Social-Democratic Feudalism and Its Upper Paleolithic Impetus

I think I am understanding Matthias better than he is understanding me. If so, it might be because he is better at making himself understood.

In his last response to me, he declares in the title “Freedom Is Not an Absolute,” something I said plainly in my opening essay. Similarly, he says that “taxation in not the same thing as slavery,” that taxation “does not mean that the government ‘owns’ you,” that “Singling out liberty as the only idea that matters” is wrongheaded. Perhaps he confuses me with Robert Nozick, the nonlibertarian’s favorite libertarian philosopher. That could explain why he thinks that the Hayek passage he provides is more at odds with what I say than it is. Yes, the taxes used to fund a government safety net would be reductions in liberty, but nothing I have said necessarily implies a position against such impositions.

Matthias admits that Obamacare forces individuals to buy health insurance. But he continues:

I will admit to this only if you admit that the fifty federal states of the United States of America ‘force’ their adult citizens to buy car insurance. And to your immediate response that ‘nobody forces you to buy a car or drive one’ I can only ask how anyone in this country could be truly free without a car, given the decrepit state of public transportation everywhere. As a good libertarian, you will surely appreciate that the only way you can exercise your liberty to move around the country is by car, and you do not even have to live in Los Angeles or Texas to understand this.

I agree that it is hard to move around the country without driving. One is thus dependent on roads, and thus on the owners of the roads. But dependency is not the same as force or coercion.

To draw the distinction, consider what Smith says about dependency in The Wealth of Nations. He says that in feudalism individuals “lived almost in a continual state … of servile dependency upon their superiors.” But in commerce: “Each tradesman or artificer derives his subsistence from the employment, not of one, but of a hundred or a thousand different customers. Though in some measure obliged to them all, therefore, he is not absolutely dependent upon any one of them.”[1]

We feel forced to buy car insurance because the government has enveloped the road industry. It is like the great lord. But in the feudal context, if we grant the lord’s ownership of his lands, we cannot say that he coerces the peasants who live on them. Assuming that the peasants are free to leave and that the lord sticks to agreed terms, the peasants are dependent, and probably servile, but not coerced. It is a terrible situation, but the problem is that society is enveloped by the feudal lord, not that the lord coerces. A better situation would come from voluntarily subdividing the land, giving rise to many competing owners.

I am supposing that car insurance today is a condition simply of driving on government roads. The government owns the road, and, as owner, it offers certain rules for use of its property, as the feudal lord offers for his. (I realize that our simplifications of both feudalism and car insurance are probably inaccurate in some respects, but I am assuming away complications to draw a basic parallel.)

Smith detested the dependency of feudalism, and he wrote at length about the feudal period as an “unnatural” development built and sustained by violations of natural liberty, including the engrossing of uncultivated land, primogeniture, and entails. He advanced natural liberty, whose natural tendency was toward subdivision not only of labor but also of land. Smith saw liberty as the bulwark of independence and the school of virtue.

Suppose there were liberty in road ownership, perhaps restricted in that crossing easements were imposed (sometimes coercion is our friend!). Roads owners would be private and multiple. Would all of them require users to have car insurance? Who knows. But even if they all did, we would feel less forced in the matter.

Practically all restaurants require a shirt and shoes, but that is not force, either. To say that we are forced to buy car insurance is to say that we are forced to wear a shirt and shoes by the pizza shop.

If you go about your business and avoid agreements that require buying car insurance, no one will stick a gun in your face for not buying car insurance. Someone will stick a gun in your face for not buying health insurance, under Obamacare. Unless you count being in the polity as agreeing to Obamacare — unless, that is, you grant overlordship — you have not entered any such agreement, and the gun is an initiation of aggression.

Dependency is one of the hazards of social democracy. The government monopolizes schooling by coercion, partly in the tax financing that advantages government schools, partly in the restrictions put on private competition (which in some states, such as California, are very significant[2]). In consequence, students and parents enter passive dependency on the local government school. Smith said that when our position is only passive, our sentiments tend to be sordid and selfish; when active, generous and noble.[3]

In social democracy individuals indeed often live in a state of “servile dependency upon their superiors.” People stoop to get permission to engage in voluntary intercourse. Pharmaceutical companies would no sooner antagonize the FDA than a slave would antagonize the whipping master. About 30 percent of the workforce is now in fields subject to occupational licensing.[4] The policy is to ensure that noncompliant service providers, though perfectly peaceful, will be fined and, as necessary, arrested and shot, and it creates other forms of dependency. Practitioners have to submit to the requirements to get permission. For many of the trades, one must get an accredited college degree — what Smith called “the privileges of graduation,”[5] and these are privileges again based on the gun pointed at anyone who would practice without the required credentials. Students are thus induced to go to college, a realm of privilege and dependency, sustained in part by this coercion-induced demand and the coercion of tax financing.

Social democracy is the new feudalism. That is why Hayek titled his work The Road to Serfdom. Thousands of coercions create dependency on officialdom and its cultural institutions. Many of the professors and experts, and most leftists, tell us that the coercions are good for society.

In fact, the vast majority of professors range from left to center or neutral; there are very few libertarians or conservatives, especially outside economics. Maybe it is because professors are such a smart bunch. They want more Americans to go to college. They favor new coercions to induce more college-going. It is good for America, they say.

In Mattias’s first response, he quoted Karl Polanyi, to the effect that there is nothing particularly natural about private property. Polanyi was a Hungarian for whom liberalism was liberalism, however much he misunderstood it. Unlike the Anglos I quoted in my opening essay, he felt no impulse to pass his outlook off as “liberalism.” Throughout The Great Transformation he heaps contumely on liberalism, for example, speaking of “the liberal virus.”[6] It is not hard to see overlordism in Polanyi’s outlook:

Socialism is, essentially, the tendency inherent in an industrial civilization to transcend the self-regulating market by consciously subordinating it to a democratic society. It is the solution natural to industrial workers who see no reason why production should not be regulated directly and why markets should be more than a useful but subordinate trait in a free society.[7]

In this subordination, “the actual content of property rights might undergo redefinition at the hands of legislation.”[8] For the overlordist, private ownership of the manufacturer is not attenuated; liberty is not infringed. Rather, the manufacturer’s rights are redefined. Again, it makes sense if one grants that “democratic society” is the owner either of the resources handled by the subordinates, or the owner of some kind of enveloping substructure with which the manufacture is then under contract. Either way, there is no incursion on liberty: If you do not like our terms, you are free to leave.

Ilya, in his second posting, says that overlordism underlies “some left-wing rhetoric about these issues, but by no means all or even most of it.” I had noted, and Ilya quotes me, that “one could affirm the individualist configuration of ownership and then go on to say that he nonetheless favors the myriad initiations of coercion of the modern activist state.” Ilya adds: “In my view, this is in fact what most American left-liberals (and many European ones) do.”

Ilya is suggesting that most American leftists would grant that, say, the minimum wage law is an incursion on liberty, but simply say that they nonetheless favor it (assuming they do favor it, that is). Well, I have some evidence on that.

In October 2006, 659 individuals, mostly economists, signed a petition to raise the minimum wage. I wrote a questionnaire asking them about the matter (Klein and Dompe 2007). Among the questions were the following:

In one manner of speaking, liberty is freedom from political or legal restrictions on one’s property or freedom of association. Subscribers to this definition are apt to say that the minimum wage law is coercive because it (along with concomitant enforcement) threatens physical aggression against people for engaging in certain voluntary, consensual acts (namely, employing people at sub-minimum wages). (Notice that even subscribers to this definition of liberty recognize that it does not by itself carry a policy recommendation; values other than liberty exist and might conflict with it.)

Q7: Please indicate which of the following options best fits your view of this semantic issue:

  • A. [ ] I agree that that definition of liberty is the primary definition of liberty, and in that sense the minimum wage law is coercive.
  • B.[ ] I give some weight to that definition of liberty, but not primary weight; the minimum wage law is only coercive in a sense.
  • C.[ ] I give little to no weight to that definition of liberty; the minimum wage law is not coercive in any significant sense.
  • D.[ ] Other [please specify]:

Now, if we take the questionnaire respondents to be a representative sample of vocal leftists, then, on Ilya’s supposition, most would have chosen option A. Yet, of 93 respondents who answered the question, only five did.

The responses frequencies (in percentages of the 93 individuals who answered the question) were as follows:

  • A. 5.4%
  • B. 19.%
  • C. 50.5%
  • D. 24.7%.

Thus, a straight-up majority selected the option that says that the minimum wage law “is not coercive in any significant sense,” and given that most of the responses at D were essentially denying the classical liberal interpretation, we may say that a vast majority of these respondents did not fit Ilya’s description of how leftists think. Again, 94.6 percent rejected the option that simply says that the minimum wage law is coercive.

For leftists, the minimum-wage law, which threatens to stick a gun in the face of employers who peaceably contract to pay less than the specified minimum, does not tread on their liberty. To use Polanyi’s term, the law simply “redefines” the employer’s rights.

Most leftists do not accept the individualist configuration of ownership. Do they affirm the collectivist configuration, or overlordship, as I have described it? Not consciously, perhaps. But, again, in the original period of social-democratic reaction to liberalism, the collectivist configuration was often quite explicit, as seen in quotations in my opening essay and many other quotations that could also be shown.

But the Left Hates Feudalism and Domination: Enter the Atavism Thesis

Frankly, I do not know what to make of the left. They fail to support school choice, the repeal of occupational licensing, and 100 other focal liberalizations that would obviously help the poor, whom they say they care about. Even worse, they often champion interventions. This conundrum has puzzled thinkers for centuries.

Searching for explanation, I look around and see what we can come up with. One of the best explanations available is Hayek’s conjecture that leftist ideology is an atavistic expression of deep-seated yearnings and penchants evolved over millions of years but little changed since the Upper Paleolithic ending 10,000 years ago.[9] It seems that the Upper Paleolithic band was a small, simple society, quite democratic in its structure and functioning, with solidaric ethics and encompassing experience and sentiment. Like any band of 20–40 members, consisting largely of family groupings, there would be a leader, an “alpha male,” but our researchers seem to suggest that the social relations were rather egalitarian and consensus-oriented.

Band-man sees society as organizational, not a network of spontaneous relationships. He yearns for an encompassing coordination of sentiment, not a cosmos of intersecting romances.[10] He yearns for common knowledge, and is uncomfortable with disjointed knowledge.[11] He yearns for social justice, and is not satisfied with merely procedural or commutative justice.[12] He presupposes an underlying configuration of collective ownership, not one of individual ownership.

In the narrative of ideological development, the biggest factors in enlivening the political reassertion of these instincts as a modern statist ideology are the rise of the nation-state and universal suffrage. Those provide the mythos that enlivens the Paleolithic ethos and mentality.

Although there are always jackals and others interested in overlordship and dependency, I think that the raw leftist impulse is Paleolithic, not feudal. In the small band of 10,000 years ago, there is collective ownership in the community: Even if nomadic, the troop is a collective club, and if you belong to the club you are agreeing, as it were, to its consensus-based governance and habitus. Otherwise you exit or are expelled. In the small band, there is no overlordship because there is just one level of organization. There is no basis for the “over” in overlord. And even the “lord” does not really apply, because of the personal familiarity and democratic ethos of the simple troop.

So the left wants “The Cooperative Commonwealth,”[13] not feudalism, dependency, and overlordship. But the latter is what their penchants yield in a society that is no longer small and simple. From leftist foolishness we get social-democratic feudalism, as though by a vicious and evil invisible hand.

I regret I am being so critical of the left. If they would stop championing coercions and opposing liberty, I would be a lot friendlier.


[1] Smith, WN, 412, 420.

[2] Seireg 2004.

[3] Smith, TMS, 137.

[4] Kleiner and Krueger 2009.

[5] Smith, WN, 778, 780.

[6] Polanyi 1944, 196.

[7] Polanyi, 242.

[8] Polanyi, 243.

[9] Hayek 1967, 1976, 1978, 1979, 1988.

[10] Klein 2005.

[11] Klein 2010.

[12] Hayek 1976, 1978.

[13] The leftist expression “the cooperative commonwealth” presumably originates with Gronlund 1884.


Gronlund, Laurence. 1884. The Cooperative Commonwealth. Boston: Lee and Shepaud.

Hayek, Friedrich A. 1967. The Legal and Political Philosophy of David Hume. In Studies in Philosophy, Politics, and Economics, 106-121. University of Chicago Press, Chicago.

Hayek, Friedrich A. 1976. Law, Legislation and Liberty, Vol. 2: The Mirage of Social Justice. Chicago: University of Chicago Press.

Hayek, Friedrich A. 1978. The Atavism of Social Justice. In New Studies in Philosophy, Politics, Economics and the History of Ideas, 57-68. University of Chicago Press, Chicago.

Hayek, Friedrich A. 1979. The Three Sources of Human Values. In Law, Legislation and Liberty: Volume 3, The Political Order of a Free People. Chicago: University of Chicago Press, 153-176.

Hayek, Friedrich A. 1988. The Fatal Conceit: The Errors of Socialism. Chicago: University of Chicago Press.

Klein, Daniel B. 2005. The People’s Romance: Why People Love Government (as Much as They Do). The Independent Review 10(1): 5-37.

Klein, Daniel B. 2010. “Knowledge Flat-talk: A Conceit of Supposed Experts and a Seduction to All.” The Independent Review 15(1): 109-121.

Klein, Daniel B. and Stewart Dompe. 2007. Reasons for Supporting the Minimum Wage: Asking Signatories of the “Raise the Minimum Wage” Statement. Econ Journal Watch 4(1): 125-67.

Kleiner, Morris M. and Alan B. Krueger. 2009. Analyzing the Extent and Influence of Occupational Licensing on the Labor Market. NBER Working Paper 14979.

Polanyi, Karl. 1944/1957. The Great Transformation: The Political and Economic Origins of Our Time. Boston: Beacon Press.

Seireg, Bahaa. 2004. Addition and Subtraction: State and Local Regulatory Obstacles to Opening a New Private School. Policy Study 329. Reason Public Policy Institute, December.

Smith, Adam. 1790. The Theory of Moral Sentiments. Edited by D.D. Raphael and A.L. Macfie Indianapolis: Liberty Fund, 1982.

Smith, Adam. 1976 [1776]. An Inquiry into the Nature and Causes of the Wealth of Nations. Edited by R.H. Campbell and A.S. Skinner. Oxford: Oxford University Press. Indianapolis: Liberty Fund, 1981.

Also from this issue

Lead Essay

  • In his lead essay, Daniel B. Klein introduces us to the idea of overlordship – the premise, implicit in modern social democracy, that the state is the ultimate owner of all property rights in society. Under this theory, the state provisionally delegates any rights that individuals may have, and it is free to revoke them as well. The social contract, to which we have all allegedly subscribed, gives warrant for these acts, or so we are told.

    Though his formulation may seem quite harsh – “overlordship” is a term we more often associate with feudalism – Klein traces its development in the late nineteenth century, citing authors who were quite explicit about their intentions. He also cites recent figures, up to and including President Barack Obama, who subscribe to substantially the same views. Klein calls for a return to individualist modes of ownership, as championed by David Hume and Adam Smith, both of whom were also skeptical of the social contract in general, owing in part to the dangerous consequences implicit in that mode of thinking.

Response Essays

  • Matthias Matthijs charges that libertarian thinking caused the biggest economic disaster since the Great Depression, and that our current political climate is nonetheless still dominated by an ideology highly congruent to Daniel Klein’s. Reasonable people, however, now doubt even market capitalism itself. Libertarians and social democrats disagree on three fundamentals: the empirical evaluation of government efficacy, the positive/negative liberty distinction, and the absolutism of private property rights. On each disagreement, Matthijs argues, the social democrats have the upper hand. In particular, property rights would not exist without the state to regulate them, and these rights are in no sense “natural.” A natural right, Matthijs argues, would never have any need of defense by the state.

  • David Friedman suggests a threefold classification of rights. In his scheme, normative rights are moral claims whose violation results in a moral judgment: I may think, with reason, that you are a bad person. A legal right is one that has been duly written into the law. Finally, a positive right is one for which violators face meaningful consequences, such that they will be substantially deterred. These definitions differ somewhat from those found in traditional legal theory, but Friedman defends the analytical power of his schema. In practice the three types overlap, but we may still analyze rights according to their normative, legal, and positive dimensions. Friedman offers historical and contemporary examples of the three types of rights and speculates on their origins using game theory.

  • Ilya Somin examines three arguments for government control over property rights: the claims that property rights are created by the government, that residence and/or citizenship imply consent, and that government control can produce superior outcomes to private control, regardless of theoretical justification. He dismisses the former two and concedes that the latter, consequentialist argument for government control is the strongest of the three. Still, he argues that this approach has serious weaknesses, in that people across the political spectrum tend to overestimate the good that governments can do.