We’re Living in a Neofeudal Bubble

By Charles Hugh Smith

Source: Of Two Minds

If you listen to conventional economists, everything’s rosy: thanks to the expansion of alt-energy like wind and solar, energy is getting cheaper, batteries will power the new global economy, we’re getting smarter — just look at the rising number of advanced college degrees, wages are finally growing, inflation is trending down, household balance sheets and corporate profits are strong, debt loads are not an issue yet and GDP is rising.

All this happy news is backed by statistics, of course, but there’s one little problem: all the conventional cheerleaders are living in a bubble of like-minded elites who are insulated from the neofeudal realities of life in the real world.

Outside the bubble of wealthy, protected elites that generate the statistics and the “news,” the global economy is completely, totally neofeudal–and so is the American economy. What does neofeudal mean? It refers to a two-tiered socio-economic system in which an aristocracy owns the vast majority of the wealth and collects the lion’s share of the income, and uses this financial dominance to buy political and narrative dominance.

In a neofeudal arrangement, the machinery of governance protects and enforces elite dominance. Cartels and monopolies have free rein to price-fix and exploit, tax revenues flow freely to cartels, elite organizations such as family trusts get tax breaks, and so on.

In other words, “the market” is rigged and the government maintains the status quo.

Toiling away to enrich the aristocratic owners of capital are the serfs and peasants, who own a tiny shred of income-producing capital. Their primary assets–the family home and vehicles–are actually income streams for the wealthy who collect the mortgage and auto-loan interest paid by the serfs.

The core dynamic in neofeudalism is the already-wealthy increase their share of the wealth, and everyone else sees their meager share diminish. As the charts below show, the vast majority of financial gains generated by the US economy flow to the top 0.1% of households. The top 1%’s share has risen by 40% while the bottom 50%’s share of the wealth has slipped to 3%–essentially signal noise.

Social mobility is limited to the occasional serf clawing their way into the technocrat class, the top 5% who slavishly serve the interests of the financial aristocracy. This class lives in a self-contained, protected bubble: an echo chamber of privilege, residential enclaves, jetting around the world, and so on: everything’s great because we’re doing great.

Life is good in the bubble because there’s no homeless encampment a block away, there’s plenty of money coming in and our wealth–401Ks, inherited bonds and rental property, university pensions, corporate stock options, and so on–increases smartly, year after year and decade after decade.

The Wealthy Are Not Like You and Me–Our Terminally Stratified Society (8/3/23)

That all this wealth expansion is the result of unprecedented central bank intervention is left unsaid. As noted above, the role of the state and central bank is to maintain the status quo of the already-wealthy increasing their share of the national wealth and income, and loading more (very profitable) debt on the serfs. (See student loan debt chart below.)

Outside the technocrats’ privileged bubble, wages’ share of the economy have been stripmined by the aristocracy for 45 years. Oh dear; could this be why I’m having such trouble finding low-wage reliable “help”?

While wages inch up, costs of shelter, utilities, debt, vehicles, public transport, childcare and other essentials soar. Please glance at the chart of wages and rents below. This is neofeudalism in a nutshell. Wages have flatlined (or fallen when measured in purchasing power) while rent has steadily increased, eating away at the serfs’ disposable income.

Inside the technocrat class bubble, everything’s wunnerful. AI will boost profits (all of which flow to the aristocracy, so that’s wunnerful), energy’s getting cheaper and more abundant, and so on.

Oh, wait. Alt-energy only looks cheap because all the full lifetime costs have been ignored (i.e. externalized), and these modest additions to our vast hydrocarbon consumption aren’t actually replacing hydrocarbons, they’re simply adding more energy for us to consume.

Thousands of Old Wind Turbine Blades Pile Up in West Texas

Avangrid agrees to pay $48 million to terminate offshore wind deal

Models Hide the Shortcomings of Wind and Solar

In other words, conventional economists and the other technocrats maintain their privileged bubble by clinging to a delusionally disconnected-from-the-real-world mindset. There’s always a slew of academic papers or think-tank / corporate reports to bolster the inside-the-bubble confidence that everything’s great, because generating positive narratives that leave the neofeudal structure untouched in the primary industry of the technocrat class.

If you want to understand the neofeudal reality, study these charts. There are no rebuttals, there are only sputtering obfuscations: b-b-but the mission to Mars! Taylor Swift raked in a billion bucks! OnlyFans pulled in $5 billion! Stocks are rallying! Everything’s great!

Sure–if your dose of Delusional is high enough. Then you can go back to complaining about air travel delays, finding someone to repair your pool pump and bragging about how well your investments are doing.

8 Critical Factors Behind Every Food Crisis

FILE – In this Monday, Aug. 15, 2011 file photo, children from southern Somalia hold their pots as they line up to receive cooked food in Mogadishu, Somalia. A report by two U.S. government-funded famine and food agencies gives the highest death toll yet, estimating that 260,000 people died – more than double previous estimates. (AP Photo/Farah Abdi Warsameh, File)

By John Hawthorne

Source: Business Connect

From the beginning of time, their have been food crises in one form or another. Ancient books such as the Bible have records of various famines devastating portions of the world.

And while it’s easy to attribute these crises to a single cause, such as war or drought, the causes are usually much deeper and much more complex.

Nelson Mandela said, “Overcoming poverty is not an act of charity, it is an act of justice.”

In order for us to achieve the kind of justice envisioned by Mandela, it’s essential that we first understand the underlying causes of food crises. Only after we have understood can we then begin creating meaningful solutions.

With that in mind, here are 8 primary factors behind almost every global food crisis. While not all 8 of these will be present at a time, you will almost always find several of these at work.

Factor #1 – Poverty

One of the greatest factors in every food crisis is stark and abject poverty. This isn’t surprising. With enough money, anyone can ensure they have enough food. But with many developing nations sitting well below the poverty line, the population simply can’t afford the food they so desperately need.

Additionally, poverty has a distinct effect on food output. In Africa, for example, many farmers can’t afford proper irrigation and fertilizer. This, in turn, leads to lower yields, which then reduces the overall amount of food available to the population.

The population of the Sub-Saharan region of Africa is expected to grow at an astronomical rate, topping out at 2.4 billion by 2050. This will continue to exacerbate the poverty issue, which will then continue to drive the lack of sufficient food in the area.

Factor #2 – Drought and Desertification

Widespread droughts, leading to the desertification of particular locations also causes huge disruptions to food production. For example, leading up to and during the global food crisis of 2008, 110 countries experienced significant droughts. This caused even the most well-irrigated, fertile areas to become arid deserts, making it impossible to grow crops.

As Mark Hughes noted:

Australia is normally the second largest exporter of grain, after the U.S. The continent, though, is experiencing an ongoing drought that has been described as the worst in a century. Grain yields have shrunk and many silos remain empty. Australia’s drought is a major factor in global wheat stocks being at their lowest since 1979. In fact, many wheat and rice farmers are switching to crops that demand less water, such as wine grapes.

Additionally, farmers often let animals over-graze on their land, reducing the amount of vegetation and increasing desertification. If the soil becomes dry enough, it is ruined and unable to support any crops at all.

Finally, as populations grow, deforestation occurs at an increased rate, which then leads to less vegetation and more desertification.

Factor #3 – Political Pressure

In the past, the International Monetary Fund has pressured small farmers, particularly in impoverished African countries, to abandon agricultural farming in favor of industrial work. The money generated from this practice would be used to pay off debt and import food.

While it may sound like a working strategy, it has created catastrophic results.

As Eric Holt-Giménez noted:

The urban population increased seven-fold, swelling from 18% to 33% of the population. Millions of poor and unemployed workers have swelled the cities—with two-thirds of them living in slums. The manufacturing and industrial sector did not “take off” in African countries; the percent of the GDP coming from industry was 30% in 1961 and 32% in 2000. In the countryside, as plantations for agro-exports expanded, food production plummeted and poverty grew. Though the rural population, density increased by 180% as more farmers were crowded onto smaller plots.

Factor #4 – Increased Consumption of Meat and Dairy

Many countries have begun adopting a more Western diet, which includes eating significantly more meat and dairy. To make this happen, farmers have been forced to raise more cattle, and more cattle means more grain being consumed.

The problem, however, is that this causes a significant deficiency in terms of calories consumed versus calories available. A cow consumes approximately 700 calories worth of grain to produce a piece of meat containing only 100 calories. When this happens on a massive scale, an enormous shortage of food is the end result. The longer this deficit continues, the greater the imbalance will become.

Factor #5 – Increased Oil and Transportation Costs

When the price of oil goes up, the energy cost for planting and transporting foods goes through the roof. When food costs more to grow, it then costs more to sell. These rising costs then make it more difficult for the local population to purchase crops as well as for farmers to export their crops to industrialized nations.

Additionally, increased oil costs has led many countries to invest heavily in the development of agro-fuels. More agro-fuels always means less food available.

As Esther Vivas helpfully puts it:

The increase in the price of oil, which doubled in 2007 and 2008 and caused a big rise in the price of fertilizers and transport related to the food system, has resulted in increasing investment in the production of alternative fuels such as those of plant origin. Governments in the United States, the European Union, Brazil and others have subsidized production of agro-fuels in response to the scarcity of oil and global warming. But this green fuel production comes into direct competition with the production of food. To give just one example, in 2007 in the United States 20% of the total cereal harvest was used to produce ethanol and it is calculated in the next decade that this figure will reach 33%. We can imagine the situation in the countries of the South.

Factor #6 – Falling World Aid

At the peak of the 2007-2008 food crisis, food aid was at it’s lowest point since 1961. This is one of the oddities about the national food market. When cereal prices are low, countries look to sell their food through international aid. However, when food prices are high, they prefer to sell them on the open market for increased profits.

In other words, during food crises, when food is scarcest and at it’s highest prices, it isn’t available for international aid. When the bottom falls out of world aid, food crises grow in magnitude.

Factor #7 – International Conflicts

International conflicts are a particularly visible factor behind many food crises. During conflicts, it’s common for one country to restrict exports to another country, which then reduces the amount of food available to the general population.

Or, even worse, dictators will intentionally isolate their countries, refusing foreign aid that is desperately needed. Aid workers may be blocked from entering the country, making it difficult for the citizens to receive needed help. If foreign aid does come, they seize it for themselves, depriving the population of desperately needed sustenance.

Factor #8 – Disease

If a country experiences a particularly violent outbreak of a disease, it can completely disrupt the overall food supply. For example, the HIV/AIDS crisis in Africa has killed farmers, which in turn pushes families deep into poverty.

When a population is undernourished, drugs become less effective and can at times create intense hunger pains. These two factors combined create a vicious cycle of death, poverty, and hunger.

Additionally, certain highly contagious diseases can restrict the amount of aid available to a country. For example, during the 2014 Ebola epidemic in West Africa, aid workers were restricted from traveling to the region due to fear of spreading the disease.

Perfect Storms

Most food crises aren’t the result of a single factor. Rather, they are caused by a perfect storm of events that coalesce into a deadly storm.

For example, in 2011, Somalia was devastated by a drought that caused widespread crop failure. The food crisis was made even worse by a non-functioning government as well as a national conflict. All these forces combined to make it difficult for aid workers to reach those who so desperately needed help.

The result was that approximately 260,000 people died.

Because the problems are almost always complex and multi-layered, the solutions must be equally multi-faceted. Simple solutions typically exacerbate the problem at the expense of the local population.

The best solutions are those that involve numerous parties working together to create a tangible, workable solution.

There will always be food crises to one degree or another. But as we grow in our understanding of what causes them, we can also grow in our ability to bring them to an end.