Yanis Varoufakis: TECHNOFEUDALISM – What Killed Capitalism

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Yves here. Yanis Varoufakis has posted the preface of his new book, TECHNOFEUDALISM – What killed capitalism, on his site. The book is set for release in the UK in late September, and his post lists public presentations starting September 25 in Bath, Manchester, Edinburgh, London, and Ely (details here).

Varoufakis posits that capitalism has changed fundamentally, into what he calls technofeudalism, and discusses how it happened and what capitalism has become. Even though you may not agree with Varoufakis’ conclusions, he is describing fundamental changes in how our system operates and asking the right questions, which is a critically important step in improving knowledge…or if you prefer, diagnosing a pathology.

By Yanis Varoufakis, an economist, former Minister of Finance of Greece, and a founder of Democracy in Europe Movement 2025, or DiEM25. Originally published at his website


Some years ago, I decided to write a brief history of capitalism. To temper the task’s enormity, and force myself to focus on what capitalism boils down to, I decided to pretend I was narrating capitalism’s story to my then twelve-year-old daughter. So, without seeking Xenia’s permission (something she will never let me forget!), I began writing the book in the form of a long letter to her. Taking care to use no jargon (not even the word capitalism!), I kept reminding myself that whether or not my narrative made sense to a youngster was a litmus test of my own grasp of capitalism’s essence. The result was a slim volume entitled Talking to My Daughter: A brief history of capitalism. >It took as its starting point an apparently simple question of hers: why is there so much inequality?

Even before it was published, I was feeling uneasy. Between finishing the manuscript and holding the published book in my hands, it felt as if it were the 1840s and I was about to publish a book on feudalism; or, even worse, like waiting for a book on Soviet central planning to see the light of day in late 1989. Belatedly, that is.

In the years after it was published, first in Greek, later in English, my weird hypothesis that capitalism was on the way out (and not merely undergoing one of its many impressive metamorphoses) gathered strength. During the pandemic, it became a conviction, which became an urge to explain my thinking in a book if for no other reason than to give friends and foes outraged by my theory a chance properly to disparage it having perused it in full.

So, what is my hypothesis? It is that capitalism is now dead, in the sense that its dynamics no longer govern our economies. In that role it has been replaced by something fundamentally different, which I call technofeudalism. At the heart of my thesis is an irony that may sound confusing at first but which I hope to show makes perfect sense: the thing that has killed capitalism is … capital itself. Not capital as we have known it since the dawn of the industrial era, but a new form of capital, a mutation of it that has arisen in the last two decades, so much more powerful than its predecessor that like a stupid, overzealous virus it has killed off its host. What caused this to happen? Two main developments: The privatisation of the internet by America’s, but also China’s, Big Tech. And the manner in which Western governments and central banks responded to the 2008 great financial crisis.

Before saying a little more on this, I must emphasise that this is not a book about what technology will do to us. It is not about AI-chatbots that will take over our jobs, autonomous robots that will threaten our lives, or Mark Zuckerberg’s ill-conceived metaverse. No, this book is about what has already been done to capitalism, and therefore to us, by the screen-based, cloud-linked devices we all use, our boring laptop and our smartphone, in conjunction with the way central banks and governments have been acting since 2008. The historic mutation of capital that I am highlighting has already happened but, caught up in our pressing dramas, from debt worries and a pandemic to wars and the climate emergency, we have barely noticed. It is high time we paid attention!

If we do pay attention, it is not hard to see that capital’s mutation into what I call cloud capital has demolished capitalism’s two pillars: markets and profits. Of course, markets and profits remain ubiquitous – indeed, markets and profits were ubiquitous under feudalism too – they just aren’t running the show any more. What has happened over the last two decades is that profit and markets have been evicted from the epicentre of our economic and social system, pushed out to its margins, and replaced. With what? Markets, the medium of capitalism, have been replaced by digital trading platforms which look like, but are not, markets, and are better understood as fiefdoms. And profit, the engine of capitalism, has been replaced with its feudal predecessor: rent. Specifically, it is a form of rent that must be paid for access to those platforms and to the cloud more broadly. I call it cloud-rent.

As a result, real power today resides not with the owners of traditional capital, such as machinery, buildings, railway and phone networks, industrial robots. They continue to extract profits from workers, from waged labour, but they are not in charge as they once were. As we shall see, they have become vassals in relation to a new class of feudal overlord, the owners of cloud capital. As for the rest of us, we have returned to our former status as serfs, contributing to the wealth and power of the new ruling class with our unpaid labour – in addition to the waged labour we perform, when we get the chance.

Does all this matter to the way we live and experience our lives? It certainly does. As I will show in chapters 5, 6 and 7, recognising that our world has become technofeudal helps us dissolve puzzles great and small: from the elusive green energy revolution and Elon Musk’s decision to buy Twitter to the New Cold War between the USA and China and how the war in Ukraine is threatening the dollar’s reign; from the death of the liberal individual and the impossibility of social democracy to the false promise of crypto to the burning question of how we may recover our autonomy, perhaps our freedom too.

By late 2021, armed with these convictions, and egged on by a pandemic that strengthened them, the die had been cast: I would sit down and write a brief introduction to technofeudalism – the far, far uglier social reality that has superseded capitalism. One question remained: Whom to address it to? Without much thought, I decided to address it to the person who had introduced me to capitalism at a ridiculously young age – and who, like his granddaughter, once asked me an apparently simple question that shapes almost every page of this book. My father.

For the impatient reader, a word of warning: my description of technofeudalism does not come until chapters 3 and 4. And for my description to make sense, I need first to recount capitalism’s astounding metamorphoses over the preceding decades: this is chapter 2. The beginning of the book, meanwhile, is not about technofeudalism at all. Chapter 1 tells the story of how my father, with the help of some metal fragments and Hesiod’s poetry, introduced my six-year-old self to technology’s chequered relationship with humanity and, ultimately, to capitalism’s essence. It presents the guiding principles on which all of the thinking that follows is based, and it concludes with that seemingly simple question father put to me in 1993. The rest of the book takes the form of a letter addressed to him. It is my attempt to answer his killer question.



Chapter 1 – Hesiod’s lament

Father’s friends
A child’s introduction to historical materialism
From Heat to Light
A most peculiar introduction to capitalism
An equally odd introduction to money
Free to choose? Or to lose?
Father’s question

Chapter 2 – Capitalism’s metamorphoses

Retrieving the irretrievable
Attention markets and the Soviets’ revenge
The audacious Global Plan
Mad numbers
The fearless Global Minotaur
From uncontrollable discontent to controlled disintegration
The Minotaur’s favourite handmaidens: Neoliberalism and the computer
Back to your question

Chapter 3 – Cloud Capital

Commanding capital

From Don to Alexa
The birth of the internet commons
The New Enclosures
Cloud capital: beginnings
Wither markets, hello cloud-fiefs
Back to your question

Chapter 4 – The Rise of the Cloudalists and the Demise of Profit

The secret of the new ruling class
2008’s unintended consequences
Poisoned money, gilded stagnation
How profits became optional for the cloudalists
Private Inequities
Back to your question

Chapter 5 – What’s in A Word?

What would it take for capitalism to die?
Rent’s revenge: How profit succumbed to cloud rent
Capitalism on steroids?
The technofeudal method to Elon Musk’s Twitter madness
The technofeudal underpinnings of the Great Inflation
The case of German cars and green energy
Back to your question: Is capitalism not back on track?

Chapter 6 – Technofeudalism’s global impact: the New Cold War

Technofeudalism with Chinese characteristics
Technofeudal geopolitics: The emerging ‘threat’ of China’s cloud finance
Technofeudal geopolitics: How Ukraine helped divide the world into two super cloud-fiefs
The spectre of technofeudalism over Europe, the Global South, the Planet
Back to your question: who wins and who loses?

Chapter 7 – Escape from Technofeudalism

The death of the liberal individual
The impossibility of social democracy
Crypto’s false promise
Imagining Another Now
Democratised companies
Democratised money
The cloud and the land as a commons
A cloud-rebellion to overthrow technofeudalism
Back to your question, one last time

APPENDIX 1 – The Political Economy of Technofeudalism

APPENDIX 2 – The Madness of Derivatives

Influences, Readings and Acknowledgments

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  1. digi_owl

    In the end rent extraction is the core of finance, be it via interest on loans or some other regular payment for simply existing.

    And interestingly, the problem could be seen fermenting already back when Marx was writing up a storm. The later, posthumous, volumes warned of the power of finance and suggested industrial capital join forces with the working class to face the threat.

    And yes, the net has allowed for way to police the rent extraction in ways that would require a STASI like apparatus in times past.

    Upholding copyright, an arm of “intellectual property”, on an individual basis would in the past require a policeman in every home. With the smartphone we potentially have a policeman in every pocket.

    1. NoFreeWill

      Most other commentators call it late capitalism, or merely the triumph of neoliberalism, and I don’t see how you can focus entirely on tech and obscure that fundamentally we still run on a petroleum economy very much governed by industrial capitalisms standard extractivist playbook. While the tech companies have enormous powers nowadays, they are just as dependent as everyone else on finance (even if they have VC and other slightly different methods of raising capital) and energy to run their servers. It reminds me of the standard libertarian trick of calling capitalism “crony capitalism” as if there’s ever been anything else, that somehow there’s a pure untainted capitalism that was good actually. We might talk about digital enclosure (of IP, the commons of ideas) and I’m sure his analysis is interesting as a history of contemporary capital, but I don’t buy his main thesis that somehow things are not following the classic rules of capitalism.

    2. Skip Intro

      OTOH breaking copyrights on an individual basis in the past would require a lot of typing or drawing…

      I have heard our modern oligarchy described as neofeudal, but that doesn’t capture the vast new array of rent extraction that we are all subject to as the price of participation in society.

      1. digi_owl

        Yeah copyright didn’t really become a “hobbyist” issue until we go the first tape recorders. But ho boy did the likes of the RIAA see that as the proverbial anti-Christ.

      2. Kouros

        In Romania, the modernity is marked by the Revolution from 1821 led by Tudor Vladimirescu. One of the demands of the participants was the removal of taxes on moving products from Severin to Bucharest (~300 km), which were required in over 120 places on the road… The Greek Eterists killed the Romanian, who didn’t care much about the Greek antiottoman movement, but Romanian principalities got rid of rulers directly appointed by the Sublime Porte….

    3. hk

      I will deviate a little from others by noting that Varounakis is, in fact, channeling both Smith and Marx. The central thesis of The Wealth of Nations is that capitalism is in fact very bad for capitalists and that capitalists always seek to subvert it. History is replete with examples like this: by the time of the late Venetian Republic, the formerly entrepreneurial Venetian merchants became landowners in the countryside engaged in very much classical feudalism (This was a point that economic historian Jan de Vries raised.). Feudalism, built on monopolies backed by both sword and pen, grants propertyholders “security.”. Every capitalist economy suffers constantly from the paradox in which the capitalists struggle to overturn it and appoint themselves feudal lords protected from risk via a system of privileges.

      In this sense, one can even consider Marx’s argument of the internal self-contradiction of capitalism as recapitulation of Smith, except that he was more “pessimistic” about chances of capitalism to survive the assault from within by capitalists. Marx, I think, saw that the technological changes accompanying the Industrial Revolution gave the capitalists the chance to reimpose feudalism than in Smith’s time.

      In this sense, Varoukis’ argument echoes my reading of both Smith and Marx, except that the modern technology allows capitalists even more opportunity to subvert “capitalism” from within. I don’t think “technofeudalism” (as opposed to just “feudalism”) is a particularly helpful term, but I suppose Varoukis does want to draw attention to his book, after all.

  2. chuck roast

    Interesting that Yanis began his writing by pretending to narrate his story jargon-free to his 12 year old daughter. I did some close-up magic back in the day…coin tricks, rings, that kind of thing. It was easy to fool the adults, but the kids always sussed me out. It was very frustrating. I grew to have a great appreciation for magicians that worked with kids, because kids have figured out that adults are always trying to BS them. Regular, run of the mill magicians are just BS artists to them. Should be a fun book.

  3. Carolinian

    Sounds good although some of us wonder if the new feudalism is going to be a lot more short lived than industrial capitalism much less the first feudalism. Things are speeding up.

    Also the first feudalism enforced those rents with a great deal of violence. How many divisions does Jeff Bezos have? Our current situation seems to depend on a great deal of passivity by the general public. The constant panic the elites show toward the deplorables seems to indicate them worrying about this.

    1. Tom Doak

      The elites are working hard on pre-crime: to arrest or disqualify challenges to their regime before they even begin. Mass surveillance is key to the plan, but to actually follow through, they have to make sure the people will go along with it. Anti-protest laws are one example; the “me, too” movement might have been another. The January 6 prosecutions are surely another step in that direction: twenty years in jail for even thinking about harming an elected official.

  4. Aukerboy

    Thank you for this excellent excerpt. Between this and McKenzie Wark’s writings on capitalism being replaced by “vectoraIism,” I am slowly becoming convniced that those in control of networks and logistic chains, not land or factories, are hegemonic these days.

  5. Susan the other

    I can buy that thesis – that capital, as cloud capital, killed capitalism. But I see it as a long inexorable continuum of rationalization. And “ living in the clouds.” Rationalizing the world instead of actually living the reason. Money has always floated above what real value is. The two will probably never meet. I’ll look for this one next time I’m in the bookstore.

  6. Amfortas the Hippie

    towards the end of that long research frenzy into the american right i did, sort of coinciding with being laid up with no hip replacement…it dawned on me that what the Biggest Bosses were really after was an undoing of the Enlightenment…a return to 1100AD for all of us’n’s…but with cell fones, streaming tv and flush toilets for them.
    then i happened across folks like Mencius Moldbug(Yarvin–of late, peter thiel’s court philosopher), hans hermann hoppe, and their intellectual godfather, joseph de maistre.
    these folks were actually advocating a return to feudalism…with corporations replacing geographical countries and kingdoms and whatnot.
    to me, these people were harder to stomach than charles murray or even david duke.
    truly dangerous minds.
    …and totally anathema to all that i hold dear.
    but here we are.
    Yannis’ newest is on my list, if i ever have a book budget again.

    1. Kouros

      The Mote in God’s Eye & The Gripping Hand by Jerry Pournelle and Larry Niven describe perfect technofeudal societies. Great SF fun.

  7. Jeremy Grimm

    I think “Technofeudalism” introduces a completely unnecessary and confusing new term. Its component parts — especially ‘feudalism’, although it is nicely ‘retro’ in many of its allusions — carry a lot of conflicting baggage. Besides, I think Michael Hudson’s concept of Finance Capitalism and rents combined with Stoller and Barry Lynn’s concepts of modern monopoly/monopsony [reduced to monopoly in further usage] described in Lynn’s book “Cornered: The New Monopoly Capitalism and the Economics of Destruction” — work just fine. Though new and flashy, platform/techno monopoly is just another form of monopoly among many. Capitalism in the West and its colonial Empire died at the hands of Neoliberalism. The forces of Neoliberalism enabled “Technofeudalism” along with the growth of the other varieties of monopoly after it bought full ownership of the Imperial government. “Technofeudalism” has a certain panache for its novelty and starring role in the current instances of what passes for antitrust enforcement by the u.s. Department of Justice Antitrust Division and the FTC.

    1. Vicky Cookies

      You bring up a good point in identifying these “fiefdoms” as “just another form of monopoly”, a tendency of capitalism. Ideas are only helpful inasmuch as their logic guides us to effective action. I’ll have to read the book, but perhaps Yanis will show us how feudal structures (rentierism) never went away, despite the bourgeois revolutions. That the FIRE sector Hudson describes is rent-seeking, and that monopoly in general performs this activity is probably, as you suggest, enough. I’ve long thought that left and leftish intellectuals have read and experienced the accurate diagnosis of the problem; more scribbling does sometimes seem superfluous, and often counterproductive, giving intellectuals a stake in the game: so long as capitalism (or whatever name we give it) persists, jobs are to be had criticizing it. Not unlike social work, except without the material benefits to those with whom writers profess solidarity.

  8. Willow

    This Sumerian proverb seems to sum up Varoufakis’ take (Varoufakis observing things are even worse and taken to the next level of absurdity):

    ‘Things may be traded in the city but it is the fisherman who brings in the food supply.’

    We make mistakes when lessons where already learnt 5,000 years ago..

  9. Richard

    It’s not just capitalism, it’s the whole economic structure

    When will we be fully developed???

    How can we have never ending growth on what is a finite Planet???

    How can we do anything about the climate catastrophe when the malignant system of never ending “growth economics” demands “more” of everything that’s created the problem in the first place????

  10. Eclair

    I have problems with names. Specifically, names of ideas, or concepts. My mind tends towards the concrete, the touchable. My problem. ‘Capitalism,’ neoliberal,’ ‘socialism,’ ‘democracy.’ (Our neighbor has a yard sign: Save Democracy!).
    Capitalism: good! Socialism: bad! Neoliberal: icky! Democracy: good! So many names exist as shorthand to tell us who or what to hate, or to love.

    I understand ‘extractivism.’ Or rentierism. It’s where the big money is. It’s taking what Nature (no humans involved) has produced over the centuries, or aeons, and digging it up, sucking it out, or cutting it down, and selling it, converting it into cash, money, dollars. This involves appropriating and privatizing ‘uninhabited’ land. It’s the process that has been going on in the North American continent for the past 500 years. A process that has enabled a small class of rapacious humans to become extremely powerful.

    Meanwhile, some of us have eked out a living by producing stuff: growing food, weaving cloth, beating out pots and pans and nuts and bolts and steel rails. Although, by controlling the means of production, a smaller group of humans has managed to amass a nice pile of gold. The mill and factory owners of the 19th and early 20th centuries, the Abbots, the Lowells, the Cabots, made a nice living off the profits generated by their workers. As did the men who owned the slaves who raised the rice, the sugar cane, the cotton;

    But the good times are ending. Humans have pretty much appropriated all the land on the planet, fenced it off, privatized it. The opportunities for making big money are drying up. The realization that there are limits to the virgin forests, the oil, the gas, the gold and diamonds, is sinking in.

    Enter cyberspace, the digital commons, the Cloud. The men who create this vast landscape, this opportunity to extract rents from us, from knowing our needs, our desires, our DNA, must feel like gods. They lure us in and then cannabalize us. It’s a limitless world, with limitless cash to be generated. Leading to limitless power. But it’s not real. Pull the plug, the plug that is at the end of the cord that connects the Cloud to the real world of limits, the limits of water and electrical generation, and it’s gone.

  11. JonnyJames

    You bring up an important point. Definition of terms is a must when using these loaded and slippery words. Many people throw around terms like “capitalism” “socialism” “feudalism” “democracy” “republic” etc. with different definitions and understandings.

  12. Victor Sciamarelli

    Most Americans know the price of a gallon of gas but few know that the cost of sending a gallon of gas to Afghanistan, once the Pentagon contractors were paid, was $400. That’s according to Mike Lofgren, an expert numbers cruncher, who worked for nearly three decades on the Senate and House budget committees specializing on National Security and possessing a top secret security clearance.
    Though the name ‘Deep State’ (DS) has been used by some for their own purposes, Lofgren shed light on the DS back in 2014, and, I think things have gotten worse since then. Also, I think this runs parallel to YV’s article.
    Lofgren said that the DS is not a secret, conspiratorial cabal. It is a government within the government whose “operators mainly act in the light of day.”
    The DS does not consist only of government agencies. Basically it involves a symbiotic relationship between Wall Street (WS), Silicon Valley (SV), and the National Security State (NSS) roughly: The Pentagon, Homeland Security, State Dept, and Treasury because it has a direct connection with WS, controls the flow of money, and enforces sanctions.
    According to Lofgren, for example, 70% of the intelligence budget goes to private contracts and there are over 400,000 contractors, private citizens, who have top secret security clearances; more than government personnel.
    Lofgren continued, “Everyone knows Wall Street and its depredations. Everyone knows how corporate America acts. Together, the NSS and the Corporate State are sucking money out of the economy. Based on the twin pillars of national security imperative and corporate hegemony, they’re about money, sucking as much money out of the country as they can, and they’re about control; corporate control and political control.” “It’s how we had deregulation, financialization of the economy, the Wall Street bust, the erosion of our civil liberties, and perpetual war. While our infrastructure collapses, millions of people on food stamps, we incarcerate more people than China—extravagance for the Deep State and the penury being forced on the rest of the country.”
    “A government within the visible government that operates off the visible government, off the taxpayers but it doesn’t seem to be constrained by the government in a constitutional sense.”
    Though Lofgren remarked, “While it (the DS) seems to float above the constitutional state, its essentially parasitic, extractive nature means that it is still tethered to the formal proceedings of governance, he concludes, “As long as appropriations bills get past on time, promotion lists get confirmed, black [i.e. secret] budgets get rubber stamped, special tax subsidies for certain corporations are approved without controversy, as long as too many awkward questions are not asked, the gears of the hybrid state will mesh noiselessly.”
    Essay: Anatomy of the Deep State
    February 21, 2014 by Mike Lofgren
    The Deep State Hiding in Plain Sight — Moyers and Company — April 15, 2014

  13. Weil

    Technology is that pesky ‘mean of production thing’ written about by Marx.

    First of all capitalism is not dead, it is alive, though reeling.

    Secondly, blaming the means of production and not the owners of the means of production, for changes in financial and personal/social life is like blaming the the ship gone to-wreck and not those that manage it misses Marx’s fundamental insight.

    As long as the means of production, be they banking or factories are in the hands of a few then the decisions will be centrally planned for the few.


    ”The mine owners did not find the gold, they did not mine the gold, they did not mill the gold, but by some weird alchemy – all the gold belonged to them! If the workers are organized, all they have to do is to put their hands in their pockets and they have got the capitalist class whipped.”

    ~ Big Bill Haywood, Miner, founding member & leader of the Industrial Workers of the World (IWW).

    “For every boss with a dollar he didn’t earn, there’s a worker who earned a dollar that doesn’t have it.”

    -Big Bill Heywood I.W.W.

    It is quite simple once one penetrates the propaganda.

  14. Jorge

    A big part of the transition from just plain neoliberalism to technofeudalism is the IT revolution: you can buy all the chicken-packing plants you want, but if you can’t execute, if you can’t manage the operations well, if you can’t get the packed chickens into the supermarket before they go bad, it will all be for naught.

    With the IT revolution in general, and recent “data science” inventions in particular, it is now possible to successfully run larger and larger, more and more concentrated monopolies.

  15. Goeffrey

    Echoes of Wolfgang Streeck’s 2016 book “How Will Capitalism End?”
    Having not been prviy to Varoufkis’ book, but just looking at the headings, he seems to lump China’s digital platforms as being the same animal as the West’s whereas from what I understand of Michael Hudson’s et al arguments there is a distinct difference in that China has shown its intention not to allow private digital oligolopies to expand across several areas of the economy, and particularly not into finance. Further MH has said he thinks China is the only place that a genuinely fresh construction of capitalism can come from, aka a form of state directed capitalism, perhaps an iteration of Alexander Hamilton’s “American System”, restoring the role of the state in shaping the market for the common good, not just the benefit of oligarchs.

  16. les online

    Orwell’s’1984′ is a depiction of a technofeudal society…
    ‘The Economy’ is next to non-existing…
    The main production activity is the reproduction of the social control complex…

    The knowing, clever ones risk being ‘disappeared’ just like Syme…
    (aka – being ‘Symed’ ?)

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