In the Middle Ages, feudalism was not thought of as a political system or even an economic system. The people using the term, and enforcing the rules, simply looked at it as a set of reciprocal legal and military obligations among the nobility. The lord or king, granted property, a fief, to a vassal, who then had military or economic obligations to the lord who granted it to him. The property could be land, titles or a right to collect taxes in a certain area of the realm. You’ll note that the peasants were not part of the discussion.
Just because the people ruling over the feudal system had no regard for the peasants, it did not mean the peasants were unimportant. The peasants worked the land, provided men for military service, operated the system of trade and food rents. Modern historians prefer to describe this period as manorialism. This a system that bound the peasants, the nobility and clergy together economically and politically through a hierarchy of economic obligations. Everyone kicked up to someone, in labor, kind or coin.
It’s easy to dismiss this organizational model, but it lasted for six centuries and provided the foundation for later developments like property rights and the rule of law. One big flaw in this system is it transfers the cost of society, and all the risks inherent in the human condition, to the lowest possible level of society. The peasants have to hand over food rents, even when there is a bad harvest or an invasion by barbarians. That’s because the lord of the manor owes his lord food rents or coin, regardless of the harvest.
Probably the biggest defect is it is a zero sum game at the top of society. The king can only have one heir. Similarly, his vassals can only have one heir. Usually, the goal was to have an heir and a spare. The spare served in the military just in case the first born son died or was an idiot. Extra kids and daughters would be sent off to the church. This is good for the church and military as they get high quality people, but the rest of society is locked into a swelling peasant population until nature culls the herd.
In his book A Farewell to Alms, Gregory Clark argues that Britain experienced an extended period where the peasants died off due to disease and violence. At the same time, members of the ruling class precipitated down to take up the positions in the lower classes. Downward mobility raised the mean IQ of British society until it reached an inflection point where it escaped feudalism and developed a market economy, and eventually the industrial revolution. Downward mobility birthed upward mobility.
Historians have argued that the black plague ended feudalism on the Continent because it knocked the foundation out from under the economic pyramid. When a third of the peasant population was killed by disease, the system ceased to be economically viable. Of course, the disease killed a lot of nobles too. Once the peasants were free to move about, they could go work for the highest bidder. The labor shortage caused by the plague gave the peasantry new economic power and that translated to political power.
The mobility of human capital, vertically as well as horizontally, coincides with the collapse of the feudal system. Whether it was the collapse of the system that unleashed this mobility or it was the mobility that undermined the system is debatable. Perhaps some combination of both. As the system became more fragile, mobility increased, which in turn made the system more fragile. The waves of plague that decimated the population finished off the process that started much earlier.
something similar happened in America in the 17th and 18th century. The second and third sons of land owners headed west looking for land. Of course, ambitious and talented men like Ben Franklin could literally go from rags to riches. Similarly, the post WW2 period was a time of high social mobility in America. Ambitious men could move up into the middle class or move west looking for a shot to make their fortune. It’s not an accident that the U-Haul Company started after the war. Americans are not moving much anymore.
Another interesting reality of the feudal system is that it was a rentier system. The people at the top did not make anything or improve anything. They were not particularly inventive or creative. The slow progress in agricultural technology is a good example of the technological stagnation. The nobles and the church lived off the rake. They skimmed from every layer of society. Feudalism was a pyramid scheme, where each layer paid the layer above a portion of their take. It operated a lot like the modern financial system.
The real key to the system, the point of system, was the protection of asset values, which mostly meant land, but also mines, ports and fisheries. The chief concern of the nobles was the preservation of the asset base. Owning land meant owning rents, which meant a permanent place in the ruling class. Feudalism was, at its heart, a way to protect land from external threats, as well as internal ones. In the modern age, the monetary system works the same way. It’s primary purpose is to protect and promote asset values.
The challenge of the feudal system was not a lot different from the challenges of the current age, at least for those who sit atop the social system The key was maintaining the balance between the social layers of the pyramid. Too many people in the managerial class means too many idle hands doing the devil’s work. They could also start complaining about their economic status. Maybe they would try to rally the lower classes to support their demands for a bigger share of the skim.