Review of The Coming of Neo-Feudalism: A Warning to the Global Middle Class by Joel Kotkin, Encounter Books (May 2020) 288 pages.

Writing books which make bold predictions about the future of the Western world can be risky, so I naturally approached Joel Kotkin’s The Coming of Neo-Feudalism: A Warning to the Global Middle Class with caution. Could feudalism really be making a comeback in the West, as Kotkin argues? The answer might not be a straight “yes,” but Kotkin’s overall argument that deep currents of history and economics are pulling us towards a more stratified and ideologically orthodox society is persuasive. Particularly in light of recent events, as we shall see.

Feudal societies were hierarchical, with clearly-defined roles and responsibilities for everyone. The knights fought for all, the priests prayed for all, and the peasants worked for all. Times of upheaval could force open the door to social mobility, but otherwise, people kept their station. These barriers were broken down by the Enlightenment, the Industrial Revolution, and the rise of the modern democratic state. Now, Kotkin argues, some of this old stratification is returning. I’m not sure if the society he is warning us about is really feudal, as he doesn’t seem to be saying that the state will weaken—quite the reverse, in fact. But whatever we call it, it probably won’t be a society we like.

Kotkin writes of the medieval and early modern “Estates of the Realm”—the First Estate (Clergy), Second Estate (Aristocracy), and Third Estate (commoners). In the place of the clergy, we are seeing a new first estate which Kotkin calls the Clerisy—an increasingly detached intellectual elite found across government, the media, universities, and the professions. And in the place of the aristocracy, a new second estate, the Oligarchy. Just as the Clergy buttressed the wealth and power of the Aristocracy, so too does the Clerisy support the Oligarchy. People outside the new first and second estates are losing the opportunity to advance in life. In short, Kotkin’s neo-Feudalism rests on two pillars. One is growing and increasingly entrenched wealth inequality. The other is the cultural disconnect between the elite and the general population.

From Aristocracy to Oligarchy

Whereas the medieval Aristocracy owed their wealth to land and armies, Kotkin argues the new Oligarchy owes it to natural monopolies in the tech industry. Amazon now controls 90 percent of US ebook sales and 50 percent of paper book sales, replacing thousands of bookshops. This funnels revenue into the hands of those who work in the globalised technology sector, and in the secondary industries (like law and banking) which serve it. These new tech companies can make significant revenue with little labour. Google and Facebook make 300 times the revenue per employee that traditional firms like GM and Home Depot do.

Kotkin refers several times to French economist Thomas Piketty, who argued in Capital in the Twenty-First Century (2013) that wealth concentration is inevitable when the productivity of capital increases faster than economic growth. This is what we are seeing in practice. From 1945–73, the richest one percent of the population received 4.9 percent of total income growth. Now they get more than half. The richest 400 Americans own as much as 185 million other people. The wealthy have also been able to translate their wealth into land, something which the economy can never produce more of no matter how productive it becomes. From 2007–17, the 100 biggest landholders increased their holding from 27 million acres (an area the size of Maine and New Hampshire combined) to 40.2 million acres (an area the size of New England).

Kotkin examines the case study of California, the centre of the tech boom. California’s Gini coefficient of 0.49 makes it more similar to Latin American countries like Guatemala and Honduras than other Western countries like Canada and Norway (a Gini coefficient is a measure of inequality—a society with perfect equality would have a Gini coefficient of zero, while a society where one person owned all the wealth would have a Gini coefficient of one). He finds that there are patterns to this inequality. One is geography—wealth has increased much faster in the Bay Area and Los Angeles than in the Central Valley. Another is race—per the cost-of-living estimates of the Census Bureau, 28 percent of African Americans in California live in poverty compared to 22 percent of African Americans nationally. Kotkin argues that it is now practically impossible to buy a house in San Francisco unless you work in a high-paying job in the globalised economy or inherit the money from someone who previously owned a house in San Francisco themselves.

Conservatives and libertarians have historically argued that inequality of outcome is acceptable provided there is reasonable equality of opportunity. But it is true that a significant difference in equality of outcome for one generation leads to a larger gap in equality of opportunity for the next, and this can snowball over several generations. Kotkin persuasively argues that, as the high-tech globalised economy requires fewer people to generate more wealth, it is able to find them in fewer and fewer places.

From Clergy to Clerisy

Behind the Oligarchy is the “benign authoritarianism” of the Clerisy, those in government, the media, and academia who determine society’s orthodoxies. They view themselves as “more enlightened” than the majority, and tend to hold similar progressive views on the major political issues of the day. Kotkin cites studies suggesting that the ratio of liberals to conservatives in academia is 50–1, and at top schools anywhere between 8–1 and 120–1. These views are often at odds with those of poorer and less-educated people. As with the Oligarchy, the Clerisy has become more hereditary over time. Economic inequality and the cultural divide are obviously related. The Clerisy are educated at universities, and while more and more careers require a university education, the cost of that education per average American salary tripled from 1963–2013. The top universities, in particular, are limited to both the cultural and economic elite. Harvard, Princeton, Stanford, and Yale enrol more students from the top one percent of families by income than the bottom 60 percent.

The Oligarchy and Clerisy have broadly similar political views. Socially, they’re supportive of progressive politics and social justice. On economics, Kotkin argues they favour “oligarchical socialism,” including Universal Basic Income (UBI), public healthcare, education, and the like. I’m not sure “socialism” is the right word, as they still support private enterprise and free trade, but it is certainly true that they favour redistributive welfare. Andrew Yang’s presidential campaign, with UBI as its central plank, was obviously an example of the politics favoured by the tech industry and the Clerisy.

Progressives can reasonably point out that someone struggling to make a living in New York from three casual jobs isn’t in that predicament because the boards of Fortune 500 companies broadly support #MeToo and #BlackLivesMatter. And it would obviously be an oversimplification to suggest the Oligarchy and Clerisy hold one set of opinions and everyone else holds another. On some issues, such as same-sex marriage, society has shifted more broadly. And on others, such as the economic benefits of free trade and the risks of climate change from carbon emissions, some positions are simply much better-supported by the available evidence than others. But it would be foolish to suggest that the causes of populist anger against the elites are purely economic, or that economic issues cannot also have cultural aspects—measures to mitigate climate change tend to fall hardest on the poor and those in traditional industries, as Kotkin himself points out.

The Two Middle Classes

The struggle between the two middle classes is not just a matter of wealth and power, but also of retaining the social basis for democracy itself.

QuilletteJoel Kotkin

Where to for the Third Estate?

Finally, we have the third estate, which Kotkin divides in two. Some, whom he compares to the medieval yeomanry, are still doing okay in small businesses or trades. Amazon can’t compete with your barber or hairdresser. But many are stranded in unstable employment in the precarious gig economy—they’ve gone from Proletariat to Precariat. For them, upward mobility is stalling. 90 percent of people born in the 1940s went on to earn higher incomes than their parents, as opposed to 50 percent born in the 1980s. They may be supported by UBI and public welfare, but that would mean trading solid unionised blue-collar jobs for a life in a government-provided studio apartment watching Netflix. Understandably, faith in liberal democracy is declining in the Third Estate. Kotkin quotes the radical social theorist Barrington Moore: “No bourgeois, no democracy.” Economic inequality and cultural alienation leads to the rise of left- and right-wing populism. And, as in the Middle Ages, “peasant rebellions” like the gilets jaunes protests in France.

“The current ‘progressive’ approach to ‘social justice,’ with its attachment to a powerful central government, will only strengthen the clerisy by vesting more authority in the ‘expert’ class” Kotkin concludes. “On the other hand, the devotees of market fundamentalism, refusing to acknowledge the dangers of oligarchic power and the harm being done to the middle and working classes, might further a political trajectory that threatens the viability of capitalism itself.” However, he says, we can bend the “arc of history.” The solution is expanding opportunities for the working- and middle-class rather than promoting dependence, and correcting the lack of understanding or appreciation of the principles which make Western countries successful.

Here, Kotkin’s argument is not as strong. Both the Left and the Right seem to agree that it was better when a working-class man with a high-school education could spend his working life in a steady unionised blue-collar job which paid enough to buy a house, raise a family, and retire in security. But neither can agree on the solution, and I’m not sure if Kotkin has one either. Expanding opportunities for the Third Estate is easier said than done, and I can’t see it happening outside a government program like a subsidy for jobs or small businesses. The alternative is to save the jobs by regulating the economy to make it more inefficient, making the government the 21st century equivalents of the Luddites who tried to save the cottage textile industry by smashing mechanical looms. And I’d like to think I understand the principles which make Western civilisation successful, but this knowledge has never gotten me a job. Nor, as far as I know, have the social justice movement or the expert class ever prevented me from getting one. And while living on UBI might not be ideal, it’s surely better than starving.