Neofeudalism: The End of Capitalism?
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When chattel slavery ended many of the freed slaves became sharecroppers, bound to the land by eternal debts that could never be repaid. Although they were no longer legally bound to their "masters", for many their lives were not really any better.
Although in principle the monopolies and the government are separate institutions, we all know that the reality is that our politicians are bought out by the corporations, and the regulators are staffed by ex-employees of the very companies they are supposed to be regulating. We used to bust monopolies, but since the 70s or so the regulators have become very lax, and practically every industry has become more consolidated than it's ever been (finance, advertising, airlines, utilities, telecom, agriculture, healthcare, etc).
What's interesting to me is that whenever Google/Facebook does something authoritarian that would seem to violate some principle of liberty we deem sacred (eg. censorship, violating freedom of speech), many if not most of the comments seem to rationalize the corporation's decision as exercising their own free speech. But when you're Reddit with 430M monthly active users, your userbase is the population equivalent of the world's 3rd largest country, and so you're effectively the equivalent of a nation-state. When you're Amazon with 750k employees, then your employees could fill up a city.
Does the principle of democracy only apply to country's governments, or does it also extend to corporate monopolies?
I think it's usually referred to as "corporatism," but, yes. Specifically, I think our current form of government in the US is https://en.wikipedia.org/wiki/Inverted_totalitarianism
No, corporatism is a completely different thing; it comes from the same root (“corpora” = “body”) as does “corporation”, but it doesn't come from or refer to corporations but rather to the whole of society with institutions in different domains being a singular whole body working together. It was a pretty big idea on Catholic social/political theory for a few centuries, before getting radically reworked into a central part of the basis for Italian Fascism.
Rule by the capitalist class through the entities creates by the State to advance the interests of capital (of which corporations are the foremost) is called “capitalism”, a name coined for that system by it's socialist critics who were quite concerned by what it did to everyone else.
If it was the government doing "authoritarian" things, then that is potentially actionable under US laws. Otherwise, Big Tech is not breaking any laws or violating anyone's rights. Google/Facebook are just websites doing what website owners do. They decide what pages to publish.
Unfortunately most HN commenters do not understand that distinction. No doubt many HN readers do, but most readers are not also commenters.
Perhaps Google/Facebook should be run by the US government. At least then users would have some rights they could enforce. Government could not get away with doing what Google/Facebook do.
If the politicians are bought out and regulators are staffed by ex-employees then there is one other way to modify corporate behaviour. Trial lawyers. Death by a thousand cuts. All we need is one good law that gives internet users some rights to sue Google/Facebook for the creepy way they do "business" and I think we would start to see change. Imagine the things that could be uncovered in discovery. It would all be laid bare.
Big Tech is doing what a government only wishes it could do. Consitutional law protects citizens from government, not corporations. In the US, coporations have nearly as many rights as people if not more. The constutional law protects them from governement, too.
Perhaps in a legal sense, but most people criticizing Big Tech policies aren't debating what is or isn't legal under current laws, but rather what should or should not be legal. Current laws give monopolies and corporations an enormous amount of freedom and leniency, and perhaps a certain degree of power and societal importance should entail greater restraints.
If there was a possibility they could be sued for this behaviour, then the threat might become non-negigible. The "legal sense" matters because it is a threat the company's management would take seriously. The threat of "people complaining about us on the internet" is not a serious one. It costs very little, often nothing, to make it go away.
Do they realise that, like government regulation, that would leave discretion over enforcement to a third party, e.g., a prosecutor.
It is possible to have a regulatory framework and a criminal code aimed at Big Tech that is, in practice, never enforced, rarely enforced, or enforced arbitrarily.
Giving users a private remedy against tech companies, letting them initiate actions in response to wrongdoing, does not mean anyone has to forgo democratic government, government regulation, law enforcement, and so on.
It is just something that as far as I can see is not getting any focus in popular discussions about the evils of Big Tech. We watch as people bring factually-supported cases over large scale privacy violations but they always fail in the courts because there is no law that is truly adequate to bring them under. The existing law requires actual injury. It reflects a time before the ubiquity of computer networks, let alone the widespread practice of using them for dragnet surveillance on the public as a business model.
These type of comments seem to be common in discussions on sites like HN, perhaps because it is so easy to make them, when commenters are hidden behind keyboards. Commenters make broad, general, often philosophical statements that do not address the specific points of discussion. Comments argue about abstract notions, failing to cite specific, concerete examples. Others respond to the generalities, and a tangent is created.
1. Many (most?) of the population is too busy trying to keep their life together to be able to go after a corporation in the courts.
2. Corporations have dramatically more resources to fight in the courts.
3. Corporations are able to make sure that the laws that people could sue them for violating never get passed.
2. True, but depending on the law and the facts, sometimes the party with more resources still has a significant chance of losing, decides it is not a risk worth taking and their best option is to either avoid such litigation or settle before trial. Most cases that are filed in the US settle. For every case filed, there are problem many more that are deliberately avoided by coporations modifying their behaviour, i.e., being careful.
3. History has shown they have not been 100% successful. America has a history of legislation that was introduced on the initiative of some "ordinary citizen" who was able to draw attention to a societal problem, through a personal story where they were affected and/or through their tireless perseverence and dedication to the cause. Big Tech is in a unique position in the history of mega-corporations because the work they do is less likely to produce the types of harm that existing US laws were designed to address. Things like death, illness, physical injury, financial loss, and so on. Laws addressing those harms did get passed. No one has ever really tried to get laws passed that address the Big Tech behaviours we learn about reading the stories and comments on HN.
While some amount of cynicism is probably healthy, it's very important to keep in mind that these observations aren't absolutes.
There are many, many politicians who aren't bought, and regulators who are genuinely fine people who want to do their jobs responsibly.
It's important to make this distinction, because we can use our voices and votes to increase their power relative to the bad apples, and thereby make the system better.
Unfortunately, it's a slow process. But if your cynicism takes over and prevents you from taking even these little steps, then you're part of the problem.
There are some, sure. Alexandria O'Casio-Cortez for example ran a campaign on grassroots donations lambasting politicians taking corporate donations and prioritizing their corporate constituents. But when the average U.S. senator spends 2/3 of the last 2 years of their term fundraising, I don't think this cynicism is unwarranted.
Hopefully the takeaway from my cynicism isn't that there is no hope, but that more drastic measures are needed to make real change. All these problems imply serious structural/systemic inefficiencies in our system. Simple telling people to vote has not really gotten us very far as the problem runs deeper.
Everything else however is I think pretty far off the mark, comparing this era to feudalism doesn't make much sense.
The article posits extraction of resources from the poor to the rich, including globally, and this is just wrong. We've seen a great convergence in global equity which one can see with their own eyes if they travel to China or Poland.
Lack of property or wealth also doesn't imply 'serfdom'. In today's age property isn't really a guarantor of personal autonomy any more, in fact if anything the opposite is true, the biggest benefits today fall on people who can move. Owning a house doesn't really do most people any good any more, in particular not if it's in a place that has its economy turned upside down.
Real interests, or perceived affiliative values?
Example: for several things "hinterland" areas are generally underserved by markets alone (hospital/medicine, broadband, delivery). Currently, the party generally stronger in those areas, though, seems more interested in eroding public solutions to those problems rather than building them out...
Perhaps you're correct those on the rural side of the urban/rural divide know their business very well. Maybe you're even right that some would consider it even more important to avoid affronting anyone's status by suggesting any other possibility -- though of course if that's true, it says something about the place that status as a value has in the discussion versus, say, actually articulating the picture of the business that they know very well.
Either way, no one seems to have challenged the fact that rural areas are poorly served in areas like medicine by the policies of the political faction they appear to support. Which people are free to do, naturally, but speculating about why doesn't make for condescension by itself.
Rural areas are poorly served, in almost exactly the same ways, no matter which (of the two) political faction(s) they decide to support, which is why they overwhelmingly support politicians who promise to dismantle the status quo. This is one of the qualities that both candidate Obama and candidate Trump shared. The actions of both in government ended up following the Reagan orthodoxy, though their rhetoric was different.
I don't think that a lot of these people take elections seriously anymore as a method for accomplishing change (with good reason[1]), and now are just voting for the person whom the most complacent like the least.
[1] https://www.cambridge.org/core/journals/perspectives-on-poli...
Very sparsely populated.
It has a few shops and hospitals within a kilometre.
Ofc, there is no way I can afford same land in middle of city but a lot of people don't have choice between living in a city Vs living somewhere peaceful / scenic.
Their jobs are in city so they can't just move to somewhere clean and beautiful.
There are things in city which is mostly services available at walking distance.
I am YouTuber - I need the land my channel and also don't really need extra services which city offers.
Once a month, I take the truck to city and hall all the stuff I need for channel.
You might consider looking at the study reported here https://www.theguardian.com/global-development-professionals...
> In 2012, ... developing countries received a total of $1.3tn, including all aid, investment, and income from abroad. But that same year some $3.3tn flowed out of them. In other words, developing countries sent $2tn more to the rest of the world than they received. If we look at all years since 1980, these net outflows add up to an eye-popping total of $16.3tn – that’s how much money has been drained out of the global south over the past few decades.
No comments on how good the study is, because I am not an economist.
Imagine that I own a house.
You stay at my house for a night and pay me $1. Let's call it rent or whatever.
I then spend $3 on bricks and stuff and improve my house. My cash outflow is -$2.
The work done on my house improves the value of my house by $4 (consider this to be the "internal economy").
In that year then, my net worth has increased by $2.
That is to say that it seems possible to me that you could have a negative trade balance and still be winning as you're increasing your wealth at a rate faster than you give it away.
Am I missing something?
This would still be losing when compared to growing without giving away so much of it.
Besides, it was being used as evidence that resources are moving from the poor to the rich globally.
I'm not claiming there is no issue here, but rather that this situation seemingly can arise with no ill will at all assuming countries exist.
No matter the reasons, this situation arising supports the claim that that global resources are flowing from the poor to the rich.
That said, even if that were possible it is clearly not what is happening. No country needs this capital flight.
The fact aside that the "16 trillion since the 80s" which sounds staggering is one year of economic activity by China, this isn't about someone forcibly extracting wealth out of the developing world. It's the newfound class of wealthy people in the developing world transferring export surpluses and wealth to places they consider more safe. (which if anything is an indication of their total increase in prosperity).
from the article
"But by far the biggest chunk of outflows has to do with unrecorded – and usually illicit – capital flight. GFI calculates that developing countries have lost a total of $13.4tn through unrecorded capital flight since 1980."
The report is about the total flow of money, the article just highlights capital flow. Why is this a different issue than the "extraction of resources?"
BTW, the number's quoted do not include China for reasons contained further in the paper than I read.
First off this kind of 'Feudalism' may be happening at a national scale even more greatly in China than elsewhere.
Second, property is still a huge differentiator between classes. In a time of cheap interest rates, one of the greatest drivers of inequality is home ownership. Those with the most massvive homes are able to leverage even greater. In Canada, people's 'retirement plan' is literally their home.
--> The average home increased last year in value more than the average worker's income. Just contemplate that for a moment. Society is valuing the arbitrary ownership of a non-value creating entity - a plot of land - more than literally an entire year's worth of average labour. In fact much more, due to taxation. Another way of saying this is that there is in fact massive inflation going on, but it's in housing.
Over the last 20 years, the ratio of income to house prices has risen quite rapidly, indicating very real inflation for most people - the less leverage they have, the worse the inflation.
The Feudalism actually makes sense in the context of globalism - it makes huge sense for Sweden to 'back IKEA' instead of regulating them to try to create 'more competition among furniture makers in Sweden' for very obvious reasons.
Instead of 100 different national economic pyramids, we're converging into one big massive pyramid where it's 'winner takes all' so it's a big fight for global ownership.
I think the essay is definitely fodder for thought at very least.
Inequality is rapidly increasing, and the speed of the spread is accelerating.
And given that housing still accounts for somewhere between 20% and 45% especially for the lowest income quintile, yes, owning a house makes a huge difference.[1] https://www.oecd.org/els/family/HC1-2-Housing-costs-over-inc...
I respect you have a different opinion, but if it's contradicting available data I'd appreciate a source for that belief.
https://en.wikipedia.org/wiki/Gini_coefficient#World_income_... (see second chart)
This is also reflected in one of the graphs ("The Global 1% Captured Twice as Much Growth as the Bottom Half") from your link, with the decline in the top 1% since 2009 and the slow increase in the bottom 50% since 2002.
The graphs you show are largely broken down by country, and reflect an instance of Simpson's Paradox. [1] Within each individual country, income inequality is rising. However, globally income inequality is falling, because an increasing share of global income is moving from rich countries to poor countries. The super-rich in the U.S. are rapidly outpacing the poor in the U.S., and the super-rich in the China are rapidly outpacing the poor in China, but a large fraction of the huge number of poor people in China are rapidly approaching the middle-class standard of living formerly reserved for the U.S, much more than the number of people that have fallen out of the U.S. middle class.
Inequality within countries is rising (in some countries), but the average standard of living between countries is converging.
That aside wealth inequality isn't a good measure for economic equality in a meaningful sense . Take a look at life expectancy and education gaps, urbanisation, female participation in the workforce and absolute poverty, there has been an undeniable convergence over the last few decades[1]
If wealth inequality wood be a good measure of economic prosperity then Sweden would be one of the world's worst places to live.
[1] section: Global divergence followed by convergence
This time around it's the middle class that's taking the hit. Our consumption fuels the process that does result in a certain re-distribution of wealth, and yes, some of that does indeed reach the poorest. That's good. Most of the cash flows up though. The richer do become richer, and the middle class is probably going to be a thing of the past in 30-40 years. If we continue down the pre-COVID path then the middle class will be replaced by a consumption economy powered by debt, and where the richest own the debt and the rest will have to live a life constant work in order to pay their debt.
Mind you, this won't necessarily be a horrible existence; people will still have access to modern technology, will still have streaming services, phones and whatnot. Compared to how average people lived 500 years ago it will most likely be quite a step up.
The former middle class, on the other hand, will have much more limited freedom, and far less influence on their own situation compared to today.
Time to re-read "The Space Merchants" again.
What about the clear regressions we’re seeing in quality of life for poor communities in America? Flint, MI hasn’t had clean drinking water for several years now. The quality of aggregate healthcare in states like Texas is being compared to countries like Russia. Access to affordable healthcare is a major issue for millions of Americans today.
Nobody cares that life will be better than it was 500 years ago, people care that it’s worse than it was 40 years ago, and wealth inequality is major driver of this decline in quality of life.
Agreed. And since we're currently in an unprecedentedly long period of prosperity it's only a matter of time before some people will be taking quite a few steps back.
My largest worry is that society will simply cease to have a purpose for some groups of people, while still preventing those people from trying another path. In the past such situations usually triggered large migrations of people, but at the moment, there isn't really anywhere for them to go. It's a situation that needs to be resolved within the next 10-20 years if we want to avoid civil unrest in the future.
It's not worse than 40 years ago, it's worse than 5 years ago, but short intervals aren't that good in predicting larger trends. Flint, MI seems to be a unique issue, as far as I'm aware, it's an outlier and not the rule in the US.
As many as 20% of Americans have been exposed to unsafe drinking water at least once in the past decade[0], Flint is in no way an outlier. The cost to upgrade old pipe systems is completely out of reach for poor communities throughout America.
Between the flight of manufacturing overseas hollowing out jobs in cities from the Northeast all the way through the Midwest and Southern US and the introduction of the private equity model, life is indeed worse for millions of Americans. Just look at the political climate we’re currently in, that anger is coming from a very real place. Spend some time in Detroit or the Rust Belt, it’s a profoundly sad experience.
0: https://www.usatoday.com/story/news/2017/08/14/63-million-am...
I don't know how good it was in rural towns 40 years ago, though. Detroit was certainly doing better, but I'd also assume that testing and requirements have changed since then, so you might still have a similar quality today, but it's not considered safe today.
Whether that's responsible for the political climate, I don't know. We've seen lots of changes in Europe as well and we don't face infrastructure issues of that magnitude and our dying industries are a bit more spread out over the country, so you get fewer pockets of absolute desperation.
20% of Americans exposed at least once in the past decade does not sound too bad. Does that include people drinking from streams while hiking?
From what I've seen, it's a phenomena in most of the Western World, and not just in the States. But you are right, of course, and as I mentioned there are more people who are living under decent conditions now than 500 years ago and that applies world-wide. I have no doubt that we'll keep going in that direction for some time yet.
However, as save_ferris pointed out above, the groups that don't stand to gain from this won't care. They will be forced into a lifestyle that might not be terrible and which will be far better than their ancestors had 200 years ago, but which they cannot opt out from and which will still be far worse than their parents had.
But, considering the pandemic and the amount of war-mongering going on at the moment, I guess we should all consider ourselves lucky if we don't have to pay our food with bottle caps in 20 years...
Our wealthiest cities in the U.S. are packed with homeless people, sometimes lining entire streets with tents [1]. Denying the enormous divergence between the wealthy and the poor at this point is just straight denial.
> Lack of property or wealth also doesn't imply 'serfdom'
Yeah, tell that to the homeless.
Did you know one of the major issues facing homeless in Portland is Type-2 diabetes? And that's a genuine concern and one we should address - but the presence or lack thereof of homeless is not an indicator of wealth disparity.
What a load of crap. The U.S. has the greatest wealth disparity of any OECD nation, and the most homelessness. So yea, I'd say homelessness is a pretty strong indicator of wealth disparity.
The mental gymnastics people go through to justify homelessness is appalling.
Egypt, Nigeria, Zimbabwe all have more overall homeless populations. Sweden, New Zealand and Ireland have more homelessness per capita.[^1]
So clearly homelessness isn't an indicator of wealth disparity at all. I'm sorry reality doesn't align to your belief system.
[^1]: https://en.m.wikipedia.org/wiki/List_of_countries_by_homeles...
- The first point is missing the point, because it is ignoring the Simpson's paradox critique that a few users have already pointed out. It's possible for global wealth inequality to decrease, while at exactly the same time, wealth inequality within nations is increasing. Wealth inequality in the US is growing, and has been, for some time now. Nobody in this thread is disputing that.
- I am on board with the second point. The user that JSavageOne is responding to is pulling a bait-and-switch. They wrote that "Lack of property or wealth also doesn't imply 'serfdom'", and then followed it up with a paragraph explaining why real estate is a bad investment. They never said anything about wealth. But lack of wealth is basically serfdom by definition. Before you start strawmaning me, I'm not suggesting that everyone needs to be Warren Buffet to qualify as a non-serf. I mean something like this: if you A) Don't own anything and B) Don't make enough money to save in eg a 401k (this is a form of wealth) you are in a precarious situation. Whether or not we want to call it "serfdom" is just a matter of semantics. Moreover, I think that society should be trying to minimize the number of people in the situation. (Aside: I recently relocated to Sweden and I find the pension system here impressive. Making it easy (and in fact, mandatory) for people to start locking up money in index funds feels like a realistic, if imperfect, way to level the playing field in a world where wealth, and not income, is how you make money.)
I'm gonna write out a notion before I actually read the article and get disappointed.
Feudalism was a mode of production in which value was chiefly produced from arable land via agriculture and mainly extracted in the form of rent or tax by force, with the ruling class being the most effective military force. Merchants, traders, artisans, engineers, and bureaucrats weren't really major players under feudalism, and their rise from tolerated skilled servants to a class for themselves, the asset-owning class of capitalism, was a major historical transition.
If, hypothetically, we were transitioning into a form of "neo-feudalism", it would be a mode of production in which efficiently producing valuable goods for market trade is no longer more valuable than the ability to just force other people to pay you not to plunder them by force. It would indicate that society's productive potential was either actively degrading, or being held hostage by a ruling class of rent-seekers on the limiting factors of production.
For instance, a society run largely by real-estate or oil tycoons who twist the law to bully their competitors and extract rents/ransoms from anyone needing land or oil could (again, hypothetically) qualify.
The nasty question in this whole thing would be: what so strangled capitalism that feudalism was able to make a comeback? The feudal-to-capitalist transition happened in the first place because the ruling class of capitalism was able to so steadily erode the economic, social, and even military relevance of the landed nobility that by the time of the French Revolution they could be executed en masse without anyone else complaining much, and the nobles of many other countries like England and Germany had to marry into industrial enterprises to keep their wealth! Are we somehow so de-industrialized that we're switching back to subsistence agriculture?
Which is not to say I love tech companies and "platforms" so much, but as the COVID-19 shutdowns have shown us, stuff like AirBnB and Uber basically just make money off facilitating other people's transactions in economic sectors that are already heavily rentiered and concentrated. Taxis and real-estate aren't going to get any less rentiering just by getting rid of the apps.
But the scale of the internet has really amplified this, and it feels much newer since we have oligarchs in SV now with far more publicity than typical US oligarchs. They get media attention because they have threatened the media. They tyranny of NIMBY-driven land use is not a (new) threat to traditional media, and those who uphold that system are the same people who typically prop up local media, and media is controlled by those that own property in the same way.
If you want to be a YouTube star or a Hollywood star, you had more avenues to success in Hollywood but it was still a very limited number of power brokers that gate keeped access. Now, organic growth of a YouTube star is possible, but that star is share cropping just as the Hollywood star is sharecropping a system with tightly controlled distribution; YouTube is a single agent and there's just a handful of Hollywood studios.
Personally, I think that real estate rentierism is a far bigger problem than platforms. But addressing that offends a far broader audience, and lacks novelty, even if the scale of rentierism is affecting higher income quantiles than in anybody's memory.
That's a pretty good summary, yeah. As vile as Facebook spying and YouTube's hit-rate algorithm can be, most people are more affected by old-fashioned landlording, with the semi-novel twist that the metropole and its inhabitants try to limit the number of people who can move in and "compete for jobs", rather than dragooning people out of the countryside to work in labor-intensive industries.
Unfortunately this view falls apart because you need a strong-ish state to enforce money, and penalize contract non-performance, which seems to me to be the achilles' heel of libertarian do-everything-by-contract as well.
And I should add that "strong-ish" means a state that's not corrupt, strong enough politically to enforce its own rules via police action, and ethical enough to attract popular support. I don't think these things can be quantified, so people corrupting the system, or gaming the laws can always argue about whether or not the state is "strong-ish" enough.
Yeah, I was really surprised to see this piece was published in May 2020 without any notes of the major shifts in partisan politics of the past few years.
For instance, one wouldn't critique the Left today for being too decentralized or libertarian-municipalist. One would critique the Left today for being, essentially, the interests of the neo-feudal "center" wrapped up in moral language, with a social base that tilts far more educated, metropolitan, and white-collar than the rest of the population.
And then, of course, there's ignoring the elephants in the room: Trumpian right-wing nationalist populism, and COVID-19. Both have pushed official politics in a direction of greater "state capacity", and the former is explicitly rooted in the identity and interests of the neo-feudal "hinterland" being asserted against those of the "center".
Like Marx pointing out the falling rate of profit, I think you've hit on the contradiction in this "neo-feudalism": the networked metropole of "global cities" has to be maintained, militarily and infrastructurally, by nation-states that give people in the "hinterlands" a vote, often a vote that "weighs more" than that of the people in the "centers". Insofar as a company like Facebook or Google props up the San Francisco real-estate industry, that's great, and they can even worm their way around paying California taxes by various clever means. But an electoral revolt from the "hinterlands" so severe that both major parties now put up candidates and platforms centered around telling the "centers" (ie: San Francisco) that they're a bunch of loony extremists who need to be brought to heel? That's a political problem for neo-feudalism.
I think you're overlooking the role of military technology in unseating the feudal power base. Mounted knights were no match for pike squares, and cannons rendered castles obsolete.
Centralised standing armies of cheap soldiers proved more effective than the much more expensive mounted and armoured knight.
Unless something undermines the military and security apparatus of the modern nation-state it's not going away.
I think you're assuming that the feudalism is referring to replacing the current system, rather than building a new system on top of it and describing the new structure within.
I don't think the article's neo-feudalism directly predicts that people in the hinterlands will be extracted from physically. But rather just in the scope of their digital activity - they want to communicate with friends, use Facebook, and Facebook grows richer off of their labor. But I do think the article hops around between the narrow digital context and the larger world to lend more gravity to its point.
Talking about the entire real world, and making things easy by assuming some basic income - what keeps people in the hinterlands from just sitting around? The article critiques the lack of a coherent description of work, which I am perpetuating. But the article also leans on Facebook moderators of an example of new-style work, even though it is fundamentally unnecessary.
To the extent that we go down this path, we could also just not have an economy - the people in the hinterlands could very well just end up homesteading, physically and digitally. Food and shelter enabled by cheap technology, setting up DIY servers for themselves and their friends, and scavenging digital devices that are cast off by the more centralized economy for lack of software updates.
I kind of already feel this way running libreboot/me_cleaned coreboot/microg for my main devices, and keeping as much stuff out of the cloud as possible. News about the latest gadgets just doesn't excite me much.
As capital grows it tends to become concentrated and inflexible, oriented more towards protecting itself than innovating. Capitalism is an unstable system, it tends to evolve in the direction of monopolies and hyper-rich 0.1%.
* Feudal Security
https://www.schneier.com/blog/archives/2012/12/feudal_sec.ht...
> Perhaps instead of hoping that our Internet-era lords will be sufficiently clever and benevolent -- or putting our faith in the Robin Hoods who block phone surveillance and circumvent DRM systems -- it's time we step in in our role as governments (both national and international) to create the regulatory environments that protect us vassals (and the lords as well). Otherwise, we really are just serfs.
How are any of these companies making money on the 'cheap' labor of their workers? Amazon pays all warehouse employees a minimum of $15/hour. This is well above the minimum wage in most areas of the US and outside the US, is a very good wage for doing repetitive tasks that don't even require a high school education.
This article doesn't even touch on the censorship aspects of companies like Google and Facebook becoming more and more a reality every day. They both regularly censor opposing view points and are definitely influencing our elections.
"Digital platforms are the new watermills, their billionaire owners the new lords, and their thousands of workers and billions of users the new peasants"
Not quite. Anyone can still start a website and sell a product without a digital overlord. In fact, there are less barriers to entry than there were a decade ago. Most people choose to give control to companies like Amazon because it's easier and more convenient.
Do you have anything to say about this when it comes to, say, AirBnB, Google (play store), Apple (App Store), Amazon (the web marketplace, not AWS) and Uber?
You can make good money renting out your place and listing it on Airbnb. Don't like it? You can always use Craigslist or advertise yourself. It's not like airBnb provides nothing. They provide a built-in stream of potential customers, which could take a lot more money and time to obtain on your own.
"Google (play store)" "Apple (App Store)"
People are only willing to pay a few dollars at most for an app, unless it's very specialized. I have always seen apps as a feature/benefit to a main business, which Google and Apple can't control.
"Amazon (the web marketplace, not AWS)"
Most businesses on Amazon have a storefront/website and use Amazon to get more business. Amazon may control the marketplace, but they don't have to control your business. This is a choice with many alternatives.
"and Uber"
Again, this is a choice. Uber was never meant to provide a full-time income for anyone. It's meant as a way to make some extra money on the side.
When we have many choices and alternatives, the argument that these companies are the 'new lords' becomes very weak.
Airbnb doesn’t “not provide anything” but it does so at the expense of driving up rent and property prices and the mass capture of real estate.
Google and Apple most certainly control what apps they allow on their stores, and many businesses are exactly their app. Also, try getting an app out on iOS without going thru the App Store.
Re: Amazon, you’re opting in into them getting a cut of your revenue for the privilege of selling through their marketplace with a very slight indication of your brand name.
And working Uber may not be a choice for many people who for some reason lost their 9-5 jobs, or have careers that aren’t consistently remunerative etc
The story of diapers.com cogently illustrates the fate awaiting those who believe that there are no barriers to competing with amazon:
https://slate.com/technology/2013/10/amazon-book-how-jeff-be...
If a 550 million dollar acquisition is my fate after trying to compete with Amazon, I would look forward to it.
$15/hr is nothing in NYC and barely covers rent + food. Meanwhile Amazon made $11.5b in profit last year and Jeff Bezos is worth $144b. Amazon warehouse employees are getting scraps. Recently a warehouse worker in NYC was fired for demanding better health protections in light of COVID-19 [1]
But that being said, like you said Amazon warehouse workers aren't the best example of underpaid workers. Walmart and McDonald's employees make way less and often rely on welfare.
> Anyone can still start a website and sell a product without a digital overlord
Sure that's one positive example where individuals can compete with corporations. Though creating an ecommerce site will not generate any traffic unless you market it, and marketing it will probably entail buying ads on Facebook, Instagram, Google means being beholden to those corporate monopolies.
[1] https://www.vox.com/recode/2020/3/31/21202075/new-york-city-...
Combine Goldman, JPMorgan, Morgan Stanley, UBS, etc and see the number you come up with. Tech is child’s play in comparison.
On the basis of market cap, this is not true (but might not have been your point):
* Berkshire: 410B
* JP Morgan: 261B
* Bank of America: 186B
* Wells Fargo: 96B
* Citi Group: 87B
total: 1.040T
* Apple: 1,333B
* Alphabet: 1,373B
* Amazon: 1,200B
* Facebook: 600B
* Netflix: 200B
total: 4.708TI suppose tech is projected to get there soon enough (or not), we’ll see.
Market cap is based on share price, so the current share price could be reflecting that companies like Amazon would literally be worth more one day. That doesn’t mean Amazon is worth more than UBS if we straight up sold each company right now.
Someone correct me if I’m wrong.
So I guess my larger point would be that I personally don’t think something like a Netflix will be as valuable in 20 years (or certainly not attain the projected value), and even come close to sniffing the total worth of companies in other industries. Within perspective, tech is not as big as we are thinking it is (which is fine, it is and will be reasonably big).
A company's market cap is its share price multiplied by the number of outstanding shares. Using parent's Netflix example, there are approximately 450m Netflix shares, times a market price of $450, for a market cap of approximately USD 200b. So it's fair to say that Netflix, right now, is worth some $200b.
Now the market cap can sometimes be misleading: Say you start Runaway Co and issue 100m shares. Each of these shares is worth what the market is willing to pay for it. If I agree to buy one off of you for $100, then we've just spent $100 to make a $10bn company. That's where the trade volume comes in.
Netflix is a publicly traded company. Today, some 7.5m Netflix shares were traded at prices ranging from $443 and $456. Given that volume, you can be relatively sure that the market price accurately reflects the company's current value (as seen by the market).
On the other hand, a company's balance sheet is listing its assets and liabilities. That's where the huge numbers come in for banks. Let's say a bank receives $1m of deposits from its customers, and uses that money to fund a $1m mortgage. That bank's balance sheet is now $1m.
Of course, that doesn't necessarily mean that the bank is now worth $1m -- all of the $1m in mortgage debt that it is owed is offset by $1m in deposits that it owes to its depositors. Instead, the bank would be valued according to the profit it can generate from this. If it charges 2% for the mortgage and pays 1% interest to its depositors, that leaves 1%, or $10k per year. Valued at 10X profit, that bank might be worth $100k or so, even though its balance sheet lists a far bigger number.
Which takes us full circle.
As you said, Citi has some 2tn assets on its balance sheet. In 2019, it generated some $75bn in revenue from this, and made a profit of some $20m. At approximately $45 per share, its market cap is right around $95b.
Netflix, on the other hand, had about $33b on its balance sheet. Way fewer assets, but also way fewer obligations. In 2019, it generated revenues of about $20bn and some $4bn in profits. Investors appear to believe that there is a lot of growth still ahead, because they value the company at $200b.
Did the author just compare market capitalizations with GDP? What? It's hard to take some of this stuff seriously.
REVENUES (2019):
Apple: $260B
Facebook: $70.7B
Microsoft: $126B
Amazon: $233B
Alphabet: $162B
TOTAL: $852B
_____________________________
GDPs in 1000's (copy paste from Wikipedia):
1 United States 21,439,453
— European Union 18,705,132
2 China 14,140,163
3 Japan 5,154,475
4 Germany 3,863,344
5 India 2,935,570
6 United Kingdom 2,743,586
7 France 2,707,074
8 Italy 1,988,636
9 Brazil 1,847,020
10 Canada 1,730,914
11 Russia 1,637,892
12 Korea, South 1,629,532
13 Spain 1,397,870
14 Australia 1,376,255
15 Mexico 1,274,175
16 Indonesia 1,111,713
17 Netherlands 902,355
18 Saudi Arabia 779,289
19 Turkey 743,708
20 Switzerland 715,360
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...
Remember, the age old debate of whether the state should let the free market operate, or regulate away market failure, with bitter debate on this for over a century. Neoliberalism breaks out of this framework altogether. It says that the job of the state is to actively force an unregulated market everywhere. This active roles means discouraging unions, being part of international free trade agreements, bailing out businesses, encouraging allowing monopolies, etc.
This is what the power of the state is used for today. Of course, the power is not unlimited, so in times of great need like today, we do get a temporary halt to economic activity.
See for instance, http://cult320sp15.onmason.com/files/2015/01/Harvey.Neoliber...
Meanwhile the financial response of cutting interest rates started two weeks earlier, which certainly seems like the state trying to appease capital.
I get your general point with regards to say the "patriot" act, mass surveillance, etc. But on the other side of that, intelligence agents have complained of there simply being too much data to sift through. So once again it could be a kind of miswielded faux power rather than actual power.
I think you'd have to dig into the historical record to really find out. I'm not a big reader of history, but many things from the past seem more authoritarian. I mean, the draft. Can you even imagine that today?
For military service, specifically the US has moved away from the draft though. It's much less authoritarian to effortlessly cheerlead for sending employees off to die, versus being so whipped up that the majority of the population is willing to go themselves. Mandatory military service only works when people trust the government. If USG attempted to institute a draft for its next nation building exercise, it would find out how little support its wars actually have.
Not in the US, no.
1) Theres not a reason to when there are so many poor people who volunteer for the promise of 3 hots and a cot, healthcare, and an education
2) The workarounds that >=middle class would have to do to keep their children exempt would be harder to keep quiet in the age of social media
3) If >= middle class kids were actually forced into service, it would be much more difficult to garner wide spread support for military actions
4) There’s much more legal flexibility now than there used to be. It’s not really required or useful to formally declare war and open up a draft.
I feel there's a wider range of possible reactions between instant compliance to outright defiance. But I don't see many of those in-between reactions. It may be me...
It's like complaining that critics of Stalin can't criticize him for both making the people poor, and making some people (the party) richer.
Ignoring the context doesn't make you smart.
What we have now is a Servile State, not a feudal one.
First: feudalism was a system that came into existence in response to circumstances after the Roman Empire fell. In exchange for binding themselves to lords, serfs were promised physical protection in a world that was getting more dangerous. The negative sides of this arrangement became intolerable once serfs no longer needed to depend on lords for physical safety.
The other half is that serfs worked less than modern workers. But that’s not because they’re serfs, it’s because that in a world without refrigeration, you have a limited ability to over work, since your primary product (food) will spoil if you over produce it.
Serfs didn’t work less because they were serfs, they worked less because once enough food had been collected then there was no more work to be done.
We are talking 90% of the population living in extreme poverty and suffering from malnutrition.
A number that plummeted in the 20th century, especially since 1960, being less than 10% in 2015.
This was due to technology and the industrial revolution of course, but those went hand in hand with capitalism.
So from what perspective was it better?
People continue to innovate today without a large profit incentive. Look at the open source movement, the creative commons movement, the content producers all over the Internet that accept donations in exchange for sometimes large amounts of their time. People will innovate because they enjoy innovating. I don't think we can say that capitalism as we know it was necessary for the living conditions of the 15th - 19th centuries to improve.
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> "People continue to innovate today without a large profit incentive. Look at the open source movement"
I'm a part of the Open Source "movement", I've contributed significantly to a couple of high profile open source libraries.
Everything is driven by profit, either directly or indirectly. OSS contributions are apprenticeships for beginners and a great addition to any resume. Improving one's reputation by OSS is no small thing. Granted some OSS developers are exploited, but that's because they haven't learned to say no yet, or to ask for money. But that's just temporary, a part of the growing up process.
Companies contributing to OSS? That's just complementary to their cash cows. There's no company on this earth contributing to OSS without a profit motive.
Also, even in capitalism we need access to "the commons". In order to continue to innovate, the price of foundations needs to drop and in capitalism this is a natural phenomenon. Everybody needs roads and at some point roads become subsidized.
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> "People will innovate because they enjoy innovating."
You have a romantic view of the world. My view is that everything is about sex and power.
I think people need ownership and the potential for profit in order to innovate. I am no advocating for communism or the removal of private property. I think private property is necessary for all sorts of other human rights.
But private property and a profit incentive existed in the middle ages. There were guilds, and trademen, and yeomen, and all sorts of people making a profit and trading in capital. My issue with the industrial revolution is that exploitative capitalism replaced most other forms of exploitation. Yes, you could argue that serfs were exploited. But there were obligations that came with being a landowner and a lord. The industrial revolution paved the way for exploitation without obligations. Can't do the work anymore? Well, say goodbye to a house since you can't pay rent, food because you don't have money, etc. At least there was a level of security afforded by community living and living off the land. The total output of a household or town was enough to pay satisfy the year's quota, none of this week to week rent seeking.
I don't think comparing the USSR to the middle ages is accurate then in this sense. And I think that had the industrial revolution not happened, we could very well have seen a similar increase in technological development. But I suppose it's one of those things we'll only ever be able to speculate about. One thing is for sure: the exploitative capitalism that we have today in many countries needs to change. And I believe there are better solutions than communism. Distributism for instance, with elements of Georgism (also posted about on the front page of HN today funnily enough) would be a good place to start.
This was Marx's worry and reason for its theory of value.
It's not true. Capitalism goes hand in hand with the constant evolution of technology and the competition pressure that companies have, which leads to prices dropping all the time. Food prices have been dropping and I'm pretty sure agriculture will get so efficient that the price of basic food items will be free.
The only worrying thing nowadays, the only phenomenon that can disrupt this trend, are the IP laws (copyright, patents, trademark) that are essentially government-granted monopolies, allowing software companies to keep competition at bay and their prices high. But due to the evolution of technology, even software companies need to evolve and to drop the prices on their services, or they die. Maybe in the future this will stop being true, maybe there is a ceiling to what technology can do. But for now Marx's dystopian future isn't here yet.
Again, let us look at the results. In 2015 less than 10% of the world's population lived in extreme poverty, compared with over 90% in the 19th century.
I think the rapid change in poverty levels may actually be due to globalism and off shoring. If the most basic of jobs are now done by overseas workers or immigrants, suddenly the quality of life in countries that are beneficiaries of that work increases. Imported food, mass production of goods on a grand scale. Cheap Walmart products made in China that even people on the poverty line can afford. This would not be possible without globalism. You could argue that capitalism and globalism go hand in hand, but again, I don't think capitalism necessarily leads to globalism.
Take this for example:
"Most of us constitute a property-less underclass only able to survive by servicing the needs of high earners."
Who is "us"? In the USA, over 60% of housing units are owner-occupied. Hardly property-less. Hyperbole much?
But then to presumably provide support for this, the author goes and cherry-picks something:
"A report from the Bureau of Labor Statistics says that over the next 10 years the occupation that will add the most jobs is personal care aides, not health workers but aides who bathe and clean people. The dependence of the ruling class on the vast sector of servants..."
Could this BLS statistic be because the boomers, a large cohort, are getting old? The author makes the caregivers seem like servants to the "ruling class", not people taking care of the elderly who really do need the help.
Another example:
"Universal Basic Income is an untenable survivalist approach. It promises just enough to keep those in the hinterlands going and barely enough for urban renters to handover to their landlords."
Let's just dismiss UBI, a complex topic, with two sentences! Why prove anything when you can simply assert plausible-sounding things?
And then you have stuff like:
"Such groupings reproduce their lives in common, yet the commons they reproduce is necessarily small, local, and in some sense exclusive and elite, exclusive insofar as their numbers are necessarily limited, elite because the aspirations are culturally specific rather than widespread."
Huh? Am I just too dumb to understand?
I could probably find more examples.
There might be some interesting ideas in the article, but it's just obscured by all the BS.
Does that include houses with mortgages? Because in my opinion if you're not really the owner until you've paid off your mortgage fully.
Your point makes me wonder if mortgages just had the effect of transferring rents from landlords over to banks.
This sentence is busted for me. Power laws are inevitable and acknowledging this is the starting point to finding a solution. You can't fix it from within.
EDITed to address regionalism.
It's almost like once we broke the political will of the slave owning class we removed the need for slaves too.
It also used to apply for numbers of wives before Christianity killed that particular power law.
Applying descriptive social statistics as prescriptive policy is idiocy.
>>> Power laws are inevitable and acknowledging this is the starting point to finding a solution.
>> It wasn't too long ago that there was a power law in owning people.
> if you look up ownership statistics for slaves they indeed followed a power law,
Your first statement is incomplete, at best. Thank you for explaining. As it stands, not sure how that explanation applies to the assertion.
> Applying descriptive social statistics as prescriptive policy is idiocy.
Not sure what that has to do with the topic either. The issue is with the articles' assertion that you can avoid the power law via political will, akin to "equality in outcome" or https://en.wikipedia.org/wiki/2081_(film)
Social statistics have to be taken into consideration, or solutions are broken conceptually.
I’ve had a suspicion that we’re trending towards a feudal structure, with managers as minor lords, companies as countries, and CEO as a modern king. It’s not a perfect analogy, but it does explain why our culture doesn’t seem to be doing things that a capitalist society should do.
Industrialized societies quickly tear themselves apart when you need an educated workforce, and intelligent consumers.
A society of serfs will only consume the bare minimum, stagnating technological progress, ask the chinese about gunpowder and naval force projection.
Unlikely for the US to enter Neofeudalism when we are entering an age of great power competition.
You only get to keep your power if you "bribe" your workers enough to help you.
This is largely a misunderstanding of historical systems of discipline. When the enclosures started to happen, serfs were booted from their land, and were coerced into working for early capitalists at threat of subjective violence (branding, beating, &c., if caught begging) or objective violence (starvation).
It's understood that the states armed bodies of men, under feudalism and neofeudalism, don't care about you. So what is to stop a reversion to the level of subjugation seen by English serfs many centuries ago? You're free to go look up cops wearing, "I CAN breathe," t-shirts and take from that what you will.
These bribes you mention, although an accurate retelling of American history through westward expansion and imperial expansion, are directly threatened by the faltering american hegemony.
Okay, so post industrial revolution domination is what you want: Blair Mountain. Even more relevant? Literally today as America shovels an underpaid mass of it's citizens into the jaws of a pandemic so that a labor aristocracy can resume their bloomin' onions, onto the beach, and back into movie theatres.
Specifically, we're living in an era where companies are so flush with capital that the intent isn't even to make money. It's to corner a market so that they can have monopolistic behavior over it. In a capitalistic economy companies like Doordash, Grubhub or Ubereats simply should not exist because the way they operate is contrary to how capitalism is supposed to perform.
So if companies like that can thrive, the only answer is that capitalism is broken.
https://www.businessinsider.com/bill-gates-billionaire-strat...
There is still by and large belief in meritocracy and American dream. Contrast that with feudalism, people in the middle class had the ideology of the divine, unchanged order.
So I think the future is still open because it will crucially depend on what ideology will be taken by middle classes. They might as well adopt a social democratic ideology again, as the did in the reaction to late 19th century capitalism in the Europe and U.S.
Feudalism seems to be a natural order. Look at corporations - they are all feudal hierarchies internally.
So what is capitalism among the natural order of feudalism?
Technology of industrial revolution allowed new generation of aristocracy (refer to as capitalists) to replace old generation of aristocracy (landed gentry).
It's more likely that we have regressed back to natural feudal order than that we are experiencing some funky next stage of capitalism, since there were no major wars or societal conflicts recently.
> Communism was supposed to come after capitalism and it’s not here, so doesn’t that mean we are still in capitalism?
Ah, no sorry. That is not correct. That Communism was supposed to come after Capitalism was a believe held by guess who, COMMUNISTS. And that believe was based on a bunch books by a German philosopher who neither had the correct view of history, and then he drew even wronger conclusions from it. Basically making up Communism as a Utopian so he had a reason to criticism Capitalism, as Capitalism was clearly better then anything else to have an alternative he had to invent a utopia. That worked out great for everybody.
> If we’ve rejected strict historical determinism
How about were reject historical determinism itself?
> The economic scale and impact of these tech super giants, or, overlords, is greater than that of most so-called sovereign states. Evgeny Morozov describes their dominance as a “hyper-modern form of feudalism.”
Except that tech giants and other big companies don't have global armies that enact genocide on other nations. Or care what you do with your life, what religion you are and so on. Or force you in any way to use their service of the alternative produce from another service, or the open source version. Or are in any way even close to as powerful as a nation state. So except for all the things that really matter, its the same.
> he result, then, of free choice, growth, and preferential attachment is hierarchy, power law distributions where those at the top have vastly more than those at the bottom.
And those on Top then get replaced by something else when a new fade happens comes by. IBM will dominate everything. Microsoft will dominate everything. Netflix will dominate everything. MySpace will dominate everything.
Basic Market Process Theory.
These structures are only there as long as people want them and they are continually reshaped. And they are continuously and dynamically reshaped because people have free choice and the providers have no real powerful way to enforce them. The only power they have is to say 'use this service completely or not at all'. Will governments had the power to say, use this service or we kill your children.
> Power law distributions are not inevitable. They can be stopped. But that takes political will and the institutional power to implement it.
So we need government centralization against the peoples will to create rules to stop people from voluntary centralization around what they want.
> Quinn Slobodian’s Globalists: The End of Empire and the Birth of Neoliberalism documents the neoliberal strategy of undermining the authority of the nation-state over its economy in the interest of advancing global trade.
How horrible, they power is taken away from dictators and government burocrates who have done such a brilliant job organizing their economics.
We should make it as easy as possible for dictators to systematically exploit their people and natural resources and put all power in the government. That is much preferable to people being 'controlled' by the evils of global trade.
> maintaining the competitiveness of national economies has become “a top policy concern.”
What, being efficient has become a 'top policy concern' for governments, how horrifying. We need to stop this and restore systematic inefficiency.
> Competitiveness has replaced competition and growth as a state goal ... the dismantling of monopolies but “to aid specific economic actors — those who are best positioned to perform well in the global competition for profit.”
This is just a false. States sometimes push some industries, but mostly because of geo-strategy, not for profits. In actuality those industries most heavily pushed are often not those that produce those profits.
Its the opposite, those that produce profits, finance those that geo-strategy things your country should have.
And honestly, if your great fear is 'the state bureaucracy' will perfectly figure out what companies can be the most profitable and smartly invest in those, you are ignorant of all history.
> “public authority handpicks the companies on which to bestow this privilege.”
This is the same old fear that people had in the 70s about Japan. Find a new slant, this one is old and clearly wrong.
Ignoring that pretty much all of these problems have existed for a long time and the solutions actually do exist already and have been discussed since the 1800s. Those states that do a good job implementing those solutions are still doing well, and others don't.
> Digital platforms are the new watermills, their billionaire owners the new lords, and their thousands of workers and billions of users the new peasants.
I really do feel like peasant who was not allowed to leave his village under threat of death because Google provides free Gmail. This is so incredibly stupid and ignorant it actually blows my mind.
Coven is a statist. While he calls himself a libertarian, his recommendations usually don't involve les# government - very unlibertarian.
There is a long long history of this criticism going back all the way to the French Revolution.
People have been predicting this since Marx, and they've been wrong every single time. It's a better time to be a peasant today than at any time history, and it keeps getting better. The chattering class sure does love to chatter about this though.
This is quite literally the “99% of ‘poor’ people have refrigerators” argument popularized by Fox News.
You should find better sources of information.
> You should find better sources of information.
The factual claim I made is true. My sources of information are just fine, so you must be objecting to something else.
There is no ...