The tech giants have overthrown capitalism. That is the argument of former Greek Finance Minister Yanis Varoufakis, who became famous when he tried to defend debt-laden Greece against its German creditors. Varoufakis never quite regained the fame of 2015. But he has remained a prominent left-wing voice. After an unsuccessful campaign for a seat in the European Parliament in 2019, he plans to run again in June. This time his opponent is not Berlin or the banks. It is the technology companies he accuses of distorting the economy while turning people against each other.
Courtesy of Penguin Random House
Varoufakis is also a prolific author; his seventeenth book, written as a letter to his techno-curious father, traces 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 his most compelling pieces, 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 farmers, working their land for little money.
According to Varoufakis, every time you post on X, formerly Twitter, you’re essentially toiling Elon Musk’s estate like a medieval serf. Musk doesn’t pay you. But your free labor pays him in a sense by increasing the value of his company. On X, the more active the users are, the more people can see ads or sell subscriptions. On Google Maps, he says, users improve the product by warning the system of traffic jams on their route.
The feudal equation is not new. But Technofeudalism tries to introduce the idea to a wider audience. The US release, launched a month before regulators in the US and the European Union simultaneously launched antitrust actions against Apple, also had impeccable timing.
I spoke with Varoufakis via Zoom, from his home near Athens, about how the tech giants have changed the economy – and why we should care about them.
This interview has been edited for length and clarity.
WIRED: That word, technofeudalism, what does it mean? How is the feudal system relevant here?
Yanis Varoufakis: Profit drives capitalism, interest drives feudalism. Now we’ve 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 domains like Amazon.com, like Airbnb, where the main way to gain wealth comes not in the form of profit but in the form of rent.
Take the Apple Store. You create an app, Apple can keep 30 percent of your profits (via a commission). That’s rent. That’s something like a ground rent. It’s a bit like the Apple Store is a fiefdom. It’s a cloud fief, and Apple charges exactly the same interest rate as in feudalism. So my argument is not that we have gone back from capitalism to feudalism. My argument is that we have made progress towards a new system, which has many of the hallmarks of feudalism, but is one step ahead of capitalism. To indicate that, I added the word techno.