Tech Platforms, Digital Economy and the Fallacy of Techno-Feudalism
The digital age brings a new economic epoch. Many say that traditional capitalism is ending, and by many, I mean plenty. It is said to be a result of the change of the social fabric and advance of technology – intertwined. The core of this is happening in the digital domain, or better said informational domain and through digital platforms, which will soon move into synthetic virtual spaces as a next step.
According to the former finance minister of Greece, Yanis Varoufakis, value extraction has increasingly shifted away from markets and onto large digital platforms, which no longer operate like oligopolistic firms, but rather like private fiefdoms or estates.
The digital domain has expanded beyond communication and commerce infrastructure. Because an ecosystem of economic and social interaction is getting more and more complex, it has become a battleground for economic and social power. The digital realm – the realm of information and data – interconnects digital spaces governed by technology and those behind it. Some see them as the architects and custodians of a new equalizing infrastructure, others as behemoths that rule over the digital space with their algorithmic dictatorship. So what are they – the builders or techno-feudal lords?
In this article I will review the definitions and arguments, and present an insight, or perhaps a counter-insight, that highlights some major characteristics of today’s digital economy that I don’t necessarily see as feudal.
What Is Feudal Order
Firstly, let’s define feudalism:
Feudalism was a socio-economic and political system that flourished (mostly) in medieval Europe. It is characterized by a tiered structure of land holding and obligations between a king or monarch at the top and various lower tiers of lords, vassals, and serfs.
The core of this system lied in the exchange of land (fief) for military and other services. A monarch or a high-ranking noble would grant land to lesser nobles, knights, or vassals in exchange for their loyalty, service, and protection. They could parcel out their land to lower classes, creating a hierarchy of landholding and obligations. At the bottom of this hierarchy were the peasants, who worked the land and produced the goods that supported the entire feudal structure. They were bound to the land, unable to leave without their lord's permission, and owed a variety of duties and taxes to their lords in exchange for protection and the right to work the land for their subsistence.
Its advantages were order, stability during times of war and unrest, the disadvantages were stark inequality, dependence of lower classes on lords. It ended as a decline in late Middle Ages due to growth of trade and cities, rise of central monarchies, Black Death, development of new military technology – gradually transformed into nation states and modern capitalism.
What is Techno-Feudalism
Now let’s look at the (semi)official definition of techno-feudalism that usually serves to form an argument:
Techno-feudalism is a new term describing a contemporary socio-economic system where traditional capitalist dynamics are gradually intertwined with or replaced by a new form of digital hierarchy and dependence. System-wise it means that large technology corporations and digital platforms become the new lords, exerting control over digital spaces, data, and the means of production and distribution in the digital economy.
Key characteristics should include:
Data control and surveillance – monopolization of data and control of information
Platform dominance – digital platforms as the fiefdoms, where users (serfs) contribute content and data, often without fair compensation, while the platform owners (lords) reap the economic benefits
Economic disparities – disparities between the “nobility” and the “peasantry”, widening of economic gaps between the tech elite and the general populace
Dependence and exploitation – users become dependent on platforms for social interaction, business, and accessing services (subject to the platforms' terms and conditions), exploitation of user data
Regulatory challenges – the global reach and influence of big tech companies overshadow traditional regulatory frameworks, often allowing them operations across borders with minimal oversight
While digital platforms are supposed to offer fantastic connectivity and access to information, this also raises questions about power concentration, privacy, economic inequality, and sovereignty in regulating global digital entities. This is being examined already — how do digital infrastructures shape socio-economic relations and the potential need for new frameworks and economic participation in the digital age? Still, we don’t know yet – it’s all in the making, and we’re a part of it.
Where the Concept is Inconsistent
While I see the point of comparison between medieval feudalism and contemporary techno-feudalism (I guess reflection is always welcome), I also think it's necessary to provide a framework to understand the nuances in the ways of how “power dynamics” is exerted in the digital age. This is to uncover deeper inconsistencies that might potentially cause looking away from the actual reality.
Yes, the big tech is trying to gather control over digital space, but because synthetic space is not finite, there is a limit to how effective this control exertion can be. For physical space in the medieval time, of course, peasants couldn’t magically create more space or easily wander elsewhere. This is the main
Here are several points where the analogy does not hold true, and where they actually further emphasize the distinct nature of today's digital ecosystems:
Voluntary participation – Participation in the feudal system was not voluntary. Peasants were born into their social and economic roles with no choice or mobility (or an extremely unlikely chance of it), bound to the land and lord by necessity and survival. Engagement with digital platforms is largely voluntary. Users can choose which platforms to engage with, how to interact with them, and can even opt-out entirely. There are many alternatives for the users to explore, and new platforms are constantly emerging. They vary in offers, services, preferences or values, and foremost – operational policies.
Digital serfdom and monetization of data – The notion of digital serfdom suggests that users are exploited for their data. Sometimes they are, not contesting that, that is why big tech social platforms have been facing lawsuits (some even repeatedly) for laboring the profit without adequate compensation to users. But in feudal order, the bondage of serfs was inescapable. Users of digital platforms often derive tangible benefits from their participation in these platforms, such as connectivity, convenience, visibility and access to services. For digital creators, it is direct earnings stemming from visibility and connectivity to audiences. Moreover, the increasing awareness and regulation around data privacy and ownership challenge the unilateral exploitation of user data, and that’s why more equitable models of value exchange emerge as well.
Innovation and competition – The feudal system was largely characterized by stagnation, with little incentive for innovation within a rigid hierarchical structure. But the digital economy is literally built on and thrives on innovation and competition, it’s the alpha and omega of such systems. New platforms emerge regularly, and they challenge the established players by offering alternative solutions and services. That results in high dynamism and a continuously evolving landscape. Their success depends on innovation, user satisfaction, and adaptability, and if they’re not able to satisfy the users, they run out of business.
Access to resources – In medieval feudalism, access to resources was physically constrained and controlled by the feudal lords. In the digital realm, resources such as information, tools, and networks are abundantly available. The internet is an interconnected network, and to a large degree it democratizes access to knowledge and opportunities. The abundance of knowledge online, learning opportunities, creative outlets absolutely cannot be compared to feudal society. This accessibility alone challenges the monopolistic tendencies of big tech, and it is a pathway to empowerment and entrepreneurship for builders and creators.
Global connectivity vs. local feudal systems: Feudalism was inherently local, with control over specific territories and their inhabitants. The digital economy is global, transnational and without geographical boundaries. There are cross-cultural exchanges, collaborations, and the formation of communities based on shared interests rather than physical proximity. That completely challenges the localized control characteristic of feudalism.
Regulation and governance: The transition towards digital ecosystems has seen evolving forms of regulation and governance, with governments and international bodies attempting to curb the excesses of big tech companies through antitrust laws, privacy regulations, and digital taxation. It is not true that these companies are not being challenged, which was the case of unchallenged authority of feudal lords. Digital space is a contested space where the rules of engagement are continuously negotiated.
Takeaway
Looking into techno-feudalism vis-à-vis medieval feudalism underlined significant differences that challenge the analogy, emphasizing the unique nature of the digital economy. These distinctions attempted to bring some clarity into the subject and highlight some inaccuracies (although it is not all wrong, obviously). The digital realm is massive, expansive and complex, and it's crucial to recognize the opportunities it presents. We need to move beyond simplistic historical comparisons to fully understand and shape the future of our digital society.