He may have been wrong in the past, but this insight seems to be spot on. I'm pretty satisfied with what is to me a faithful description of the zeitgeist.
He worked for Valve, a 30% app store, on making an economy of consumer producers to make digital hats for them to resell, but never seems to mention it in interviews for this new book. Does he discuss it in the book? He seems to have been an early architect of the "cloud capital"/"technofeudalism" system.
"I won't take his ideas seriously because of superficial reasons, and I don't have any actual arguments against his thesis, so I must throw mud and hope something sticks."
This framing is silly. He says we're Cloud Serfs because we do unpaid work whenever we use our phones... You're not a Serf for using social media or watching videos online, regardless of how much value is extracted by these companies.
You contributed nothing to the dialogue surrounding the topic that you are supposedly defending from mud throwing.
Which is true... Think of it this way, your phone does social media, which doesn't work unless ypu engage. When you engage there, mote people adapts it due to community, more eyeballs for sweet ad money. These medias also grow large and relies on other services to scale and perform those ad workload so they also build or pay someone else for the resources.
In the end what you get is a good feelong in the heart that people liked that one post/photo while they got sweet ad money and someone actually bought a product and someone else made more money.
However that engagement has a cost, you are the acrobat in their circus stage, but you get no pay and while at it you also paid for that over complex device that they also sold(charged you money to give your performance).
Of course, you can nitpick all you want from my bad example, and do a lot of what-aboutism, but the point is clear I hope.
I agree with everthing you said, but again, contextually users aren't doing any "work". That is the distinction I'm trying to draw. You are less like a serf and more like a thief victim, making the writers comparisons quite stretched by definition. We could be discussing these problems straight-forward as you have described them instead of trying to make it sound like skynet has turned us into actual slaves and selling people on 24 news-cycle style dystopia bait.
Many/most economists and historians find it beneficial to understand things not by rigid or otherwise static categories and concepts, but through relations. Feudalism, insofar as it can be defined (and this is hard[1]), is probably best captured as a certain kind of relation between serfs and landlords (or whatever). Focusing on the relations between things is fruitful for analysis and research as well as being resistant to changes or transpositions in the terms in question.
It would be much harder to say that there is this one selfsame phenomena called "work" and we have done it throughout all of history. Or that we are definitely not "working" as we generate another's capital by getting brainwashed and depressed by social media. Or that the peasants living off their lord "went to work" everyday.
You are right, it is easier to write utilizing few relations instead of trying to manipulate static categories and concepts that don't bend to your will. To me this is a signal of quality but I could see benefits to writing this way, such as, if your goal was to get more people talking about the issue proposed. There are also potential downsides to writing this way, especially if you actually care about solving these problems and are at the mercy of governmental and capatilistic systems vs selling a book (Not saying that's what this economist is doing).
I agree that the definition of "work" has changed over time and I'm not trying to be pedantic so let's get to the point, does it matter if it's considered work or not? The real issue most people would agree with is the bad guys are extracting tons of value through the actions of their users. Should those users be paid? The answer is: it depends.
In our current system we would create an organization that can generate money by holding the tech companies responsible to pay users when it is deemed to do so. Unfortunately I don't see the money amounting to very much unless laws change drastically since even class-action lawsuits for leaked data provide very little. I'm guessing that measuring "phone work" would amount to micro-cents regardless of value directly generated.
But it is if you are viewing advertisements. That is the argument that Yanis makes in the book anyway, heavily simplified and removed of a lot of context.
The point is that you can't choose what you read or watch. We still can somewhat - we can install adblock and decide what media to consume. But instead of a "capitalist" effort to simply try to to invest in better "content", you could make the case that cloud companies are simply holding content hostage and demanding more of your attention, money, and time. Even at the expense of civil rights like privacy. It is stuff that gets talked about every day on Hackernews. It isn't that far fetched that antagonistic serfdom is basically the type of relationship large tech conglomerates treat their users. Dark UI patterns. EULAs.
I would agree that it doesn't make sense on it's face, but only in the context of a comprehensive macroeconomic analysis. That's what the good deal of the book is about.
Most times you are getting something else of value in return when viewing advertisements. free services, etc
What we're doing is more capitalistic so I'm uninterested in drawing parallels with feudalism personally, I guess fan-fiction economics are not for me.
But if this deal follows a Capitalist system, if we have greater supply of "valuable" content, than the price should go down and we should view less ads over time. Instead the opposite is happening.
That's kind of the greater goal of the book - contextualizing our interactions with cloud companies within a larger macroeconomic picture. It is a compelling enough topic to consider. I don't really think it is fair to call it fan-fiction. It could be right or wrong, but it is a book about a macroeconomic theory that seeks to explain observable behaviors.
>But if this deal follows a Capitalist system, if we have greater supply of "valuable" content, than the price should go down and we should view less ads over time.
The prices are not going due to an economic change of form. It's happening because capitalism facilitates it. I think the writer is using an old view of capitalism and ascribing developments in modern capitalism to something brand new.
We can't stop the markets and tell them they're not being good old boy pure capitalists when they are doing exactly what capitalism promotes, albeit secretly. If a system develops differently than anticipated due to how it's used, it doesn't make it not the original design. You can repurpose the design, and make people view it differently, but the design remains static and people will react to the system appropriately based on the conditions allowed and not the conditions predicted or requested.
The need for a new definition arises solely from the person attempting to persuade you to accept it, better so if it confirms bias, uses half-truths to explain, and catchy language like Technofeudalism.
I guess it has provoked my thought, maybe I will read it.
You missed a crucial point. Meta, X, reddit and other digital spaces that have user produced content make money off that content. It certainly is work to create tweets, posts, and comments, and videos on TikTok. This is free labor that these social media systems make money off of.
I haven't read the book but in this pull quote from a related article linked in the comments
>Traditional capitalists, he proposes, have become “vassal capitalists”. They are subordinate and dependent on a new breed of “lords” – the Big Tech companies – who generate enormous wealth via new digital platforms. A new form of algorithmic capital has evolved – what Varoufakis calls “cloud capital” – and it has displaced “capitalism’s two pillars: markets and profits”.
How is it that creating a new type of capital paradoxically brings about the end of capital? Also, in this definition, why are the "lords" able to "generate enormous wealth" just like capitalists? In feudalism, lords were lords over their vassals due to violent power, literally the threat of the sword, and did not create wealth the way a capitalist does by directing the application of capital to generate more wealth, but instead used the threat of violence to take a portion of what their vassals would otherwise generate anyway, in exchange for using that violence against foreign enemies as well.
So.. is Facebook forcing me to hand over some of my wealth by using violence, with the agreement that they will also use their monopoly on violence to protect me from Snapchat, if I sign up to Facebook?
If not, this seems like someone wanted a book about "technofeudalism" and "capitalism" because they are words that will sell books, and worked backwards to make whatever claims they wanted to make without any real interest in what feudalism or capitalism even actually are.
> Also, in this definition, why are the "lords" able to "generate enormous wealth" just like capitalists?
Feudal lords generated their wealth from exploiting the lands they held. Generally, they don't make more land, but when the world wide web came into being, there was suddenly a ton of new land! Between 2000-2015, the tech giants consolidated much of that land (and thus the wealth) - giants like Alphabet, Meta, Amazon, Adobe and MSFT can absolutely be viewed as imperialist, and they operate in that manner internally.
> So.. is Facebook forcing me to hand over some of my wealth by using violence, with the agreement that they will also use their monopoly on violence to protect me from Snapchat, if I sign up to Facebook?
Kind of. Facebook is using economic and legal violence, rather than physical. They won't send a squad of knights to your house to punish you, but they are attempting to create a system where your only options are to use their service, in the manner they want you to use it (i.e. the one that maximizes their revenues). Why run a business when you can collect the gabelle?
Sure, they don't own Snapchat, they certainly tried, but they own Instagram, Whatsapp, and hundreds of other startups they've taken out of the market. You still have some options (TikTok, Snapchat) because Meta's dominance is incomplete and the state doesn't fully support them having a monopoly.
You are picking very specific points. Think about the online death, if you misbehave or the google seo index misunderstand something, your business is theoratically dead.
If FB decides to suddenly block you by automoderator a few times, you lose access to your community.
If paypal bans your account by mistake or whatever, they can withold your assets in that account and you have no remedy.
These techs are like feudal lords, they can perform "virtual" violence to cut you off but most of your actions actually builds them wealth (you engage to build community, your views brings them ad money, your content may bring their advertisers sales, you using a particular service will bring them cut of any transaction that you perform, your bid on their platform will make them money despite you having zero control, you selling products on their platform will have to give them a big cut while you also need to spend more for their platform to promote your stuff etc.)
It is a bit complex and needs some deeper thought than simply looking at the surface.
Because large banks don't have enormous revenue or profits while not being super reliant on the tech lords? Traditional capitalist are doing quite well, I think.
What bank do you know that doesn't rely on cloud services these days? Heck, when was the last time you even made a transaction that didn't involve a computer?
I think the respect to which this worldview holds up is the definition of the "cloud capital" that Yanis has constructed, but isn't really able to make a concrete definition of. He isn't an engineer. But in a banking system, the series of transactions are liable to the bank itself, but can only happen really with the assistance of cloud service providers. In the book, he argues for a more centralized system of payment guaranteed by a government, preferably democratically. Whether you agree or not, it is a compelling lens to look through the emergence of Wechat payments in China, or the rolling out of Fed Now servicing, where governments themselves are trying to centralize computation around payments and transaction settling.
They do use them, but at times more than one cloud provider as well as their own data centers. Certainly, the top banks do not fear the large tech companies and I think similarly, it isn't that Amazon wants to pick a fight with JPMorgan. They (simply) do business with each other and banks have been using computers far longer then "big tech" has been around.
Also, depending on jurisdiction, using cloud services in banking comes with audit/certain oversight obligations (via the bank and more regulation at least being contemplated).
Btw., Europe has had some central bank(s) run settlement system (TARGET and its succesors) for a long time now.
It's not about fearing them - it's about them not having any choice but to do business with cloud providers, and that being the case in every industry. The whole thing gets set by whatever prices a handful of companies decide to charge. You are even starting to see cloud subsume the holdout big iron that is generally used to handle large transaction volume processing. IBM is pivoting towards cloud. AWS is rolling out mainframe emulation. Etc. We accept regulations on financial industries because of how influential they are, but why not regulation on cloud companies and services which offload much of their liabilities?
I also don't really think you can point to banks as especially profitable businesses in today's environment. They are getting hammered by high interest rates. I'm not committed to this new construction of the economy, but it is interesting that SVB failed despite being the sole bank for cloud focused start ups. It points to a system where normal finance rules we have taken for granted no longer apply.
Banks generally love high interest rates. Look at JPM clocking in at $13B profit in Q3.
Cloud regulation is coming anyway (and as I said, it is kind of already there for some cloud uses in financial services), your idea of all cloud users being pure price takers also doesn't match my experience.
The reason banks don't "like" high interest rates is it devalues the market rate all the bonds they usually hold. I guess Chase has done a good job navigating. Regardless, it isn't long term bad for banks because they are getting great rates now.
But it still goes to show that banks are ultimately beholden to Federal reserve actions, at the end of the day. Believe me, CSPs absolutely wield power when it comes to pricing. Especially in enterprise deals - those are probably more favorable honestly. But I do think we will see regulation around it. I think of CSPs as utilities.
I am always talking about large banks. The main business is not holding bonds, but they can suffer a transitional effect on their portfolios, that's all. Btw., Bank of America just under $8B in Q3.
You and I have a different experience regarding unidirectional pricing power, but maybe that is related to the different banks we have in mind.
Yeah, we would be fairly in trouble if banks just depended on low rates indefinitely. But more expensive debt is worse for them in the short term - that's what banks sell. I'm talking about in principle. At the end of the day, a healthy dollar that doesn't inflate super hard is better for US banks.
Banks are such an odd thing to bring up as proof of a capitalism still working in a macroeconomic sense, because they don't "do" anything. Sure they provide financing, but they don't build roads or bridges or software, or medical equipment, or make movies or anything productive that is supposed to improve our quality of life. Meanwhile, 40% of Americans can't afford a 400 dollar emergency. How is that a sign of healthy finance? I think it is worth considering - how is there a system of life where banks are super profitable, and no one can afford any credit? Yanis puts forward a theory in Technofeudalism - that it is really technology enabling all of this, but there are stark economic consequences. Whether or not that theory is right or wrong, it is compelling to consider.
I'm fairly familiar with enterprise software deals at Well's Fargo, from the vendor side. That's all I'm going to say about that. Everyone wants to make a deal, but at the end of the day there are really only 2 cloud providers: AWS and Azure, Amazon and Microsoft. They set the pace, they set the price. Even on bigger deals than banks. At least from where I sit.
Obviously, we need to find contemporary analogies:
- the other day I opened (manually) a bunch of Linkedin profiles (each in one browser tab). Apparently, Linkedin thought it was a suspicious activity and blocked my account for some time (I don't remember, but in the range of hours). Luckily me, I still got my account... but it would be hard to find jobs and keep working connections without Linkedin. I dodged the sword
I'm sure one can find similar examples (or worse) for all the big companies out there (never heard of "google banned me. help!"?)
Being rate-limited by LinkedIn isn't a contemporary analog to being extorted by force. You're choosing to use their service. You can choose to not use it.
The closest contemporary analog to being extorted by force is, of course, our relationship to our governments.
One of the most interesting aspects of libertarian thought is their notion that the liberal revolution (which began in 1776 and spread to Europe in 1789) is not, as we are inclined to think, complete. They argue that it is still in its infancy, and in some ways has regressed. This becomes clear when you consider the number of ways in which our modern governments are similar to those states (some feudal) which existed prior to the onset of the liberal revolution. You can now leave your lord's land without permission... but only if some other lord gives you permission to enter theirs. Our lords take far more of our incomes than was taken in the past (even under feudalism), and just as in the days of old, our lords dole that money out in a way which is best suited to their retention of power. If your entire village (or entire region!) doesn't support the elected lord, and endeavors to create a state of your own with a new lord (perhaps because you have been influenced by dangerous ideas like "[sometimes] it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them") then your lord reserves the right to reestablish the "consent of the governed" by force of arms! The primary difference is that they had no say in who their lord would be, whereas you decide (or, you are at best 120,000,000th of the decider) who yours is (so long as they come from one of the two established factions, of course).
When put in the appropriate context, the use of the term feudalism to refer to LinkedIn seems rather a stretch.
> Being rate-limited by LinkedIn isn't a contemporary analog to being extorted by force. You're choosing to use their service. You can choose to not use it.
If you include network effects, does everyone really have that choice?
For example, I can't choose not to use WhatsApp to keep in touch with my family and friends in Brazil. It's simply not possible because some of them won't use another messaging app, I've tried and they will simply forget it exists because no one else uses Signal there except for me. It forces me into the Meta-world because of that, I'm not really choosing it, they aren't forcing me with violence, it's shadier than that, I simply need to since they've captured so much of the marketshare.
LinkedIn isn't the same, consequences are you might miss some job offers, you will need to find workarounds for recruiters to find you, or for you to find positions, but there are other apps that are definitely on the path of "I can't choose not to participate".
> If you include network effects, does everyone really have that choice?
The network effects just increase the value-add of the platform, making foregoing the platform more costly (in terms of unclaimed utility). There is still a choice.
> For example, I can't choose not to use WhatsApp to keep in touch with my family and friends in Brazil. It's simply not possible because some of them won't use another messaging app... I'm not really choosing it
Having a compelling reason to use a service is not remotely the same as being forced to use a service.
> it's shadier than that
High-value-add services are not shadier than violence.
> Having a compelling reason to use a service is not remotely the same as being forced to use a service.
Hence "shadier", violence is not shady, it's pretty in your face, it's shady I'm forced to use an app not by choice but just because such apps have captured enough of the market that there is absolutely no way for a competitor to be a suitable replacement.
Sure, I have the choice to simply lose contact with 50% of my family if I would like to stand up to my principles and cut Meta from my life.
The political power these companies have is unprecedented, and makes violence unnecessary.
Governments fear these companies because their black box algorithms can easily make or break elections and even drive people into the streets to protest or riot. Also, these companies have unlimited amounts of money to promote the policies and politicians that they want to see succeed.
With the exception of the East India Company at its height of its powers, no private entity has ever been permitted to accumulate this amount of political and economic power.
Evgeny Morozov wrote a very interesting, but also quite long, critique of the "technofeudalism" concept from a Marxist perspective in the New Left Review back in 2022:
> In the case of well-known figures like Varoufakis and Mazzucato, tantalizing their audiences with invocations of feudal glamour may provide a media-friendly way to recycle arguments they have made before. In Varoufakis’s case, techno-feudalism seems to be mostly about the perverse macroeconomic effects of quantitative easing. For Mazzucato, ‘digital feudalism’ refers to the unearned income generated by tech platforms. Neo-feudalism is often proposed as a way to bring conceptual clarity to the most advanced sectors of the digital economy, where the left’s brightest minds still find themselves very much in the dark. Are Google and Amazon capitalists? Are they rentiers, as Brett Christophers’s Rentier Capitalism suggests? What about Uber? Is it just an intermediary, a rent-taking platform that has inserted itself between drivers and passengers? Or is it producing and selling a transportation service? These questions are not without consequences for how we think about contemporary capitalism itself, heavily dominated by technology companies.
> The idea that feudalism is making a comeback also coheres with left critiques condemning capitalism as extractivist. If today’s capitalists are mere lazy rentiers who contribute nothing to the production process, don’t they deserve to be downgraded to the status of feudal landlords? This embrace of feudal imagery by media- and meme-friendly figures of the left intelligentsia shows no signs of ceasing. Ultimately, though, the popularity of feudal-speak is a testament to intellectual weakness, rather than media savviness. It is as if the left’s theoretical framework can no longer make sense of capitalism without mobilizing the moral language of corruption and perversion. In what follows I delve into some landmark debates on the distinguishing features that differentiate capitalism from earlier economic forms—and those that define political-economic operations in the new digital economy—in hope that a critique of techno-feudal reason may throw fresh light on the world we’re in.
Wow, I tried to read it and mostly managed to, although I ended up skimming the end. It is really everything that is wrong with bitter overintellectual leftism: endless babble littered with pointless historical references and a neverending adoration of 'theory' while totally misunderstanding the rest of the world's moral opinions on, well, anything.
The worst passage I found was this:
>If these are lazy waterfall-owning rentiers, they are peculiarly masochistic ones: why not just rest on their laurels, fire everyone and stop spending? And who, looking at these numbers, could really believe—together with the post-workerists—that capitalists are now external to production? What then are they spending all this r&d money on?
The gist: if you choose the dumbest possible interpretation of what 'technofeudalism' is referring to and couch it in enough verbiage and citations you can dismiss the concept without ever having to see why people find it so appealing or realize that you're missing the point.
It's really simple. It's the monopolies and their walled gardens and moats and manipulations... and the lack of accountability to the public. What's feudalistic is the lack of accountability. It only incidentally has to do with any particular model of what capitalism or feudalism is according to some random texts or endless theory and everything to do with the fact that everyone hates the system but can't seem to change it and make it follow prosocial dignity-preserving rules.
More specifically: although theorists have opinions about whether this is some sort of 'alternative' to capitalism (if what we're 'in' can even be called capitalism anymore, even before the internet...).. The reason the concept rings true and has staying power is not those theories; it is that the modern world emotionally pattern matches to aspects of feudalism. No doubt people felt the same way circa 1900 in the first big era of capitalist monopolies. Regardless, labeling what 'mode of production' we're in is really not the appeal of the phrase (or, imo, a very useful concept at all).
Not taking the position personally, but the major critiques of capitalism are that capitalism is inherently exploitative, alienating, unstable, unsustainable, and creates massive economic inequality, commodifies people, and is anti-democratic and leads to an erosion of human rights and national sovereignty while it incentivizes imperialism (Wikipedia).
These are very old arguments. The difference in my mind is merely the label. Morozov said it well:
Techno-feudalism is more than that. I noticed in the early 2010s that a friend of mine was essentially a loyal vassal of a former EA exec "game industry legend", and followed him to multiple startups. There were a couple other such retainers, including the nobleman's brother and receptionist / HR manager.
I've never played in the start up major leagues, but it sure isn't a meritocracy in regards to who gets funding (or can self-fund). After working in and adjacent to multiple startups of this "game industry legend", I concluded that a lot of his ideas were crap, and his one successful startup had succeeded in spite of him.
Interesting, I hadn't considered that that could be seen as another aspect of technofeudalism. I don't think it's really what people are talking about with the word, but it is an interesting connection.
How delightful to see your comment. I just finished reading the review and it’s quite a good critique and well worth the time. I actually had to print it out to read it as it’s a bit of a tome and I just couldn’t read it on screen. Why is that?
Anyways, he also has a long critique of Thomas Picketti's Capital in the 21st Century (another good read btw, though I did this book on Audible which was quite good).
I have been listening to Yanis a lot lately. His ideas are quite provocative. His economic ideas are quite refreshing, to hear an economist talking about what a post-subjective-money world may look like.
Today, we have a new class of people, who to borrow Yanis's metaphor I would call Techno-peasants, who exist in a grand subjugation. Any reader of these comments would do well to listen to a few interviews of his.
So watching cat videos is somehow akin to serfdom now.
I swear the over-intellectualism of the left makes them sound dumber and dumber. Why do they have to make everything so idiotically complex? Is it an occult/esoteric thing in order to signal authority to the masses?
Its the utter domination of capitalism that they truly do not realize how ridiculous they look every day. Capitalism has answered all that communists and socialists could never even fathom, and more. It used to be a caricature to portray the rich as fat men with monocles, now the world is in an obesity crisis.
Leftists are stuck in the 1800s, and the only thing they do is talk like it as well. They really have nothing else going for them. Its all a performance, we can only hope that the few that are honest would admit it.
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