One of the potential outcomes from the Coronavirus pandemic is that many small businesses will collapse and their dip in their share of the total GDP will surpass the dip from the Great Depression. Most small businesses already fail, but this will increase even more as small businesses are unable to bring in additional revenue during this crisis.
Small businesses also don’t make the big dollar donations to political campaigns necessary to get government bailouts. While they should be able to apply to get “interest free” loans, there are obvious concerns about the fine print in the CARES Act, with Forbes reporting that businesses can get grants for $10,000 that don’t have to be paid back, any additional money will be for loans that have a deferred payment for 6 months and 1% interest rate for the first two years and then becomes a 3.75% interest rate.
With a potential oligopoly rising from this economic crisis, the concern is what will happen to the workers of the country. One possibility which will arise from this crisis will be a rebirth of the “company town.” For those who aren’t familiar, company towns are one of the best examples of why libertarians who say, “if it’s not government doing it, it’s not oppression” are fundamentally wrong. Grapes of Wrath and Of Mice and Men include depictions of company towns and stores and the exploitation the sharecroppers suffered due to them. The sharecroppers lived in the “town” on the landowner’s property and would shop at the company store, which is the store that exists on the landowner’s property and serves as a monopolistic market for all the workers. Often, this monopoly was either ensured by paying workers in “scrip” (which could only be redeemed at the company store) or by the sheer realities of geography (there were no nearby stores). In either case, it served to exploit workers and ensure they didn’t have the means to strike out on their own.
It was possible to end up in debt to the employer and essentially find yourself obligated to work for the employer for another season. Interestingly, the sharecropper turned debtor is one of the theories behind why serfdom became widespread throughout Europe: nominally free men in medieval Europe rented land from lords, had a bad season and couldn’t pay the full rent, and eventually found themselves in a hole they could not work their way out of. While that is not the only reason for serfdom becoming widespread (something akin to it had existed since before the collapse of Rome), it certainly explains why many freemen became serfs.
Why is this issue about serfdom relevant now? Well, with the loss of jobs and the loss of small businesses, a lot of renters are going to potentially lose their homes. Facebook, Amazon, Google, and some other larger companies have been building facilities for their employees for some time. It is cheaper for all involved (because of economies of scale) to pay employees slightly less but provide them free housing at the company compound. Facebook and Amazon have been going farther than this by planning actual towns. Looking at plans for Facebook’s Willow Village makes it seem somewhat desirable. You can live, laugh, love at the place you work. On its surface, it made me think of how this is basically like serfs living on the manor. Now, I’m not the only one to make the connection between shady business practices and feudalism. James Weinstein called it “semi-feudal” in The Long Detour: The History And Future Of The American Left and PBS even compared it to outright slavery. Slate and other people that support Facebook will obviously support this move and some libertarians justify this type of arrangement as better than the arrangement between man and the State because it’s more akin to a real contract and thus “voluntary.”
Due to the unequal bargaining power and the need for jobs, this will likely end up being far more like the company towns of the past than these businesses care to admit. While company towns thrived because the government couldn’t enforce fair labor practices, our government wouldn’t enforce rules against these companies if they get enough senators in their pockets.
Can Facebook get away with paying employees that live on site in scrip? Probably not, but they probably could get away with paying them in a cryptocurrency they design. Of course, a “serf” living in a Facebook village won’t be like a serf of the past. Between the student debt, the deracination, diversity, and the degeneracy, this new lifestyle will combine the worst aspects of being a “wagecuck” with the worst aspects of serfdom. That’s why it’s even more important to support local business (however we can in this trying time) and make sure the local support networks are strong to avoid such a dystopian fate.
-By Ethan
O I’m a good old rebel, now that’s just what I am. For this “fair land of freedom” I do not care at all. I’m glad I fit against it, I only wish we’d won, And I don’t want no pardon for anything I done.
Part of the solution is to continue to support small businesses so they don’t go under (meaning this negative outcome does not emerge). Another part is to make sure your family and local community are as self-reliant as possible. The other part is to put pressure on the legislature when bailout requests come in to *not* bailout the big businesses. There are likely additional steps that can be done, but these are the ones that directly come to mind.