Techno-feudalism
The Narcissism of Post-Capitalism Economics
Previously published on September 29th in Brussels Morning Newspaper.
Brussels Morning is a daily online newspaper based in Belgium. BM publishes unique and independent coverage on international and European affairs. With a Europe-wide perspective, BM covers policies and politics of the EU, significant Member State developments, and looks at the international agenda with a European perspective.
“If rich people with private property have been stuffed through excessive greed, and if they want in their contents too obstinately, they give rise to countless and incurable illnesses. And through their vices, these rich people can bring about the ruin of the body as a whole.”
Policraticus by John of Salisbury, 12th century (~1159)
Millennials and Gen Z tend to have a beef with exploitative profits-driven capitalism that has marginalized them to a rent economy, though they aren’t necessarily in favor of socialism either. It’s in this yawning gap between capitalism and socialism that, like gophers, technocrats are poking their head up to run roughshod over the terrain while narcissistically exploiting chinks in the armor of the status quo for their own gain.
Capitalism as an organizing principle with its historical stronghold in the West may have reached the end of the line with the advent of sweeping technological changes. It appears that the debut of app culture and social media in 2007 was just a warm-up act for the grand(-iose) visions of billionaires who have more money than God and seek power to reorganize society in their images.
Societies are undergoing a rigorous inquiry into geopolitical structures. Not one social structure or institution is safe from the narrowing of eyes of scrutiny from predominantly the tech sector. Long past are the days of tech utopia when we could count on Google to do no evil.
Of this transition Prof. Sam Vaknin has stated, “Something really bad has happened with capitalism. It is transitioning to what I call neo-feudalism.” Add to it a technological veneer and you get technofeudalism.
Prof. Sam Vaknin continues:
“The future will not be a clash between narcissists and anti-narcissists. It will be a clash between narcissists, elite narcissists and mass narcissists.
But they will all be united by an organizing principle and an ideology of narcissism.
Between different types of narcissists, lowbrow narcissists, uneducated narcissists, ignorant narcissists, anti-law Harvard graduate narcissists, corporate narcissists against shareholder activist narcissists, politician narcissists against electorate narcissists — but everyone will be a narcissist. It will be the explanatory, meaning-imbuing principle. It will be the overarching ideology, and it will merge with capitalism.
So capitalism itself will be narcissized if you wish. Everything will be narcissism.”
Since narcissism and capitalism are inextricably linked, and a narcissist always ends badly, it opens the vista and horizon to new, though not necessarily better, ways of structuring society. This new way is bound up with enterprising technocrats.
With this backdrop, Sovereign AI refers to a nation’s capabilities to produce artificial intelligence using its own infrastructure, data, workforce, and business networks. Though tech fascists advocate the dismantling of nation-states in favor of network states, the principle of sovereign AI may still hold.
A diaspora of startup cities/statelets/network states would be linked in a network similar to a spider web covering the globe, though the typical framing confines network states to states formed initially online in a computer network with a like-minded demographic before setting up shop in a geographic location with its own concordant laws.
As Yuval Noah Harari has written in his latest book, Nexus: A Brief History of Information Networks from the Stone Age to AI, AI is the first technology that is not simply a tool, but is agentic — capable of acting, growing, and evolving independently of human intervention or stewardship. Just as the internet knows no bounds other than firewalls thrown up by authoritarian governments such as Russia and China, AI, flexing its agency, will likely find its way around these obstacles, with virtual private networks (VPNs) being a crude prototype for the types of obstacles ahead.
AI poses a risk to dictators the world over. Dictators will be faced with how to punish agentic AI in order to maintain their power. Humans are relatively easy to track down — AI, not so much. Ostensibly, dictators would punitively crack down on AI companies that are ironically likely funded in part by the state and in a climate where even engineers don’t understand how the algorithms work in their entirety. The question would then be whom to blame. In this scenario, the AI “train” has left the station and jumped the tracks.
Nobel prize-winning 81-year-old economist Joseph E. Stiglitz writes in his recent book The Road to Freedom: Economics and the Good Society that a moral compass concerned with trust undergirds a healthy capitalist system as opposed to our current system of neoliberalism with its unfettered, Darwinian capitalism.
In this cynical and narcissistic era, trust is hard to come by and even smacks of a hokey yesteryear adhered to today only by “suckers and losers.”
Without a foundation of trust, the entire capitalist system as we know it is running on the fumes of a civilized bygone era. It’s in this climate of distrust that capitalism, expressly neoliberalism, is currently pushing the envelope of a functioning economic system and, as such, has nearly, if not, effectively, run its course.
Neoliberalism, the form of capitalism in place since Reagan’s 1980s up until today, is ideologically deregulated capitalism and, in practice, nearly laissez-faire capitalism with little to no government checks and balances. Neoliberalism is capitalism run amok with minimal constraints.
Without regulatory constraints, the thinking goes that the economic system of capitalism has engineered its own demise with the catastrophic 2008 recession, which was narrowly bailed out by the central banks’ printing money hidden behind euphemistic “quantitative easing.”
International bestselling economist, Yanis Varoufakis writes in his book published this year, Technofeudalism: What Killed Capitalism, that the '08 recession precipitated a paradigmatic upset. Just as feudal societies never anticipated the seismic shift and turn to capitalism, it seems inconceivable that society would organize world financial markets on a new schema of technofeudalism, but here it is.
Varoufakis, the former finance minister of Greece, hypothesizes in his book that capitalism has mutated into a more virulent form of capitalism called technofeudalism.
In this shake-up just under our noses, Varoufakis maintains that the economy is now comprised of feudal Lords called cloudalists, cloud capitalists, or cloud Lords who reign over digital fiefdoms such as Amazon, Alibaba, and Facebook.
For example, Amazon owner Jeff Bezos charges a rent upwards of 40% to old-school merchants or capitalists who sell products on his website. Merchants or vassals defer to Bezos’ algorithm, which controls their product’s visibility in his market platform/digital fiefdom. Markets are profit-driven, whereas platform/digital fiefdoms are rent-driven. A rent-driven economy is not capitalism anymore; it is parasitic on capitalism.
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 to vassals, which isn’t capitalism, it’s feudalism. Users are “cloud serfs.” Unwaged labor in the form of tweeting and posting builds value in these companies.
Cloudalists provide platforms to merchants/capitalists/vassals that provide goods and services to modern-day peasants or serfs. Thus, the hierarchy from top to bottom is cloudalists, vassals, and serfs.
“The people we think of as capitalists are just a vassal class now. If you’re producing stuff now, you’re done. You’re finished. You cannot become the ruler of the world anymore.”
Yanis Varoufakis, former finance minister of Greece and Professor of Economics at the University of Athens
Central to Varoufakis’ argument, no longer is capitalism driven by profits; it is driven by rents — a paradigm shift that the younger generations know all too well with the likes of the sharing economy through Airbnb and making use of one’s own car to drive for Uber, etc. Additionally, Millennials and Gen Z are having an increasingly difficult time affording their own home and resort to renting with no end in sight.
This sharing or rent economy runs on “cloud capital”—data generated for free by end users or serfs to be sold to advertisers. This cloud capital informs the algorithm, which directs consumers to products the algorithm thinks the user will purchase.
To own the means of production is not the way to seize the most power in the world any longer because even the people who own the means of production are often beholden to people who own the means of behavioral modification; this is the new form of power that defines technofeudalism. The new ruling class of cloud capitalists own the means of behavior modification in order to charge rent and skim fees off the top of the capitalist producers.
To summarize, “Capitalism is on a drip feed being kept alive with constant injections of money from central banks,” says Yanis Varoufakis. He asserts that since the Great Recession of 2008, profit has been replaced by central bank money which acts as the fuel of a new exploitative system called technofeudalism. “We have a replacement of profit by central bank money that is a new fuel of this exploitative system and the steady encroachment into the space of markets of platforms such as Amazon and Facebook.”
After '08, the United States government threw trillions at corporations; some 35 trillion was printed in fantasy-based capitalism. Capitalism killed capitalism because neoliberal deregulation, combined with the biggest liquidity event in the history of the world, created the conditions for technofeudalism.
These monies were meant to bolster the economy by creating jobs. Instead, corporations bought their own stock in the stock market, which boosted the stock market and created record-breaking profits for the top 10% and corporate executives. As a result, Americans have been increasingly living paycheck to paycheck.
Prof. Sam Vaknin argues that civilizations oscillate between feudalism and capitalism. For the last 50 years, capitalism has been reverting to feudalism.
Capitalism promotes selfishness and narcissism by concentrating wealth at the top until it collapses back into feudalism from wage stagnation and social immobility. Capitalism is more secular, and it emphasizes individuality over family. People work more hours with less time for family and religion.
Under feudalism, serfs rely on their family and religion for survival to cope with the harsh reality of not being able to improve their lot in life to move up the hierarchy.
Feudalism lacks social mobility, though serfs know their place, which offers safety and security. Absent individualism, feudalism negates personal responsibility. The emphasis in capitalism is on individualism, initiative, ambition, etc., which lends itself to narcissism and its shoddy reality testing.
If one person owns the algorithm that controls billions of people, then we have something worse than 1984. We are shifting towards Brave New World. 1984 was a problem with surveillance and Brave New World, we are happy little slaves who love slavery and that is a problem if you are a liberal, if you believe in freedom.
Yanis Varoufakis, former finance minister of Greece and Professor of Economics at the University of Athens
Former Rep. Denver Riggleman of Virginia left the Republican Party because they have “embraced fantasy over facts.” In the same vein, Professor of Economics Richard D. Wolff has stated of the United States, “We are a declining empire, and we are only making that situation worse by pretending it isn’t happening.”
The “serfs” of today are not buying the fantastical narrative that the economy is strong. The working class and middle class are demoralized under the weight of inflation. Inflation results from the central banks’ printing money; it can also manifest as a “tax” on goods and services passed down from greedy corporations, ostensibly to make up for governmental taxation.
Inflated prices balloon CEO take-home pay and shareholder profits at the expense of stakeholders for the common good. “Shareholder capitalism” espouses that a CEO’s only responsibility is to maximize shareholder returns with no respect given to the “social contract.” “Profits over people” appears to be the mantra and credo.
The status quo demands fidelity to an increasingly antiquated and fantastical capitalist system that is only still standing thanks to inflation-inducing central banks’ printing money and a collective belief in capitalism bordering on religiosity. The (shared) fantasy dies hard, that a capitalist system is a be-all and end-all, all-encompassing solution for that which ails us.
Enter narcissistic techno-fetalism feudalism to regress the masses into a rent economy absent the self-efficacy of home ownership. The tech overlords as reified by AI demoralize the serf class that they could ever grow up or adultify, and the implicit message is that godlike AI will save them.
In a fit of self-preservation to save their own hides from a mass revolt, the oligarchs/ cloud Lords/cloudalists will have every incentive to placate the masses/serfs in their gig economies with the functional equivalent of universal basic income and/or government subsidies.
The masses’ intoxication of regression to a childlike dependency fits hand in glove with the oligarch’s desire for oppression to bolster their power. This dynamic eerily echoes narcissistic abuse.
The oligarchs have the behavior-modified people right where they want them—cowed, infantile, and subservient, constantly on the soma-dopamine hamster wheel of generating content and cloud capital to please their overlords, while thumb in mouth, amusing themselves to death.
Narcissistic billionaires court disaster with their selfishness and greed that come at the expense of a functioning society. Solipsistic shortsightedness is self-sabotaging.
As billionaires continue to take more than their fair share of the economic pie, the average Joe, more and more disenfranchised, becomes more radicalized towards fascism to upend the capitalist system.
Capitalism goes hand in hand with individualism and liberalism. Feudalism goes hand in hand with authoritarianism and stagnation. Radical income inequality, which happens to be a characteristic of feudal societies, is a recipe for the scapegoating of immigrants through Nazism and its concordant civilizational collapse.
Capitalism is a fantasy-based system, just like narcissism. A return to feudalism, or neo-feudalism, theoretically could offer an antidote to the hard-charging narcissistic imperative behind capitalism. However, a mutant technologically based feudalism, i.e., a rent-based capitalism on overdrive with extreme wealth inequality, in conjunction with AI, threatens to strip the people of their agency with none of the upside of individualism-based capitalism with its potential for self-esteem, self-worth, and social mobility. Additionally, feudalism and liberal democracies are mutually exclusive.
Techno-capitalist-feudalism is more capitalist than capitalism itself. Indeed, the age of techno-capitalist-feudalism is the age of super-monopoly and super-exploitation.
TECHNO-CAPITALIST-FEUDALISM by Michel Luc Bellemare
To live under the thumb of an omniscient, omnipotent tech master encourages a childlike surrender to the problems and woes of the world. Once subjugated to this extent, narcissistic defenses will rise up, and in an upside-down world fitting for these inverted times, it may just be that collectively, narcissism saves us.
Bonus Content:
The Coming of Neo-Feudalism: A Warning to the Global Middle Class by Joel Kotkin
Technofeudalism: What Killed Capitalism by Yanis Varoufakis
How Silicon Valley Unleashed Techno-Feudalism: The Making of the Digital Economy by Cédric Durand
TECHNO-CAPITALIST-FEUDALISM by Michel Luc Bellemare
Capitalism and its Discontents YouTube playlist by Sam Vaknin
Philosophize This! Transcript
Yuval Noah Harari: “We Are on the Verge of Destroying Ourselves” | Amanpour and Company
In Yuval Noah Harari’s new book Nexus: A Brief History of Information Networks from the Stone Age to AI the bestselling author and historian looks at the unique challenges that artificial intelligence represents for our time.
Trust: No Economy, Money, Business Without It
Economist Sam Vaknin discusses the importance of trust in economics, arguing that economics is 100% a branch of psychology. Trust is critical to economic success, and there are different types of trust, including trust in the playing field, trust in other players, trust in market liquidity, and trust in other people's knowledge and ability. When trust breaks down, it can lead to catastrophic outcomes, including decreased economic activity, increased illegal and extralegal activities, and societal polarization. Vaknin proposes a simple index of trust and distrust to measure the level of economic trust in a society.
I do find it interesting that someone can be like the 3rd, 2nd, or richest person on the planet and still be claiming to be a victim of taxation. It’s a pretty obvious tell, isn’t it?