Is Technofeudalism Ripping Us Off?

Technofeudalism describes a system where powerful tech companies act like digital feudal lords, controlling essential online platforms (the “cloud fiefs”) and extracting “rent” (data, fees, attention.) They are like the medieval lords who controlled land and taxed peasants.

Users (or “serfs”) become dependent on these platforms (Amazon, Google, Meta) for work, services, and access. They give up control and personal data in exchange for participation, effectively replacing traditional profits made by capitalist producers with a new form of digital vassalage and control.

To illustrate: Airbnb controls 80% of short-term property lets in the UK. Their investment is in the platform, which can be rolled out across most of the world with tweaks to accommodate local laws, customs and preferences. Airbnb collects a compulsory fee from both ends – the hosts and the tenants.

This model extends across multiple services and industries, most often funded by US equity, and largely uncontrolled by host countries. The multinational structures normally allow profits to be allocated or transferred to low tax jurisdictions. This optimises returns and leaves the host countries wondering where their tax base went.

We based our discussion around a talk by the left wing economist by Yanis Varoufakis. who popularised the term ‘technofeudalism.’

QUESTIONS ARISING

1: Was the austerity period after the 2007/8 banking crash a major mistake – the wrong way to revive the economy?

2  Given the rise of the Tech Giants, and their effective monopolies, do we need much stronger anti-trust laws around the world?

3  Does Britain need to seek international allies to enable the fair taxation of the tech giants? (Sadly, the US will be exempt from a recent global tax deal targeting profits of multinationals.)

4  Should some of this extra tax revenue be used to support businesses in the high street – by reducing business rates, for example?

5  Will this be even harder to achieve with Donald Trump as President?

6  Do we need to find ways to slowly and carefully deflate asset bubbles like housing and some shares?

7 Should there be greater government powers to prevent important and successful British firms being sold to foreign investors?

8  In principle, should all natural or important monopolies like Water services and the national Postal Service be held in public ownership?

9  Are we in favour of economic growth – to improve the government finances?

10  Do we think that All investment in the new green industries should be in the public sector, funded by the government?

11  Do we accept the need for Fiscal Rules, to gain the confidence of the markets, (eg the government to balance current account spending and taxation over a five year term)?

12  Should we switch to more progressive taxation of personal incomes, land and wealth rather than measures like the employers’ national insurance rise which could be said to tax jobs?

HOW WE VOTED

We all agreed Q1 that the international period of austerity after the banking crash was a mistake: and Q6 that we need a slow careful deflation of asset bubbles and property values; and Q12 that we are in favour of progressive taxes on income, wealth and land rather than the employer’s national insurance rise which taxed jobs;

We almost all agreed with Q8 that important natural monopolies (like water) should be in public ownership; and with Q7 there should be greater government powers to stop successful British companies being sold to foreign investors; and Q2 that we need stronger anti-trust laws.

INTERESTINGLY – there was significant doubt about the mecca of economic growth Q9; and also the sanctity of Fiscal Rules Q11 – although the doubters were in the NA camp.

And there was a clear majority NO to the idea that all new investment in the green industries should be kept in the public sector Q10.