The last word: Modern feudalism of the sharing economy

Home Technologist 09 The last word: Modern feudalism of the sharing economy

The sharing economy is not as democratic as its creators claim: it’s a big business that relies on a lot of free resources.

Sharing economy

Prominent “sharing economy” platforms, like Facebook and YouTube, are an unusual form of business because they forsake direct production and instead create and maintain platforms that allow other people to produce. These people, whom we all know as “users”, create such content as videos, photos and text. Their biggest contribution to the business, however, is their attention, without which there would be no marketplace for the platform owners. The content creators rarely reap a monetary reward, which is realised mainly by the proprietary platforms. And while owners allow peer-to-peer communication, they control its potential monetisation.

Typically, the front end of the technological infrastructure is peer-to-peer, promoting social contact among users. But the back end is something entirely different. Its design is in the hands of the owners, as are the users’ private data, allowing their attention to be marketed through advertising. Making money from cooperation is still the name of the game. The back end of these platforms, which serve as attention pools, is generally a centralised system in which personal data is privatised. The monetisation of the surplus value produced is exclusionary, keeping out the users/producers. Nearly everything is controlled by the platform owners, creating a huge power discrepancy between them and the users.

The same applies to other proprietary platforms, such as Airbnb, which helps people rent out lodgings, or Uber, which matches drivers with people who need to go somewhere. They both make commodities of idle resources (rooms or cars) that were not previously for sale. A careful look at the back end of Airbnb’s or Uber’s productive structure reveals that there is neither collaborative production nor governance. Control rests entirely with the platform’s owners, who often do not even grant their users the rights traditionally guaranteed by labour or housing laws.

What it comes down to is that platform owners, who desperately seek the trust of user communities, exploit the aggregated attention and input of the networks in different ways even as they enable it. In addition, such platforms are unreliable trustees of any common value that might be created, due to their speculative nature and the opaque closed-source architecture of their platforms. The parasitic nature of this mode is apparent through the fact that an empty networking platform has little value. Making matters worse, search engines and social networks limit the diversity of information sources so as to please their advertising customers, potentially minimising the development of critically thinking citizens.

Such profit-maximising business models have given rise to a new form of capitalism that can best be described as modern feudalism. If medieval feudalism was based on an elite’s ownership of land, the minority-controlled resource now is networked data. This is far worse than traditional capitalism. It goes without saying that any proposed alternative should be ambitious in both scope and method.

If medieval feudalism was based on an elite’s ownership of land, the minority-controlled resource now is networked data.

By Vasilis Kostakis 


2-nbVasilis Kostakis is founder of the P2P Lab in Ioannina, Greece, which conducts research on current peer-to-peer practises. A senior research fellow at Tallinn University of Technology, he is the co-author, with Michel Bauwens, of Network Society and Future Scenarios for a Collaborative Economy.