New Detroit Shows What Neo-Feudalism Actually Looks Like

Greektown, Not Kotkin

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[AUDIO] Detroit Shows What Neo-Feudalism Looks Like

Detroit has long been a byword for dysfunction and disorder. That’s for good reason: a mix of globalization, union intransigence, and Civil Rights-fueled disorder hollowed it out in the mid-1960s and 70s, and it went from being the Paris of the Midwest to a hollowed-out hellhole. It’s now known for blighted neighborhoods where houses either sit hollow and rotting or are bulldozed to form empty, weed-covered blocks amidst crumbling infrastructure. Crime is high, the city declared bankruptcy in 2013, and industry no longer supports, much less invests in, the city in the way it once did.

So, if there ever was a city with much potential that could be unlocked by elites tired of seeing their city rot, it was Detroit a few years ago. More on this in a minute.

Meanwhile, we’ve also seen the renewed rise of a hyper-wealthy economic elite with more power to shape government than has been the case since the crushing reforms of the early 20th century. That elite has many flaws, but could be great should it choose to be, much as the Virginia gentry went from being a collection of grasping economic elites to a true upper class of noble, service-minded gentlemen over time.

Particularly, were the current crop of economic elites to return to caring about a particular place and people, as was once the case, and use their wealth to support the communities in which they live, all would gain a great deal from their doing so. Namely, they could become vastly more powerful at the local level by transmuting their wealth into political power, and in so doing make at least some of their wealth somewhat safer and more stable than if left invested in frothy public markets.

This is, after all, why the aristocracy—and those who wanted to join it—always invested in land until forced out of its estates during the egalitarian mess of the early 20th century. Land ownership can grant the owner significantly more political power than abstracted, financialized wealth if wielded wisely, as shown by the Virginia gentry and British landed elite. Similarly, the way in which the Fitzwilliam family parlayed its coal mining operation into immense local political power and no small degree of national political power shows the general manner by which the fusion of local investment and the scale of industry can empower elites with newer fortunes.

While that was crushed by expropriation and death taxes, it is now returning, and a form of neo-feudalism is developing as the wealthy—tired of being expropriated and generally sensing that the government has failed them and everyone else—try to turn their fortunes into political power. Author Joel Kotkin, describing this thesis in his The Coming of Neo-Feudalism, notes:

Feudalism is making a comeback, long after it was believed to have been deposited into the historical dustbin. Of course it will look different this time around: we won't see knights in shining armor, or vassals doing homage to their lords, or a powerful Catholic Church enforcing the reigning orthodoxy. What we are seeing is a new form of aristocracy developing in the United States and beyond, as wealth in our postindustrial economy tends to be ever more concentrated in fewer hands. Societies are becoming more stratified, with decreasing chances of upward mobility for most of the population. A class of thought leaders and opinion makers, which I call the "clerisy," provide intellectual support for the emerging hierarchy. As avenues for upward mobility are diminishing, the model of liberal capitalism is losing appeal around the globe, and new doctrines are arising in its place, including ones that lend support to a kind of neo-feudalism.

His thesis then goes off the rails from there, as he insists that the “neo-feudal” elites are on the same side as the “clerisy”, by which he means opinion-makers and shapers like professors.¹ He also spends a great deal of time discussing climate policy, wealth inequality, and the like. I don’t think much of this is particularly accurate, as the sorts of economic elites who are attempting to turn wealth into power—namely the coalition of bankers, industrialists, and somewhat right-leaning technology types—are generally at odds with rather than aligned with the “clerisy” and are self-made. Elon Musk is a prime example.

Regardless, his basic point is a good one. The failure of government, rise of great fortunes, and unsettled nature of society at present collectively mean that money is no longer just money. It is, rather, the potential for power. Ownership of real assets that can be used to influence the shape of things in the real world—meaningful stakes in powerful companies, control over a politically significant amount of housing or land, or control of companies on which the government relies or platforms on which the public relies—can mean real power, the ability to decide the exception at a given level, typically local. Thus, the rise of “neo-feudalism” is not the combination of institutions and Big Business in a stagnant economic environment, but overlapping bounds of authority and obligation rooted primarily in political power built from and backed by meaningful amounts of concentrated wealth, whether in land, resources, or companies.

Elon, again, is one good example. Without SpaceX, America would be in a bind. His control of it means that he has a certain degree of wiggle room in terms of national regulation or political pull that a furniture maker might not; the guy whose factory makes your cabinets couldn’t cause a conniption by cutting off Ukraine’s satellite communications access after they threaten him. Then again, as an important local employer, he could do the same thing at the local level. Certainly much more so than an accountant or lawyer, even if their roles are more “prestigious”.

Much as the powerful in the feudal system encompassed lords, knights, and many others, with the number and size of manors generally meaning more power and the “middle class” such as it was largely excluded from power (except for the Hanseatic League, which turned commercial wealth into military might), power sharing neo-feudalism involves all those who have built enough wealth concentrated at a specific point to be politically relevant at that point, and to add weight to their opinions. Thus a local employer of note generlaly has more say than the fellow with a large stock portfolio or high income, and that can scale. This is not the mid-20th century, when all businessmen had to live in fear of an expropriation-minded government, nor is it the 1980s and ‘90s, when generally good government meant the wealthy could check out of politics and social atomization meant bad business behavior like mass offshoring and the like could be gotten away with.

This presents opportunities. Whereas in the mid-20th century, companies like Ford were at the mercy of the state and federal governments, which generally mugged them to pay for welfare programs, now companies can and sometimes do push back. Anthropic is feuding with the Pentagon; regardless of how that goes, it’s the sort of open conflict tech companies generally tried to avoid just a few decades ago. Gun and ammunition companies now routinely refuse to sell to states with anti-2nd Amendment legislation. Erik Prince thumbed his nose at the Obama regime and hunted pirates for the UAE after being harassed by and losing Blackwater thanks to the machinations of Hillary Clinton; now he is pacifying the Congo for corporate interests. The times, they are a changin’.

This leads us back to Detroit.

Some cities can still get away with mugging those within them. New York City has become infamous for this: with so many businesses headquartered there for legacy reasons, and so much capital invested in its real estate, it can tax and spend to its heart's content while doing nothing about the ever-growing crime problem. Or, at least, it used to be able to. The money might be drying up as the wealthy give up in disgust and leave.

Detroit has not been one of those cities with such public policy wiggle room in a long while, particularly after its bankruptcy. It, rather, was in a position where striking an informal deal to provide public safety in exchange for investment seemed like a tantalizing prospect rather than an intolerable abridgment of its authority.

That is, a quiet and generally effective form of Neo-Feudalism could fix it by bringing order and something approaching prosperity, much as the original feudalism rose out of the chaos of early Dark Ages Europe.

Neo-Feudalism and Detroit

Such is what has happened. The urban core of Detroit has gone from being a hollowed-out hellhole populated primarily by crackheads and vagrants to a relatively functional city featuring the usual amenities—restaurants, entertainment, sports teams, and so on—and law and order.

A hugely enlarged police force refuses to tolerate disturbances of any sort within the “Green Zone” of sorts that has been established, turning a chunk of the city into a livable place: thanks to renewed investment and policing, downtown Detroit, Midtown, Corktown, Brush Park, and Greektown are safe and relatively thriving areas. It is in that handful of areas that jobs, resident amenities, safe housing, and visitor attractions are concentrated. Further, it is that area that is safe. Outside that invisible wall of enforcement lie the barbarians of the wild—crackheads festering in rotting, abandoned homes as highwaymen, Moorish pirates, and Raubritter once lurked beyond the bounds of feudal authority.

Meanwhile, the other end of the bargain is being upheld as a few notable families pour resources into redeveloping the Green Zone areas of the city.

Dan Gilbert, owner of Rocket Companies and Bedrock, moved thousands of employees downtown and renovated dozens of buildings that he bought, revitalizing the area and reinvesting in it.

The Ilitch family—owners of Little Caesars, the Detroit Tigers, and the Detroit Red Wings—rebuilt the Fox Theatre, helped deliver Comerica Park and Little Caesars Arena, and developed the surrounding District Detroit. Partnering with the Ilitches is Stephen Ross of Related Companies. He partnered with the Ilitches’ Olympia Development on the $1.5 billion District Detroit project, which includes the development of housing, offices, a hotel, and retail around Little Caesars Arena, along with the aforementioned revitalization of Fox Theatre and Comerica Park. Related brought additional capital and development expertise to the project.

Also participating is the Ford Motor Company and the Ford family, which has led, with a $740 million investment of its own, the ~$950 million restoration of Michigan Central Station in Corktown, and is further strengthening the local economy by developing an “innovation district” there to attract new engineers, researchers, and the like.

Finally, Tom Gores of Palace Sports & Entertainment has participated. Gores owns the Detroit Pistons and is involved in the $3 billion “Future of Health” collaboration with Henry Ford Health and Michigan State University. That project includes significant real estate investment, including redeveloping the former Henry Ford headquarters into apartments.

A few through lines run through these names and projects: those involved are either Detroit natives or have close familial and business ties to the city. They need not have decided to invest in it, but did so to revitalize the portion of it within the “walls” of police enforcement, and in so doing turned generally abstracted financial wealth into tangible, physical wealth that gives them more power over the local government and turns the prosperity of their companies into prosperity for their city.

Gilbert pulling thousands of employees into an area of the city he bought and redeveloped after ensuring there was enough policing to make it safe is the prime example: those real estate investments are paying off because Rocket and Bedrock employees have to be there for work, and they are ok with that because the area is nice, newly developed, and safe now…and their boss has an immense financial incentive to keep it that way. So long as they keep working for him and keep him wealthy, he’ll keep deploying the resources and political pull necessary to keep the area in which they live nice and on the relative ascent. Such is the informal bargain, and it appears to be working.

It was cooperation between the municipal authorities and the few wealthy families behind the project that made it possible. The city wanted to restore its tax base while drawing new visitors into what once had been an utterly decimated and hollowed-out urban core. The families, by bringing in thousands of workers and renovating old buildings, could make that happen. For a price, that is. Gilbert got over $600 million in tax incentives for his projects, for example.

On the public order side of the equation, the city provided extra downtown patrols, lighting, and ordinance enforcement. This is meant to keep the barbarians at bay and inspire confidence in the large crowds of sports fans and tourists, while protecting the high-value investment properties that are concentrated in the “Green Zone”.

Not content with or not trusting of the city’s efforts, Gilbert also built his own large private security force and camera network that coordinates with Detroit Police, paying out of pocket to ensure order is maintained and his investments are safe. What does that sound like?

The benefits to locals, particularly small property owners, have been immense. For example, in the most famous of these redevelopment projects within the Green Zone—Greektown—much of the real estate is still owned by local Greek families who held on through the chaos. They now implement the neighborhood revitalization at the local level, receiving many of the same tax incentives, credits, and city cooperation as Gilbert, just at a smaller scale. The grand projects of the great families—new offices, housing, stadiums, a restored train station, and entertainment venues—have helped them substantially, creating the necessary density of workers, tourists, and high-value property that led the city and private security firms to concentrate cameras, patrols, and order-maintenance in the downtown core and to make the local economy functional again. They, in exchange, have provided the sort of private amenities—dining options, for example—that keep workers and tourists around and thus make the grand projects of the great sustainable and remunerative.

In this, one sees the vague outlines of neo-feudalism, particularly the reciprocating bonds of duty and private parties gradually taking on some aspects of the role of the state due to its inability to deal with barbarians.

This is less formalized than in the feudal world, but is nevertheless present.

For example, the symbiotic relationship between the employees who have been brought to Detroit, the hugely wealthy families who brought them there, and the small real estate owners who fill in the cracks to make it work.

Similarly, Gilbert and the Ilitches can hardly trust the city to provide police protection for their investments in the requisite amount out of the goodness of its heart. Instead, they pay for the privilege of having their properties defended by investing heavily in a compact (and thus defensible via exclusion) urban core, supplement that with private security, and recoup that cost through incentives and redevelopment. All are dependent upon all, with mutual and overlapping bounds of authority, duty, and financial incentive.

Further, it is not open but opaque, being a workable solution developed organically through tacit agreements regarding what had to be done and a web of one-on-one agreements that collectively make the project work.

Finally, though no wall of stone has been built, there is a wall of blue-uniformed officers, cameras, and private security that separates the “Green Zone”—that safe zone of a few areas described earlier—from the rest of the city, which is generally in hellish condition. Perhaps that will be fixed over time as the wall expands outward with more investment and renewal; perhaps it will contract a bit as the costs bite.

Regardless, it’s a generally workable solution for those inside the circle, and as they are the ones who pay taxes, they are the ones the distressed city government has to worry about. Further, as they’re represented generally by the big players in the redevelopment, they have a voice that can be heard. Detroit might not care about what happens to Suzie from accounting at Rocket, but if something happens to Suzie and Gilbert has to take that to the city, there will be problems for it, and it will have to rectify the situation, generally, at least. He has enough resources to get the city to listen, and his reliance on his employees staying there for his investments to pay off mean he has incentive to. There is some degree of obligation and duty on both sides of the equation, not just a garnering of money and power.

Such is what Neo-Feudalism looks like, and it will become increasingly common as public order continues to break down along South African lines for reasons of ideology.

Don’t want to be eaten by a cannibal? Well, if it is you alone speaking and your money is invested in mutual funds locked up in a retirement account, no one cares. You can exert no force upon the system. But what if you work for the guy who owns the developments along the street where a cannibal was caught eating somebody? What if the financially significant local manufacturing plant employed the person who was eaten, and the city is struggling to raise funds to pay for a new school? If that developer or owner is a reasonable man guided to at least some degree by virtue and duty, that situation can be rectified much as it was in Detroit’s Green Zone. Better yet, we all can and should aspire to be the person who can rectify the situation through exerting pull within the local government, direct oversight of it, or both. Either way, the barbarians need to be kept outside the gate.

I don’t think generalized public order is coming back any time soon. Perhaps once we’re through the genetic bottleneck of modernity, but not before then.

What is coming back is a set of conditions by which those who are frustrated with the anarcho-tyranny of the present can strike a deal that obviates it for their dependents, as has largely happened in the Green Zone areas of Detroit.

That looks much more like feudalism—a hierarchical system of dependency, obligation, and service in exchange for protection—than anything else. Thus, being either a dependent or provider to dependents (generally, in a feudal system, one is both at ones, as with the owner of a small manor who has those providing resources to him as he provides resources to a greater lord up the food chain) is critical, for it is the only way to get a good deal out of the situation and be within rather than without the Green Zone, the modern equivalent of the castle walls. Or one can take to the hills and hope for the best. Either way, avoiding being in a blighted zone is a must, and these are the paths to avoiding that.

Naturally, then, cultivating a virtue and duty-oriented elite is of immense importance. Here’s how Virginia managed that:

Virginia's Cursus Honorum

1. For example, he somewhat misses the point, I think, in arguing that the neo-feudal elites and “clerisy” are on the same side:

Just as the clerical elite shared power with the nobility in the feudal era, a nexus between the clerisy and the oligarchy lies at the core of neo-feudalism. These two classes often attend the same schools and live in similar neighborhoods in cities such as New York, San Francisco, or London. On the whole, they share a common worldview and are allies on most issues, though there are occasional conflicts, as there were between the medieval nobility and clergy. Certainly, they hold similar views on globalism, cosmopolitanism, the value of credentials, and the authority of experts.

This power nexus is enabled by technologies that once were widely seen as holding great promise for grassroots democracy and decision making, but have become tools for surveillance and a consolidation of power. Even as blogs proliferate, giving the appearance of information democracy, a small group of companies-mostly based on the West Coast of the United States— exercise tightening control over the flow of information and the shape of the culture. Our new overlords do not wear chain mail or top hats, but instead direct our future in jeans and hoodies. These technocratic elites are the twenty-first-century realization of what Daniel Bell prophetically labeled "a new priesthood of power" based on scientific expertise.

The future of politics, in the high-income countries at least, will revolve around the ability of the dominant estates to secure the submission of the Third Estate. As in the Middle Ages, this requires imposing an orthodoxy that can normalize and justify a rigid class structure.