The Fatal Flaws of Plantation-type Economies

I came across a post on salon.com which argues that the USA is headed towards a plantation-type economy based on “southern” aristocratic (read that as feudal) values. While that line of thinking does make some sense, even if the north-easterners were not much better human beings than southern slave owners, it misses an important and rather obvious point concerning the viability of feudal systems in the present and future.

Feudal systems require a large and external market for their labor-intensive products or services.

All feudal systems require a large pool of poor, low skilled and abundant laborers. However these slaves, serfs and indentured laborers are usually too poor to purchase what they produce. Hence plantation economies require a large, external and wealthy market for their products. The slave owners and plantation aristocrats of the 17th and 18th century (be they in the USA, Caribbean, South or Central America) had a ready-made market for their produce in the rapidly industrializing economies of Europe. Even the indentured labor economies prevalent in the post-civil war south had a market for their products in the rapidly growing and increasingly affluent Yankee north.

But is that still the case?

Where are the new costumers for low-cost products and services offered by plantation-type economies going to come from? Western societies are rapidly aging and the numerical strength of their younger generations is rapidly going down. It certainly does not help that the younger generation have low incomes and poor future prospects due to stupid economic policies. Furthermore, they themselves are either not having any kids or having even fewer kids. East-Asian countries are also following that same path of low and decreasing fertility and poor economic prospects for their next generation. Even countries such as Iran, India and Saudi Arabia now have fertility rates that are either less or close to replacement.

High-tech and skill based industries such as making specialized engineering, electronic products, chemicals etc are somewhat less susceptible to gross demand shrinkage by population aging and contraction, though they can still shed jobs due to automation and outsourcing. However relatively low-tech stuff such as product assembly or raw material extraction and processing are susceptible to gross demand shrinkage and job loss if the size of the overall market decreases.

Plantation-type economies throughout human history never had to face anything more than temporary dip in demand for their products. The loss of old customers through death in wars, epidemics and economic downturns was more than balanced out by even more younger customers. That “unchangeable” historical trend has now changed- throughout the world.

Which brings us to the second flaw of plantation-type economies which is far more relevant today than it was 100 or even 60 years ago. These socio-economic systems are characterized by low social cohesion, even lower trust and an inability to get large projects done or maintained.

But, once again, why?

Feudal societies have only one tool or method to motivate people to slave way- the threat of violence or death. Coercion is capable of forcing people to pick cotton, dig ditches, raise pigs and do other pre-industrial or early industrial era vocations. However you cannot coerce people to build and maintain usable electrical grids, civil engineering projects, high-intensity transportation systems, decent health care systems or even maintain good water supply and sewage disposal systems. A very significant factor behind the lubeless sodomy of the South by the Yankees in the civil-war was the former’s inability to run a functional industrial-age economy.

Today, even totalitarian countries such as China, whose economy is close to the slave-labor model dare not run their economies and societies as true feudal societies. Their feudal minded elite spend tons of money on power, infrastructure, education and betterment of their own population- if only to maintain their own power. They understand something which escapes many american CONservatives- a population which experiences an increase in their living standards under your rule is far more likely to stand behind and overlook your indiscretions. Investing in the betterment of your own country consolidates your power in a way that coercion never can.

Meanwhile american CONservatives are still mentally in the 1800s. They apparently believe that they can get way with much more of their bullshit, because the system has yet imploded. Then again, the stupid lumberjack who is hacking away at the very branch he is sitting on does not stop till the branch ‘unexpectedly’ snaps and kills him. I guess that is what the future really holds for American CONservatism. It is just too bad that they will have caused a lot of damage because they get exterminated in the collapse.

What do you think? Comments?

  1. July 2, 2012 at 7:32 pm

    I read somewhere that plows used by slaves had to be more durable because the slaves would try to break them….

  2. P Ray
    July 3, 2012 at 5:28 am

    East-Asian countries are also following that same path of low and decreasing fertility and poor economic prospects for their next generation. Even countries such as Iran, India and Saudi Arabia now have fertility rates that are either less or close to replacement.
    Syllogism time:
    Premise 1: People keep saying Islam will stop feminism.
    Premise 2: Iran, India, Saudi Arabia are Islamic countries (India, NOT Indonesia, has the worlds’ largest Muslim population, eventhough it doesn’t identify itself as a Muslim country)
    Conclusion: Islam will not stop feminism.

  3. Webe
    July 3, 2012 at 8:12 am

    There really is problem with productivity gains (automation, technology) if the dividends are not spread throughout society, but only go to wealth owners. As a thought experiment, imagine an economy in which a single wealthy person could produce everything everybody needed without any employees at all. Obviously there would be no demand, since nobody could produce anything the wealthy producer wanted. This is reductio ad absurdem for an economic model which does not distribute the dividends of their own cultural legacy and the gains made through increasing productivity, energy use, and techonology.

    However the term feudal is very out of place. Plantation economies are very different than feudal economies. Feudal economics are about pledges of allegiance between vassals and lords in a whole heirarchy of fiefs and loyalties. The whole system is predicated on the need to fend off external threats to ongoing agricultural efforts. And in the Middle Ages, a day labourer could earn enough in 4 months to feed himself and his family for a year. Wages have been going down for a long time.

    • P Ray
      July 4, 2012 at 1:55 am

      imagine an economy in which a single wealthy person could produce everything everybody needed without any employees at all. Obviously there would be no demand, since nobody could produce anything the wealthy producer wanted.
      There’s no way to yet produce hot, chaste girls.
      So there is still something wealthy producers want.
      You can boil a lot down to the idea that men do things to get noticed by women.

    • July 15, 2012 at 1:20 pm

      Your comment about feudalism was spot on. To this day, when I’m questioned about my preference for monarchistic rule over democratic rule, I say this, “In a monarchy, all of the rulers’ power is based on the will of the people. Even the most autocratic regime (barring regimes based on ruinous ideaologies such as communism) hold one basic premise: the better the lives of the subjects, the more the rulers are allowed to get away with. The worse the lives of the subjects, the sooner the axes start whirring and the fires begin to blaze. Conversely, democracies have deferred/muted responsibility structures. When something goes wrong in a monarchy, its the fault of the lord, of the lord’s liege, of the king, then heads start disappearing from bodies. When something goes wrong in a democracy, its always ‘someone else’s’ fault. Loans go bad, its the bankers fault to the owners’ faults to the legislators’ fault to the executive’s fault to the executive’s peoples’ fault to the opposing party’s fault to the peoples’ fault for electing the wrong representatives, while the problem goes unchanged… A baron can be disinherited, a duke can be banished, a king can be beheaded and the people can see the results of failure. But when it comes to autonomous businesses and ‘chosen’ officials, the assignment of blame (a necessary part of any form of successful change) becomes anathema. After all, it was rare for the average serf to have any sort of contact with anyone of a higher rank than his liege, but its the rare person in a democracy who hadn’t met her representative, or has had a few drinks with a loan officer or banker, etc. Familiarity breeds comfort as well as contempt, and its the rare person who feels comfortable with stabbing a ‘buddy’ in the back. It’s akin to the way that a stranger who touches a child inappropriately is a monster, but a family member who does the same becomes ‘misunderstood’ or ‘ol’ Cousin Morty’, while the actual molestation is allowed to continue unabated.”

  4. P Ray
    September 22, 2015 at 4:28 am

    “Investing in the betterment of your own country consolidates your power in a way that coercion never can.”
    http://www.dailymail.co.uk/news/article-3244449/Tap-water-Syrian-city-ISIS-control-undrinkable-brown-sludge-filled-worms-Islamic-State-engineer-charge-water-plant-steals-funds-goes-run.html
    Tap water in Syrian city under ISIS control is an undrinkable brown sludge filled with worms after Islamic State engineer in charge of the water plant steals its funds and goes on the run
    Apparently ISIS didn’t get the memo!

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