by Charles Hugh Smith, Of Two Minds:
What the political class and the Financial Nobility don’t yet grasp is that ALICE will never go back to her insecure, low-wage job, ever.
Meet ALICE: Asset Limited, Income Constrained, Employed, at least she was employed until the pandemic presented impossible choices between taking care of her children and their education, and her aging parents, and keeping her demanding, low-wage job.
Though it doesn’t fit in with the cute mythology of “capitalism” that apologists love to promote, ALICE wasn’t working to get ahead–she was working to barely survive in an economy where wages have stagnated for decades and recently lost ground at an alarming rate as costs for everything from rent to childcare to utilities have soared while her hours have been cut.
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This is the neofeudalism I’ve often described here: the modern-day equivalent of the landless (i.e. owns no capital) serf is a landless (i.e. owns no capital) debt-serf with student loans, an auto loan and credit card debt and income that is constrained by globalization, financialization and the scarcity of high-paying work that isn’t reserved for insiders and the privileged few who chose their wealthy, well-educated, socially connected parents wisely.
Lacking capital and any realistic means of acquiring any, the debt-serf has only labor to sell, and in a globalized world in which everyone selling their labor is competing globally for work producing tradable goods and services, ordinary labor has lost purchasing power for the past 45 years (see charts below).
The dominance of Big Tech monopoly platforms has created new fields for the exploitation of ordinary labor in the low-paid gig economy and fulfillment centers. The traditional neofeudal fiefdoms (retail outlets, hospitality and restaurants) have been hit by the pandemic pullback in consumer spending, and the other low-wage fiefdoms (fast food and domestic service) have been in structural decline for years.
Meanwhile, the owners of the Financial Nobility’s fiefdoms and Big Tech monopolies have enjoyed unprecedented gains in income and wealth (see charts below) as wages’ share of the economy has declined for decades, in effect transferring trillions from labor to the Financial Nobility.
This neofeudal arrangement is about to change as Universal Basic Income (UBI) or its equivalent becomes the accepted status quo solution to neofeudalism’s soaring inequality. Since there’s no limit to how much currency can be created by the Federal Reserve, then why not distribute enough “free money” to the serfs to tamp down the brewing revolt?
What the political class and the Financial Nobility don’t yet grasp (due to their complete disconnect from neofeudal daily life) is that ALICE will never go back to her insecure, low-wage job, ever. No matter how meager the UBI, permanent unemployment, stimulus or whatever the political class calls the distribution of “Fed free money,” ALICE will find a way to escape the bonds of neofeudal serfdom.
As I’ve noted here many times, the cash / informal economy beckons. All sorts of labor arrangements can be made on ALICE’s terms, not the Big Tech monopolies’ terms. No wonder the Financial Nobility is so desperate to eliminate cash. But other currencies may fill the need if the Neofeudal Overlords try to eliminate cash dollars.
Liberty and freedom are not just lofty academic abstractions; what matters is being freed of the neofeudal chains of Big Tech monopoly platforms and the Financial Nobility’s other fiefdoms.
Of related interest: Why the Pandemic Is Forcing Women Out of the Workforce (via A.P.)