Tech giants have overturned capitalism. This is the argument of former Greek Finance Minister Yanis Varoufakis, known for trying to protect debt-ridden Greece from its German creditors. Varoufakis never fully recovered the notoriety he achieved in 2015. But he remains an important voice on the left. After unsuccessfully running for a seat in the European Parliament in 2019, he plans to run again in June this year. This time, his opponent is not Berlin or the banks. He accuses tech companies of distorting the economy while pitting people against each other.
Provided by Penguin Random House
Varoufakis is also a prolific writer. His 17th book, a letter to his technology-curious father, chronicles the evolution of capitalism, from the advertising boom of the 1960s, to Wall Street in the 1980s, to the financial crisis of 2008 and COVID-19. In its most striking extension, technofeudalism Argues that Apple, Facebook, and Amazon have changed the economy so much that it now resembles Europe’s medieval feudal system. The tech giants are the lords, while everyone else is a farmer, working their land for little in return.
For Varoufakis, every time you post on X (formerly Twitter), you’re effectively toiling on Elon Musk’s estate like a medieval serf. Musk doesn’t pay you. But in a sense, your free labor pays him by increasing the value of his company. On X, the more active users you have, the more people you can show ads to or sell subscriptions to. He believes that on Google Maps, users have improved the product by alerting the system to traffic jams on their routes.
This feudal comparison is not new.but technofeudalism Trying to introduce the idea to a wider audience. Its U.S. launch comes a month before U.S. and EU regulators simultaneously launch antitrust action against Apple, and the timing is impeccable.
I spoke with Varoufakis via Zoom from his home near Athens to learn how tech giants are changing the economy and why we should care.
This interview has been edited for length and clarity.
Wired: the word, technofeudalism, What does it mean? What relevance does feudalism have here?
Yanis Varoufakis: Profit drives capitalism, rent drives feudalism.Now we have moved [from one system to the other] Because of this new form of super duper, all-dancing capital: cloud capital, algorithmic capital. If I’m right, it’s the creation of new digital territories, like Amazon.com, Airbnb, where the primary mode of wealth extraction is not profit, but rent.
Take an Apple store as an example.You’re developing an app and Apple can keep 30% of your profits [through a commission fee]. That’s rent. It’s like ground rent. It’s a bit like the Apple store is a fiefdom. This is cloud territory, and the rent Apple charges is exactly the same as a feudal system. So my argument is not that we go from capitalism back to feudalism. My point is that we have moved towards a new system that has many of the characteristics of feudalism but is one step ahead of capitalism.To indicate this, I added the word technology.