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The Antidote to Corporate Feudalism

Feb 20, 2017 | Blogroll, Economy, Labor, Politics, Rants and essays | 81 comments

In my last posting, I discussed the similarities between medieval feudalism in Europe and corporate feudalism that we are entering today.  I also promised to identify what finally brought an end to medieval feudalism, and thus, the antidote to corporate feudalism today.  I am not a historian, and I will not be going into a lot of historical analysis, dates or specifics.  Instead, I am going to approach this topic through the eyes of an economist.  I welcome real historians to contribute as they deem appropriate.

There is debate about the correct date of the end of the Roman Empire and start of the middle ages, however, most historians consider it to be either the sack of Rome on June 2, 455 CE, or September 4, 476 CE, on which date Odoacer deposed the last  Roman Emperor Romulus Augustulus. However, Rome was also sacked on August 24, 410 CE, which was an important factor in the decline of the Roman empire.  With the fall of the empire, much of the cosmopolitan element of the society disappeared.  There was much less travel among communities, fewer people moved from one state to another, and society fell into isolated fiefdoms, with only the church as a somewhat uniting factor.  From that time until the crusades, feudalism, as described in the previous post, prevailed.

In 1095, Pope Urban issued the Crusades, whose purpose was to recapture Jerusalem from the Muslims. According to Lisa Blades and Christopher Paik in their paper, “The Impact of Holy Land Crusades on State Formation:  War Mobilization, Trade Integration and Political Development in Medieval Europe,” there were “four causal channels by which crusader mobilization strengthened nascent states. First, the departure of relatively large numbers of European elites for the Holy Land reduced the absolute number of elites who might serve as challengers to the king, increasing the stability of ruling monarchies. Second, crusade tithes were also among the first “per-head” taxes to be levied on European populations, creating precedent for later forms of centralized taxation and encouraging the development of representative institutions. Third, the large-scale sale of land by rural elites seeking to finance crusade expeditions undermined existing feudal institutional forms. Finally, the Crusades were a catalyst for the reintegration of Western Europe into global trade networks with implications for the rise of towns and urban governance structures. Using an original dataset of the geographic origins of elite crusaders, we find that areas with large numbers of Holy Land crusaders saw increased political stability, a higher probability of establishing parliamentary institutions, higher downstream levels of tax revenue and greater urbanization, even after controlling for a number of possible confounders.”  Others have pointed out that large numbers of lords and nobles left for the Holy Land, many died while they were there, others were bankrupted.  Their lands were escheated to the monarchs, thus increasing the power of the monarchy.  Still others had their properties seized while they were away.

While the first three channels are interesting, they don’t seem to me to be the biggest influence on the changes that occurred.  It is the last channel that I believe had the greatest impact.  Let me explain.

I first revisit the factors of production:

Land (including all natural resources),
Labor (including all human resources),
Capital (including all man-made resources), and
Enterprise (which brings all the previous resources together for production).

While the result of the first and third channels did cause ownership of the land, the first factor of production, it did not really change that ownership in a way that was felt by the peasants working the land.  It made no difference to that peasant whether the land was owned by a lord or a monarch, it was still not owned by him.  The second factor could not really be felt by a peasant either, taxes were what they were, regardless of who they went to.  Capital may have moved from lord to king, but the general population didn’t experience benefit or otherwise.  However, the reintegration of Western Europe into the global trade networks was significant.

When most people think of the Crusades, they think of phalanx of knights riding off on steeds with grim faces.  This picture is misleading.  Those phalanx of knights had to be fed, clothed, and otherwise provisioned.  It was an enormous mobilization of various trades required to keep the lords and their knights battle ready.  Peasants were not often part of this mobilization, but the craftsmen were.  There needed to be blacksmiths to tend to the horses, the swords, and so on.  There had to be people to work on the wagons, to mend the harnesses, to make or mend clothing, and even to build structures to house the armies.  There were vast amounts of food that had to be transported, and cooks to prepare that food.

Most of the craftsmen who traveled with the knights had never left their villages before.  On the journey, they met and worked with people from other villages, from other countries, who spoke other languages.  They were exposed to different ways to apply their crafts.   The new people they encountered were not only fellow Europeans, they also associated with locals in the different places they went.  This included Muslims.  They developed friendships. Most important, as I see it, they encountered the Muslim Guilds.  Originally begun in the 9th century as a way to control the quality and value of documents, the Muslim guilds had developed to control the quality and value of many other crafts. These guilds took various measures to protect their customers, and restrict access to techniques, materials, and markets.  Through these guilds, the craftsmen were able to command a reasonable, preset price for their services and know they would not be undercut by a competitor.  In other words, the guilds removed the control of the labor factor of production from the user (the lords, etc) to the provider (guild member).

The guilds did not return from the crusades fully developed.  Being introduced (or, more truthfully, reintroduced, since they had been in existence during the Roman Empire) to a society that did not have them, they had to mature, through starts and stops.  However, eventually, the mature guilds had some common characteristics in their charters: protection for the workers and protection for the consumers.  The following is taken from the Medieval Guilds page of Medieval Life and Times:

Guilds in the Medieval times – Protection of Workers / Guild Members
The Guilds in Medieval times protected the workers, or the guild members as follows:

  • Members of Medieval Guilds received protection from excessive taxes imposed by the lords and land owners
  • Competition between members was regulated by fixed pricing policies – advertising and price cutting was banned
  • Illicit trading by non Merchant Guild members was banned
  • All members of guilds were obligated to retain all trade secrets
  • The number of Guild masters and members of guilds were restricted to ensure there was sufficient business for each of the guilds
  • Sickness Protection
  • Protection for their members, goods and horses when traveling
  • Help with funeral expenses. Orphans of members of guilds were also cared for
  • Guilds funded the first non-religious schools of the Middle Ages
  • Working conditions and hours of work were regulated

Guilds in the Medieval times – Protection for Consumers
The Guilds of the Medieval times in Medieval Times also protected the consumers. The spin-offs from the regulations of the guilds led to:

  • Fair pricing policies – all prices were regulated by the guilds
  • Quality of goods or workmanship. Goods and services were inspected and members of guilds were expected to undertake long apprenticeships.

A review of the mature guild charters reveals a strong similarity to today’s Labor Unions, in fact, they are the same thing by a different name.  The first recorded registry of guilds is in 1170.  Note that guilds funded the first non religious schools of the Middle Ages.  This is important.  The guilds felt it was their responsibility to ensure the education of their members and their children (ok, boys back then, for the most part).  By establishing non religious schools, the guilds could teach students information that was outside that allowed by or pushed by the church.

Another factor of production was recovered for the guild members by the guilds.  That is the factor called Enterprise.  The guilds could, as a group, put together resources in a way that an individual could not.  They could also provide a forum for sharing ideas that could lead to innovation.  Innovation is a part of the factor called Enterprise.  The sharing of ideas stimulated the minds of the guild members, and offered an incentive to innovate.  We notice that the first castles built in the middle ages were essentially earth works, large earthen mounds.  We begin to see stone castles emerging in the Norman castles in the 12th century, coincident with the emergence of guilds.

The playing field was greatly leveled with two of the four factors of production in the hands of the laborers.

Now I turn to discuss corporate feudalism.  I begin by pointing out that the guilds, which broke medieval feudalism, were to all intents and purposes labor unions.  The only difference is in the name, and many of our labor unions today call themselves guilds (i.e. screen actor’s guild).  Labor unions are our antidote to corporate feudalism.  We can trace the strengthening of workers rights with the rise of the Labor Unions.  Unions got us child labor laws, paid vacation, company provided health care, the 40 hour work week, pensions, workplace safety and myriad other benefits.

We can also trace the weakening of workers rights over the past 35 years to the weakening of the labor unions.  The pensions that our unions had won for us at great cost, have been largely lost since then.  Health care and workplace safety are now at risk.  Corporations are pushing to regain the labor factor of production by controlling the availability of jobs and removing the ability of individuals to defend themselves.  Corporations are also pushing to regain the land factor.  Notice their buying up of farmland and creating corporate farms.  Notice their use of eminent domain to lay pipelines or create shopping centers and the like.  They are using the financial system to make home ownership more difficult.

It is important for us to stand together with unions to restore their place in our financial system.  An individual cannot stand up to the corporations alone.  It is only through unity that we can reestablish the rights of the workers.  In my next installment, I discuss the union movement in the U.S.


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