Techno-feudalism then? — Is It The End Of Capitalism As We Know It
The ballooning of technofeudalism that is seemingly replacing capitalism & morphing into something much more alarming
It’s the start of 2024, but the air quality has worsened in Mumbai. My humble Chinese-made Android smartphone has been regularly sending me notifications that the air quality in my area is poor. An old friend also shared a post by some popular Mumbai-born comedian on her Instagram ranting about not being able to see Madh from a Versova terrace.
At what point do we get fed up of chasing every plume of smoke & the carbon emissions from vehicles & the burning embers of the fossil fuel industry all the way to the Arctic to see just how much of the ice melts? I touched upon How We Must Reimagine Capitalism To Solve Climate Change in an older article in this publication, and several technological solutions that can help this good old fight. While alternative jokes about the situation like George Carlin’s “plastic bags” & “the planet is fine, the people are f*cked” rants remain novel.
But without a massive shift to green solutions & ousting the oil behemoths who are clinging on to all the liquid gold they can, the hope is that things change. “I mean I’m very optimistic about the future and what technology means and I think um I think there’s something….” says the podcast’s host. “But that takes an incredible degree of naivety to be optimistic about the future!” urges Yanis Varoufakis.
Chelsea’s Cole Palmer, dubbed ‘Cold’ Palmer scored an audacious, almost Mesut Ozil vs Ludogrets like finish away against Luton & as I sat re-watching the clips of that goal in slow motion on Instagram, I began to wonder when this new year would bring its first lull in with its tides after starting out on a bit of a high.
The last memory of the ocean shoreline on my latest trip to yet another beach destination on India’s west coast remained etched in the fading art gallery in my head, and is only left with the remnants of a few strokes now, a couple of days since returning from the short & peaceful getaway for NYE.
As my sister & I exchanged some yearly reflection worksheets, you know those productivity/reflection documents, shortly after the turn of the ol’ 23, it’s now been 3 days into 2024 and in hindsight, there’s been so much advancement & progress, particularly over the last 5 years in the kinds of technology we have seen evolve. Last year could arguably be dubbed as the year of AI — (AI23).
ChatGPT debuted in Jan 2023(if I’m not mistaken) & has pretty much changed the entire landscape in a lot of ways when it comes to labour, education & its future trajectory for the foreseeable future & we’re only beginning to understand it. But what about the socioeconomic shift we’re seeing in 2024?
I usually(or at least try to) post interesting & thought-provoking reels, quotes, literature, motivational or music or articles on Instagram, but every now & then I do dabble in sharing funny reels in my stories. Ominously, and almost foreshadowing what was to come today in the feeds of the digital food we’re consuming on our go-to apps now, I saw a comical reel from the TV show ‘It’s Always Sunny In Philadelphia’ where Frank(Danny DeVito) & the gang discuss “inflation” rather humourously & sarcastically.
The reason I’m telling you this, is because apart from it being a part of the underpinning theme of this article, there are certain aspects that are rather contentious about this seemingly harmless use of an app that most of the world uses, i.e. Instagram. “We’re shifting towards Brave New World. Brave New World is a problem where we are all happy little slaves who love our slavery right?”, suggests Varoufakis referring to the Aldous Huxley classic.
We’re in a flux where capitalism is giving way to techno(not that techno) feudalism — techno abbreviated in short for ‘technology’. But this techno isn’t a tune that is something to dance to like its musical counterpart. It’s a rather murky, gloomy & shadowy mutation, a gene straight out the X-men movies, that’s rabidly mutating & causing an imbalance & a shift of power to a handful of CEOs & in turn, leading to increased outrage & disillusionment in society.
Essentially, technology is not the problem, it never has been the problem; technology keeps growing in complexity y-o-y, but it’s perhaps the way we use technology & furthermore the socioeconomic impact & societal structure we create as a result of how we use this technology.
Coming back to the Instagram example, the key detail in fine print is that — we’re under the influence of algorithms. These algorithms know us better than we know ourselves. In terms of our needs, interests, habits, what we search for, what we buy, everything is monitored & stored, in seas of server farms. The data on you knows you better than you do & it’s what these algorithms have been feasting on.
Furthermore, these algorithms are designed to suggest the best content or products tailor made for each one us, in short — behavioural modification — to keep us hooked to our screens & trudging the streets like benumbed zombies unknowingly being shot in the temple like the hook Zack de la Rocha sings on Rage Against The Machine’s “Bullet In The Head”, being shot by Jesse Eisenberg’s Zombieland crew in his post-Social Network exploits.
Carole Cadwalladr of The Guardian, in her piece from September last year writes “We’re now in servitude, Varoufakis argues, to the fiefdoms of our new global masters, Lord Zuckerberg of Facelandia and Sir Musk of the rotten borough of X.”
It’s not the algorithm that’s the problem. It is rather the power the people who own these platforms wield, that are instigating this societal behavioral modification on a global scale, and ushering hyper-focused consumerism while siphoning off capital in the form of rent to use their platforms.
Now economists smoke their own kind of crack, but Greece’s Minister of Economics Yanis Varoufakis, who has published a book titled ‘Technofeudalism: What Killed Capitalism’ seems to suggest that this is the beginning of the end of capitalism as we know it & the renaissance of a new kind of feudalism much like feudalism of old was displaced by capitalism in the 18th century.
Call it economic karma, if you like, for lack of a better name; but this is an eye opening hypothesis albeit a rather controversial one. Yes, there are many doomsdayers out there, but Varoufakis isn’t one to fall in that bracket considering his prolific past — going toe to toe with the IMF et al.
Feudalism in 2024, isn’t your typical example of feudalism but shares some congruence. We’re now living in a world where commercial land or space is digital & online. And the landlords are the billionaire owners of this digital land, or these digital properties.
“The way I see it is this: suppose this was 1776 and we were in London and we’re having a discussion about the state of the world. Now, everywhere we looked in 1776 we would see feudalism, we would see feudalism in the House of Lords, in the House of Commons, in government, in every local Council around the world.
On the land we would see peasants, we would see you know aristocrats, and yet we do know that don’t we already feudalism had died and was being gradually but fast being replaced by something called capitalism.
The magnificent shift of power from the owners of land to the owners of machinery of steam ships of electrical grids later on and the shift of wealth creation from rent accumulation to profit making.
My view is that we are already experiencing a similar transformation today. Wherever we look, we we see capital, we see markets, we see capitalists doing extremely well and yet I think that already we have undergone a transformation to something like feudalism but a very technologically advanced version of it. Markets have been replaced by platforms.”
According to Varoufakis, we are now seeing a shift marked by the biggest tech players & their owners who allow us to “rent” space on their online platforms. Varoufakis compares this to feudalism of yesteryear, whereby a landlord would rent out his land so that a citizen living & working in an area under his control could operate their own business, while taking a chunk of their revenue & charging rent.
“So Amazon.com is not a market. It looks like a market but it’s more like a digital cloud belonging to one man whose accumulation of wealth is based not on profit but on a form of rent. Every time you buy something from Amazon 30 to 40% of the price goes to Mr. Bezos, not to the maker”, says Varoufakis.
Varoufakis calls this new mutation or form of capital as “Cloud Capital”:
“About until 10 years ago capital was always a produced means of production. So whether you have Robinson Crusoe’s fishing rod, a steam engine or an industrial, a very advanced industrial robot, today it’s a produced means of production something we produced in order to produce other stuff. But this new mutation of capital which I called ‘Cloud Capital’ it’s what lives in your phone.”
Speaking about how techno-feudalism works elabourating on the Amazon example, Varoufakis explains:
“Alexa convinces you to buy something, an exercise bike whatever, a pair of binoculars right and then sells it to you bypassing every marketplace in the world.
Now that is a fiefdom and you see and most income now that is accumulated is accumulated in the form of rents that Bezos charges capitalists for access to this digital fiefdom.
So we’re going back to system where access to the land, only this time it is digital land — it’s what I call Cloud capital — is restricted, crucial, outside the marketplace, outside capitalism, and procures a magnificent rent for the new ‘Cloud Lords’.”
In an excerpt from his book, cited in The Guardian, he writes — “Imagine the following scene straight out of the science fiction storybook,” “You are beamed into a town full of people going about their business, trading in gadgets, clothes, shoes, books, songs, games and movies. At first everything looks normal. Until you begin to notice something odd. It turns out all the shops, indeed every building, belongs to a chap called Jeff. What’s more, everyone walks down different streets, and sees different stores because everything is intermediated by his algorithm… an algorithm that dances to Jeff’s tune.”
“It might look like a market, but Varoufakis says it’s anything but. Jeff (Bezos, the owner of Amazon) doesn’t produce capital, he argues. He charges rent. Which isn’t capitalism, it’s feudalism. And us? We’re the serfs. “Cloud serfs”, so lacking in class consciousness that we don’t even realise that the tweeting and posting that we’re doing is actually building value in these companies.”, writes Cadwalladr in her Guardian interview with Varoufakis.
Taking his stand as a proponent & supporter of the enabling & infinite possibilities of technology but warning against this emerging macroeconomic shift, he says:
“AI today is designing antibiotics that can kill super bugs that human minds cannot design.. that’s brilliant, that’s a triumph of the human spirit but not to see that we have in exponential concentrations of incomes in the hands of people who produce nothing except for the right and the opportunity to extract incomes from others.”
Charting the emergence & cause of this shift into technofeudalism, Varoufakis explains:
“The switch happened after 2008 and it happened because of 2008 to a very large extent because the way in which the G7 governments and central banks responded to the great financial catastrophe by a combination of socialism for the bank, you know trillions pumped out of our central banks to go to the financial sector with huge hit for everybody else.”
“So you know you create lots of money you have liquidity that we never had in the history of the world which never went into investment because of low levels of demand so the companies that got this money from the central banks bought back their own shares that created asset price inflation the only ones who invested were the cloud elitists: the people who own cloud capital.”
“You know the tech lords and you know wonderful machinery and all that but that investment went into creating the cloud capital which then replaced markets with platforms and shifted a very significant percentage of the circuit flow of income from profits to rents, and that is destabilizing for the global system.”
“Technology has never been the fix to the problems we create with the technology”, says Varoufakis in almost succinctly elabourate fashion, “the problem is political, it’s social” he implores.
When it comes to the functioning of this technology that is bringing about this technofeudal current, I’ve touched upon how algorithms on these platforms are changing the way buying & selling happens from a consumer directly interacting with a seller, while also subjugating us, the consumers, to operate within the confinement of the algorithm & the platform owners’ policies, but Varoufakis suggests that it is central to technofeudalism.
“Amazon or for that matter Facebook is not a produced means of production — it is a produced means of behavioral modification. Cloud capital gives the owner an immense exorbitant power and privilege to alter people’s behavior in order to create, you know, alternatives to markets in which we are all caught up as buyers and sellers but not within a market in which we can choose our partners. The algorithms does the choice for us and the algorithm chooses in a manner that maximizes cloud rents of the owners of that cloud capital.”
Further imploring the dangers of how out of control these algorithms that run on these platforms are, Varoufakis states:
“I’m far more worried by what they own! They own this capital which is a capacity to separate us to fragment us as markets as communities as societies to influence us in ways we don’t understand, in ways that the people who wrote the algorithms do not understand, this is even more worrying right.”
“You hear that from coders from AI more true like AI is a good example people are surprised so for me as an old Lefty yeah the answer must always be the socialization of the means of production.”
So, perhaps we know this is a looming evil that we don’t fully understand because of the nature of these platforms & the technology. But according to Varoufakis, there is a narrow glimmer of light at the end of the tunnel if we’re responsible.
Suggesting two solutions Varoufakis suggests:
“Firstly we must end free services because you don’t need me to explain that when you have free services effective if you’ve got the complete tyranny of the cloud capitalist or the cloudalist. It would be fantastic if we had subscript micro payments a micro payment system and if some people can’t afford it they should get Social Security payments in order to make for these micro payments so you’re creating an app okay right you get paid directly by the person who is using the app yeah not not indirectly through advertising because that way you do not have this complete takeover of our souls.”
For his second example, Varoufakis while dubbing it bordering on “science fiction” & calling for a change in corporate law, suggests perhaps a seemingly utopian yet realistic solution. His idea is that these big tech companies could create an equitable distribution of company shares, just one share per employee of each company, but these shares would be special non-tradable voting rights shares similar to a college student’s library card. A non-tradable but votable share that allowed each employee a vote on company policy & in turn, its leaders.
“You would have market-based cooperatives owning the algorithm but in a way that is not predatory, and if they had to receive micro payments from those who actually use them, the algorithms, then we would be talking about technology in the interests of a combination of freedom and justice,” he adds.
In his 30 minute chat with the Euro News podcast, Yanis Varoufakis outlines what he means by technofeudalism from a historical & economic lens & the ideas encompassed in his book that makes for a rather intriguing watch along with some jibes & digs at the podcast host which are amusing but rather blunt & honest. It’s an interesting theory of the burgeoning economic climate that is emerging as of 2024.
You can watch it at length below:
Thank you & do drop me & my publication ‘Light Years’ a follow if you found this piece informative. There’s also a lot of intriguing articles on it, which you can check out. Cheers!
