In Technofeudalism: What Killed Capitalism, Yanis Varoufakis argues that capitalism is dying or maybe is even already dead. He argues that the drive for profit by a dominant capitalist class is no longer the driving force in global political economy. No longer do all capitalists produce commodities in factories, and then sell those commodities to consumers, skimming off the surplus value created by their workers as profit.
He argues instead that an even smaller group of dominant tech capitalist overlords like Bezos, Musk, Zuckerberg and others (he calls them “cloudalists”) have come to monopolize the tech infrastructure on which almost all other capitalists rely, and on which almost all consumers rely as well. In doing so, these tech lords no longer rely on or even need profit in a traditional capitalist sense. Instead, for these cloudalists, profit becomes optional! What matters most to them is total market domination. Because these cloudalists control entire infrastructure systems, much like public utilities, they are actually mega-rentiers, controlling nearly continuous income simply through the existence of the infrastructure that other capitalists must pay for in order to survive. For these capitalists, rent is now their driving force.
He argues that rivalry between Musk, Bezos, Zuckerberg and a few others isn’t really capitalist competition. It’s instead a sort of feudal competition between cloud lords (cloudalists). And in this new phenomenon, traditional capitalists, even many extremely wealthy and powerful capitalists, are actually “cloud vassals,” in other words, dependent underlings reliant on the tech overlords for their survival. This evolution, he says, has fundamentally changed capitalism into something else. He calls it technofeudalism.
He believes that this process began with what he correctly calls the enclosure of the internet. This occurred over a few decades as the internet became a wild west frontier of privatization and privatized spaces. In the end, by the early 2000s, this had led to giant tech companies being able to get, control, own, and utilize our information as their own. And they could monetize and profit off their infrastructure at the same time. These new enclosures, as he calls them, created the fiefs that have become the giant internet/tech companies of today – Google, Meta, Amazon, and more. He calls these giant companies and their activities “cloud capital.”
Cloud capital still uses the labor of humans to create value in its factories, its fulfillment centers, its stores and more. But outside of those traditional places of capitalist value production, cloud capital is, he says, demolishing everything that we have taken for granted.
He argues that by participating in this cloud world we have all (assuming we have anything more than a minimal digital footprint) become unknowing workers for cloud capital. He calls us “cloud serfs” and “cloud proles.” He argues that this is the true revolution that the cloud capitalists have brought: it has converted billions of people into “willing cloud serfs volunteering to labour for nothing to reproduce cloud capital for the benefit of its owners.” By using our preferences, likes, and engagement to maintain use of and engagement with their many platforms, they are having their work done for them, by us, for free! We create their content, which is their version of the commodity. But they’re not paying a worker in a factory to create it. Our so-called labor is free to them!
Although all this is obviously bad enough, he also thinks that this developing technofeudalism brings an even larger, potentially more destructive competition onto the horizon. This is the conflict between the cloudalists of the U.S. and the cloud finance system that China has been developing specifically to get around U.S.-based capitalist cloud restrictions on its growth. In other words, the same geopolitical competition that has driven U.S. and Chinese imperialist competition over bodies of water, land masses, natural resources and productive capacities for the past two decades is now shifting into competition over cloud dominance as well. In their own way, the U.S. and Chinese systems will be even larger cloud lords than Bezos or Zuckerberg, and the rest of the world will have to decide which lord they will submit to! He describes this coming imperialist conflict as “a titanic battle over as yet technofeudal territory on which two systems of cloud-rent extraction wish to establish themselves as overlords. It will take a miracle for this recently evolved species of imperialism not to result in more wars and more failed states.”
Combined with other recent analyses of the tech and AI sectors under capitalism, Varoufakis’s book helps deepen our analysis of the changes taking place in how capitalism functions. Even if we don’t agree that capitalism is dead, or even dying, his new concepts capture real currents that are shaping how the ruling class operates. Their actions in turn shape how the rest of the capitalist world functions, and therefore how our entire world operates.
This is no exaggeration. Within 20 years, the tech capitalists (Varoufakis’s cloudalists) have reshaped our world in a hundred ways. They forced almost everyone on earth to attach themselves to computers and mobile phones and screens. They are swallowing up huge amounts of resources to build data centers. They are using millions of nearly enslaved gig-workers to deliver food, drive us around, do repetitive coding, or “screen” websites and images of emotionally numbing violent content, sexual abuse, and more. They are destroying our attention spans. They are subjecting us to more intrusive surveillance. They are purchasing media outlets and shaping our understanding of reality. They are enabling the killing of so-called enemies by drones and AI-guided weapons. They are addicting children to their apps. He is correct to focus on the unrivaled significance of the tech sector and its billionaire owners who are supporting reactionary governments and leaders around the world, driving humanity towards what Naomi Klein and Astra Taylor have called “end-times fascism.”
In order to at least offer some potential solutions, towards the end of the book he does describe a number of structural proposals for democratic control of these technologies and systems. But his proposals, while ingenious and far more democratic than what exists today, still seem unlikely given the power of the tech lords and the many other capitalists (or cloud vassals) who dominate our world. Varoufakis was a member of Greece’s left-wing Syriza party and was the Minister of Finance who led the 2015 negotiations with the International Monetary Fund and major European creditors to try to restructure Greece’s debt. He is critical of capitalism and the financial systems that support it, and he was politically principled enough to leave the Syriza government when its leaders overruled its members to accept an unpopular new bailout agreement. He has described himself as both a libertarian Marxist and a progressive. His proposals for how to control the technofeudalism he describes seem to mirror his own progressive political perspectives.
But it seems to us that it will take a mass upsurge – a revolution – to make any of his ideas possible and sustainable. To some extent he may understand this. Although his proposals do not include a call for revolution, and although he doesn’t call himself a revolutionary, on the final page of the book he reformulates Marx’s famous words at the end of the Communist Manifesto to meet the evolving realities that he believes we face today: “Cloud serfs, cloud proles and cloud vassals of the word unite! We have nothing to lose but our mind-chains!”
Even if we don’t agree with his thesis that something called technofeudalism is replacing capitalism, the book is well worth reading to help us understand the world we are facing. And we couldn’t agree more with him and Marx – the working class of the world must find ways to unite – we have nothing to lose but our chains! We have a world to win!
