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Welcome to Neocolonialism, Exploited Peasants!

In my latest interview with Max Keiser, Max asked a question of fundamental importance: (I paraphrase, as the interview has not yet been posted): now that the current iteration of capitalism has occupied every corner of the globe, where can it expand to for its “growth”?

My answer: neocolonialism, my term for the financialized quasi-colonial exploitation of the home domestic population. I described this dynamic in The E.U., Neofeudalism and the Neocolonial-Financialization Model(May 24, 2012).

We all know how old-fashioned colonialism worked: the imperial power takes political and economic control of previously independent lands.

In the traditional colonial model, there are two primary benefits:
1. The imperial power (the core) extracts valuable commodities and low-cost labor from its colony (the periphery)
2. The imperial power sells its own high-margin manufactured goods to the captured-market of its colony.

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Greece and the Endgame of the Neocolonial Model of Exploitation

With the bankruptcy of Greece now undeniable, we’ve finally reached the endgame of the Neocolonial-Financialization Model.

We all know how old-fashioned colonialism worked: the imperial power takes physical control of previously independent lands and declares its ownership of the region as a newly minted colony.

What’s the benefit of controlling colonies?In the traditional colonial model, there are two primary benefits:
1. The imperial power (the core) extracts valuable commodities and low-cost labor from its colony (the periphery)
2. The imperial power sells its own high-margin manufactured goods to the captured-market of its colony.

This buy low, sell high dynamic is the heart of colonialism, which can be understood as one example of the The Core-Periphery Model (June 11, 2013).

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Neofeudalism’s Tax Donkeys (Yes, You) and the Battle for Control of Resources

Those who own the resources and influence the political control of those resources are the New Nobility in a pernicious Neofeudalism enforced by the very government that claims to serve the debt-serfs and tax donkeys.

Let’s tease apart several strands of Neofeudalism, my preferred term (along with Neocolonialism) for the Status Quo.

The E.U., Neofeudalism and the Neocolonial-Financialization Model (May 24, 2012)

It is increasingly clear that a new form of feudalism has subverted democracy, and that the New Feudalism is powered by concentrations of private wealth and centralized state control: what I call the New Nobility.

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The Coming Global Generational Adjustment

All sorts of promises, explicit and implicit, were issued to win votes. All the promises are now empty, and we might as deal with this reality head-on.

Here’s what often happens when people start discussing Baby Boomers, Gen-X and Gen-Y online: rash generalizations are freely flung, everyone gets offended and nothing remotely productive results from the generational melee.

These sorts of angry, accusatory generalizations reflect what I call the Generational Monster Id (GMI), the urge to list faults in generations other than our own.

I think the source of generational angst and anger is the threat that the entitlements promised by the developed-world governments will not be delivered as promised.

These entitlements range from healthcare to education to old-age pensions to “a good paying job now that I have a college degree.”

The bottom line is that the promises cannot and will not be kept. 

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America’s Nine Classes: The New Class Hierarchy

Eight of the nine classes are hidebound by conventions, neofeudal and neocolonial arrangements and a variety of false choices.

There are many ways to slice and dice America’s power/wealth hierarchy. The conventional class structure is divided along the lines of income, i.e. the wealthy, upper middle class, middle class, lower middle class and the poor.

I’ve suggested that a more useful scheme is to view America through the lens not just of income but of political power and state dependency, as a Three-and-a-Half Class Society(October 22, 2012):

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A Critique of Piketty’s Solution to Widening Wealth Inequality

The real problem with Piketty’s taxation/social welfare solution to wealth inequality is that it does nothing to change the source of systemic inequality, debt-based neofeudalism and neocolonialism.

Those of us concerned by widening wealth/income inequality have been following the work of Thomas Piketty and Emmanuel Saez for many years. I’ve cited their analysis many times; for example: Two Americas: The Gap Between the Top 5% and the Bottom 95% Widens (August 18, 2010).

Thomas Piketty has taken his meticulous research and turned it into a book, Capital in the Twenty-First Century, that has catalyzed the discussion of widening inequality by essentially proving that capital expands at rates far above the overall economy and wages. Since capital grows much faster than wages or the underlying economy, the gap between earned income and unearned income (rents) widens, along with the net worth of those who own capital and those who own little to no capital.

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