This paper claims that neo-liberalism is a period that capitalism calls and brings back some archaic forms of class domination depending on the results of marketisation policies in education. Marketisation policies in education are accompanied by specific shifts in ideological discourses, such as meritocracy that were valid only under the welfare state. Meritocracy, as an ideology at the heart of capitalist society, claims that allocation of social status in modern societies depends on merit which is obtained through educational success, unlike in feudalism that depends on family background. In fact, family background, through its effect on educational success, had continued to be an important factor in the allocation of status in modern societies. This effect was only compensated for to a certain extent by the idea of welfare state. The welfare state is a relatively equalitarian agent for it provides widespread educational opportunities and for it intervenes in the education-market relationship on behalf of public interest. However, the liquidation of the welfare state in the neoliberal era with the help of marketisation policies in education, caused the family background to step forward on the allocation of the status. That the family background is again the one and only determinant of social status, meritocratic ideology totally declines. The only difference in terms of the allocation of social status between feudalism and neo-liberal capitalism is that the family background takes effect thanks to the education system in capitalism. This is a distinctive kind of social segregation mechanism in the neo-liberal era that could be named as "neo-feudalism". Under neo-feudalism, family background does not affect the process directly but it does indirectly through its effect on education. The neofeudal segregation is a distinctive kind of reproduction of social inequalities through education.