Feudalism and macroeconomic cannibalism

The revered Chinese author Lu Xun (1881-1936) described feudalism as sort of predatory structure that caused ordinary people to descend into cannibalistic rituals. In his seminal work, The Diary of a Madman (1918), he provided a scathing critique of feudalism as the cause of gross social dysfunction. This sentiment is mirrored in macroeconomics, where there is a growing area of investigation that examines how feudal structures create inter-sectoral “cannibalism” through the distortion of government taxation decisions (see the literature survey of Erickson and Vollrath (2004)). This is done by increasing the tax burden of the manufacturing and service sectors at the expense of the oftentimes semi-feudal agricultural sector in numerous developing countries (Rangazas and Mourmouras 2008: 8). —> Read More