It worked up until bows were able to reliably pierce armor.

And even then, it was mostly a protection racket, where you were essentially paying tribute to a king so they wouldn't pillage the lands you lived on and who had left a stay-behind administrator Lord who would pick knights from the locals to administer their territories while they pretty much did whatever they wanted, which was mostly drink and fuck. And you literally prayed that the local knight or administrator was good friends with the Lord otherwise your region would only get increasing tax burden, while other regions whose knights were friends with the Lord would get off easier. This would usually escalate until the peasants in these areas were literally starving after a couple bad harvests and would start a rebellion, usually attempting to appeal to the king to dispose the bad Lord, only for the king to order the Lord to kill the peasants, because that was the whole point to begin with. Better hope you actually have something to offer, and your knight actually gave a shit about his territory, or you were easy pickings for raiding bands. And if the king wasn't able to protect you, it was still illegal for you to seek protection from someone who could.

Rinse and repeat for basically a millennia and a half and that is more or less feudalism in a nutshell. Not that modern capitalism doesn't have it's own versions of all of this.