Critique of techno-feudal unreason



Techno-feudalism is nothing more than an element of the final maturation of capitalism itself

Several authors in the field of political economy criticism have adhered to the thesis that capitalism evolved in an unexpected way, now assuming the character of something they call techno-feudalism, without ceasing to be capitalism: among them, some of the most vocal are Yanis Varoufakis, Mariana Mazzucato, Jodi Dean, Robert Kuttner, Michael Hudson and Wolfgang Streeck.

The most consistent formulation of this thesis, however, was developed by Cédric Durand in his book Techno-feudalism – Critique of the digital economy.[I] However, a much smaller number of authors have criticized this theorization which, even at first sight, seems unusual and strange to the tradition of criticism of political economy: among them, there are Evgeny Morozov, Michael Roberts and the author of this note.[ii]

It was Evgeny Morozov who has so far presented the most extensive and most systematic discrediting analysis of this thesis in his article Critique of techno-feudal reason.[iii] There, he clearly defined the outline of this formulation that intends to configure itself as a theoretical body: “The theorists of techno-feudalism share with the authors who support the thesis of cognitive capitalism[iv] maintain the assumption that something in the nature of information and data networks pushes the digital economy towards a feudal logic of rent and dispossession, outside and beyond the logic of profit and exploitation”.[v]

In addition, these authors use an analogy to find firmer support for the thesis under consideration. They observe that the way of collecting income in the digital economy has a certain similarity – apparent – ​​with the way of extracting surplus in historical feudalism.

In the latter, as is well known, the serfs produce goods and services autonomously on plots of land that are under the control of a lord, but, in return, they have to hand over, free of charge, according to certain traditional rules, a part of the product generated. Considering that feudalism as such does not return, these authors speculate, however, that its methods of rent appropriation may return, starting to prevail again in history.

It is this kind of resurgence that they see happening in contemporary capitalism. The owners of digital platforms, as if they were new masters, use the collection of information produced decentrally by users of digital services to obtain economic gains. Behold, currently, all those who use these instruments are under the control of computational systems, providing their owners, also free of charge, as if they were new servants, precious data as a basis on which they obtain gains.

Now, these gains supposedly come from the appropriation of other people's effort – and not from one's own. And this authorizes the theorists of transformed capitalism to consider all this production of information as a type of work and all the people who share it free of charge as productive workers of useful things and mercantile values. Thus – they admit – some expropriate part of the wealth produced by others in a way already seen in the past.

As is known, however, the phenomenal appearance of things authorizes explanations – whether in everyday life or within the scope of positive science – that seem to make sense, but which turn out to be false when faced with adequate criticism. Is this the case for the thesis of the mutation of capitalism into techno-feudalism? Evgeny Morozov, who accurately described the theoretical contours of this thesis, sought to show with good arguments that it does not hold within Marx's dialectical exposition in The capital.

His critical strategy consisted of examining the arguments of the supporters of the theory of “feudalization” of capitalism to examine whether they were sufficient or even adequate, whether they were rigorous and true. Under the blows of criticism, it showed that they seemed ineffective to show that the evolution of the system would have extrapolated the contours of its supposed concept – at least if this turns out to be the one dialectically exposed by the founder of Marxism.

Here, at the end of the day, is his conclusion: “Marxists should be aware that dispossession and expropriation have never ceased to be constitutive of capital accumulation in history. (…) The extraction of value in a properly capitalist way in the center depended on the extensive use of non-strictly capitalist modes of extraction in the periphery. As soon as this analytical leap is made, feudalism ceases to be appealed to or invoked. Capitalism is moving in the same direction as ever”.

It will be? Here we will disagree with this last conclusion, even if we consider that it is necessary to criticize the techno-feudal (un)reason and if we endorse the central counter-argument of Evgeny Morozov, which is he, that the capitalism of the present is still, simply , capitalism. It is still founded on industrial capital (capital that commands the production of value and surplus value), even if it needs to receive other qualifications, due to the need for theoretical or historical clarification.

Even rejecting the techno-feudal thesis, it is argued here that there was indeed a change in the capital system. For, in fact, at the end of the XNUMXth century, a historical tendency that had been noticed by Karl Marx in mid-XNUMXth century capitalism took place. However, it occurred without a mutation having occurred, that is, something that implied the overcoming of any limits given by its intrinsic characteristics. Capitalism is still founded on industrial capital (in the sense in which that term is used elsewhere). The capital).

The history of capitalism, however, is marked by successive restructurings and they have always come about under the spur of competition to obtain profits and ever more profits, as well as the achievement of a rate of profit compensating for past investments and stimulating new investments. New technologies, new forms of organization, improvements in the subsumption of work, new markets, etc. were being discovered and introduced into the processes of production and circulation so that capital accumulation could continue. The last of these endogenous changes, coming more recently, has already received the name of “information and knowledge economy”.

The functioning of capitalism in the XNUMXst century now depends, crucially, on the extraction, manipulation and centralized use of “data” – an inherent element of commodity production and circulation, which previously remained sparse or even largely lost. It is quite evident that the intensive use of information resulting from commercial operations is associated with the advent and improvement of computer technologies, which has been occurring since the last decades of the XNUMXth century. The concentrated use of “data” has become fundamental to the coordination of markets.

The functioning of the economic system currently depends on companies specialized in operating large banks of digitized “data”. To understand its economic nature, a summary classification of the types of companies that employ formidable computing systems and make use of large or immense amounts of information and even knowledge is used.[vi] They are called, as you know, platforms. It will be necessary to show which market relations they participate in and, in particular, which production relations are implicit in the usual operations of these companies.

From a technological point of view, platforms are computational infrastructures that mediate between people, companies, public bodies and other organizations in general, making interaction between them possible, immediately reducing any distances. From the social and economic point of view, even if they have a common characteristic, they are constituted as monopoly companies that aim at capital accumulation.

Here's how Srnicek characterizes them: “Platforms, in short, are a new kind of company; are characterized by providing the infrastructure to mediate interactions between different groups of users, by presenting tendencies to become monopolies driven by “network economies”, by employing cross-subsidies to attract different groups of users, and by having a central architecture designed to govern the possibilities of interaction. Platform ownership, in turn, is essentially ownership of software and hardware, which are built as open systems. All these features make platforms business models that are based on extracting and controlling data”.[vii]

There are several types of platforms. Those that feed on advertising (Google, Facebook) extract “data” from users and other sources such as scientific journals, newspapers, etc., organize all the data obtained and use them to form information vehicles that aim to sell ads. They produce both a useful service and advertising space; the latter, bearer of value and surplus value, is sold as a commodity to capitalist enterprises in general. It thus obtains profits and even, eventually, super-profits. These companies' market relationships with ordinary users are not, however, value relationships.

There are platforms that have a large capacity to store information and are called clouds (Onedrive, Dropbox, etc.). These companies produce a commodity, namely, certain storage spaces, which are made available and sold to users in general, be they individuals or organizations. As in the previous case, these are industrial companies that, like any other, produce goods, that is, use value and value; perform the latter in a market and thus make profits. Market relations here are always value relations.

There are also industrial platforms that are made up of hardware and software complexes capable of transforming traditional companies into companies connected to the Internet, at the same time that they contribute to the reduction of their costs and the expansion of their markets, that is, of their ability to compete. This type of company normally produces and sells merchandise and, therefore, does not present characteristics that could lead someone to think of a mutation in the mode of production of modern society, in a techno-feudalized capitalism.

If the previous modalities are based on the sale of goods, there is a type of platform that is based on the sale of capital as a commodity through proprietary networks and the internet. They are created for the purpose of renting certain “capital goods”, such as machines, cars, sports equipment, etc. for other people and companies. They thus sell the use-value of the commodity in question, but not the commodity itself. The income it obtains is roughly in the form of interest, since the borrowed money also consists of the sale of capital as a commodity.

In the four previous cases, the companies tend to be monopolistic, but they are not structurally different companies from the classic companies of capitalism. In the fifth case, however, there is something different.

Finally, there is a type of platform that introduces a novelty in terms of the social relationship between capital and labor: and this is found on platforms that specialize in the purchase and sale of taxi services, delivery services, etc. (Uber, Loggi etc). As is known, these platforms hire workers who operate with their technological supports, but act on their own account. Therefore, the question arises as to whether there is a disguised salary relationship here or another type of social relationship, since workers own part of the means of production used (car, motorcycle, cell phone, etc.).

It is judged here that they should be considered as self-employed workers who rent the platform's computational services. They buy the use of the capital of this type of enterprise; the latter, on the other hand, sells (rents) capital to them as a commodity. They start to operate through their informational webs and, in doing so, subordinate themselves to them in a way as firm as that of wage earning. As they cannot obtain income for themselves and their own families without paying rent to the companies they are linked to, workers, when entering into this social relationship, are financially subordinated to capital. For the rent they are obliged to pay is in the form of interest – and not land rent, as is often suggested.[viii]

Bearing these considerations in mind, it is soon seen that the capital error of the defenders of techno-feudalism does not come from the fact that they do not consider dispossession and expropriation as historical, complementary or subsidiary, forms of capital accumulation. Even if they do make this mistake, their central flaw, ultimately, lies in their misunderstanding of the production relations inherent in platform capitalism.

The origin of this error is that they understand finance as Keynes – and not as Marx. For the author of General Theory, as is known, rentism comes from the ability to exploit the scarcity value of production factors in general, be they land, means of production, money capital, etc. And, in this sense, this great economist includes interest and land rent in the category of “rent”, calling the possessor of the scarce factor “reindeer".[ix] Instead of seeing typically capitalist relations in the interaction between industrial capital and finance capital, he sees pre-capitalist or insufficiently capitalist relations there.

Keynes, unlike Marx, does not think from a theory of value consistently developed to think about capitalism. For him, the existing economic system aims at the production of use value in such a way that the logic of extracting economic value is foreign to it, even if possible. For Marx, on the contrary, capitalism is internally guided by an “automatic subject”, in such a way that it aims at the valorization of value. Thus, expropriation and dispossession, even if they are complementary, are inherent in the economic system of capital.

Moreover, as Keynes predicts that the evolution of capitalism will necessarily lead to the “euthanasia of the rentier”, that is, of “the cumulative oppressive power of the capitalist to exploit the scarcity value of capital”[X], he believes that rentism may disappear as the “monetary economy of production” evolves, whose purpose – he thinks – is the production of goods and services that meet people's needs.

As the theorists criticized here see that this “death foretold” not only did not happen, but, on the contrary, that “rentismo” not only survived, but supposedly became a dominant form, they conclude by claiming that capitalism underwent a historical mutation and , through it, came to appear as techno-feudalism. Rentism, in this view, is promoted not only by platforms, but also more broadly by what is usually called financialization.

Now, as has also been shown in other texts (see note 9), this is a superficial way of understanding the financialization and financial dominance that has come to light in contemporary capitalism. Here, he apprehends only the economic phenomena that reflect the appearance of change, sees only the subsumption of industrial capital (in a broad sense) to financial capital, but does not understand that he is facing a structural change in the sunset of capitalism. In fact, we are witnessing the realization in the historical development of a tendency that already appeared in an incipient way in the middle of the XNUMXth century, namely, the expansion of the socialization of capital.

This process can only be briefly presented here. With the development of capitalism, private capital tends to be transformed into social capital, that is, into “capital of directly associated individuals”. In this way, according to Marx, “the suppression of capital as private property takes place within the limits of the mode of production itself”.[xi]

The process of centralization and concentration of capital, the tendential law of the capitalist mode of production, induces the emergence of share capital, elevates the importance of interest-bearing capital not only quantitatively, but qualitatively. Capital's financial forms, however, are not alien to its industrial forms, but, on the contrary, are complementary to it. Both these types of capital are intertwined with one another in the process of production and accumulation in all phases of the economic cycle.

In the final moment of the cycle, in the phase in which overaccumulation manifests itself, industrial capital tends to take refuge in fictitious forms of capital. There it is concentrated until the effective outbreak of the crisis initiates the process of destruction of a greater or lesser part of the accumulated capital. However, underlying this cyclical movement, there is also an increase in the relative weight of capital expressed in “papers” of various types, increasingly complicated from a financial point of view, in relation to the capital invested in production.

Now, the apogee of this process of long-term structural change actually began to occur from the 80s onwards. And it was recognized by science, which secretly loves ideology, as a new phenomenon, which deserved to be typified by the names of financial globalization and financialization. From that moment on, from the historical peak of the socialization of capital, the reversal of the accumulation process into a de-accumulation process at the onset of the economic crisis began to threaten, due to its gigantic volume, the destruction of the very mode of production.

The brutal devaluation of capital thus became a practically unacceptable event by the ruling class and by the governing forces, mainly at the center of the global system. It is the purpose of blocking this process that gives rise to State intervention through so-called monetary easing. By exchanging securities for cash, the central bank prevents the lack of liquidity from leading to the bankruptcy of commercial and investment banks, as well as large key companies in the industrial production network. In doing so, as this outcome is endogenously necessary, the State also blocks the possibility of a sustainable recovery of the economic system. This, therefore, enters a structural crisis that seems insoluble.

What a plethora of theorists call techno-feudalism is nothing more – it is believed here – than an element of the final maturation of capitalism itself. Either way, they opened the door to a debate that is important to continue.

* Eleutério FS Prado is a full and senior professor at the Department of Economics at USP. Author, among other books, of From the logic of the critique of political economy (Ed. anti-capital fights).

Originally published on the website Other words.



[I] Durand, Cedric. Techno-féodalisme: Critique de l'économie numérique. Paris: Editions La Découverte, 2000.

[ii] Prado, Eleutério FS Techno-feudalism or socialism of capital?. In: blog Economy and Complexity:

[iii] Morozov, Evgeny. Critique of techno-feudal reason. New Left Review, nº 133/134, Jan-Apr, 2022.

[iv] For example, Moulier-Boutang, Yann. Cognitive Capitalism. Cambridge: CambridgeUniversityPress, 2011.

[v] Op.cit., p. 107.

[vi] See Srnicek, Nick. platform capitalism. Cambridge, UK: Polity Press, 2017.

[vii] Op.cit., p. 33.

[viii] See Prado, Eleutério FS Financial subsumption of labor to capital. In: Blog Economy and Complexity.

[ix] See Keynes, John M. General theory of employment, interest and money. São Paulo: Abril Cultural, 1983.

[X] Op. cit., chapter 24, p. 255.

[xi] Marx, Carl. Capital – Critique of Political Economy. Volume III. São Paulo: Boitempo, 2017, p. 494.

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