Reed's essay has received a lot of attention, including a good discussion of its implications by Vox Day. Day concludes:
The feudalism of the Middle Ages required peasants for agriculture. But the technofeudalism of the future doesn't appear likely to require peasants for anything. So what will be done with them? What will be done with us? The long and bloody history of Man does not suggest an optimistic answer.I have briefly addressed this topic at various times, including a post from last July on "The Coming Surplus Population Boom." While current thinking seems to be expansion of welfare to include a guaranteed income, my belief last year was that "[t]he wealthy and the elites are already thinking about this, and I would be willing to bet that a whole lot of their thinking will be around how to get rid of the surplus."
In his novel, Hegemony, Mark Kalina imagines that the surplus population will be walled away in ghettos located some distance away from the metropolises, made docile by sufficient food and entertainment, with limited access to the outside world and, absent extraordinary effort on their part, having only a limited education. The society he imagined would be very class structured based on intelligence and ability, with the top elite ruled by nearly immortal transhumans. Testing and monitoring would allow the elite to cull those few from the ghettos that had the intelligence and drive to succeed in the transhuman Hegemon.
So, two possibilities: ghettos or death camps. Which is more likely?