Digital Feudalism

Digital feudalism is Mazzucato's diagnostic term for the structural arrangement of the platform economy, extended with increasing specificity to AI. In a feudal economy, the peasant's productivity increases through better farming techniques, but the lord who owns the land captures the surplus. In the AI platform economy, the builder's productivity increases dramatically through AI tools, but the platform that controls access to those tools is positioned to capture an increasing share of the value the builder creates. The feudal analogy is deliberate because it identifies the specific structural feature that distinguishes the platform arrangement from competitive markets: productive capability depends on access to infrastructure owned and governed by a third party whose interests diverge from the producer's. Mazzucato warned in a February 2025 Project Syndicate essay that given the pace of AI development, policymakers and civil society must step in now to ensure that the next general-purpose technology serves the public interest. Otherwise, already dominant monopolists will supercharge the socially harmful digital business models they perfected