While the times beg for a clash, we may just be boiling to death stupidly in a slow, slow kettle. Since 2004, the term “urban feudalism” has increasingly characterized my outlook on the future. This outlook has essentially been confirmed by Thomas Piketty in his recently translated “Capital in the Twenty-First Century.” He uses monster-sized data to suggest that the future will resemble the past era of feudalism, with the exception that the rich shall live in the city. In other words, urban feudalism. I don’t like to be right on this, but unfortunately, you heard it here first.
In 2011, I wrote:
“Urban feudalism is the top-down, urban-centric, affluent-class authoritarianism that seems to be overtaking the future of Florida and of America. Historically the state has been able to escape this fate, partly because it has a diversified lower middle class, along with service and construction workers. In the past, the rich came to the state mostly when on vacation. This era appears to be waning, however.”
A simplified version of the term, which Piketty takes 577 pages to illustrate, is that we are returning to an era when wages just don’t amount to much. Wealth is highly concentrated and will get more so as growth slows. America’s wealth is worth six times its GDP, and half of it is concentrated in the top tenth of population.
Politicians, naturally, strive for policies that return to growth, because growth – making more stuff – allows more people to prosper. It seems more and more like growth is a ghost, cruelly poltergeisting us with bubbles. First it was the dotcom bubble, then the housing bubble, then the Silicon Valley bubble. The rental bubble is just exactly what Piketty writes about: the return of the rentier class, people who finance rental housing and then sit back and reap the rent off of it. Poor renters don’t get it: by succumbing to this form of housing, they are just furthering the problem. It is as if we are reaching out of the pot and turning the heat up on ourselves.
All these bubbles burst, and if the market is analyzed across the long term, they have no real effect on growth. They provide an illusion useful for political purposes. Bubbles also cause emotional excitement, and it is easier to fleece someone who is thinking irrationally. Once again, we seem to be boiling ourselves to death.
Piketty notes that this time around there are more middle-class people with mortgages, which puts a twist on the ownership class. Now, I haven’t finished the book so I don’t know exactly what the twist is, but it isn’t hard to imagine that all of us who owe money to Wall Street for our mortgages – and we seem to owe them perpetually, through the perpetual buy-sell-refi syndrome – are worsening things.
Everywhere you turn, your life is being urgently monetized – to benefit this top centile. (While the “Occupy” movement concerned itself with the one percenters, those typically have little to do with your life. Their investments are elsewhere.) Your privacy is being monetized by social media, for the more you post and tweet, the more you reveal yourself to marketers. We all seem to be on this fated path with no ability to step off and return to a more equitable, open social structure.
Piketty is getting criticized for broad tax policy suggests to curb this densification of wealth. Instead, some argue, unionization is the answer. Urban feudalism, like climate change, is here; it is past the point of arguing and needs to be dealt with.
Taxation, unionization…these are both top-down reactions. What about plain old grass roots action instead? If people would conserve a bit of their own wealth instead, they would be so much better off; eliminating the middlmen (read: loans) and foregoing the temptation to consume so much. A slow-growth period can be good for you; your life will stabilize and you may actually have time to enjoy it.
Piketty opens his book with confrontation, he alludes to many of the political revolutions sparked by similar conditions, and he implies this is the only solution. With cars and cell phones and ipads and everything else that the middle class craves, it will be a long time before we realize that the water is boiling and our carcasses are cooked. And then, it will be too late.
In the meantime, my humble prediction of urban feudalism came true. You’re welcome. What comes next? Keep reading.