The dystopian nightmare of billions of propertyless workers serving a minority of landowning elites is already here. But many Americans awoke to this reality following a Wall Street Journal report outlining how BlackRock and other private equity funds buy up entire neighborhoods, renting out blocks of residential homes as the properties accrue in value.
“We’re not watching a conventional housing market,” Fox News host Tucker Carlson said in response to the Journal’s article. “We’re high-speed becoming a nation of renters.”
When private equity firms like BlackRock buy residential homes, those with concentrated capital benefit at everyone else’s expense. “Neo-feudalism” is the term best describing the relationship between renters and the monolithic structures profiting from their living conditions; the current system resembles European feudalism wherein lords maintained massive estates, while a majority of propertyless serfs maintained them. Leftist writers have written extensively about the horrors of late capitalism, but a subset of thinkers on the populist right have shaped the concept of “neo feudalism” into a mainstream talking point now promoted on Fox News.
“Your generation, the readers of New York Magazine, you’re nothing but 18th-century Russian serfs,” populist ringleader Steve Bannon told an interviewer in 2018. “You’re better fed, and you’re better dressed, and you’re better educated. But you don’t own anything. And you’re not going to own anything.”
In The Coming of Neo-Feudalism: A Warning to the Global Middle Class, conservative geographer Joel Kotkin warned the United States was being overtaken by “a new social order that in some ways more closely resembles feudal structure — with its often unassailable barriers to mobility — than the chaotic emergence of industrial capitalism.” Kotkin’s solution? Further deregulation. In a further twist of irony, the academic promoted praise of his book from the urban theorist Richard Florida (who coined the term ‘creative class’ which has become synonymous with the contemporary upper feudal caste Kotkin sees as suppressing everyday people).
Neo-feudalism owes its conditions to neoliberalism. The Biden administration is staffed with BlackRock’s former senior leadership: National Economic Council Director Brian Deese was previously an investment executive at the firm, Treasury Department official Adewale Adeyemo was chief of staff to BlackRock CEO Larry Fink, and chief economic advisor to Kamala Harris was previously BlackRock’s chief investment strategist. It is hard to imagine any reversal happening when those tasked with overseeing monetary policy are connected to the financial firm benefiting from the current system.
Outwardly progressive media outlets like Vox meanwhile say the threat of private equity firms in real estate is overstated, and “the boogeyman isn’t who you want it to be.”
“The fundamental reason these large investors are gaining market share is because we have turned housing into a quickly appreciating asset,” writes one of their policy reporters in a piece titled Wall Street Isn’t to Blame for the Chaotic Housing Market. “Investors go where the yield is. They are profit maximizers and face strong pressure to return large gains to shareholders. Want to stop them? Build more homes, ensure they cannot have a large market share and engage in predatory behavior, and reduce the incentive for yield chasers to further commodify the market.”
Sure, let me just get on that.
Rather than examine the structural cause of the problem, which is a system designed to benefit companies like BlackRock holding trillions in assets, Vox puts the blame on the elusive “we” and frames BlackRock as innocently chasing yield like some dog who couldn’t help defecating on the carpet (the article is currently indexed as the first Google search engine result for “BlackRock Buying Homes”).
Although the Vox article notes individual home ownership has been on the rise for Americans during the pandemic, so has the accumulation of homes by private equity firms like BlackRock; the latter of which is much better positioned to handle a sudden economic downtown. Rising home costs, a housing supply shortage, and rampant inflation will likely make home ownership more difficult in the future, and lead to a situation in which a majority of Americans become renters.
The decline of ownership is not limited to real estate either. Even well before the pandemic, Silicon Valley executives fetishized the concept of the “sharing economy,” wherein ownership becomes an obsolete concept as consumers increasingly rely on-demand services. Billionaire Bill Gates in 2018 wrote a blog post about how a large swath of the modern global economy was being powered by “intangible assets” like software (“something you can’t touch”). Yet over the past several years, Gates has acquired over 242,000 acres of farmland. There is a juxtaposition between what is being preached by those who created such abstract concepts as cloud computing, and the physical territories they are amassing with their capital.
The cavalier attitude toward neo-feudalism from progressive media outlets, a neoliberal administration hiring the enablers of its conditions, and left-leaning technocrats amassing more land than any 18th century lord dreamed of: An opening has emerged for Republicans to channel populist sentiments. Tucker Carlson realizes this. Steve Bannon realizes this.
And if the events on January 6th were any indicator, the savvier heir apparent to Trump will know how to properly mobilize these hatreds of the current system.