Some people don't understand economic policy outcomes or economic principles, so they think that the only thing we can use to measure policy efficacy is progress or lack of it. The narrative linking feudalism to capitalism is not just flawed - it's a deliberate distortion of history used to promote statist ideology. This narrative is rooted in Marx's theory of historical materialism, which posits that societies progress through stages of economic development. It's not a neutral historical analysis, but a carefully crafted story designed to make statist socialism seem inevitable and capitalism appear as just another exploitative system.
By conflating feudalism with capitalism, this narrative obscures the revolutionary nature of free markets. It falsely portrays economic freedom as simply another form of exploitation, rather than a system that liberated people from feudal bonds.
By conflating feudalism with capitalism, this narrative obscures the revolutionary nature of free markets. It falsely portrays economic freedom as simply another form of exploitation, rather than a system that liberated people from feudal bonds.
This narrative dominates many history and economics departments, not because of its accuracy, but because of the ideological leanings of many academics. This has created a self-reinforcing cycle where challenging this view can be career-limiting in academia.
The feudalism-to-capitalism narrative has seeped into popular culture, shaping how people understand economics and history. This makes it easier to sell statist socialist policies to the public, as they don't fully grasp the nature and benefits of free markets.
This distorted view of history influences policy-making, pushing for more regulation and state control under the guise of preventing "neo-feudalism." In reality, these statist policies recreate the very power structures they claim to oppose.
By focusing on this false narrative, attention is diverted from the real threat to freedom … which is statism - both statist socialism and statist capitalism ( aka corporatism or fascism).
Feudalism is a form of statism. The key similarities include:
- Centralized control: Both feudalism and statism concentrate economic decision-making power in the hands of a few (lords or state planners).
- Lack of economic calculation: Neither system allows for genuine market prices, leading to misallocation of resources.
- Restricted mobility: Both limit individuals' ability to freely choose their economic activities.
- Collectivist mindset: Both prioritize group (or class) interests over individual rights.
Capitalism is fundamentally individualist, emphasizing personal liberty, property rights, and voluntary exchange. Feudalism and statist socialism are collectivist, subordinating individual choices to the perceived needs of the group or ruling class.
Feudalism like all forms of statism fails due to the Economic Calculation Problem, which applies equally to feudalism and statism. Both systems lack the price mechanisms necessary for efficient resource allocation. This leads to economic stagnation and lower living standards compared to free market systems.
True property rights are absent in feudalism like in every other form of statism.
- In feudalism, ultimate ownership rests with the monarch or nobility.
- In statist socialism, the state claims ownership of the means of production.
- Only in a free market system do individuals have genuine property rights.
People who hate property rights should love feudalism.
Feudalism like all other forms of authoritarianism relies heavily on state power to function. It requires coercion to maintain their economic systems, and it restricts individual economic freedom for the supposed benefit of the collective.
The common narrative of capitalism evolving from feudalism is not just wrong, but backwards. Capitalism represented a break from the collectivist, state-controlled systems that dominated most of human history. Modern calls for socialism or fascism - increased state economic control - are in essence advocating for a return to feudal-like conditions, not progress. The true dichotomy in economic systems is not between feudalism and statism, but between free markets and various forms of state control. Understanding this helps explain why statist systems often recreate hierarchies and inequalities reminiscent of feudal societies. Many critiques of capitalism are actually critiques of state-granted privileges and interventions, not of free markets themselves.
Historical Opposition to Feudalism
The most significant opposition to feudalism often came from groups and individuals who advocated for economic freedom, property rights, and individual liberty - principles much more aligned with Rothbard's views than with leftist ideologies:
- Merchant guilds in medieval cities often fought for economic freedoms against feudal restrictions.
- The Magna Carta (1215) in England, while not abolishing feudalism, represented a push for individual rights against arbitrary rule.
- The School of Salamanca (16th century) developed early free market theories in opposition to mercantilism and feudal economic practices.
Early Capitalist Developments
Many of the developments that undermined feudalism were proto-capitalist in nature:- The rise of free cities and towns in Europe, with their emphasis on trade and craft production.
- The emergence of banking and credit systems in Renaissance Italy.
- The Dutch Republic's relatively free economic system in the 17th century.
Enlightenment Thinkers
Many Enlightenment philosophers who critiqued feudalism advocated for ideas more in line with classical liberalism than leftist thought:
- John Locke's writings on property rights and limited government.
- Adam Smith's critiques of mercantilism and advocacy for free markets.
- Voltaire's arguments against arbitrary rule and for economic freedom.
Liberal Revolutions
American Revolution
The American Founding Fathers, in their rejection of Old World feudal remnants, established a system based on individual rights and limited government - ideas much closer to Rothbard than to leftist ideologies.
French Revolution
While often portrayed as a leftist movement, many initial revolutionaries (like the Girondins) advocated for economic liberalism against feudal privileges. The later radical turn was a deviation from, not a continuation of, the original anti-feudal sentiment.
Industrial Revolution
The early industrialists who drove this transformation were often advocates for free trade and economic liberty, opposing the remnants of feudal and mercantilist systems.Conclusions
- The most effective opposition to feudalism historically came from proto-capitalist and classical liberal sources, not from the left.
- Leftist critiques of feudalism, particularly Marxist ones, came much later and often mischaracterized the nature of both feudalism and the systems that replaced it.
- The ideas that truly undermined feudalism - individual rights, property rights, economic freedom - are much more aligned with Rothbardian libertarianism than with socialism or other leftist ideologies.
- The common narrative of leftist movements as the primary opposition to feudal oppression is largely a retrospective invention, not an accurate historical portrayal.
- Understanding this helps explain why socialist revolutions often ended up recreating feudal-like power structures, while capitalist developments consistently dissolve them.
Economic Illiteracy is the root of the Marxist narrative. The lack of understanding of basic economic principles leads many to view history through an oversimplified lens of "progress." This perspective fails to recognize the fundamental differences between economic systems and their outcomes.
One of the most basic economic principles is that price controls lead to shortages. This was as true in feudal systems as it is in modern attempts at central planning. Yet, many fail to connect these dots across history. Feudal lords often attempted to control prices, leading to shortages and economic stagnation. This is fundamentally similar to statist price controls, not capitalist free markets.
Price controls are inherently statist due to the natural ratchet effect. The economically illiterate fail to grasp how free market prices convey information and coordinate economic activity. This leads them to see the "visible hand" of feudal or statist control as more orderly than the "invisible hand" of the market. Frédéric Bastiat's concept of "the seen and the unseen" is crucial here. People often focus on the visible structures of feudalism without seeing the unseen economic activities that truly drove progress. Many mistakenly view mercantilism as early capitalism, rather than as an extension of feudal economic control. This leads to a misunderstanding of how true free markets emerged.
The concept of spontaneous order in free markets is not understood by statists. This leads to the false belief that economic progress requires centralized planning. Economic illiteracy leads many to view the Industrial Revolution as a natural outgrowth of feudalism, rather than as a result of increased economic freedom and property rights. Feudal systems, like all statist systems, distort incentives, while free markets align them with productivity.
Socialists in particular incorrectly view wealth as a fixed pie to be distributed, rather than understanding how free markets create wealth. Therefore they believe how society is structured is what's important rather than incentives. This is why the left constantly talks about hierarchy while the right simply wants people to be free. The importance of institutions like property rights and rule of law in fostering economic growth is underestimated, leading to a focus on surface-level changes rather than fundamental institutional differences between systems.
Technological advancements are often erroneously seen as inevitable progress rather than as results of specific economic incentives present in free market systems but absent in feudal or statist ones. On top of that the nature of economic exploitation in feudal systems is often misunderstood, leading to false equivalences with capitalist employer-employee relationships. The central planning of feudalism with it's state-granted monopolies is essentially the same as all other statist systems. The function of profit in guiding resource allocation is frequently misunderstood, leading to erroneous comparisons between feudal extraction and capitalist earnings. Furthermore, they do not comprehend the role of Entrepreneurs in driving Economic Growth and Innovation.
