Neoliberalism was neither new nor particularly liberal when it established its dominance 50 years ago. Its significant advantage was its sharp departure from classical liberalism. While it paid tribute to liberal thinkers, neoliberalism retained neither their method nor the concept of the market. Today we are on the threshold of another, equally fundamental ideological innovation.
Unlike Adam Smith or John Stuart Mill, neoliberals did not feel obliged to demonstrate, theoretically or empirically, under what circumstances an unfettered market should transform private profit-seeking into collective prosperity. The invisible hand was divine, infallible. Even when the market failed, they argued, any attempt to correct it through collective action was doomed to even greater failure. This view suited Wall Street perfectly.
The 1971s were hardly a time for this doctrinaire indifference to evidence of the ill effects of deregulation of financial markets. Ever since America became a deficit country and President Richard Nixon shocked the world by detaching the dollar from its gold standard in XNUMX, successive American governments have reinforced US global hegemony by increasing – not reducing – fiscal and trade deficits.
Of course, Wall Street banks were assigned the key role of recycling the dollars (into government bonds, stocks, and real estate) that foreign exporters had been accumulating thanks to deficit-driven American demand for their goods. But to do this—to become the center of this bold scheme to recycle global surpluses—the bankers had to be freed from regulatory constraints, which meant re-educating legislators and the public who had been taught since 1929 to fear an uncontrolled Wall Street. The fundamentalist orthodoxy of neoliberalism, which celebrates the sanctity of deregulated markets, as reflected in the growing influence of the “law and economics” movement, perfectly met this requirement.
Today we are witnessing the rise of a new form of capital – cloud capital, or networked algorithmic machines that give their owners special powers to modify our behavior. This capital needs a new ideology to justify it. I have called this new system technofeudalism. It is a form of production and distribution that is driven by cloud capital and that replaces markets with cloud fiefdoms (such as Amazon) and capitalist profits with cloud rents.
To realize the full power of cloud capital, its owners (people like Jeff Bezos, Peter Thiel, Mark Zuckerberg, and Elon Musk) need a new ideology. Just as Wall Street financiers needed neoliberalism after the Nixon shock, a new ideology must support the expansion of the domain of cloud capital in three ways.
First, it must legitimize the colonization of human effort. Starting with the relaxation of rules governing, say, self-driving cars or AI-powered medical and legal services, this ideology must justify the unlimited replacement of error-prone, unruly humans—machines—by cloud capital, in every domain, including work that gives us pleasure (say, translating poetry) or that we should want (say, raising children). The deeper cloud capital can penetrate tasks currently performed by humans, the more money from cloud rents flows to the technofeudal class.
Second, the new ideology needs to legitimize the colonization of state institutions, especially the privatization of public data through its transfer to the cloud capital of big tech companies. For example, it must justify Musk’s use of the Department of Government Efficiency (DOGE) to connect his cloud capital to various federal agencies, including the Internal Revenue Service, or the tight tying of Thiel’s defense company Palantir and Google to the Pentagon, making their cloud capital indispensable to the military-industrial complex.
Third, it must legitimize the colonization of Wall Street. Zuckerberg was the first technofeudal to try to create his own digital currency, Libra. Wall Street thwarted him. But then Musk’s purchase of Twitter, now X, evolved into a bolder attempt to create an “App for Everything” that would challenge Wall Street’s monopoly on payments. Big tech companies, seeking to provide unfettered cloud finance outside of traditional financial markets, have been emboldened by President Donald Trump’s executive order directing the Federal Reserve to create a strategic reserve of cryptocurrencies. Now more than ever, they need to justify merging their cloud capital with financial services.
The new ideology is already here. I have called it technolordism, a mutation of transhumanism – a doctrine that advocates blurring the boundaries between the organic and the synthetic until such “augmented” humans achieve true freedom, or even immortality. Just as neoliberalism borrowed ideas from classical liberalism but usurped them by adding a supreme deity (the infallible market), technolordism serves cloud capital and its threefold colonization project by replacing neoliberal Homo economicus with an amorphous “HumAIn” (the human-AI continuum).
Technolordism has also found a replacement for the supreme god of neoliberalism. The new deity is an algorithm that renders the signaling functions of the decentralized market mechanism obsolete, providing (in the form of Amazon.com) a completely centralized mechanism for matching buyers and sellers.
The long-term consequences of the societal transformation accelerated by technolordism are breathtaking. They include, among others, unprecedented macroeconomic instability (as cloud rents decimate aggregate demand), the demise of democracy, even as an ideal (a position espoused by Thiel, an early prophet of technolordism), and the end of the university (to be replaced by personalized “augmented reality” based on artificial intelligence).
In this light, Trump is a godsend for technofeudals. His agenda—completely deregulating their AI services, boosting cryptocurrencies, and exempting cloud rents from taxes—enhances the power of cloud capital. For the new ruling class, however much money it loses in the short term due to Trump’s tariff delusions—it looks like a magnificent long-term investment.
Project syndicate
Translated by Milica Jovanović
Peščanik.net
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