Where is Digital Technology Taking Us?

In its August 2025 issue, Le Monde Diplomatique published an article by Evgeny Morozov offering a scathing critique of the concept of “techno-feudalism”, as proposed by economist Cédric Durand. This critique was more recently expanded upon by Frédéric Lordon, who fears the hypothesis of a new “techno-feudal” configuration of capitalism will have the effect of sidestepping the necessary break, not with this or that configuration of capitalism, but with capitalism as such.

In this article, Cédric Durand responds to Morozov’s critique (and, in part, also Lordon’s) by examining the current macroeconomic dynamics of capitalism and the new forms taken by capitalism under the rule of Big Tech, which he believes the concept of “techno-feudalism” allow us better to conceptualise.

In its August 2025 issue, Le Monde Diplomatique published Evgeny Morozov’s scathing critique of the concept of techno-feudalism.[1] Understanding the drivers and implications of the growing influence of digital technology is clearly a matter of real urgency; and as such, Morozov’s intervention and the insights he brings to the debate are to be welcomed. However, in my view, there are three major weaknesses at the heart of his argument, which I would like to briefly outline in this text.[2] First, Morozov’s approach suffers from myopia. Focusing on tech companies without questioning their macroeconomic impact tends to obscure the systemic dynamics being fuelled by the development of this sector. Second, it seems to me that his understanding of capitalist competition is truncated. He views the competitive dynamics in tech solely from the perspective of “creative destruction at its most creatively destructive”. In so doing, he dismisses any questioning of the dialectic between competition and monopolisation that is so central to Marx’s conception of the future of the capitalist mode of production, which he calls, at the end of Volume I of Capital, “the historical tendency of capitalist accumulation.”[3] Finally, on the political level, the only lesson Morozov draws relates to the risk that the critique of techno-feudalism may ultimately serve only to rehabilitate capitalism. The argument is valid, but rather a weak one in view of the challenges posed by the rise of Big Tech. Let’s examine these points one by one. 

“Obviously capitalism doing what capitalism does best”?

The key thrust of Morozov’s argument goes as follows. Big tech companies are not feudal lords dominating their fiefs and lazily settling for collecting rents. Rather, they behave in the classic manner of companies locked in the capitalist iron cage: invest to boost profitability or die. In support of this position, Morozov points out that the tech giants are investing heavily (with $320 billion in AI infrastructure planned by 2025 for Meta, Microsoft, Alphabet, and Amazon); that they are fiercely competing with one another, fighting price wars on AI services; and that, far from taking in a feudal tribute, their income simply results from selling other companies the digital machinery essential to the production of goods and services. Fundamentally, cloud services are thus production goods in the same way as, for example, the industrial equipment sold by Siemens.

At first glance, each of these points seems reasonable enough. Tech companies compete to make the right investments to stay competitive and sell their products more effectively. The productive fabric is renewed as the frontrunners outcompete the laggards, overall efficiency increases, costs fall, and growth takes off again. It’s “what capitalism does best”!

But the story that Morozov tells us is skewed by his microeconomic perspective. We need only look at the macro dynamics to see that something is amiss, here. Far from doing “what capitalism does best”, the macroeconomy in the era of Big Tech is stagnating. One telling indicator among many is the private sector’s net investment rate, i.e., fixed capital investment outside the public sector minus capital depreciation (Figure 1). It collapsed spectacularly after the great financial crisis of 2008, but what is most notable is that it has not recovered since then — that is, in the period when the digital realm was expanding rapidly thanks to massive investments by Big Tech. Another indicator is the trend in productivity growth (Figure 2). Without any doubt, it has been markedly and continuously declining since the mid-1990s.

Figure 1. Net fixed capital formation in the private sector (Euro area 19, United Kingdom, and United States, 1995-2024, AMECO)

Figure 2. Labor productivity growth (Euro area 20, United Kingdom, and United States, 1996-2024, trend curves for GDP growth per hour worked, OECD)

In other words, looking at the awesome figures for Big Tech’s investments doesn’t tell us anything about the nature of the competition itself. After all, didn’t feudal lords battle to outdo each other with expensive fortifications, costly military operations, and lavish parties? Today, more investment in Big Tech’s forces of predation means less investment in the economy as a whole. As the burden of the digital tribute weighs down the prospects for profitability in other sectors, investment declines, productivity slows, and stagnation spreads. Of course, I am saying all this too summarily. Macro dynamics cannot be reduced to the single parameter of the cost of technology: various forms of inequality, the role of finance, forms of international competition, monetary and fiscal policy all play a role that cannot be examined here. But the sharp decline in investment and the slowdown in productivity are enough to invalidate Morozov's thesis. To use his own words, the idea that the dynamics of creative destruction in the tech sector allow “capitalism to do what capitalism does best” is a “fairy tale that obscures the actual horror story.”

Regressive socialization

“Is digital technology taking us back to the Middle Ages?”[4] The question is as absurd as it sounds. Historian Guy Bois sums up the nature of the feudal economy in a single sentence: “‘It is the hegemony of small-scale individual production (and therefore the level of productive forces that this hegemony implies), plus the seigneurial levy ensured by a constraint of political (or extra-economic) origin.”[5] However, our era is the antithesis of the individual production he refers to first. The “true history” in which digital activities are inscribed is that of the growing socialization of labour as a result of the dialectical interplay between competition and monopolization.

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In Late Capitalism, in the early 1970s, Ernest Mandel pinned down the dynamic of capitalist competition, pointing to “constant hunt for ‘technological rents’ that can only be attained through permanent technological ‘renewal’”.[6] This struggle between capitals for survival constantly reshapes the economy and society as a whole because, in late capitalism, no social domain escapes the influence of capitalist value production. At the same time, links are becoming denser across the global social space. As Mandel writes, “The socialization of labour is taken to its most extreme extent as the total accumulated result of the scientific and technical development of the whole of society and humanity increasingly becomes the immediate precondition for each particular process of production in each particular sphere of production. With the achievement of full automation this would be realized in a literal sense.”[7]

Five decades later, as generative AI tools colonise every corner of the social fabric, Mandel’s vision of permanent global interdependence and the generalised automation of intellectual labour is coming true. He understood that this qualitative transformation of capitalism would not lead to a new wave of expansion. Far from “capitalism doing what capitalism does best,” in the era of late capitalism competitive dynamics bring a systemic mutation marked by extreme centralisation, pivoting on the forces of knowledge. To return to Morozov’s point, this is not a matter of asserting that capitalist dynamics will suddenly disappear, but rather that their full accomplishment will bring about something new.

Mandel, leaning toward the optimism of the will, believed that this growing socialisation was paving the way for socialism. It is worth quoting him at greater length on this point:

Private appropriation of this socialized production leads to the crying contradiction that this vast scientific and technical ‘capital’ at mankind’s [sic] disposal is subordinated to the conditions of the valorization of actual capital, and is consequently withheld from millions of people or made available to them only in a deformed or fragmentary fashion. Only when the forces of production finally cast off the shell of private appropriation surrounding them, will the revolutionary powers which are still for the most part slumbering in contemporary science be able to be fully utilized to serve the liberation of labour and the liberation of man [sic].[8]

Mandel was right about the upheavals associated with the rise of knowledge. On the other hand, he left out the catastrophic fall that Marx had envisaged in the drafts of Capital, which happens when “the use of science (the general product of social development), in the immediate process of production, takes the form of the productive power of capital”.[9] Through the negation of autonomous and creative activity, individual and collective subjectivities are dislocated. Work is caught up in this mystification; individuals are nothing, capital is everything. This calamity extends beyond the sphere of production. The individual in their work, and then in all phases of their life, tends to be expropriated of their own existence. The philosopher Étienne Balibar calls the possibility of this definitive defeat “total subsumption.” It implies “a complete loss of individuality, in the sense of … personal identity and autonomy”[10] and, on a political level, the stamping-out of any prospect of emancipation. 

So, what’s old?

If digital technology is developing at the leading edge of the historical process of economic socialisation, and this process is fuelled by capitalist competition, then what can be feudal about the current hegemony? When Guy Bois points, in the second part of his definition of the feudal economy, to “the seigneurial levy ensured by a constraint of political (or extra-economic) origin,” he indicates the principle at work in the hybrid domination exercised by the tech giants. The feudal reminiscence refers to relationships of dependence, the blurring of the boundary between economics and politics, and the pre-eminence of a predatory logic based on extending the domain of control. The current wave of speculation surrounding AI expresses a spirit of conquest. It fuels a race for the equipment of capture: data centres, satellite networks, and marketplaces offering cloud services. This is where most of the data converges and where large swathes of economic and social activity are coordinated. As Koray Kavukcuoglu from Google DeepMind puts it, "Being able to connect with consumers, customers, companies, at that scale is really something that we can do because of that full stack integrated approach that we have”[11]. This is where the capacity for extraction lies. One may not like the comparison with feudalism, and one may propose better conceptual tools to understand what is at stake. But to claim that to understand this phenomenon, we just need to call “capitalism by its real name,” is hardly convincing.

Techno-feudalism does not express some sort of technological determinism. China’s heavy regulation of the tech sector and of the social uses of digital technology seems to be taking that country along a different path. There, a form of public interventionism — via the Chinese Communist Party — remains in control. In the United States, however, as the Trump administration removes all obstacles to Big Tech, it is paving the way for private companies to colonise politics. When it comes to AI, the administration’s philosophy could not be clearer. As Vice President J.D. Vance put it: “We believe that excessive regulation of the AI sector could kill a transformative industry just as it's taking off, and we’ll make every effort to encourage pro-growth AI policies.”[12] In terms of administrative organisation, the interventions by Elon Musk’s allies via the Department of Government Efficiency (DOGE) and the mounting number of contracts benefiting Palantir are leading to the consolidation of government and private data under the sway of these companies.[13] Even within the military, a new type of collaboration is emerging. Senior executives from Meta, Palantir, and OpenAI are being co-opted into an ad hoc body without giving up their lucrative activities, suggesting Silicon Valley’s growing influence over the defence budget and operational planning capabilities.[14]

But the most significant development to date concerns currency. The Trump administration’s active encouragement of stablecoins will not only increase financial instability and the fragmentation of the global financial system.[15] More than that, it is creating new private vectors of integration that could dethrone sovereign currencies and the financial circuits associated with them. Companies such as Amazon, Walmart, Facebook, and X are planning to develop their own currencies. Given these players’ sheer social reach, it is easy to imagine a monetary substitution in their favour. This would mean central banks and regulators losing control over their financial system and, ultimately, the rapid shrinking of the space for economic policy.

Current developments in the USA point to a kind of disarticulation of the state[16] a step toward the realisation of libertarian fantasies of a world free from politics. In countries deprived of digital sovereignty, a new kind of colonisation is emerging,[17] combining both unequal economic development and political-administrative subordination. Because the concept of techno-feudalism emphasises the hybrid nature of Big Tech firms, it allows us to focus on the destruction of administrative capacities as an imminent threat to any possibility of emancipatory politics. Short of rapid actions to counter the tech giants’ monopolisation of knowledge and coordination capacities, political institutions will soon be made irrelevant, and the anti-capitalist Left deprived of any strategic options.

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