cluborlov | Once upon a time—and a fairly long time it was—most of the thickly
settled parts of the world had something called feudalism. It was a way
of organizing society hierarchically. Typically, at the very top there
was a sovereign (king, prince, emperor, pharaoh, along with some high
priests). Below the sovereign were several ranks of noblemen, with
hereditary titles. Below the noblemen were commoners, who likewise
inherited their stations in life, be it by being bound to a piece of
land upon which they toiled, or by being granted the right to engage in a
certain type of production or trade, in case of craftsmen and
merchants. Everybody was locked into position through permanent
relationships of allegiance, tribute and customary duties: tribute and
customary duties flowed up through the ranks, while favors, privileges
and protection flowed down.
It was a remarkably resilient, self-perpetuating system, based largely on the use of land and other renewable resources, all ultimately powered by sunlight. Wealth was primarily derived from land and the various uses of land. Here is a simplified org chart showing the pecking order of a medieval society.
It was a remarkably resilient, self-perpetuating system, based largely on the use of land and other renewable resources, all ultimately powered by sunlight. Wealth was primarily derived from land and the various uses of land. Here is a simplified org chart showing the pecking order of a medieval society.
Feudalism was essentially a steady-state system. Population pressures
were relieved primarily through emigration, war, pestilence and, failing
all of the above, periodic famine. Wars of conquest sometimes opened up
temporary new venues for economic growth, but since land and sunlight
are finite, this amounted to a zero-sum game.
But all of that changed when feudalism was replaced with capitalism. What made the change possible was the exploitation of nonrenewable resources, the most important of which was energy from burning fossilized hydrocarbons: first peat and coal, then oil and natural gas. Suddenly, productive capacity was decoupled from the availability of land and sunlight, and could be ramped up almost, but not quite, ad infinitum, simply by burning more hydrocarbons. Energy use, industry and population all started going up exponentially. A new system of economic relations was brought into being, based on money that could be generated at will, in the form of debt, which could be repaid with interest using the products of ever-increasing future production. Compared with the previous, steady-state system, the change amounted to a new assumption: that the future will always be bigger and richer—rich enough to afford to pay back both principal and interest.
But all of that changed when feudalism was replaced with capitalism. What made the change possible was the exploitation of nonrenewable resources, the most important of which was energy from burning fossilized hydrocarbons: first peat and coal, then oil and natural gas. Suddenly, productive capacity was decoupled from the availability of land and sunlight, and could be ramped up almost, but not quite, ad infinitum, simply by burning more hydrocarbons. Energy use, industry and population all started going up exponentially. A new system of economic relations was brought into being, based on money that could be generated at will, in the form of debt, which could be repaid with interest using the products of ever-increasing future production. Compared with the previous, steady-state system, the change amounted to a new assumption: that the future will always be bigger and richer—rich enough to afford to pay back both principal and interest.
