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Tom Au, CFA
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In the early 1990s, during the middle of a secular bull market, I began work on "A Modern Approach To Graham and Dodd Investing," that was not particularly suited for the decade of the 1990s, but was ideally suited for the following "Lost Decade" of the 2000s. In the early... More
My company:
Carryl Capital Management
My book:
A Modern Approach to Graham and Dodd Investing
  • Why A New Feudalism Is Plausible 0 comments
    Nov 16, 2009 5:26 PM

    The original feudalism started (around the fall of Rome) with a simple invention called a stirrup. This was a device that stabilized a rider in a horse by anchoring his feet  so he could sit up straight (the metal was then attached to the saddle). Prior to the stirrup, the better organized yeoman infantry armies (e.g. those of Rome), had the advantage against cavalrymen awkwardly seated atop horses.

    Armed with a horse, sword, armor, and stirrup, a knight was WAY more powerful than Pat Buchanan's "peasants with pitchforks." It typically took five to ten such peasants to kill a single knight (if they were so brave as to take the consequences, and well enough organized). Only rich people could afford armor and a horse, with or without a stirrup. After the introduction of the latter, bands of knights rode around the countryside terrorizing formerly free peasants until they were reduced to little more than slaves.

    The emergence from the Dark Ages (and the fight for freedom) required about a Millennium. It was the result of the introduction of gunpowder, and guns, which equalized the power between poor peasants and rich horseriders.  (Even with a stirrup, horseriders with swords and pistols had only a slight advantage over much "cheaper" infantry armed with muskets and bayonets.

    How does this affect modern society? High speed computers give rich traders like Goldman Sachs huge advantages over the "peasantry." High speed trading is their way of "roaming the countryside and terrorizing the peasants." If the rest of us are forced out of the capital game, the logical next step would be the "enfeudalization" of the American (or world's) people by large capitalists.

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