Feudal lords taxed people (mostly materials, not cash). In addition, peasants worked for the local lord and built castles, roads, cathedrals, etc. No money changed hands, but you could be fed for doing the work. That was a form of wealth redistribition -- the government taxes everyone, and then has people perform work, and gives them the taxes (food) that was collected.
If you look hard, you can see that America still follows an economic system that has some of these features. In other countries, it is even more obvious. People in China make $2 a year? Sure. They work, and the government keeps them from starving. Cash is really not required.
In the cities, things can be different. As the old Medieval saying went: "City air makes you free." The city burghers created the bourgeoisie -- the Middle Class that actually used money for daily living. Commerce and craftsmanship created real opportunity.
Note that in the Chinese countryside, the people are not free, but must worry about survival. Note also that we in the West have turned this around -- most of the people in our cities are not "free" but are wholly dependent on government handouts.
We are all so much closer to serfdom than we like to think.
Most people like the idea of serfdom, so long as it doesn’t offend their precious post-modern sensibilities.
Real freedom requires virtue, hard work, and the ability to accept failure.
Serfs don’t have to do any of that, their lives are structured for them and they don’t have to think or do anything other than what they’re told.