IN CAPITAL IS DEAD, McKenzie Wark asks: What if we’re not in capitalism anymore but something worse? The question is provocative, sacrilegious, unsettling as it forces anti-capitalists to confront an unacknowledged attachment to capitalism. Communism was supposed to come after capitalism and it’s not here, so doesn’t that mean we are still in capitalism? Left unquestioned, this assumption hinders political analysis. If we’ve rejected strict historical determinism, we should be able to consider the possibility that capitalism has mutated into something qualitatively different. Wark’s question invites a thought experiment: what tendencies in the present indicate that capitalism is transforming itself into something worse?
Over the past decade, “neofeudalism” has emerged to name tendencies associated with extreme inequality, generalized precarity, monopoly power, and changes at the level of the state. Drawing from libertarian economist Tyler Cowen’s emphasis on the permanence of extreme inequality in the global, automated economy, the conservative geographer Joel Kotkin envisions the US future as mass serfdom. A property-less underclass will survive by servicing the needs of high earners as personal assistants, trainers, child-minders, cooks, cleaners, et cetera. The only way to avoid this neofeudal nightmare is by subsidizing and deregulating the high-employment industries that make the American lifestyle of suburban home ownership and the open road possible — construction and real estate; oil, gas, and automobiles; and corporate agribusiness. Unlike the specter of serfdom haunting Friedrich Hayek’s attack on socialism, Kotkin locates the adversary within capitalism. High tech, finance, and globalization are creating “a new social order that in some ways more closely resembles feudal structure — with its often unassailable barriers to mobility — than the chaotic emergence of industrial capitalism.” In this libertarian/conservative imaginary, feudalism occupies the place of the enemy formerly held by communism. The threat of centralization and the threat to private property are the ideological elements that remain the same.
A number of technology commentators share the libertarian/conservative critique of technology’s role in contemporary feudalization even as they don’t embrace fossil fuels and suburbia. Already in 2010, in his influential book, You Are Not a Gadget, tech guru Jaron Lanier observed the emergence of peasants and lords of the internet. This theme has increased in prominence as a handful of tech companies have become ever richer and more extractive, turning their owners into billionaires on the basis of the cheap labor of their workers, the free labor of their users, and the tax breaks bestowed on them by cities desperate to attract jobs. Apple, Facebook, Microsoft, Amazon, and Alphabet (the parent company name for Google) together are worth more than most every country in the world (except the United States, China, Germany, and Japan). 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.”
Albert-László Barabási explained the processes underpinning such a neofeudalism in his analysis of the structure of complex networks, that is, networks characterized by free choice, growth, and preferential attachment. These are networks where people voluntarily make links or choices. The number of links per site grow over time, and people like things because others like them (the Netflix recommendation system, for instance, relies on this assumption). Link distribution in complex networks follows a power law where the most popular item generally has twice as many hits or links as the second most popular, which has twice as many as the third most and so on down to the insignificant differences between those in the long tail of the distribution curve. This winner-takes-all or winner-takes-most effect is the power law shape of the distribution. The one at the top has significantly more than the ones at the bottom. The shape the distribution takes is not a bell curve; it’s a long tail — a few billionaires, a billion precarious workers. The structure of complex networks invites inclusion: the more items in the network, the larger the rewards for those at the top. It also induces competition — for attention, resources, money, jobs — anything that is given a network form. And it leads to concentration. The 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.
Power law distributions are not inevitable. They can be stopped. But that takes political will and the institutional power to implement it. The neoliberal policies of the 20th century, however, strove to create conditions that would facilitate rather than thwart free choice, growth, and preferential attachment.
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. Threatened by the organized demands of the newly postcolonial nations of the Global South for reparations, sovereignty over their own natural resources, stabilized commodity prices, and the regulation of transnational corporations, neoliberals in the 1970s sought to “circumvent the authority of national governments.” They advocated a multilevel approach to regulation, a competitive federalism that would let capital discipline governments while itself remaining immunized from democratic control. In the words of Hans Willgerodt, one of the neoliberals Slobodian studies, the new competitive federalism required the state to “share its sovereignty downward with federal structures and bind itself upward within an international legal community.”
Rather than focusing on the origins of neoliberalism, Albena Azmanova’s Capitalism on Edge demonstrates the ways neoliberalism in practice has led to a new precarity capitalism. Policies pushing deregulation and global free trade have had unexpected outcomes. The global market morphed from a system of “national economies integrated through trade agreements into transnational production networks.” Because of the unclear and uncertain contribution of these networks to national economies, maintaining the competitiveness of national economies has become “a top policy concern.” Competitiveness has replaced competition and growth as a state goal, leading states to prioritize not a level playing field and the dismantling of monopolies but “to aid specific economic actors — those who are best positioned to perform well in the global competition for profit.” Acknowledging how the private sector has always benefited from public funds, Azmanova emphasizes the novelty of a form of capitalism where “public authority handpicks the companies on which to bestow this privilege.” States don’t intervene to break up monopolies. They engender and award them.
Monopoly concentration, intensified inequality, and the subjection of the state to the market have transformed accumulation such that it now occurs as much through rent, debt, and force as it does through commodity production. Azmanova points out that the privatization of sectors of the economy relatively immunized from competition — energy, rail, broadband — gave owners “the privileged status of rentiers.” Globally, in the knowledge and technology industries, rental income accruing from intellectual property rights exceeds income from the production of goods. In the United States, financial services contribute more to GDP than manufactured goods contribute. Capital isn’t reinvested in production; it’s eaten up and redistributed as rents. Valorization processes have spread far beyond the factory, into complex, speculative, and unstable circuits increasingly dependent on surveillance, coercion, and violence.
Capitalism is turning itself into neofeudalism.
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Just as feudal relations persisted under capitalism so do capitalist relations of production and exploitation continue under neofeudalism. The difference is that non-capitalist dimensions of production — expropriation, domination, and force — have become stronger to such an extent that it no longer makes sense to posit free and equal actors meeting in the labor market even as a governing fiction. It means that rent and debt feature as or more heavily in accumulation than profit, and that work increasingly exceeds the wage relation. What happens when capitalism is global? It turns in on itself, generating, enclosing, and mining features of human life through digital networks and mass personalized media. This self-cannibalization produces new lords and serfs, vast fortunes and extreme inequality, and the parcellated sovereignties that secure this inequality while the many wander and languish in the hinterlands.
