Groucho Marxism

Neo-feudalism, or new feudalism, is a theorized contemporary rebirth of policies of governance, economy, and public life, reminiscent of those present in feudal societies. It refers to the idea that capitalism is evolving, or has already evolved, into a modern socio-economic system that bears similarities to the feudal social orders of ancient times, but with unique modern features. The term neo-feudalism has been popular since the early 2020s but the concept has been around much longer. The idea was first put forward by the German philosopher and social theories Jürgen Habermas, who used the term Refeudalisierung (‘refeudalization’) in his 1962 work The Structural Transformation of the Public Sphere to criticize the privatization of the forms of communication.

Recently, the Greek economist and politician Yanis Varoufakis has proposed that capitalism has evolved into a new feudal-like structure of economies and societies which he refers to as ‘techno-feudalism’. Varoufakis explains that unlike under capitalism, feudal economies have the quality of being dominated by very small groups of people who predetermine the behaviour of markets as they see fit. He notes that massive online platforms such as Facebook and Amazon are primarily governed by the whims of single individuals and small teams, and thus are not truly capitalist markets of free trade, but rather feudal markets of stringent control. Varoufakis summarized the argument in his 2023 book Technofeudalism: What Killed Capitalism. But is he right?

To answer that question we first need to define what we mean by ‘capitalism’ and ‘feudalism’. Or more specifically, we need to understand the key difference between the two. One distinction often made is that under feudalism, workers were tied to the land and owed labour to a lord; whereas under capitalism, workers are free to enter contracts for wages and can change employers or withdraw their labour if they wish to. I think this is a false distinction. In practice, most workers are no more free to withdraw their labour under capitalism than they were under feudalism. In both systems workers basically face a choice between working or starving. The only real difference is that under capitalism this stark choice gets masked behind the pretence of worker ‘freedom’.

Another distinction often made concerns property relations. Under feudalism, land was held through loyalty (fiefs); whereas under capitalism, productive assets such as land are owned as private property. Again, though, this seems to be a distinction without a difference. Both systems involve non-democratic, private ownership of the means of production. The only real difference is that under capitalism the means of production includes machinery and not just land. Yet another distinction often made concerns social mobility. Feudalism had a rigid class structure based on birthright; whereas capitalism supposedly allows for upward mobility through success, merit, or capital accumulation. In practice, however, it is extremely rare for a worker to change class and become a capitalist.

Both feudalism and capitalism are exploitative systems in which a small ruling class dictates economic decisions and a larger working class lives with the consequences. The thing that distinguishes them is the underlying economic logic. Feudalism was an agricultural system based on traditional obligation and consumption of surpluses by elites. It was essentially a static system that survived largely unchanged for centuries. Capitalism, on the other hand, is a dynamic system driven by competition, accumulation, and growth. This drives technological innovation and competitive efficiency but it also has tremendous downsides, particularly on the natural world. It is an unstable system that inevitably leads to war and crisis and is fundamentally unsustainable in the long-term.

The accumulation drive of capitalism has not gone away; on the contrary, it is as powerful as ever. For that reason I cannot subscribe to Varoufakis’s techno-feudalism thesis. If anything, new technology is being marshalled to exploit workers further and drive accumulation to an even greater degree. Therefore I think ‘techno-capitalism’ would be a better term to describe the system under which we now live. The rise of AI will only turbocharge this process of worker exploitation and capitalist accumulation – unless we do something to fundamentally change the system and its underlying logic.