name: technofeudalism
description: Apply Yanis Varoufakis's Technofeudalism framework for understanding platform economics, digital rent extraction, and the decline of traditional capitalism. Use when analyzing tech platform dynamics, evaluating business models dependent on platforms, understanding creator/gig economies, or assessing power structures in digital markets. Also use when building products that interact with or compete against platform fiefdoms.
tags: [macro, leverage]

Technofeudalism

How tech platforms replaced capitalism with digital feudalism.

The Core Thesis

Capitalism is dead. Something worse has replaced it.

Traditional capitalism: Profits from selling goods/services in markets.

Technofeudalism: Rents extracted from controlling access to digital fiefdoms (platforms).

Key shift: From market competition → platform dependency. From profits → rents.

Cloud Capital vs Traditional Capital

Traditional Capital

• Machines, factories, equipment
• Produces goods for market sale
• Competes with other capital
• Profits from production efficiency

Cloud Capital

• Platforms, algorithms, data
• Extracts rent from access
• Creates dependency, not competition
• Rent from controlling the territory

Examples of cloud capital:
- Amazon Marketplace (rent from sellers)
- App Store (30% toll)
- Google Search (pay to be found)
- Social platforms (algorithmic visibility)

Key insight: Cloud capital doesn't produce—it positions itself between producers and consumers and extracts rent from both.

The New Feudal Structure

The deal: You get access to the fiefdom's users/infrastructure. In exchange, you pay rent and follow the lord's rules. The lord can change terms anytime.

Cloud Serfs

You are a cloud serf when:
- Your free labor (data, content, engagement) enriches the platform
- You have no ownership of your contribution
- You can be de-platformed without recourse
- The algorithm determines your visibility/income

Examples:
- Social media users (content + data for "free" service)
- Gig workers (Uber, DoorDash)
- Amazon sellers (40%+ fees, compete against Amazon's own products)
- Content creators (algorithmic visibility, demonetization risk)

Serf characteristics:
- Feel like entrepreneurs, paid like workers, protected like neither
- Individualized (no collective bargaining)
- Dependent on platform's algorithmic favor
- Bear all risk, platform takes guaranteed cut

Vassal Businesses

Businesses that depend on platforms become vassals—nominally independent but functionally subordinate.

Signs you're a vassal:
- Can't reach customers without the platform
- Platform takes significant revenue cut
- Platform can copy your product
- Platform controls your customer relationships
- Algorithm changes can kill your business overnight

The vassal trap:
1. Platform offers access to customers (attractive)
2. You build business on platform
3. You become dependent
4. Platform raises rents, copies your product, or changes algorithm
5. You have no alternatives

Rent vs Profit

Profit (capitalist): Earned by producing something valuable more efficiently than competitors.

Rent (feudal): Extracted by controlling access to something essential.

Platform rent extraction:
- App Store: 30% of all transactions (for what production?)
- Amazon: 40%+ fees on marketplace sellers
- Google: Pay-to-play for visibility
- Social: Algorithmic suppression unless you pay to boost

Test: Is this company making money by producing better goods, or by controlling access to customers?

Algorithmic Control

The algorithm is the new law of the land—written by the lord, opaque to serfs.

Algorithmic power:
- Determines what you see (information control)
- Determines if you're seen (economic control)
- Changes without notice or explanation
- No appeals process

Consequences:
- Creators optimize for algorithm, not audience
- News optimizes for engagement, not truth
- Products optimize for platform metrics, not user value

Rule: He who controls the algorithm controls the fiefdom.

The Attention Factory

Cloud serfs are workers in an attention factory, paid in dopamine.

The exchange:
- You "pay" with attention and data
- You "receive" content, connection, convenience
- Platform monetizes your attention (ads) and data (targeting)

Hidden labor: Every scroll, like, comment, and share trains the algorithm and creates value—for the platform.

Wage: Zero. You work for free and call it leisure.

Escape Strategies

For Individuals

• Own your audience: Email lists, direct relationships
• Diversify platforms: Don't depend on one fiefdom
• Build off-platform value: Skills, reputation that transfers
• Recognize the trade: You're paying with data/attention

For Businesses

• Direct customer relationships: Don't let platforms own them
• Multi-channel presence: Reduce single-platform dependency
• Own your data: Don't let platforms hold your customer info hostage
• Build switching costs for customers, not platforms

For Builders

• Interoperability: Build for portability, not lock-in
• Protocol over platform: Open standards resist feudalization
• User ownership: Let users own their data/content/relationships
• Avoid platform dependency: Don't build on sand

Recognizing Technofeudal Dynamics

Questions to ask:
- Who controls access to the customers?
- Who owns the customer relationship?
- Who can change the rules unilaterally?
- Who bears the risk vs who takes guaranteed rent?
- Is this profit from production or rent from position?

Red flags:
- "Free" service (you're the product)
- Platform takes 20%+ cut
- You can't export your data/audience
- Terms can change without negotiation
- No path to independence

Application Checklist

When building or evaluating business models:

1. [ ] Who is the lord? Who controls access?
2. [ ] Am I building a business or becoming a vassal?
3. [ ] Do I own my customer relationships?
4. [ ] Can I be de-platformed? What happens then?
5. [ ] Is my revenue profit (from production) or am I paying rent?
6. [ ] How do I reduce platform dependency?
7. [ ] Am I contributing free labor (content/data) somewhere?
8. [ ] What would this look like with protocol instead of platform?

Anti-Patterns

• "The platform helps us reach customers" → You're paying rent for access
• "Free tools/services" → You're the product; data is rent
• "We'll build audience on X, then..." → You don't own that audience
• "The algorithm favors good content" → The algorithm favors the platform's interests
• "They won't change the terms" → They always do, once you're dependent
• "We're partners with the platform" → Vassals aren't partners