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The technology giants have overthrown capitalism. That’s the argument of former Greek Finance Minister Yanis Varoufakis, who made his name trying to defend indebted Greece from its German creditors. Varoufakis never regained the notoriety of 2015, but remains a prominent voice on the left. After an unsuccessful campaign for a seat in the European Parliament in 2019, he plans to run again this June. This time his adversary is not Berlin or the banks. It is the technology companies that he accuses of deforming the economy and at the same time turning people against each other.
Courtesy of Penguin Random House
Varoufakis is also a prolific author; His 17th book, written as a letter to his technology-curious father, chronicles the evolution of capitalism from the advertising boom of the 1960s, through Wall Street in the 1980s, to the 2008 financial crisis and the pandemic. In its most convincing sections, Technofeudalism argues that Apple, Facebook and Amazon have changed the economy so much that it now resembles Europe’s medieval feudal system. The technology giants are the lords, while everyone else is peasants who work their land for little in return.
For Varoufakis, every time you post on Musk doesn’t pay you. But his free labor remunerates him, in a sense, by increasing the value of his company. In X, the more active users there are, the more people can be shown ads or sold subscriptions. In Google Maps, he maintains, users improve the product: they alert the system about traffic jams on their route.
The feudal comparison is not new. But Technofeudalism Try to present the idea to a wider audience. Its launch in the US, launched a month before regulators of the US and European Union Simultaneously launching antitrust actions against Apple, he also had impeccable timing.
Over Zoom, I spoke with Varoufakis, from his home near Athens, about how tech giants have changed the economy and why we should care.
This interview has been edited for length and clarity.
WIRED: That word, technofeudalism, What does it mean? What relevance does the feudal system have here?
Yanis Varoufakis: Profits drive capitalism, rent drives feudalism. Now we have moved (from one system to another) because of this new form of super-duper, all-singing, all-dancing capital: cloud capital, algorithmic capital. If I’m right, that means creating new digital fiefdoms like Amazon.com, like Airbnb, where the primary mode of wealth extraction is not in the form of profit but rent.
Take the Apple Store as an example. If you’re producing an app, Apple may retain 30 percent of your profits (through a commission). That’s a rental. That’s like renting the land. It’s a bit like the Apple Store is a fiefdom. It is a cloud fiefdom and Apple obtains an income exactly the same as in feudalism. So my argument is not that we returned from capitalism to feudalism. My argument is that we have moved towards a new system, which has many of the characteristics of feudalism, but is one step ahead of capitalism. To point out that, I added the word techno.
