Samuel Cohn: Global Social Trends

In the modern age, we talk about our world and our history as if it was capitalism, capitalism, capitalism. Capitalism has produced more economic growth than has any other economic system in history. This growth started to occur at the end of the Middle Ages. This is the very period when capitalism became the dominant mode of production first in Europe, then in the Global North as a whole. We tend to attribute all of the growth of the Modern Era to capitalism.

Before capitalism, there was feudalism. According to most people, feudalism is something that existed in the Middle Ages. It is ancient and irrelevant. It is all about knights in shining armor. It disappeared with the Renaissance.

In this feudalism-doesn’t-exist world, if there were to be an alternative to capitalism, it would be socialism. Mention socialism and you start hearing a lot of nonsense either about Josef Stalin, or happy egalitarian governments with no social problems. True socialism in the Marxist sense (a complete absence of private property associated with production) has never existed. People throw around the label to discuss cases that are not even remotely socialist at all.

But feudalism DOES exist. Feudalism never went away. You get feudalism in areas that capitalism has not penetrated yet. You get feudalism co-existing with capitalism as a darker partner of capitalism. Sometimes capitalism needs a “feudal backyard” to get certain kinds of jobs done that would be hard to do in a capitalist system per se. You also get feudalism when capitalism breaks down and it becomes impossible to protect free market institutions. But whether feudalism is the result of capitalism not having arrived in a place, capitalism choosing not to get involved in a place or capitalism falling apart in a place, you end up with the same result: A feudal economy with feudal rules.

The key characteristic of a capitalist economy is a FREE LABOR MARKET.

No one is forced to do any job they don’t want to do. People apply to employers to get a job. If they don’t like the work or the pay, they may quit their job at any time. When employees resign, managers may make snarky remarks like “Don’t let the door hit you in the *** when you leave.” But workers ARE free to resign.

Feudalism is based on forced labor.

Anyone who lives under a noble is obligated to provide that noble with:

a) Economic Service

b) Military Service

These obligations are not optional. If you have to spend two months a year working on your noble’s fields, then that is what you have to do. If you have to fight in the noble’s army whenever he declares war, then that is what you have to do.

If you do not provide these services, the noble’s henchmen will hunt you down and enforce the law. You will be located and pressed into service. If you continue to be stubborn, you are looking at whipping, imprisonment or death.

Capitalism is, in principle, more efficient because there is a good fit between workers and their jobs. People do what they love, or at least don’t do what they hate. Furthermore, since the capitalist has to attract the worker with wages, there is an incentive for capitalists to become more productive, so they can generate a wage pool big enough to attract the finest workers.

Captive workers are desultory shirkers. Feudal employers do not improve productivity with technology. They have the easier option of just pushing their workers harder. The result is technological stagnation.

So, if capitalism is so wonderfully efficient, why does feudalism continue to exist in the world?

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Feudalism persists when combat is an integral part of the production process.

Feudalism is intrinsic to a warlord economy, where business survival means fighting against armed rivals.

Warlord economies are far more common than people realize.

We are used to the Marxist platitude that “capitalism equals private ownership and control of the means of production.”  How capitalist is the world really if the person with the most guns can take away any means of production they want?

Physical security requires a nation-state – a government that has a monopoly on coercive force within its territory and is capable of enforcing law and order.

Go back in time early enough – and there are no nation-states.

Go back in time to the periods after empires fell – and there are no nation-states.

Go out to the frontier of any nation that has wilderness – and you will find places the nation-state does not reach.

Go to the crime zones or go to the war zones. Nation-states exist only on paper.

A whole lot of human history has taken place in areas that have no nation-states.

A whole lot of the world both historically and today consisted of territory where the control of nation states is weak.

We are talking Medieval Europe.

We are talking Warring States China or Samurai Warfare Japan.

We are talking America’s very own Wild West.

We are talking about the deserts of Northern Mexico historically, when Mexico City was a full month’s travel away.

We are talking about the jungle frontiers of Central America or of the Amazon or the Germanic forests beyond the edge of the Roman empire.

We are talking about the Eastern Congo only tenuously under the control of the government in Kinshasa.

We are talking about the no-man’s-land between Syria and Iraq, the no-man’s-land between Thailand, Laos, Myanmar and China, and the no-man’s-land between the micro-states of the Balkans.

These lands are smugglers’ paradises.

These lands are raiders’ paradises.

The law is whoever is here with guns now.

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In these violent lands, your workers have to be your soldiers. When brigands rule the highways, and pirates rule the seas, merchants cannot safely travel unaccompanied with their merchandise. Workshops with treasures, and storehouses with grain are targets ripe for the picking. The only way you protect what you have is by having workers who are ready to fight off the overly acquisitive and armed.

Once your workers are already your security guards, there is no need for their role to be purely defensive. If there are lands to be seized, convoys to be raided and cities to be charged tribute, your experienced fighters can handle those campaigns too.

When military service is necessary, it is rarely voluntarily. When your soldiers are also your production workers, the same discipline that has them building fortifications around your town is the same discipline that has them bringing in the harvest for their military leader.

When losers on the battlefield are expected to pay tribute, they may pay their tribute with forced economic production. They may also pay tribute by providing soldiers for the next campaign.

One can see how feudalism would have thrived before nation-states were developed.

One can see how feudalism would have thrived in the interstices between nation-states or where control by nation-states is contested.

One can see how failing nation-states would lead to a revival of feudalism.

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But what about the complementarity between capitalism and feudalism? What about cases where capitalists or nation-states decide to have areas of no-law or different-law? When might the rights of workers or the right to a free market be intentionally abridged?

The capitalist world economy still needs some products that are most efficiently provided by forced labor. Some products must be produced at the absolutely lowest cost possible. Forced labor and serfdom provide tremendous savings on wages.

Slavery is generally used when the capitalist world needs cheap food or cheap raw material. Every reader of this website knows the history of the American South. The British textile mills needed the cheapest possible cotton. The New England textile mills needed cotton at the same cheap price. In both England and New England, there were abolitionists who deplored slavery. However, the same cities that had abolitionists also had mill owners who bought cotton from slave plantations. Without Lancashire and Lowell buying cotton, there would have been no market for the output of South Carolina plantations. Slavery would have died from being economically unsustainable. Massachusetts and London may have been free; however they provided the economic sustenance for the slavery of Alabama and Mississippi.

The American South was not the only region where Britain and the Northern States financed forced labor. The other two major world centers of cotton cultivation besides the American South were Egypt and India. Egypt and India preferred serfdom to slavery – although they had outright slavery as well.  Egyptian and Indian cotton were grown by peasants who were bound to the land. Some were forced to deliver fixed quotients of cotton to landlords. Others nominally grew cotton on their own land. But they were taxed in cotton – with their governments selling that cotton to the British and the Americans. So, in essence, the cotton tax led to forced cotton cultivation.

Parallel circumstances led to the rise of serfdom in Russia and Eastern Europe in general. Western Europe was industrializing in the 1500s-1700s, typically with skilled artisanal craft industries such as silk making, armament manufacture or clock making. To feed the new industrial labor force, grain was imported from Eastern Europe. Because the French and the Dutch would only buy at the lowest rate, the Prussians, Poles, Russians, Ukrainians and Silesians were engaged in bitter competition to see who could grow the least expensive grain. Countries with serfdom had lower wheat, barley and rye prices than did countries with independent farmers. In order to break into the lucrative Western European export market, Poland, Prussia, Russia and many other Eastern European countries imposed serfdom on their own populations. These unfree labor markets lasted until the nineteenth century.

Sugar was another slavery-based industry The centers of sugar cultivation were at first Indonesia, then Brazil, then the Caribbean islands. Slavery per se was not used in Java, although there were obligatory taxes that could generally only be paid by providing the Dutch Indies Company with sugar. The Javanese were however subjected to being legally banned from all commerce and all manufacture – precisely to force them to grow sugar in their home fields. Brazilian sugar, and Bahamian, Jamaican and Cuban sugar, were all grown using African slaves under systems similar to those used in the American South. The Haiti Rebellion, one of the most dramatic slave uprisings in Modern History, was carried out on Haitian sugar plantations.

Currently, the lowest tier of the world fishing industry is characterized by extensive slave labor. The fish that is sold in American supermarkets generally comes from top quality fishing boats or middle-of-the-pack fishing boats. These ships generally have free labor forces and pay wages to their sailors and fishers.

The bottom tier is for junk fish that most American consumers would not touch. You see this in Asian markets in large bags of funny-looking thin frozen fish that sell for very low prices. Junk fish also goes into fish meal and other products such as cat food that can use ground fish of indeterminate origin.  Much of this labor force is de facto slave labor. Labor recruiters get a poor peasant drunk, or offer him a lucrative contract for a week’s work. Once the peasant is on the boat, he will never be able to leave. The boat never docks in harbor. It offloads its catch to other boats mid-sea. If the peasant raises a ruckus or gets too sick to work, the crew simply throw the troublemaker overboard and get a fresh replacement.

There are activists who claim that even the supply of more prestigious fish such as tuna comes occasionally from dubious independent subcontractors who run fleets of small slave boats and then sell to the American factory ships.

Marginal manufacturing and services that use forced labor also existed in Victorian Britain, the supposed archetypical case of free capitalist labor markets. Until the 1860’s, many employment contracts were regulated by the Master-Servant Act. Under the Master-Servant act, workers could sign contracts of indenture that would force them to work for the same employer for a fixed period of time. Seven-year terms were quite common. Any worker who left his employer before the end of his contract could be jailed. Many workers were in fact jailed. Indentured servants in Victorian Britain looked exactly like servants in Medieval Britain, except that the length of service was somewhat shorter in the nineteenth century.

Sex trafficking is an obvious example of forced labor in services. Not all prostitution is sex trafficking. 

Sex trafficking, however, does exist.

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Sometimes violence forces otherwise free-market businessmen to turn to feudalism in self-defense.

Sometimes capitalists violently impose forced labor on others as a way of getting the cheapest possible inputs.

Feudalism is “the opposite of capitalism” and “integral to capitalism” at the same time.

But remember that feudalism is not the stuff of knights in shining armor, and is not the stuff of samurai movies.

Both free labor and forced labor are integral to our economic history and are integral to our economy in the present day.

The opposite of capitalism is not some anti-business dictator taking voices of freedom and putting them in concentration camps.

The opposite of capitalism is not some social democratic production council designing an equitable, sustainable and humane economy.

The opposite of capitalism is a bandido, a drug smuggler or a warlord showing up at your business with five guys with machine guns telling you to pay him protection if you don’t want your store to get shot up.

The thug is not a member of some Orwellian police state. The thug is a small-time racketeer out for himself.

The entire world economy was once built on these racketeers.

If things fall apart, it will be run by these racketeers again.