Difference Between Capitalism and Feudalism

Capitalism vs Feudalism
In economics, there are two related models that have shaped standards of living and social
classes today. These are Feudalism and Capitalism. In fact, renowned economists like Karl
Marx, would recognize some correlation in the two constitutions such that in both structures,
the power of the dominant class is based on the exploitation of the subordinate class. Despite
the said similarity though, a great deal of differences exist between Feudalism and
Capitalism.
Feudalism is a political and military system between a feudal aristocracy (a lord or liege), and
his vassals. In its most classic sense, feudalism refers to the Medieval European political
system composed of a set of reciprocal legal and military obligations among the warrior
nobility, revolving around the three key concepts of lords, vassals, and fiefs. The group of
feudalism can be seen in how these three elements fit together. The obligations and relations
between lord, vassal and fief form the basis of feudalism. A lord granted land (a fief) to his
vassals. In exchange for the fief, the vassal would provide military service to the lord. The
land-holding relationships of feudalism revolved on the fief. There were thus different
levels of lordship and vassalage. In a typical feudal society, the ownership of all land was
vested in the king. Servicing him was a hierarchy of nobles, the most important nobles
holding land directly from the king, and the lesser from them, down to the seigneur who held
a single manor. The political economy of the system was local and agricultural, and at its base
was the manorial system. In the manorial system the peasants, laborers, or serfs, held the land
they worked from the seigneur, who granted them use of the land and his protection in return
for personal services and for dues. Throughout the medieval years, increase in
communication and the concentration of power in the hands of monarchs in France, Spain,
and England broke down the structure and facilitated the emergence of burgess class. The
system broke down gradually and was eventually replaced by a more contemporary approach
to resource management, which is Capitalism.
Capitalism is one of the most influential factors that define economic classes today. It is a
structure in which the means of production and distribution are privately owned and operated
for profit. Capitalists are conventionally composed of private entities that make and
implement market decisions regarding supply, demand, price, distribution, and investments
without much intervention from the public or government bodies. Profit, the major goal of
any capitalist, is distributed to shareholders who invest in businesses. Salaries and wages, on
the other hand, are paid to workers employed by such businesses. Capitalism, being an
influential and flexible system of a mixed economy, drove the main means of
industrialization throughout most of the world. There are different types of capitalism. These
are anarcho-capitalism, corporate capitalism, crony capitalism, finance capitalism, laissezfaire capitalism, late capitalism, neo-capitalism, post-capitalism, state capitalism, state
monopoly capitalism and technocapitalism. However varying, there is general agreement that
capitalism encourages economic growth while further extending disparities in income and
wealth. Capitalists believe that increasing GDP (per capita), the main unit in measuring
wealth, is set to bring about improved standards of living, including better availability of
food, housing, clothing, and health care. They deem that a capitalist economy holds better
practical potentials in being able to raise the working class income through new professions
or business ventures as compared to other types of economies. Unlike Feudalism though, it

doesnt maintain lords and serfs. Rather, it recognizes corporations and businesses to be the
ruling body above the working class. What makes it distinct from Feudalism is that the
subordinate class has freedom to demand from its employer and the employer hold limited
authority, mostly professional in nature, over the subordinate.
Summary:
1) Feudalism involves aristocracy and vassals while capitalism is privately owned and
operated for profit.
2) The obligations and relations between lord, vassal and fief form the basis of feudalism
while profit is the main goal of capitalism.
3) Capitalism doesnt maintain lords and serfs.
4) In capitalism, the subordinate class has the freedom to demand from the employer.