Feudalism And The "Algorithmic Economy"

Tyler Durden's picture

Authored by Thaddeus Howze via Medium.com,

For the sake of this essay, feudal economic models imply the idea that a very tiny segment of the society is fantastically rich while the bulk of society works hard, has few choices about the work they do, and tend to be poorly compensated for their efforts.

feu·dal·ism: noun, historical

the dominant social system in medieval Europe, in which the nobility held lands from the Crown in exchange for military service, and vassals were in turn tenants of the nobles, while the peasants (villeins or serfs) were obliged to live on their lord’s land and give him homage, labor, and a share of the produce, notionally in exchange for military protection.

Welcome to the Algorithmic Economy, a future which uses machines to determine how effective you can be and how little they can pay you in the process.

There are no unions in this economy. There are no bosses to complain to. There are no people you can ask for redress. Because in this economy, the people doing the labor are considered the least important part of the machine and it’s best if they never communicate with someone living if it can be helped.

This is just like something out of a dark and dystopian science fiction novel, except its likely happening to you, right now. If it isn’t, unless you are very fortunate, it will be, soon. I write about the near-future in my speculative fiction. Often these are my most unpopular stories because they paint technology in a less-than-ideal light.

In a world in desperate need of positive imagery, a number of famed science fiction writers such as David Brin are recommending writers look at creating more beneficial, beneficent and Utopia-oriented stories, where people see the future as something to look forward to rather than promoting the more popular (and definitely easier to write) dystopias.

I have heard David Brin and know this work does need to be done, but having the extensive background in computer technology that I do, I still feel compelled to point out just how powerful and how much effect technology can have on our society now and in the near-future.

In “Dark Harvest” I point out the future of human trafficking improving its capacity to provide “slaves to order” using social media habits to gather intelligence on users making it possible to predict their behaviors and habits. Such technologies which I see being furthered by companies like Facebook, Instagram, and now Match.com are making it even easier to find, isolate and extract people from their lives without warning and without recourse.

In “We Now Return You to Our Scheduled Advertising” I posit a world overrun by “push” information technology being used to ensure advertising cannot be stopped from being heard by potential customers.

In our current world, television advertising is diminishing due to the power of DVR technology. As a result, smartphones (because they are harder to secure) are becoming a means of forcing users to endure advertising they don’t want in order to get content.

Companies are also learning how to hack your smartphone to send you content you did not ask for, by forcing your browsers to accept cookies, they can target you with specific advertising based on your search requests. Stores can, with the right software installed, direct information to your phone in order to influence your shopping decisions.

How long before such technology becomes part of the shopping experience you cannot opt out of? Recently it became possible to push an ad to speakers at remote locations using software technology. While it was immediately repudiated, it did not stop someone from discovering it could be done.

With recent laws being created, it will be possible to extract your data from an ISP and create profiles allowing advertisers to send information directly to you, no matter where you are.

THIS WEEK, THE House of Representatives followed the Senate in voting for a resolution that throws out Obama-era regulations that would have banned your internet service provider from selling your web browsing history to advertisers. What possible reason could Congress have for repealing such a consumer-friendly policy? The refrain on the House floor yesterday was “consistency.”

 

“What America needs is one standard across the internet ecosystem,” said representative Greg Walden (R-OR). If services like Google and Facebook can turn data into profit, the logic goes why can’t the cable companies?

 

But the House’s resolution doesn’t actually apply a single, consistent standard to the internet. It maintains the broken status quo, one in which internet service providers aren’t actually at a disadvantage to websites and apps. If anything, they’re held to a lower standard. (Wired.com)

I have also written about the nature of technology in a non-fiction format discussing the future of employment, opportunities for work and the eventual need for some kind of subsidy to offset the lack of employment opportunities in the future in an essay called: “Humans Need Not Apply.”

*  *  *

In this essay, I posit something I call the “Algorithmic Economy” though it is often called the “Sharing Economy” or the “On-Demand Economy” by economists and other writers on this subject.

I prefer the “Algorithmic Economy” because it speaks to the creeping effects on decisions being made by companies and organizations, which not only include automation used in factories, but the development of apps and programs which use algorithms to direct, control and manage Human behavior.

As programmers using design-thinking engage computers to map, monitor and control Human endeavors, it is becoming more prevalent that computers are effectively in charge of Human behaviors utilizing a number of algorithms (programmed behaviors and decisions made by programmers to elicit a desired response from Humans or there programs) to enrich corporations using such technology such as Lyft, Uber, TaskRabbit and many other such “on-demand” driven businesses.

The continued existence and economic support of such companies has created companies whose values seem far greater than the benefits such corporations provide to their workers. The company is perceived to have a fantastic value which benefits investors, disrupts previous businesses or services, often unfavorably, and enriches only those at the very top of the workforce in those companies, usually executives and senior developers.

At Uber, for example, depending on the city, drivers who are, in essence the bulk of the workforce for the company can make as little as $9-$11 an hour as their only compensation for working with the company. While they are promised upwards of $30 per hour in advertising, such rates vary widely depending on the number of drivers, the time of day, the density of calls and the optimization of algorithms designed to reduce wait time for customers and to provide customers with reductions in costs per mile.

None of these reductions, however improve the amount of money made by drivers and passengers weren’t until recently even able to use the Uber app to leave tips for employees through the service because Uber decided they paid well enough that tipping wasn’t a requirement.

In fact, one of Uber’s more successful passenger programs, Uber-Pool, reduces the earning capacity of drivers by at least one third since, it cuts the cost of long trips to a third of their value under the expectation the driver will be able to make up those costs by moving multiple passengers, simultaneously.

A driver is expected to upon receipt of an Uber-Pool passenger expect at any time, their trip may be interrupted by a call to another passenger. They are expected to navigate to this new location, find the next passenger, assure the current passenger of no serious delay and get back on the road depositing the two (or three) of them in order to nearby destinations.

Unfortunately, this multi-passenger event rarely happens, in essence, reducing the cost of long trips to one third of their value since pooling occurs far less often than Uber is willing to admit. A $20 trip becomes a $7 trip of which become $5.25 after Uber gets its cut.

Adding insult to injury, Uber does not treat its drivers as employees, thus they are not compensated for the use of their vehicles, their repairs, wear and tear, their gasoline, their healthcare, or any other such requirements of normal companies for their employees.

Instead, the drivers must bear the entirety of the expense of their “economic opportunity” while turning over one-quarter of what they earn in every transaction.

If Uber were honest, they would reveal to most drivers, that under the majority of circumstances, drivers lose more money than they earn (due to the costs of incurred during their driving and vehicle operation), depending on how the algorithms are structured where someone is working. I suspect more than Uber is at fault here. I would suspect the entire workforce development of the future is heading toward this path.

More workers are doing part-time work, on-call work, unscheduled work, without significant healthcare, sick leave, or vacation pay than ever before. Corporations have grown to the point they are unable to cut any more costs during their operations and continue to pay out to investors and executives their incredible levels of profitability without cutting corners on the only remaining element of running a business: their workforce.

Rather than restructuring pay or expectations for investors, these business engines will continue to impoverish their workers, using gamification to extend their hours, while reducing their pay and opportunities for healthy lifestyles.

The New York Times reports:

The secretive ride-hailing giant Uber rarely discusses internal matters in public. But in March, facing crises on multiple fronts, top officials convened a call for reporters to insist that Uber was changing its culture and would no longer tolerate “brilliant jerks.”

 

Notably, the company also announced that it would fix its troubled relationship with drivers, who have complained for years about falling pay and arbitrary treatment.

 

“We’ve underinvested in the driver experience,” a senior official said. “We are now re-examining everything we do in order to rebuild that love.”

 

And yet even as Uber talks up its determination to treat drivers more humanely, it is engaged in an extraordinary behind-the-scenes experiment in behavioral science to manipulate them in the service of its corporate growth?—?an effort whose dimensions became evident in interviews with several dozen current and former Uber officials, drivers and social scientists, as well as a review of behavioral research.

 

Uber’s innovations reflect the changing ways companies are managing workers amid the rise of the freelance-based “gig economy.” Its drivers are officially independent business owners rather than traditional employees with set schedules. This allows Uber to minimize labor costs, but means it cannot compel drivers to show up at a specific place and time. And this lack of control can wreak havoc on a service whose goal is to seamlessly transport passengers whenever and wherever they want.

The Algorithmic Economy isn’t only going to stay in disruptive companies like the On-Demand workforce, it will make its way into other workforces, slowly, insidiously removing time, opportunities for growth, limiting costs by reducing perks except for the elite, in order to create the second age of feudal endeavor.

Their goal is to create a workforce bound by their economic debt to the system, forced to take whatever work they can find, while being paid as little for that work as possible, understanding ultimately, the creation of an indentured workforce is not only the result but an expected one, keeping society enfeebled and unable to create opportunities for further development.

Since all new creativity is held hostage in the hands of insensitive investors who promote the development of White business leaders to the exclusion of any other forms of creativity. Seventy five percent of all investment dollars are placed into the hands of White men. In the tech industry, most companies are run by, lead by, and pay the bulk of their company’s value to White men, the primary beneficiaries of such investment effort.

The Algorithmic Economy resembles feudalism complete with peasants who lack choices, and lords who decide who can become a lord, who remains a peasant, and defining the value of a peasant’s worth based on what the lord is willing to pay the peasant.

Like the feudal lords of old, neo-feudalism says they are willing to pay indebted students, just enough to not have any opportunity next year, either.

The older workers who might have known their worth will have to find a way to live off the land, creating their own slower growing opportunities because no one is funding anything which offers an opportunity for people to experience economic parity or the ability to own an operation which treats them humanely, pays them fairly, and doesn’t believe exploitation is an effective work and pay structure.

For most older workers, their opportunities lie with older exploitive corporations such as Walmart, known for its low pay and older workforce, or at the hands of the aforementioned Uber, who has, at least in the Bay Area, has a much older, and more minority workforce.

The driver diversity makeup is distinct from the much Whiter corporate office workers who draw the lion’s share of the money from the Algorithmic Economy they have helped to create and surely recognize how their algorithm exploits their workers.

If Uber’s programmers are smart enough to recognize how those numbers and gamification ensure their own prosperity, they are also aware that drivers earn less, stay with the company for less time and will eventually leave the company once they understand how they are being exploited.

Can such companies change their behaviors? It is unlikely given the expectations of double digit growth by investors and the stock market. Thus we can assume, such companies will continue to make money for the elite members of society while being a drain on every other aspect of our social fabric undermining individual wealth and earnings, employment opportunities, home ownership, and community development.

People without money can’t improve themselves or their communities. People who exploit those people don’t help with those communities either, creating a vacuum effect, taking money from communities without ever returning an equal or greater amount of money to those areas, ensuring the slow and inexorable decline of society over time.

Do a bit of research on the subject of the On-Demand economy. While prognostications promote the idea it is good for investors, almost no mention of the people doing the work and their eventual fates are ever mentioned. There is an amazing collection of essays on the On-Demand economy which point out the future of this industry and what it means to the modern workforce.

There will be arguments on both sides of the fence, pro and con, but my entreaty to you is simple: Read about it. Learn about it. Pay attention to the disruptive force it is having on your society because while you may believe it doesn’t affect you, you’re wrong.

Don’t take my word for it. Watch it and see for yourself. It is happening before you eyes. Don’t blink.

The workforce of the future will be smaller than you think.

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Grandad Grumps's picture

No need for protection and no need for feudal lords.

eforce's picture

I'd argue what we have now is worse...

"6. The people, under our guidance, have annihilated the aristocracy, who were their one and only defense and foster-mother for the sake of their own advantage which is inseparably bound up with the well-being of the people. Nowadays, with the destruction of the aristocracy, the people have fallen into the grips of merciless money-grinding scoundrels who have laid a pitiless and cruel yoke upon the necks of the workers.

7. We appear on the scene as alleged saviours of the worker from this oppression when we propose to him to enter the ranks of our fighting forces - socialists, anarchists, communists - to whom we always give support in accordance with an alleged brotherly rule (of the solidarity of all humanity) of our social masonry. The aristocracy, which enjoyed by law the labor of the workers, was interested in seeing that the workers were well fed, healthy, and strong. We are interested in just the opposite - in the diminution, the killing out of the goyim. Our power is in the chronic shortness of food and physical weakness of the worker because by all that this implies he is made the slave of our will, and he will not find in his own authorities either strength or energy to set against our will. Hunger creates the right of capital to rule the worker more surely than it was given to the aristocracy by the legal authority of kings.

8. By want and the envy and hatred which it engenders we shall move the mobs and with their hands we shall wipe out all those who hinder us on our way."

--The Protocols

Reality Creator's picture

There is no justification for taking care of an unnecessary surplus population. If you can't take care of yourself, then you have no right to demand others care for you unless you have a disability that is physical or mental.

Sure, we have an economic system that concentrates all the wealth and makes a lot of people unable to make rent, pay utilities, food bills and health insurance, and we should fix that by slaughtering all the greedy, rapacious .01% who insist on not paying taxes and who offshore their wealth. And, sure we should temporarily provide food and welfare assistance to those who are victims of this crony capitalism that the bosses own and manage.

But, in the long run with 80% of all jobs being done by robots and most all people standing around with nothing to do, we have no responsibility to the loiterers and loafers who can't go live on the earth like people did before the Industrial Revolution making a life of their own.

The world is like this: farm before the Industrial Revolution, work as a wage slave during the Industrial Revolution, farm after the Industrial Revolution. The middle period lasted from about 1750 to 2050, some 300 years.

Mtnrunnr's picture

The job of the thug and tax collecting will be done by robots though, so there are less jobs than before the industrial revolution.

cheka's picture

import tariff or continue to let the nyc.dc parasites suck us dry.  and that includes imported labor

get back to the american system -- tariffs fund the bulk of federal gov, no income tax on WAGES.  income tax only applies to INCOME.  income is profit separated from capital (now skyped up - and called 'capital gains').  capital gains = the real definition of income.  wages do not meet the definition of income. 

nyc parasites have flipped the income tax onto us...while they get favored treatment for their 'capital gains'.  this, like everything else, has been flipped upside down

sagramore's picture

Which is wonderful as they will be looking for me thousands of miles away from my actual location.

In an algorithmic world, the hacker is king.

HRH Feant's picture
HRH Feant (not verified) Reality Creator Apr 26, 2017 2:59 AM

You are correct. People that can't take care of themselves will end up dead. Once checks are cut off (for whatever reason) no one is going to keep wiping the ass of your mother / father in a care home. Families that end up in disparate places will find themselves unable to adapt.

There is a reason that leading families keep a large homestead. It is a last defense during hard times. It is all well and good to send off the kids, into the world, when times are good. But when times are bad?

It comes down to blood or money. If you don't have either of those you are fucked or dead or both.

Great Deceivah's picture

"White business leaders"... what a joke.. , as if we all didn't know that most of big amerikan corporations are financed and run by Joos

Luc X. Ifer's picture

Get over it, if u not into the 1% you r into 99% farmed cattle, and as cattle u shall live solely for generating max happines to your lord.

ElTerco's picture

... and you should stop playing altogether rather than lose the game every time.

Paul Kersey's picture

And Yet, "the algorithmic economy" has certainly not replaced Government on any level (Federal, State or local). And where's 'robocop'?

LibertarianMenace's picture

AlGore rhythmic economy? Oskar Lange would be flattered.

Twee Surgeon's picture

They are going to kill a Shit-Ton of people and call it Fewdalism. It is not a secret. Few fuckers to pick cotton, cook, do the roads and plumbing.

Fewdalism, they only need a few and you aint one of the few. Few electricians, a few farmers......

brodix's picture

Efficiency is to do more with less, so the ideal of efficiency would be to do everything with nothing.

Mustafa Kemal's picture

But efficiency is not everything. 

Mustafa Kemal's picture

Walked into my bank the other day wanting to get a car loan and could not find anyone to talk to and did not want to wait in the long line. Then I figured it out: I had to log into a computer terminal to tell them I was there and why. They confusingly  made me put in a bunch of info and then when I was done, or i think I was done, it didnt even acknowledge what I did or that they knew I was waiting. I went and sat down for 10 minutes and then left and went to another bank. I told them my experience so they could see that that was why they got my business.   Dreary

Mr. Universe's picture

From what I could tell you made two mistakes right off.

Walked into my bank the other day wanting to get a car loan.

A real Bank or a credit union? Not there is much difference, but there is some. Either way avoid going into both like the plague. I took my Dad to BofA to do some bullshit and it's like a fortress, security glass, cameras, no chance of ever getting near a teller. 

Next mistake, a car loan? I hope you put a large chunk down and plan to carry no more than 24 months. Even better save until you can pay cash, or buy a less expensive vehicle. No one needs a $60,000 car with a 6 year loan. But hey, it's your life, do what you want.

 

nufio's picture

i could have paid cash but i got a 2% loan for 5 years. my investments give more return than that...so i just couldnt get myself to pay it off. there is of course the annoyance factor for autopay and the uneasy feeling of having debt. maybe i should just pay it off, but I am hoping i can program myself to get rid of that unease of owing money. 

. . . _ _ _ . . .'s picture

Every day we move closer and closer to the singularity.

Not even WW3 will save us from that.

10-20 years (more or less) and counting.

HRH Feant's picture
HRH Feant (not verified) Apr 25, 2017 8:24 PM

Scary.

peippe's picture

Drove a taxi in pre-Uber times....

no algorithm will fix the fact you gotta be out on payday weekends 11 hours straight over night to make $$$,

some drivers thought they were smart working 'personal' contracts with riders, but the riders want discounts for that deal to work.

Problem is, you make better money through dispatch on pay weeks, versus chasing personals you end up promising discounts, you lose.

HRH Feant's picture
HRH Feant (not verified) Apr 25, 2017 8:32 PM

Ad popped up on the side bar for this event: photo of a woman with everything but her eyes and mouth covered: http://www.workhuman.com/?gclid=CL-qhpnvwNMCFY9gfgodTWYFQw

ElTerco's picture

"People without money can’t improve themselves or their communities. People who exploit those people don’t help with those communities either, creating a vacuum effect, taking money from communities without ever returning an equal or greater amount of money to those areas, ensuring the slow and inexorable decline of society over time."

Bingo.

Mtnrunnr's picture

Talk all the shit you want about the romans but at least the rich made bath houses for public placation. Now with globalization they can just move away.

MedicalQuack's picture

Sounds like stuff that I write:)  I like to call it our US Digital Caste System to where we do nothing but "score" everything and everybody.  Of course when you are scored down to the bottom the culling effect kicks in.  How much culling, well too much.  Excess Scoring!

http://ducknetweb.blogspot.ca/2015/09/excess-scoring-of-us-consumers-us....

Of course it takes all kind of wicked algorithms to do all this "scoring" out there.  Uber was just one example of data getting sold and only one and there's tons more where that came from.  I've been preaching since 2010 that we need a law to index and license data sellers, who are they, legal and what are they selling.  You can't regulate anything without knowing who the players are and there are many.  You have to get into the alter ego of those who write code and everyone who's written code has one, some are small and meaningless while others like Zuckerberg figure out how to manipulate the Dupes of Hazard society out there and get rich doing it.  

What do you think runs and models pharmacy benefit management companies...algorithms and it's a well greased model first create by United Healthcare back in the 80s and algo on top of algo is what we have today, takes the money and fools you all the way to the drug store.

Why is health insurance so unfair and complex?  It's all the quants now working at health insurance companies, yeah just like the markets, spinning you and I around like a bunch of bots:)  Look at the want ads, they are hiring armies of them and link policies to the price of the stock.  It is the attack of the Killer Algorithms and that's how the rich get richer.  

http://ducknetweb.blogspot.com/2016/09/quants-of-optum-carve-out-new.html

Forbes's picture

Essays on Medium.com must be how struggling writers flog their books. Boring.

decentralisedscrutinizer's picture

 

Why is everybody so afraid to admit that almost all the world’s economic and political problems revolve around the hegemony here in America of the global corporate cartel, which is only headquartered in the US because this is where their military arm resides. The only way to regain our (we People) sovereignty as a republic is to strictly curtail the priveledges of any corporation doing business here. The government must be reconfigured to represent the Middle Class if we are ever to restore sanity, much less prosperity. There will be no peace and prosperity in America until we, the good folk, drain the "swamp" created by the US Constitution. The "swamp" can't be drained at this point because the Constitution  does not contain a “drain plug". This is the kind of "plug" it needs. And it needs to be pulled ASAP:

 

 

 

28th Amendment

 

Corporations are not persons in any sense of the word and shall be granted only those rights and privileges that Congress deems necessary for the well-being of the People. Congress shall provide legislation defining the terms and conditions of corporate charters according to their purpose; which shall include, but are not limited to:

 

1, prohibitions against any corporation;

 

a, owning another corporation,

 

b, becoming economically indispensable or monopolistic, or

 

c, otherwise distorting the general economy;

 

2, prohibitions against any form of interference in the affairs of;

 

a, government,

 

b, education, or

 

c, news media, and

 

3, provisions for;

 

a, the auditing of standardized, current, and transparent account books, and

 

b, the establishment of a state and municipal-owned banking system

 

c, civil and criminal penalties to be suffered by corporate executives for violation of the terms of a corporate charter.

 

 

 

The biggest hurdle to convening an Article 5 convention will be to silence the 24/7 corporate media propaganda machine which will “guarantee” that a constitutional convention is the sure path to anarchy and chaos. There are so many issues that need addressing that it will be extremely difficult to focus on just one issue: draining the swamp; first and foremost. Just that one thing: get the idea of incorporating business enterprises (or political movements) out of our collective thought process. Incorporation is a subtle, inconspicuous little glitch in our collective philosophical evolution and, as appealing as it is to join groups and let them do your thinking, such groups immediately assume identities of their own and become eternal super-groups with their own agenda and more money than the sum of all members’ total investment. Corporations can’t even be controlled by their own executives; they’re “fictitious persons”, legally, morally, and tangibly. Yes, corporations are comprised of good, church-going, honest, people, while the corporations they belong to, work for, administer, or own, go about the planet (and at home) committing genocide, or worse. You can spend a lifetime fighting legal injustice, global warming, illegal immigration, racial disparity, Democrats, Republicans, Joos, globalization, and bathroom assignments, but nothing is going to change so long as corporate media has your brain in a bottle. If nothing else or until a better organizational plan comes along; try whispering in your neighbor’s ear: “Article 5 Amendment 28. Article 5 Amendment 28. Article 5 Amendment 28” until we all understand what’s necessary and act in unison when opportunity presents….

    

Yen Cross's picture

  Ohh, I see...  Robots and choices?

 

Feudalism is something entirely different...
samsara's picture

I recommend John Michael Greer's book Retrotopia

Or any of his writings

https://www.amazon.com/Retrotopia-John-Michael-Greer/dp/1945810025

sagramore's picture

There's a term for what Uber and many of these algorithmic middlemen do.

Pimping.

Falcon49's picture

It was the State that distorted the market place.  Through ever greater State involvement and distortion the market responded with the creation of middlemen that navigate and overcome the hurdles...again, the lions share of the money ends up in the hands of the middlemen.  If the corruption of the taxi business combine with State regulations that inhibited competition and innovation had not reached a point of absurdity...Uber and many other parasitical business models would have never found their way into the market place.   

francis scott falseflag's picture

 

Your 1 blue and 2 red men illustration on the index page,

captioned 'feudalism', leaves a lot to be desired.

Flibbertigibbet's picture

My intelligent dryer told me my sheets were dry. IT WAS WRONG! Thank f**k my fridge is still a moron.

DelusionsCrowded's picture

Actually I think the West is transitioning to a fully automated economy . The only real problem is how to design the system to keep people out of trouble . That is give them something meanful to do that has a purpose in their eyes .

The concept of 'work' will change . In many cases at this time , 'work' is often just forfilling an obligation to the Legal State (useless , even ridiculous often under the mantra of Health and Saftey)  and Gov 'Workers' doing something that the Legal State requires , inspectors shuffleings etc .

The Shadow Gov has been caught flat footed because they were hoping for a big war to reorganize the state. As yet to be determined . I can see Britian engeering a situation to put troops into Syria to start all out chaos .

ds's picture

The Algo economy shall birth new tribes eg digital natives. It breathes on the oxygen of diversity of talents as its disruptions founded on Science and Tech cannot be controlled and directed albeit much kills will be mounted by the vested interests. It is a stretch to be certain that it is going to be a White Man show. It will be colorless, dominated by new tribes. Existing tribes have their choices to remain played by the present Globalists and their Tribal chiefs along nationalities , cultures, relgions, race, etc. Sorry. they will be left behind in worst states than no jobs.

The global elite have all the attributes to adapt but are also not spared. They can withold funding the algo economy but a futile effort in forestalling it but not killing it. 

Algos, robots, etc are tools; just focus on the societal power shifts and who will embrace these tools to enforce their wills upon others. This will be beyond nationalities, cultures, etc.