Abstract
The purpose of this article is twofold. First, it assesses Yanis Varoufakis’ theory of technofeudalism, and will argue, by way of response, that capitalism has not been displaced by a resurgence of feudalism, but is taking new forms that, increasingly, lie outside the powers of nation-states and of social democracy. Second, it questions the ‘libertarian Marxist’ alternative that Varoufakis proposes in its place, which abdicates any interest in the regulatory powers of the state and, paradoxically, advocates consumer-based political action to damage the market position of big corporate entities, even though markets and profits are said to be no longer central to the operation of technofeudalism.
While the analysis and critique of capitalism was central to the concerns of classical sociological theory, an extensive literature has emerged over the past 30 years that has re-evaluated the basis of capitalist society and culture following the emergence of new communication technologies that have been made possible by the Internet. In this literature, capitalism has been conceptualised, among other things, as ‘platform’ (Srnicek, 2016), ‘intensive’ (Lash, 2010), ‘computerised’ (Gane, 2003), ‘networked’ (Castells, 1996), ‘digital’ (Schiller, 1999), ‘knowing’ (Thrift, 2005), ‘rentier’ (Christophers, 2020) and ‘ordinal’ (Fourcade and Healy, 2024). Yanis Varoufakis, in a body of work written in the wake of the global financial crisis, however, offers a different view: that ‘capitalism is now dead’, and, moreover, what has killed it is ‘capital itself’ (2023: xii). Varoufakis argues that capitalism has been eclipsed by a new ‘technofeudal’ order that operates through the extraction of ‘cloud capital’ from digital trading platforms in the form of rent. These new platforms, of which Amazon is his prime example, are said to be feudal in basis as they exercise power through fiefdoms that abolish the two central features of capitalist society: markets and profits. In light of these arguments, the purpose of this article is twofold. First, it will assess this theory of technofeudalism, and will argue, by way of response, that capitalism has not been displaced by a resurgence of feudalism, but is taking new forms that, increasingly, lie outside the powers of nation-states and of social democracy. Second, it will question the ‘libertarian Marxist’ alternative that Varoufakis proposes in its place, which abdicates any interest in the regulatory powers of the state and, paradoxically, advocates consumer-based political action to damage the market position of big corporate entities, even though markets and profits are said to be no longer central to the operation of technofeudalism.
Technofeudalism?
For most academics, the core arguments of Varoufakis’ recent work are likely to be well known. In Technofeudalism, for example, Varoufakis observes that through the course of the 20th Century, capitalism became increasingly experiential in basis as the production of physical commodities was accompanied and to some extent displaced by the ‘the skilful manufacture of desire’ (2023: 25); that the collapse of Bretton Woods was followed by a power-grab by the United States and by processes of financializaton made possible by new computer-based technologies (2023: 51); that finance capitalism uses complex products and instruments, and, ultimately, can be understood as a form of Ponzi scheme (2023: 41); that, following financializaton, ‘Business and government had become profoundly entwined’ (2023: 32); that after the 2008 financial crisis, ‘clueless politicians’ used ‘penny-pinching metaphors to justify self-defeating austerity’ (2023: 17); and that the actions of central banks have enabled the rich, and, more specifically, ‘Big Tech’ to profit from successive crises (2023: 93–94). These developments have been considered many times over in literatures that span the social sciences, but what is new about Varoufakis’ work is its understanding of the post-capitalist order they have made possible, what he calls technofeudalism, or the idea that ‘Humanity is now being taken over by something that I can only describe as a technologically advanced form of feudalism’ (2023: 24). This transition, he argues, has taken place through the willing participation of those who routinely use Internet-based technologies that are programmed to feed our consumer desires. This is the new world of technofeudalism, a world driven by the extraction of ‘cloud capital’ that can ‘be thought of as a vast production and behaviour-modification machine: it produces marvellous devices and the power (for its owners) to command humans who do not own it’ (2023: 89–90).
Varoufakis argues that this new era started with ‘the epic ransacking of the internet commons’ (2023: 67–68). This development, he says, was made ‘made possible by politicians’ (2023: 67–68) and resulted in ‘new enclosures’ (2023: 71) governed by algorithms so sophisticated that they have become ‘agents’ able to behave ‘in ways hitherto associated exclusively with persons’ (2023: 75). This technological and political revolution took place in stages: first, the transition from simple algorithms to those ‘that could adapt their objectives in the light of the outcome of their activity’; second, the development of neural networks; and third, the roll-out of algorithms capable of ‘reinforcement learning’ (Varoufakis, 2023: 76). These technological advances, he argues, led to the emergence of a ‘technofeudal’ order in which large technology corporations exercise such control over markets they no longer exist as such, and because of their position of monopoly are able to extract rent from the virtual territories they own, and, in so doing, operate like medieval fiefs. He explains: 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 it 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 (p. xiii).
For Varoufakis, this does not mean that capitalism no longer extracts value from the wage-labour of workers, but that ‘the owners of traditional capital ... are not in charge as they once were’ as, instead, ‘they have become vassals in relation to a new class of feudal overlord, the owners of cloud capital’. And, for those of us that are not the owners of such capital things look bleak as ‘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’ (p.xiii).
Varoufakis illustrates his argument through two main examples: first, the Apple store, which he describes as ‘the fertile soil of the first cloud fief’ (2023: 125); and second, Amazon, which, he says, works as follows: ‘Under feudalism, the overlord would grant so-called fiefs to subordinates called vassals … Jeff’s relationship with the vendors on amazon.com is not too dissimilar. He grants them cloud-based digital fiefs, for a fee, and then leaves his algo-sheriff to police and collect’ (2023: 87–88). Varoufakis’ model of feudalism comes from Twelfth-Century Europe, in which ‘economic life involved no economic choices’ as, ‘neither land nor labour power was a commodity’ (2023: 19). The transition from feudalism to capitalism, he argues, took place through ‘a shift of the power to command from landowners to owners of capital goods’ (2023: 61), and, to large extent, this has been reversed with the emergence of technofeudalism. For, now, value comes from the extraction of rent from virtual land rather than from profit extracted from wage-labour, with ‘cloud proles’ creating cloud-capital for new ‘feudal overlords’ by providing labour and personal data often for free (see Varoufakis, 2023: 171). In a key passage, Varoufakis writes: Rent flows from privileged access to things in fixed supply, like fertile soil or land containing fossil fuels; you cannot produce more of these resources, however much money you might invest in them. Profit, in contrast, flows into the pockets of entrepreneurial people who have invested in things that would otherwise not have existed – things like Edison’s light bulb or Job’s iPhone . . . Capitalism prevailed when profit overwhelmed rent, a historic triumph coinciding with the transformation of productive work and property rights into commodities to be sold via labour and share markets respectively (2023: 121–122).
If, then, the transformation, from feudalism to capitalism was ‘predicated on the usurpation of rent by profit’ (2023: 132), then the transition from capitalism to technofeudalism is predicated on the reverse, albeit through the extraction of rent from online territories and not just from physical land.
On this basis, Varoufakis rejects terms such as hyper-capitalism, platform capitalism, and rentier capitalism, as he says that they miss ‘the great transformation of our society that is currently taking place . . . the triumph of rent over profit’ (2023: 118). The global financial crisis of 2008, he claims, was a watershed moment, for government initiatives such as quantitative easing funded new forms of cloud capital that turned consumers ‘from sovereign agents into the play-things of algorithms that lie outside of the effective control of markets, governments and perhaps even their inventors’ (2023: 112). And, with this, a ‘new ruling class’ (2023: 114) emerged as a consequence; one motivated less by ‘profit’ than ‘seizing the opportunity to establish total market dominance’ (2023: 107). This power-grab was repeated through the Covid pandemic, as from April to July 2020, billionaires increased their wealth by 27.5% (see 2023: 136). Varoufakis’ view of the governmental response to this crisis is a dim one: ‘Funded by central bank money, bolstered by private equity, these cloudalists extended their cloud fiefs across the globe, extracting gargantuan cloud rents from vassal capitalists and cloud serfs alike’ (2023: 126). Friedman (1982) once argued, in Capitalism and Freedom, that ‘Only a crisis – actual or perceived – produces real change’ (p. xiv), and, for Varoufakis (2023), the same is true, as the events of the 2008 financial crisis and the Covid pandemic have, in his view, changed things decisively for the worse, and have resulted in a ‘far, far uglier social reality’ (p. xiv).
It is worth pausing for a moment, not necessarily to disagree with Varoufakis’ depiction of the ugliness of this new ‘reality’, but rather of his conceptualisation of it as feudal in basis. In an appendix to Technofeudalism, he writes: Under feudalism, land was the dominant factor of production and ground rent…was the main income stream on which political and social power was built. Feudal class societies contained a variety of subservient classes (artisans, peasants, vassals, etc.) but only one dominant factor of production (land) yielding a single ruling class (landlords) and a uniquely powerful income flow (ground rent). Under capitalism, land was replaced as the dominant factor of production by capital, the fief was replaced by the market, and ground rent was replaced by profit (2023: 227).
Feudalism is thus said to have taken its revenge on capitalism as rent has replaced profit, and land, albeit, of a different type, has become the primary source of income for a select few thanks to ‘billions of cloud serfs who are, at this very moment, putting so much time and energy into building up someone else’s cloud capital’ (2023: 171). Marion Fourcade and Keiran Healy understand this development, following which users of digital media technologies create value for their owners often unknowingly through acts of unwaged labour, in terms of a liberal-capitalist form of soft power that works by giving consumers ‘freedom’ (see 2024: 27). Contrary to such an understanding, however, Varoufakis, argues that this new order is neither liberal nor capitalist but rather neo-feudal in basis. But is he right? Are the users of the Apple store, websites such as Amazon and social media apps really ‘serfs’; has rent replaced profit; and is this new technological world really feudal in form?
A key sociological resource for understanding the structure and dynamics of feudal societies is the work of Max Weber (for an overview, see Poggi, 1988). In Economy and Society, Weber argues, first of all, that feudalism has military roots (see 1978: 1077), and for this reason, among others, is antagonistic to what he calls a ‘commercial rationality’ (1978: 1105). More than this, feudalism can take different structural forms, including ‘liturgic’, ‘patrimonial’, ‘manorial’, ‘servile’, and ‘gentile’. Weber also outlines the basis of what he calls ‘free’ feudalism, which itself can take four different forms: first, ‘vassalic’, which involves ties of personal fealty without the grant of manorial rights; second, ‘prebendal’ or without personal fealty; third, ‘feudatory’, which combines personal fealty and fiefdom; and fourth, ‘urban’, or ‘the communal association of warriors’ on ‘manorial land allotted to the individual’ (1978: 1072). This is important as because feudalism can take different forms, so can fiefs, which can include ‘land use or ... political territorial rights, in exchange for military or administrative service’ (Weber, 1978: 1071). Between these forms there are commonalities as well as differences, most notably that in each power tends to be traditional and charismatic in basis, and there are ‘fixed relationships between lord and vassal’ rather than the ‘wide realm of discretion and the related instability of power positions’ characteristic of Weber calls ‘pure patrimonialism’ (1978: 1070). Such ‘fixed relationships’ between lord and vassal, however, contain an inherent weakness, as Richard Swedberg observes: Feudal administration is characterized by the fact that its key administrators – the vassals—control the means of administration, and not the lord. This introduces a chronic instability into the relationship between lord and vassal, Weber says, because once the vassal is in charge of his land and has his own military force, there is little but his sense of loyalty to keep him from breaking away from the lord (1998: 68).
This is an important political point because the organisation of feudalism through free vassalage, fiefs and what Weber calls a status order based upon ‘honour and personal fealty’ (1978: 1104) is double-edged, forwhile the freedom of the vassal is to some extent ‘fixed’ it nonetheless contains the potential to undo the power of the lord and, with this, destabilise this type of society.
Varoufakis is not concerned with the analysis of feudalism in such conceptual and comparative detail, but rather with broad differences between feudalism and capitalism that can be used to inform an understanding of a post-capitalist present. But, still, there is much to learn from Weber. In some cases, Weber observes, the
Varoufakis does not address differences between feudalism and capitalism at length, and does not say who, exactly, the new lords, vassals and serfs are of ‘technofeudalism’, what social and political ties of fealty exist between them (or otherwise), or anything about the broader class or status hierarchy of which they are a part. Instead, he simply states that under conditions of technofeudalism there are no markets as such, and that the drive to extract profit is eclipsed by the quest for total market dominance through the establishment of fiefdoms, or what might otherwise be called monopolies. His analysis of Amazon is telling because he argues that it is not a market-based organization, ‘despite all the buying and the selling that goes on there’ (2023 : 85): This is no market town. It is not even some form of hyper-capitalist digital market. Even the ugliest of markets are meeting places where people can interact and exchange information reasonably freely. In fact, it’s worse than a totally monopolised market – there, at least, the buyers can talk to each other, form associations, perhaps organise a consumer boycott to force the monopolist to reduce a price or to improve a quality (2023: 86).
It is here, however, that the differences between feudalism and capitalism outlined by Weber still matter. For, in spite of its market dominance, Amazon is a listed company in which one can buy and sell shares, and its marketplace is one of many different competing marketplaces (some virtual, others physical) from which vendors and consumers can choose. This, then, is nothing like life in what Varoufakis calls ‘the feudal era’, in which ‘economic life involved no economic choices’ (2023: 19). And, paradoxically, it is the freedom of individual consumers to make market choices that gives Varoufakis hope for political opposition and, potentially, change.
Such opposition, he says, is to proceed through ‘cloud mobilisation’. While this sounds new and exciting, there is little accompanying indication of what it means to organise and mobilise through the ‘cloud’, and it turns out that the political actions recommended by Varoufakis are, in fact, nothing particular new: to withdraw labour from Amazon warehouses; for users and customers not to use the Amazon website for a period of time; and for consumers to participate in payment strikes that will hit ‘private utility companies’ share and derivative prices’ (2023: 209–210). Political opposition is thus possible, for Varoufakis, precisely because of what technofeudalism is supposed to deny: market choice and market participation. Indeed, it is precisely because companies such as Amazon are still market-based and market-oriented institutions that they are vulnerable to what Varoufakis calls ‘peaceful guerrilla strikes’ (2023: 210) that can, potentially, damage their valuation in the form of a share price. If there is such a thing as technofeudalism, Varoufakis’ opposition to it, paradoxically, is capitalistic in basis, as it advocates a politics of consumer choice and market investment, including the ‘mass withholding of pension contributions’ to funds that own shares in companies whose value is derived from cloud capital (2023: 210). Varoufakis’ answer, then, to a technofeudal order, which is not, in fact, feudal in basis for the reasons outlined above, is consumer action against corporations that have a market valuation determined by their ability to extract value in the form of profit, and which remain vulnerable for precisely this reason.
Varoufakis’ argument for cloud mobilisation is accompanied by a further contradiction, for while technofeudalism is said to present little opportunity to ‘form associations’ or ‘organise a consumer boycott’, these are exactly the political strategies advanced in the conclusion to the book. Indeed, in one breath Varoufakis says that technofeudalism introduces a ‘great new barrier’ of ‘physical isolation’ between ‘cloud serfs and cloud proles from one another’, and then, in another, declares that it ‘presents to its potential rebels’ precisely that which it is supposed to remove: ‘a capacity to build coalitions, organise and take action ...’ (2023: 208). It is worth observing, on this point, that many of Varoufakis’ concerns are anticipated by Zygmunt Bauman in his book Globalisation: The Human Consequences, now published over 25 years ago. In this work, Bauman observes that the problem is not just the isolation of workers or consumers from each other, but the wilful isolation of global elites, who now barely, if ever, come into physical contact with those from whom they extract value. This, in itself, makes political organisation and opposition more challenging than in the era of industrial capitalism, but does not mean that we now live in a post-capitalist or technofeudal age. Indeed, Bauman observes, presciently, that while the ‘new freedom of capital is reminiscent of that of the absentee landlords of yore, notorious for their much resented neglect of the needs of the populations which fed them’ (1998: 10), there are key differences between feudalism and what he calls ‘absentee landlordism, mark two’ (see 1998: 9). One difference is that, previously, it was not possible for landlords to ‘exchange one land estate for another and so [they] remained – however tenuously – tied to the locality from which they drew their life juices; that circumstance set a practical limit to the theoretically and legally unconstrained possibility of exploitation. . .’ (Bauman, 1998: 10). This, however, is no longer the case for global elites or for capital, both of which now have an unprecedented freedom of movement. In a key passage of Globalisation, Bauman writes: In contradistinction to the absentee landlords of early modern times, the late-modern capitalist and land-brokers, thanks to the new mobility of their liquid resources, do not face limits sufficiently real – solid, tough, resistant – to enforce compliance. The sole limits which could make themselves felt and respected would be those administratively imposed on the free movement of capital and money. Such limits are, however, few and far between, and the handful that remain are under tremendous pressure to be effaced or just washed out (1998: 11).
Arguably, this situation has become ever-more acute following the emergence of what Varoufakis calls ‘cloud capital’, which, while extracted through new technological means, is still nonetheless capital, which can be accumulated, circulated and exchanged through markets to the benefit of global elites that, increasingly, can operate at a distance.
In the preface to Technofeudalism, Varoufakis argues that ‘cloud capital has demolished capitalism’s two main pillars: markets and profits’ (2023: xii–xiii). Markets, clearly, still exist, as argued above, but what about profit in what Bauman calls ‘absentee landlordism mark two’: has this, indeed, been eclipsed by a feudal model of what Varoufakis calls ‘rent’? While Varoufakis has little positive to say about the work of Karl Marx, he draws, implicitly, on his distinction between rent, which is income drawn from the leasing of land and is ‘limited to the excess above the average profit’, and profit, which is central to the class dynamics of industrial capitalism and, ultimately, is determined by the ownership of the means of production, for just as ‘the wage assumes wage-labour, profit assumes capital’ (Marx, 1991: 1022). This leads Marx, in the final, unfinished section of Volume Three of Capital, to observe that there are ‘three great classes of modern society based on the capitalist mode of production’: wage-labourers, capitalists, and landowners. Frustratingly, Marx’s manuscript breaks off before he explains the grounds upon which each of these groups constitute a ‘class’, but he provides an important clue: these groups are defined socially, economically, and politically by their different sources of income. Wage-labourers own ‘mere labour-power’ and sell this in return for wages; capitalists are ‘the owners of capital’ including ‘cloud capital’, as will be argued below, whose source of income is profit; and, for landowners, income comes from ground-rent, which may be differential or absolute in form (Marx, 1991).
This is important because even in what Marx calls ‘modern’ or capitalist society, land-ownership is still a source of income that can be a determinant of social class. Marx could not foresee that through the onset of the 20th Century, rent would be drawn not only from the ownership of land but also from physical and virtual assets of quite different types, although, crucially, he does draw attention to the building of property for the purposes of extracting profit from rent rather than simply from the labour power used to build it (see Marx, 1991: 909 and the below example of the relation of rent to profit in a housing market).
Brett Christophers picks up on this key point in his book Rentier Capitalism, in which he explains that ‘Rent remains. . .payment for monopoly control of an asset, but the asset need not be land; it can be anything, if control of that thing generates some kind of access of usage payment’ (2020: xxi). Whereas, in Technofeudalism, it is unclear whether ‘fiefdoms’ such as Amazon draw rent from the control of land or property, or whether these are now the same thing, Christophers considers in detail the asset classes that are central to the operation of rentier capitalism. These include: financial assets; natural resource reserves; intellectual property; digital platforms; service contracts; infrastructure; and land (see 2020: xxxi). The means for gaining control of such assets may differ in form, as may the income streams derived from such control, but, nonetheless, the logic of rent is consistent regardless of the underlying asset: ‘income derived from the ownership, possession or control of scarce assets under conditions of limited or no competition’ (2020:xxiv). For Christophers, this is the defining feature of what he calls rentier capitalism, which, contrary to Varoufakis, is still very much still capitalism, but one based not simply upon the extraction of value from the labour of others, but also and increasingly upon the continuous accumulation of income from the ownership or management of different types of assets (see also Christophers, 2023). This form of capitalism is different, he argues, because it is a ‘mode of economic organization’ in which ‘success is based principally on what you control, not what you do’ (Christophers, 2020: xviii).
Does this mean, then, that Varoufakis is right to argue that profit is no longer important in a world dominated by income in the form of rent? The simple answer is no. At the outset of Rentier Capitalism, Christophers draws attention to the importance of balance sheets for documenting the ‘financial activities and position of a business’ (2020: xviii). Both Werner Sombart and Max Weber observed at the outset of the 20th Century that double-entry bookkeeping, which records credits against debits, and profits against losses, is central to the operation of capitalism, and the same remains the case today. At the heart of any annual company report, which has to be produced as a regulatory requirement of being listed on a stock exchange, is a balance sheet that documents, among other things, assets, liabilities, revenues, losses, and profits of different kinds, including: operating profit, gross profit, net profit, and adjusted profit. This is the case even for companies whose business is the accumulation of ‘cloud capital’, including Amazon. A cursory glance at Amazon’s 2023 annual report reveals that the core measure of its success is, as with any other capitalistic organisation, the ‘creation of shareholder value. . .over the long term’, which is to be achieved by growth in the form of ‘higher revenue, higher profitability, greater capital velocity, and correspondingly stronger returns on invested capital’. This, then, is not feudalism by any means, but is still a world in which, to use the words of Varoufakis in Another Now, ‘Monetary profit drives capitalism’ (Varoufakis, 2020: 148). Capital is invested in order to produce profit, and capital, as Marx observed ‘essentially produces capital ...’ (1991: 1020). This is still the case even if the underlying form of capital itself has now changed and has become, increasingly, financialised (see Brown, 2015; Fourcade and Healy, 2024) or, following Marx, fictitious (Durand, 2017) in basis.
What is missing from Varoufakis’ account is both a close analysis of the underlying structure of ‘cloud’ capital, and of the relation of rent to profit, as he simply states that under conditions of technofeudalism the former displaces the latter. Christophers provides a useful example to illustrate this relation, which, as stated above, was broached by Marx in the final sections of the third volume of Capital: the house. Christophers writes: Suppose a construction company builds a house for a landowner who then lets the house to a tenant. The house ‘earns’ money, in a sense, for both the construction company and the landowner. But fundamentally different types of economic activity, actor and payment are involved in each case. The construction fee is payment for the work involved in building the house, independent of the house’s ownership; if no work had been carried out, after all, there would be no house, and no payment. Thus, the construction company is not a rentier; it earns money not for controlling the asset, but for creating it. The letting fee, by contrast, is rent, and the landowner a rentier, since she receives payment only because she is the owner of the house and thus has the capacity to charge someone for the right to occupy it (2020: xvii).
This example of how rentier capitalism works is deceptively complex, for, first, there can be no house, or arguably any other rentier asset without accompanying forms of productive labour, and second, rent-bearing assets are ‘characterised by monopoly power not just in ownership or control . . . but also in terms of their commercialization on the market’ (Christophers, 2020: xxiv). This reference to the market is important, as rentier capitalism has not emerged independently of what Christophers calls ‘shifts in political-economic governance’, including privatisation, which ‘has increased the size of the pool of available assets for the rentier to rent out’ (2020: 24). Privatisation can take different forms, but, in essence, involves the transfer of public assets into private hands so they can be bought and sold on a market. From the 1980s onwards, this has included land and public housing that was previously owned by the state, and, as Christophers observes (see 2020: xxxv, 327–376) not only do corporations and individuals now own ‘substantial stocks of land and residential property’, but these stocks are also held, indirectly, as financial assets through investments such pension-fund holdings.
As land and property pass into private hands and become financialised assets, both can be traded, through markets, by a new class of what Christophers (2020: xxxv) calls ‘land rentiers’, whose ‘monopoly power’ creates scarcity and, in turn, inflates the price of the underlying asset, which, in this case, is the house. This benefits the rentier as it presents an opportunity to realise profit over the long term through the purchase and sale of capital assets such as land and property. This is an important point, for, contrary to Varoufakis’ argument, the motivation for all landlords is to realise profit through an increase in the price of these assets and/or by income in the form of rent exceeding associated labour and transaction costs. In terms of the latter, such profit can only be realised if the value of rent is higher than the cost, among other things, of maintaining property on an ongoing basis, the servicing of financial obligations such as a mortgage, and legal fees associated with the buying and selling of property and with the drawing up of contracts for it to be rented to tenants. In capitalist society, there are markets that determine the price and related costs of each of these things: land, property, rent, building maintenance, finance, and legal fees. Simply put, if income, including rent, exceeds costs then this then takes the form of profit. This is the case at a micro-scale for a private landlord of a house rented to tenants, and at a far grander scale for corporate giants such as Amazon that use double-entry bookkeeping, in the form of a balance sheet, to enable a market to establish a valuation based upon profit-making, or the potential for profit-making, which is realised when income or revenue exceeds expenditure and losses, including the costs associated with managing an underlying asset.
Rent, then, has not simply displaced profit, just as fiefdoms have not replaced markets, and for this reason Christophers is right to describe the present in terms of rentier capitalism rather than technofeudalism. Varoufakis’ declaration that capitalism has now ended is politically significant as nowhere does Varoufakis contest neoliberal forms of governance that have enabled elites to profit, and to continue to profit, from the privatisation of public assets, while, increasingly, being able to evade the regulatory frameworks and tax regimes of nation-states (see Gane, 2023a; Slobodian, 2023). Instead, he rejects any engagement with neoliberal politics out of hand, and declares: ‘Neither new nor liberal, neoliberalism was an uninteresting hodgepodge of older political philosophies. As a piece of theory, it had a much to do with really-existing capitalism as Marxism had to do with really-existing communism: nothing!’ (2023: 51). There is, then, no engagement with the politics of the state, except for a passing critique of the ‘vicious austerity’ (2023: 98) imposed by governments following the financial crisis, and of actions that made the rise of technofeudalism possible, in particular the bank-rolling of ‘Big Tech’ through successive crises.
Rather than involve himself in a critique of pro-market, neoliberal forms of governance that have led to the privatisation of the state in the UK and elsewhere, Varoufakis declares, instead, that he is a ‘libertarian Marxist’ (2023: 19). It is unclear what, exactly, this means, although Varoufakis is broadly antipathetic to the powers of government and the state throughout his analysis and critique of technofeudalism. He is also fiercely critical of the contemporary Left, which, in its traditional form, he says, has been all but destroyed. This, in part, is the result of de-industrialisation, which, he argues, has ‘fragmented the labouring classes’ and has led to the erosion of the class consciousness that existed when ‘the working class was still relatively homogeneous’ (2023: 183). It is not exactly clear what ‘homogenous’ means here, but Varoufakis is explicit about the problem as it currently stands: the Left has been infected by the ‘relativism’ of the political Right, and, in particular, by ‘the principle that we all have the right to be free from the extractive power of others transmuted into the principle that no one perspective is worth more than any other’ (2023: 183). In more concrete terms, the Left has embraced an identity politics preoccupied with ‘a civil war on the definition of “woman”, on the hierarchy of oppressions and all the rest’ (2023: 184), and in so doing has allowed ‘people in authority to do nothing about the economic and political extractive power that is increasingly intertwined with cloud capital’ (2023: 183). This, he says, has given free reign to political Right, including extreme groups that operate under the banner of the alt-right.
Given that Varoufakis calls himself a ‘libertarian Marxist’, one might presume that, by way of response, he would return to the work of Marx to insist on a Leftist politics of a different type. But this is not the case as, instead, he dismisses Marx for refusing ‘to go beyond vague references to the socialism or communism which he predicted and wanted to replace the Empire of Capital’. For Varoufakis, this is both a failing and also a ‘smart’ move as such questions are ‘beyond the capacities of middle-class intellectuals working in the British Library reading room or chatting in their posh living rooms’ (2023: 191). Perhaps Varoufakis does not frequent such libraries or living rooms, but, either way, one is left wondering what, exactly, is ‘Marxist’ about his brand of libertarianism. In his previous book, Another Now, Varoufakis constructs a fictional narrative through three characters – a techno-futurist, revolutionary feminist and free-market fundamentalist – and there is reference to a ‘universal basic dividend’ that can provide enough money for a person to survive without being forced into work, funded by a blanket 5% revenue tax on business. It is impossible to tell where, exactly, Varoufakis positions himself in relation to these characters, but in a recent interview (2024), he argues that governments should ‘Tax Amazon 5% for every transaction that takes place on its platform’. In Technofeudalism, Varoufakis does not expand on how, exactly, a revenue tax is to be imposed not just on Amazon but on global corporations more generally, and nowhere is there a plan for the progressive taxation of corporate profits (presumably because ‘profit’ is said to no longer exist or, at least, to matter) that could underpin a politics of redistribution aimed at restoring and maintaining the welfare state. From the pages of Another Now, one senses that Varoufakis is keen to find ways of avoiding ‘the demeaning and cruel means testing of the welfare state’, and to liberate ‘the poor from the so-called safety net that in fact entangles them in permanent poverty’ (2020: 54). While this might come as a surprise, such hostility to the welfare state, is consistent with a commitment to libertarianism, which, whether from the political Left or Right, treats the state and government more generally as institutional forms that, ultimately, are repressive in basis as they restrict individual freedom.
Indeed, rather than defend the welfare state, in the conclusion to Technofeudalism Varoufakis outlines a different strategy: to supplement ‘corpo-syndicalism’, a concept that is broached in Another Now, with a plan for a new form of corporate ownership. His vision is for each employee to have a share in the company that they work for and this ‘one share can’t be leased or sold’. This plan effectively inverts Berle and Means’ (1932) concern in their key text, The Modern Corporation and Private Property, namely that as corporations grow there is a danger that managers will pursue their own interests rather than those of shareholders (see Gane, 2023b). Varoufakis insists, instead, that his idea of one share, one vote will liberate workers ‘from the tyranny of self-serving managers’, eliminate the ‘distinction between wages and profits’, and, as a result, ensure that pay is ‘determined by a democratic process’ (2023: 195–196).
While this plan sounds progressive, there is no accompanying indication of how it is to be implemented, and thus how it is any more grounded than Marx’s ‘vague’ references to socialism and communism. Is this, for example, a plan for an alternative form of corporate governance for new start-up companies, or a model to be imposed upon existing corporations by government authorities? If the former, then the resulting changes will be small and gradual and unlikely to undo the powers of technofeudalism any time soon; if the latter, then how, exactly, is it to be rolled-out in the face of an entrenched neoliberal politics that has asserted, from the 1980s onwards, that corporations should not seek to be socially responsible and should only be run for the benefit of their shareholders through the maximisation of profits (see Gane, 2023b)? It is equally unclear how such a plan is consistent with libertarian politics given that it would have to be imposed against the will of existing corporate institutions and powers, and only through the exercise of government and/or state power? For if such a plan is to be realised, surely what is needed is stronger government in the public interest, rather than a libertarian alternative that sees government and the state, by definition, as part of the problem?
While critical of the Left for abandoning a politics of class, Varoufakis’ libertarian alternative effectively does the same, and in so doing itself cedes ground to the political Right, not least by sharing their opposition to the welfare state. Indeed, like Giddens in The Third Way, Varoufakis seems content to ‘accept some of the criticisms the right makes of that state’, including that it is ‘essentially undemocratic’ (Giddens, 1998:112), but without a clear plan for any kind of social state, or for basic structures of social support and care, that should be put in its place. Varoufakis argues that ‘the Great Inflation and cost-of-living crisis that have followed the recent pandemic cannot be properly understood outside the context of technofeudalism’ (2023: 135). But technofeudalism does not explain what he calls the ‘vicious austerity’ of the post-crisis period, which was an attack on the welfare state that, in the UK, has led to a situation where, as of 2023, 11.4 million are now defined as being in ‘absolute low income’ (after housing costs), foodbanks are used by 2.3 m people, and 11% of the population is defined as living in a ‘food insecure’ household (see Francis-Devine, 2024). In a world in which soaring corporate profits, bonuses, shareholder dividends and share buybacks have gone hand-in-hand with, and, arguably, are the underlying cause of the present cost of living crisis, one might expect Varoufakis to take a strong stance on the regulation of corporate freedoms and power. Instead, apart from an idea for the restructuring of corporate ownership so that one share carries one vote, without any accompanying details of how it is to be rolled-out and imposed, Varoufakis’ political strategy is for consumer action and payment strikes that dent the income and market position of large corporations. This, however, effectively pushes the responsibility for political action downwards to individual consumers, many of whom are already vulnerable, indebted and face serious consequences for non-payment, including disconnection from essential services and, potentially, the forced collection of any outstanding debts. It is unclear what a ‘libertarian’ solution to such problems might look like, except for the further abandonment of the politics of the welfare state, which, in turn, is likely to bring further misery to those who are dependent upon it, and more freedom to those able to profit from its demise.
Varoufakis is right to observe that things have changed, but not in the way he describes, for capitalism has not given way to technofeudalism. Instead, with the aid of neoliberal government, the underlying logic and drive of capitalism has intensified, not least because it is able to operate, increasingly, outside of the regulatory powers of the state and of social democracy more generally (see Brown, 2015; Slobodian, 2023). One consequence is that capitalist society today is characterised by ever more extreme forms of social, economic and political polarisation. In 1998, Bauman observed in Globalisation that the total wealth of the top 358 global billionaires equalled the combined incomes of the 2.3 billion poorest people, what was then 45% of the world’s population (see 1998: 70). Twenty five years on, Oxfam has reported that the world’s five richest men more than doubled their fortunes from $405 billion (£321 billion) to $869 billion (£688 billion) since 2020, while the wealth of the poorest 60 per cent - almost five billion people – had fallen (see Oxfam, 2024).
This acceleration of material inequality, clearly, is remarkable, not least because it has happened in the absence of little organised political opposition. But this is neither a proof nor a consequence of the existence of what Varoufakis calls technofeudalism. Instead, it is the outcome of a form of monopoly capitalism driven and made possible by an aggressively individualistic neoliberal and libertarian politics (on the differences between the two, see Davies and Gane, 2021) that seeks, on one hand, to use the state to serve its interests, while on the other, to evade political forms of regulation in order to give the powers of big capital increased freedom. In their book Monopoly Capital published in 1966, Baran and Sweezy (1966) observe that ‘under competitive capitalism the individual is a “price taker”, while under monopoly capitalism the big corporation is a “price maker”’ (pp. 53–54). In an extraordinary twist of fate, this argument, which was written as a Marxist critique of the powers of modern corporations, has been given a new lease of life by the libertarian billionaire, Peter Thiel. Thiel, in a 2014 essay published in The Wall Street Journal, expresses the same argument but from the opposite political perspective: that aspiring entrepreneurs should learn that ‘competition is for losers’. Rather than believe in a free market system based upon a principle of perfect competition, Thiel offers a different view: a firm should seek to dominate a market to such an extent that it can ‘set its own prices’, and, in the absence of competition, produce ‘at the quantity and price combination that maximises its profits’ (Thiel, 2014: 3). The goal, then, for Thiel is profit maximisation by becoming, in the words of Baran and Sweezy, a ‘price maker’ rather than a ‘price taker’. Thiel shares with Varoufakis a commitment to libertarianism, albeit not of the Marxist type, for it is precisely the regulatory powers of the state that, in principle, prevent this from being possible.
For billionaires such as Thiel, the aim is to dominate markets to maximise profits and personal wealth at all costs, and there should be no shame in this ambition. This, in itself, is nothing new, as, remarkably, Max Weber writes in ‘Class, Status, Party’ that Very frequently the striving for power is also conditioned by the social ‘honour’ it entails. Not all power, however, entails social honour: the typical American Boss, as well as the typical speculator, deliberately relinquishes social honour. Quite generally, ‘mere economic’ power, and especially ‘naked’ money power, is by no means a recognized basis of social honour (1948: 180).
It is unclear, given the celebrity status of some global billionaires, whether naked money power today exists in such tension with what Weber calls ‘social honour’. But, for Weber, it is not just the distinction between raw money power and social status that is important, but also the distinction between economic and political power, for in a democracy it should not be possible for the former to determine the latter. The problem, Varoufakis argues, is that this separation of economic and political power is in grave danger, as he observes that today ‘serious power comes from serious wealth’ (2023: 58). Varoufakis is undoubtedly right, and one is reminded of Crispin Odey, whose hedge fund, Odey Asset Management, was a major donor to the Leave campaign, and subsequently made £220m betting on the collapse of the pound following the Brexit referendum. The day after the decisive vote, Odey declared: ‘There’s that Italian expression, Al mattino ha l’oro in bocca, the morning has gold in its mouth, and never has one felt so much that idea as this morning’ (see https://www.independent.co.uk/news/uk/politics/hedge-fund-manager-describes-moment-he-won-ps220-million-brexit-vote-the-morning-has-gold-in-its-mouth-a7323626.html). Varoufakis offers little hope that the blurring of raw monetary power and political influence is likely to change any time soon, and, worse still, talks of the ‘impossibility of social democracy’ (2023: xiii–xiv), as, in his view, ‘European social democrats and American Democrats’ alike have been ‘lured into a Faustian bargain with the bankers of Wall Street, the City of London, Frankfurt and Paris’ (2023: 180). More than this, the ‘problem’ is that ‘nobody in government’ cares as ‘they are all in the pockets of the big technofeudal lords, as I call them’ (Varoufakis, 2024).
Varoufakis’ commitment to libertarianism provides no alternative to this situation, which itself is the outcome of decades of libertarian and neoliberal politics that have sought, at all costs, to free capital and its beneficiaries from the regulatory powers of the state. This commitment, which Varoufakis calls ‘Marxist’ (without accompanying explanation), can only exacerbate this situation by replicating the attack on the social state that has been central to austerity politics, and by passing responsibilities downwards to individual consumers who are expected to care for themselves and to self-organise with the aim of taming the powers of ‘Big Tech’. More than this, in focussing on what he calls ‘technofeudalism’, Varoufakis deflects attention away from the extraction of profit from labour, property and land that lies at the heart of new, technological forms of capitalism; a process that continues to do untold damage to the planet and to the majority of people that inhabit it. As argued above, it is not the case that rent has replaced profit. It is also not the case that markets have been replaced by fiefdoms, for while dominated by big corporate powers, they still work to extract and monetarise economic value, and, more than this, enable financial speculation on such a scale that it can ‘appropriate’ (Durand, 2017) and perhaps even determine what is possible in the future. Capitalism, then, is still capitalism, albeit of different kind, and should not be confused with what Varoufakis calls ‘technofeudalism’. For the danger of declaring that capitalism is dead is that it is left to work unopposed, along with the global elites that benefit from it.
Footnotes
Declaration of conflicting interests
The author declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author received no financial support for the research, authorship, and/or publication of this article.
