Since the 16th century, Western societies have been characterized by a socio-economic structure that has come to be known as “capitalism.” This period saw the evolution from feudalism to capitalism through a shift in power from the landowners to the owners of the means of production, which is at least in part explained by demographic growth and a shift of focus toward industrial advancement. Regardless of a series of rather virulent anti-capitalist campaigns (one can notably think of the creation of an eastern communist bloc during the 20th century, or of movements such as Occupy Wall Street), capitalism seems to remain the dominant mode of societal structuration. However, former Greek Minister of Finance Yanis Varoufakis suggests a new economic structure may have emerged: Technofeudalism.
Capitalism
Understanding Technofeudalism first requires an exploration of capitalism as it is understood today. Traditional capitalism details competition between businesses, with both them and consumers benefiting from an exchange of goods and services. The competition between companies is articulated around the desire to generate profits, which are the difference between what products are sold at and the cost to produce them (including the wages of their workers in this). This is sourced from surplus value, which is defined as the work workers do beyond their wages worth. This pushes said companies to offer consumers several options from which they must choose the objects of their consumption, thus creating markets. From this system emerges two classes: the bourgeoisie who own the means of production (capitalists) and the proletariat who own only their capacity to labour (workers). The proletariat is thus exploited, forced to work for the bourgeoisie because they do not have access to the means of production otherwise.
The rise of technology
With the emergence of the Internet and the development of services like Amazon, economic exchange has moved to a new space: the digital one. These exchanges are conducted on platforms like Amazon, which function through complex algorithms connecting buyers to sellers, who must pay either a fee or a dividend of profits to the platform to be able to sell their products through it. This is different from capitalism, in which sellers compete directly with one another for the attention of their consumers, rather than through a complex algorithm that targets specific consumers with products they are more likely to appreciate, or with products from companies who happen to be able to provide Amazon with greater rent. Moreover, competition changes, putting players like Jeff Bezos on top for their innovative manipulation of technology that gives them control over markets rather than just production. The business, which is now the leader in growth and profit, is no longer one that sells a product. Rather, it sells other businesses privileged access to consumers, who become themselves products in their attempt to purchase classic consumer goods, which used to be the main kind of traded commodity. But why does Varoufakis suggest the label of “Technofeudalism?”
To understand this neologism, we must return to Marx’s description of another economic system, that which was directly before capitalism—feudalism.
Reapplying feudalism
In feudalism, the lords who own land sit at the highest level of power, with vassals as a middle tier who are given some land themselves in exchange for their service to the lords. At the bottom of the hierarchy, you find serfs who work the land of the lords to receive their protection and a home. In the modern age, land translates into digital platforms—hence the addition of the prefix “techno.”
Our aforementioned example showcases this very clearly: Amazon acts as a lord, owning a digital platform on which sellers can gain access to their potential buyers. These sellers, in turn, are the vassals of this new feudalism, paying a fee to Amazon to use their platform and settle upon their digital land and gain whatever advantage from it they can through occupation. And, finally, consumers act as serfs. They are the ones who make the Technofeudalist system possible through their engagement in services like Amazon’s. Their data, which trains algorithms to select consumers and connect them to sellers in a targeted manner, becomes the product of the labour of medieval serfs, extracted from them with more or less consent and understanding of the implications of this abdication of property rights, to go increase the wealth and power of their lords.
Even those we assume to hold power under capitalism, those who own the means of production, often become subjects of the owners of digital platforms, which they have no choice but to sell their goods on. Owners possess the means of behavioral modification through their control of the ads and products that are presented to users, which become the new source of power, replacing the possession of capital.
Conclusion
Varoufakis’s theory of Technofeudalism suggests that our current economic policies may be failing society without us even realizing. By living in this paradigm of capitalism we become stuck on what we think the economy looks like, rather than acknowledging how it has changed and the ways in which its expression and problems have shifted. We have here argued that the deregulation of the economy through capitalist ideology is ultimately what killed it, creating the conditions for a return to feudalism in a new, modernized way. Varoufakis also calls attention to the dangers of someone owning the means for manipulating people’s behaviour, especially since these platforms utilize personal data to do so. Sociologist Bev Skeggs expands on this in her research on social media siloing, which explains how digital platforms organize users based on their perceived socioeconomic class to target them with different ads. Social inequality is reinforced through exploiting the data of lower-income individuals to target them with predatory loans, worse educational opportunities, and poor-quality products, which highlights the serious implications of Technofeudalism’s manipulation of personal data.
Edited by Sofia V. Forlini
The opinions expressed in this article are solely those of the author and they do not reflect the position of the McGill Journal of Political Science or the Political Science Students’ Association.
Featured image by World History
