"We have abolished capitalism in Poland. Now we must abolish feudalism." So said Michal Kalecki in the 60s. I suspect that western economies today face a similar task, as feudalism is still rife.

By this, I don't mean merely that we have the high inequality and low social mobility that characterised feudalism, nor that immigration controls are a form of feudalism in that they ensure that one's life chances are determined at birth.

Instead, I'm thinking of modes of exploitation.

We must distinguish between capitalist exploitation as Marx understood it and feudal exploitation. The former is an economic phenomenon, arising from capital's greater economic power over labour. The labour market, thought Marx, was "a very Eden of the innate rights of man. There alone rule Freedom, Equality, Property and Bentham." Such apparent liberal equality facilitated and disguised exploitation and oppression.

Feudal exploitation, by contrast, is more obvious. Markets play no role in it. Instead, as Ellen Meiksins Wood wrote:

When surplus labour has been appropriated by exploiters, it has been done by what Marx called "extra-economic" means- that is, by means of direct coercion, exercised by landlords or states employing their superior force, their privileged access to military, political and judicial power. (The Origin of Capitalism, p95-96)

Exploitation of this form is still widespread - perhaps increasingly so.

Why, for example, was Dido Harding put in charge of Test and Trace? It's not because market competition showed her to be the most competent, but because she has achieved the modern equivalent of winning the favour of the king. She's exploiting political not economic power. As indeed, might be many other outsourcers.

Another form of feudal exploitation is simply buying political favour, as when property developers gave money to the Tory party just before Robert Jenrick changed planning regulations to their advantage.

Yet another expression of privileged access to political and judicial power is what Robert Kuttner and Katherine Stone call "a one-way seizure of private power and law by elites". As Martin Wolf says:

The activities of companies, as lobbyists, funders of research and donors, play a decisive role in creating the rules of the political game...Corporations are not players of the game, playing according to rules set by others. They play the game according to rules they largely set themselves.

Pharmaceutical companies, for example, have in effect legalized opiate trading; banks have ensured they operate on low capital requirements, thus profiting themselves at the expense of greater risk for the rest of us. And firms generally use restrictive patent law to increase their profits.

And then there has been the use of the state to directly strengthen capital to the detriment of labour, by weakening trades unions or pursuing austerity policies. As Lance Taylor says of wage repression, "something other than the market is at work here - like power relations."

Indeed, we can think of neoliberalism not as a simple assertion of free markets but rather as the use of the state to increase the power of bosses.

Marx famously said that "the executive of the modern state is nothing but a committee for managing the common affairs of the whole bourgeoisie." He failed to add that this management would often be done not in a way unique to liberal democratic capitalism but in a manner which pre-capitalist monarchs might recognise.

On top of all this, there are hybrid forms of exploitation, wherein power derived from the market is exercised in quasi-political ways - as we see in the rise of guard labour, in the use of technologies such as CCTV to control labour, or in surveillance capitalism.

But there's something else. Another distinction between capitalist and feudal exploitation is that the former drives up productivity as capitals compete to intensify their use of labour whereas the latter occurs without much change in technical efficiency.

The stagnant labour productivity we've seen in the last decade is, in this sense, a feature of feudal exploitation, not capitalist.

The relation between modern feudalism and stagnation is perhaps both cause and effect. On the one hand, incumbents' use of political power has suppressed competition and dynamism - a process described by Brink Lindsey and Steven Teles in The Captured Economy and Thomas Philippon in The Great Reversal. Also, feudal-type power relations in the workplace demotivate workers and detract from productivity. On the other hand, though, feudal exploitation can be the result of stagnation. If it's so hard to raise productivity, why bother? Why not simply seek wealth extraction rather than wealth creation?

All this, however, brings us to a problem. In the UK (and indeed in many western economies other than the US) wage and profit shares of GDP haven't changed much for decades. Before Q2's Covid-induced rise, labour's share was much the same as it was in the early 80s. And the profit share was the same as in the early 60s*. This means that if - as is likely - feudal exploitation has increased since the 1970s, it is at the expense of capitalist exploitation.

Which leads us to some nice paradoxes. From this point of view post-war social democratic economies with their institutions of countervailing power were more capitalist than are today's economies, insofar as they delivered capitalist rather than feudal exploitation. And Thatcher was (in effect if not in intention) not so much a capitalist revolutionary as a feudalist counter-revolutionary. And it means that it is perhaps social democrats who want to restrain corporate political power who are more capitalist than are those who defend our current inequalities.

* The numbers in my chart don't sum to 100 as I've excluded other incomes such as those of the self-employed, rents and taxes.