/13/2014 - 15:52 | 4854615 NidStyles
NidStyles's picture

That's what happens when people don't understand that money is an abstraction, and currency is merely a forgery of that abstraction. 


Just look up "Say's Law", it's all you need to understand. :-)

Fri, 06/13/2014 - 17:03 | 4854859 Harbanger
Harbanger's picture

"how did people let banks become so powerful in the firrst place?"

100 years ago Progressives (Wilson) had the bright idea that they could finance the growth of a big Gov with money from private bankers, The Fed.  So here we are today, fleeced and broke but with a big Gov.

Fri, 06/13/2014 - 18:25 | 4855105 Flakmeister
Flakmeister's picture

I suggest you re-read your history...

Fri, 06/13/2014 - 16:16 | 4854706 sessinpo
sessinpo's picture

kchrisc    Maybe it's high time that people, especially the American people, see to it that the fraudulent-reserve banking system does NOT go on.

Guns and guillotines will get it done.


That is an emotional populist response. Guns and guillotines have been used before and here wer are.

The banking system goes on. It just changes the hands and names and so do the oligarchs. But they are still there.

Let me put it to you this way. Let's say YOU were put in charge to create a system that you thought perfect and fair for all. Evventually you pass on and the caretakers of that said system eventually corrupt it through the generations. The few that are wealthier will bribe and lobby for more favorable circumstances for them. Sound familiar?

One can simply look at how the US Constitution has been corrupted or ignored. But an unbiased hostorian would se it goes back thousands of years. Rinse repeat.

A reset is just that. It resets so things start over again to repeat. It doesn't change the fundamental issue. That is the problem yet to bbe solved.

Fri, 06/13/2014 - 17:01 | 4854850 creonnoir
creonnoir's picture

It can't be 'solved' sessinpo.  It is the struggle for existence inherent to all life.

Fri, 06/13/2014 - 18:24 | 4855103 NeedtoSecede
NeedtoSecede's picture

So just because kchris's solution will not solve all humanity's problems for all time, at least it helps get us to the reset and a new chance to start fresh a couple generations earlier than if we let this shit continue enslave us for decades. It is obvious we are screwed, so what is the point of waiting?

I am with kchris, roll the guillotines! The sooner the better...

Fri, 06/13/2014 - 21:21 | 4855545 mvsjcl
mvsjcl's picture

Guns and guillotines [pointed at and sharpened for the right heads] will get it done. It's crucial that the puppetmasters, and not the puppets, meet bullet and blade.

Fri, 06/13/2014 - 16:41 | 4854794 stoneworker
stoneworker's picture

"Oh pleeze..

Cause the reality now is that central banks are now at the mercy of the serf's ability to pay them back!"


Up this because I think it is pure sarcasm.

Fri, 06/13/2014 - 14:04 | 4854162 CrashisOptimistic
CrashisOptimistic's picture


Since We Own What You Need, We Own You



This is printed on all GAZPROM and Rosneft stationary.

Fri, 06/13/2014 - 14:08 | 4854163 LawsofPhysics
LawsofPhysics's picture

Why growing your own food, collecting rainwater, or having solar panels on your home is suddenly "bad"...

Look into it yourself.  Many cities have tried to ban collecting rainwater or growing gardens.  Moreover, we have solar on several buildings.  The state now wants us to pay a new "fee" for putting FREE electricity back into the grid. 

Let me be clear;  roll the mtherfucking guillotines, nothing  changes otherwise.

Fri, 06/13/2014 - 14:10 | 4854196 JRobby
JRobby's picture

Illegal to collect rain water in Colorado.

I'm sure elsewhere as well. Water rights law is a form of insanity. Be upstream from other users is a good rule of thumb.

Fri, 06/13/2014 - 14:59 | 4854406 TMLutas
TMLutas's picture

It seems to be a west of the Mississippi thing so far as I know. Anybody restricting that east of the Mississippi besides making sure that there aren't stagnant pools for mosquitos to breed in? 

Fri, 06/13/2014 - 17:11 | 4854895 Bemused Observer
Bemused Observer's picture

People should tell the state to go fuck itself...if you don't want the free electricity, don't take it.
What happens to it then? I suppose it could just be discharged somehow...I don't know how that works, but it would be neat to have something on your roof going off like a Tesla coil...

Fri, 06/13/2014 - 14:05 | 4854169 Nevsky
Nevsky's picture

Nothing is new 'neo' under the sun. Some "obscure book" already discussed the dynamic of debt.

Fri, 06/13/2014 - 14:07 | 4854177 insanelysane
insanelysane's picture

In my town they approved a bunch of new house lots in a developed area with no public water even though the residents didn't want it.  The private wells no longer have enough water so the residents went to the town for help because in their view the town screwed up by allowing the new lots.  Town said no problem but it'll cost each homeowner $25k minimum and if you don't have the cash, the town will extend you a 20 year loan at 5%.  Either that or they'll condemn your property.

Fri, 06/13/2014 - 14:38 | 4854318 p00k1e
p00k1e's picture

Too bad you can't burn City Hall down.

Fri, 06/13/2014 - 14:49 | 4854377 Hongcha
Hongcha's picture

Yes, you can; and until people start doing so, they will have everything taken away from them.

Every. Thing.

Fri, 06/13/2014 - 14:10 | 4854195 AnAnonymous
AnAnonymous's picture

So many names to avoid naming it as it is named: 'americanism'...

Fri, 06/13/2014 - 14:24 | 4854263 pods
pods's picture

Terrible ain't it?

BTW, do you know who invented paper currency?


Fri, 06/13/2014 - 17:00 | 4854845 AnAnonymous
AnAnonymous's picture

The mark of geniuses is to take something old and bring it up to an unthought of dimension.

'Americans' did not invent everything, far from it.

Did they invent the business of farming the poor, extorting the weak?

Did they bring that business to a new dimension undreamed of, that no tyrant in history ever fancied over getting close in their wildest ravings?

That is the mark of geniuses.

Fri, 06/13/2014 - 14:14 | 4854213 U4 eee aaa
U4 eee aaa's picture

Are you guys under some sort of DDOS attack today or is it just me? I can't seem to load pages with the usual ZH quickness. Sometimes it takes five or six reloads to get the page to show up :(


My other sites are working though

Fri, 06/13/2014 - 14:42 | 4854350 Atomizer
Fri, 06/13/2014 - 15:05 | 4854435 U4 eee aaa
U4 eee aaa's picture

Already have that and have it clean my box on startup. I also have the button on my browser. The thing is, it wasn't affecting other sites I was browsing so that is why I asked. I reenabled noscript for the site and this page loaded like the old ZH so maybe it was a problem with one of the ads

Fri, 06/13/2014 - 15:10 | 4854466 Atomizer
Atomizer's picture


Fri, 06/13/2014 - 17:02 | 4854857 Bemused Observer
Bemused Observer's picture

noscript stopped the hinky page freezing shit for me, also only on this is definitely something with one of the ads...something trying to 'load' but never gets there...

Fri, 06/13/2014 - 17:17 | 4854886 Atomizer
Atomizer's picture

I don't see ads on zerohedge. :P

Glad to hear your back up and running smoothly.

Fri, 06/13/2014 - 18:09 | 4855070 Bemused Observer
Bemused Observer's picture

It was making me nuts...but this noscript is great so's like it tells the perpetually-loading things to "SHADDUP!" more "busy script" pop-ups.
And it can be disabled for specific things you do want.

Fri, 06/13/2014 - 14:33 | 4854298 p00k1e
p00k1e's picture

Not bad.

The Chinese, for example, are buying up land in Detroit, MI for one of two reasons.

The Chinese feel sorry for the poor, uneducated black population and are here to give them more aid.


The Chinese are after the water resources. 

Fri, 06/13/2014 - 15:00 | 4854415 TMLutas
TMLutas's picture

It's cheaper to desalinate water from the Pacific than to ship Michigan water to China. 

Fri, 06/13/2014 - 17:03 | 4854860 AnAnonymous
AnAnonymous's picture

One of two reasons?

They simply follow the 'american' rules of the game.

If they buy too much of land from 'american' indoeuropeans, they are threatened with repossession.

Now if they buy from 'american' negroes, who cares? It will be a welcome move on the contrary.

The 'american' rules of the game.

The Chinese must play by the 'american' rules of the 'american' game.

Fri, 06/13/2014 - 14:39 | 4854332 TheFreeLance
TheFreeLance's picture

Chuck's latent anti-capital Silvio Gesell obessessions really shine here. The US currently is NOT operating in a free market, neoliberal environment. Just check your broadband options -- and bill. What are all those taxes and cross-subsidies doing there? And especially -- banking. Banking is HEAVILY regulated to produce the outcomes bankers pay for -- and to protect them from the forces of competition. Hell, bankers cannot even go to jail for fraud -- not so long as they fundamentally serve State interest whilst committing that fraud. That is fascism.

But whether you call is fascism or neofeudalism that end point is the same -- no objective rule of law, the elites who serve the status quo power win, and the only path to change is not via process, but via sudden, extra-legal means.

Fri, 06/13/2014 - 14:52 | 4854343 Frilton Miedman
Frilton Miedman's picture




I find it interesting that some who are so incensed over the obvious advent of Neo-Feudalism, serfdom and Plutocracy will also agree with said group's mass propaganda that policy to counter that imbalance of power is "collectivist", "Socialist" or "communist".

The Bush admin proved, without question, that the CIA & NSA has the capacity to work for the benefit of private interests and has largely been privatized anyway, Booz Allen, Blackwater, etc. (Valeria Plame tried to speak out about disinformation, paid dearly)

We also know these dark organizations have utilized mass propaganda in other countries to attain political & military goals throughout history.

Why is it so hard to put 2 and 2 together?

Is it not possible that behind the scenes, unelected Plutocrats have used their monied influence to invoke mass propaganda to sway the public by flooding us with terms like "socialism" & "collectivism" to maintain their control?

Just thinking aloud here, hopefully my drinking water has no polonium in it.





Fri, 06/13/2014 - 15:06 | 4854440 TMLutas
TMLutas's picture

There are non-collectivit, non-socialist, and non-communist methods to correct the power imbalance. I'm busy trying to implement a few of them. They're perfectly legal, but strangely we're lacking the prerequisite pieces of information. 

How many governments are there in the US? How many of them claim jurisdiction where you personally live, work, and frequently travel (commute)? What do they do? There's nothing particularly ideologically objectionable about asking these questions but if you were to answer them, you'd empower the citizenry to oversee governments much more effectively. 

Fri, 06/13/2014 - 15:39 | 4854583 Frilton Miedman
Frilton Miedman's picture



Back in 2008-2009, mere mention of taxing, penalizing or clawbacks of TBTF's was considered "collectivist" "an assualt on capitalism" or they were opposed to Capitalist "reward success" concept, viewers of certain media sources were shamed with these terms, being informed they were "socialists" for this thinking.

Same with health reform, while we acknowledge the health system is a monopoly, we also call intervention an act of "socialism".

Then, the OWS movement was labelled a bunch of whiny, lazy Socialists.

I'm not offering a specific course, only an observation to those who readily jump at perceived "socialists".

It strikes me, the probability, that anything we try to do to counter NeoFeudalism is going to be publicly labeled "Socialist" to shame us away from it.

Again, just thinking aloud here.



Fri, 06/13/2014 - 16:14 | 4854697 Flakmeister
Flakmeister's picture

Do you always enjoy shooting fish in barrels?

Fri, 06/13/2014 - 17:29 | 4854957 Frilton Miedman
Frilton Miedman's picture



Either two others didn't get the "pointing out the obvious" humor, or I didn't get that it meant something else.


I +'d ya, I think I got the joke.

Fri, 06/13/2014 - 20:00 | 4855357 Flakmeister
Flakmeister's picture

What passes for obvious is not always obvious...

It goes a long way to explaining this place...

Fri, 06/13/2014 - 14:43 | 4854352 Flakmeister
Flakmeister's picture

It's just like A Distant Mirror but with Iphones..... 

Fri, 06/13/2014 - 14:57 | 4854402 Atomizer
Atomizer's picture

Neoliberalism, Go fuck yourself!

Public Image Ltd - Fishing

Fri, 06/13/2014 - 15:03 | 4854427 Frilton Miedman
Frilton Miedman's picture



Wow, blast from the past.

Surprising how few know steve Vai played with them.


Fri, 06/13/2014 - 18:34 | 4855142 Atomizer
Atomizer's picture

Flowers of Romance and Metalbox taught me to see beyond limited thinking. I attended the Album & Happy concert as a young pup. Winks.  Too many good songs. Two come to mind.

  1. Albatross
  2. Poptones
Fri, 06/13/2014 - 18:53 | 4854570 notadouche
notadouche's picture

In Switzerland the banks own all of the housing.  The "homeowners" at least of the regular class pay interest only and never the principal because the property taxes are so high no one can really afford to own.  Thus they pay the "interest only" what is tantamount to rent as the banks hold the notes in perpetuity.  

I know nothing about other European countries but assume they would be similar.  Interest only housing has been tried in the US but it hasn't gone over so well.  The Swiss seem to be adjusted to this and believe they own their home but when they explain how it works it is clear they will never truly own their home, just the right to pay interest for ever and pass it on to their heirs or sell that right to someone else.  

Sat, 06/14/2014 - 04:04 | 4856083 UselessEater
UselessEater's picture

Aparently an increasing trend in Australia (1/3 new mortgages) but I can't find the link I had at the moment.

Insane - the same people apparently are upgrading their Master Chef kitchens as an investment but not paying down debt! Seems they believe home prices rising forever is both possible and a good thing.

Fri, 06/13/2014 - 15:58 | 4854610 Bugsquasher
Fri, 06/13/2014 - 16:03 | 4854643 Jack Burton
Jack Burton's picture

Max Keiser often points out that there is no free in free markets when the structure of interest rate apartheid exists. This means that interest rates are rigged by the financial elites using their control over government and the central banks to enforce "interest rate apartheid". The favored elites of bankers and big trading firms can access huge sums of zero interest rate loans to invest for speculation or market manipulation, by this means they earn billions in speculative profits. But being on the favored side of apartheid, this is considered business as usual and a part of the neo-liberal free market system. On the other side of the "aprtheid wall" is the rest of us. With no access to unlimited zero interest rate loans, we can not compete in the market place to buy assets or manipulate markets. Housing since 2008 is a prefect example of the big players using zirp money, while average folks are seeking 30 year mortgages at prevailing rates and forced to compete with prices set by zirp billions bidding on the same housing assets.

This work all across the neo-liberal manipulated marketes. Those favored with zero interest rates for nearly unlimited capital leverage, these favored can be rent seekers with special profit potential. The lower you go on the wrong apartheid side, the higher the interest rates for loans and the nharder the loans are to get, until you reach bottom, where the "Pay Day Lending Sharks Swim". When you sink that low, you will be stripped of most of your little asset base.

Bottom line, Workers and Savers are fucked. Big bankers and speculators are favored by a corrupt crony capitalist financial system in which central banks act a gift givers to the favored elites. In this way, more and more wealth is transfered to a tiny elite. In fact, the most fucked over sector of the economy are the honest family people who work for wages and seek to save money and work toward home ownership. The manipulation is all aimed at fucking them.

Add to this the insane government money printing and over spending. The USG spends 2 dollars for every dollar of tax revenues. Using the surplus of printed billions to fund wars, empires and corrupt invasions of unfavored nations.

Fri, 06/13/2014 - 17:46 | 4855012 TeethVillage88s
TeethVillage88s's picture

Moral Hazard Provided by the US Central Bank to the US Congress who no longer has to perform constitutional duty of Budget Powers OR War Powers.

ALSO: We used to have Utility Regulations that were stricter. I have posted before.

In apartheid or Mad Max World of the USA
- like the shortage of Water in California and other states,
- Like the high price of Gasoline & Diesel for 10 years now
- Like high price of Meat
- Like high price of Coffee
- Like the high Price of feed, corn, wheat, soy
- Like the Great Potato Famine

Governments can regulate & Supplement commodities and some years provide charity to starving people like Herbert Hoover did to Russia

National Stock Piles exist now for Defense
National Security is a very familiar phrase in Defense
Utility Regulations are very old
Privatization & turning everything over to Corporations for 2-3 Times the Price is new Vulture Capitalism (PUHCA)

The history of competition law reaches back to the Roman Empire. The business practices of market traders, guilds and governments have always been subject to scrutiny, and sometimes severe sanctions. Since the 20th century, competition law has become global. The two largest and most influential systems of competition regulation are United States antitrust law and European Union competition law. National and regional competition authorities across the world have formed international support and enforcement networks.

***On August 8, 2005, the Energy Policy Act of 2005 passed both houses of Congress and was signed into law, repealing PUHCA.***

**PUHCA was one of a number of trust-busting and securities regulation initiatives that were enacted in response to the government investigations of the Wall Street Crash of 1929 and ensuing Great Depression, which included the collapse of Samuel Insull's public utility holding company empire. By 1932, the eight largest utility holding companies controlled 73 percent of the investor-owned electric industry.[2] Their complex, highly leveraged, corporate structures were very difficult for individual states to regulate.**

Federal Reserve of the USA is a Monopoly of Power, Status, Trust, and Insider Conflicts of Interest**

**And we trust Investors with our Commodity Prices for what reason, what Logic?**

Fri, 06/13/2014 - 18:02 | 4855043 Steve in Greensboro
Steve in Greensboro's picture

More gibberish from Chuck-you.

Nobody is required to go into debt. Nobody except the low-IQ Dem voter (but I repeat myself) goes into debt to consume to impress other people. If they do, that is their choice and none of my business.

As a wise man said, "Life is an IQ test." Those with low IQs 1) voluntarily indenture themselves into debt slavery, 2) vote Dem and 3) give any credence to what Chuck-you writes.

Fri, 06/13/2014 - 19:12 | 4855239 Freewheelin Franklin
Freewheelin Franklin's picture

Neofeudalism depends on feudal type land grants. You think that's am allodial title you have? You have to go all the way back to Charlemagne to find one of those. 

Fri, 06/13/2014 - 21:24 | 4855546 cape_royds
cape_royds's picture

There is nothing "feudal" about this.

Feudalism is all about enduring personal bonds of absolute mutual obligation--these are usually unequal bonds, but nevertheless they are mutual, absolute and enduring. Even those who benefit from the inequality of the relationship are nevertheless tightly bound to the relationship. It doesn't matter if they're on top--they are still not free to do or think or go as they please. A feudal society is very resilient but also quite inefficient.

Liberal capitalism has little to do with absolute mutual obligation. Under liberal capitalism, all bonds between people are changeable, not absolute; time-limited, not enduring; specifically contracted, not open-ended. The modern bourgeois detests the notion of higher duty--his only duty is to himself. He consents to a bond only for very limited and specific purposes, and he seeks to keep all his relations on an impersonal and flexible basis. A liberal capitalist society is very good at maximizing outcomes, but it lacks resilience in the face of adversity.

Can it be surprising, then, that in a time of triumphant liberal capitalism, that things such as families and nations crumble before our eyes? Of course they crumble. The institutions of the family, and of the nation, are based on lifelong unlimited vows of loyalty that bind people together. The bourgeoisie detest such duties. They always seek the escape clause at the least hint of trouble. A society ruled by bourgeois in the end cannot have families and cannot have nations.

Sat, 06/14/2014 - 00:56 | 4855936 ken
ken's picture



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