When we think of feudalism, images of medieval lords ruling over vast estates with serfs working the land might come to mind. But if we replaced those lords with tech giants and those serfs with everyday internet users, we’d see how Yanis Varoufakis illustrates a timely issue – technofeudalism. 

Who is Yanis Varoufakis?

Yanis Varoufakis is an economist, writer, and former Greek Finance Minister. Known for his critique of modern capitalism, Varoufakis has spent years envisioning a more equitable economic future. His 2023 book, Technofeudalism: What Killed Capitalism, argues that capitalism is being replaced, not by a more progressive system, but by something more reminiscent of the past – feudalism in a digital guise.

What is Technofeudalism?

Technofeudalism is the idea that we are not transitioning from capitalism to something better, but slipping into a system where tech companies function like modern feudal lords. Varoufakis argues that since the 2008 financial crisis, our economic system has fundamentally changed. The cloud, big data and digital platforms have become the “land” of this new era, controlled by tech giants like Google, Amazon and Meta.

These companies, Varoufakis contends, influence our behaviours and choices in ways that are not as voluntary as we might believe. Just as medieval lords controlled land and labour, tech companies wield immense power over data and access to digital spaces. This consolidation of power, sustained by central banks and governments, mirrors the feudal structure of old, where a few elites control the resources that everyone else depends on.

Feudalism vs Capitalism

Capitalism emerged from the remnants of European feudalism, a system where the majority of the population lived under the dominion of a small elite. By the 12th century, most skilled workers toiled under feudal lords, receiving subsistence rather than wages, while serfs laboured for landed nobles. The stark difference between these systems lies in how surplus is extracted: feudal lords wielded power through direct force, while capitalism often cloaks exploitation in the guise of choice.

Capitalism often cloaks exploitation in the guise of choice.

Critics like Evgeny Morozov challenge the notion that tech companies are mere rent-seekers in this new landscape. He argues that these firms invest significantly in research, development, and extensive infrastructure – hallmarks of active capitalists. Rather than idly accruing wealth, big tech firms are engines of production and innovation, contradicting the image of feudal lords benefiting from monopolistic rents.

Though technofeudalism raises valid concerns about the power wielded by tech giants, equating them with feudal lords risks oversimplifying a complex capitalist reality. Modern tech firms are not just controllers; they drive innovation, embodying the very principles of capitalism – competition, growth and relentless progress. While parallels to feudalism persist in issues of control and dependency, the economic engines of today reflect a distinct, dynamic system.

So, are we really leaving capitalism behind?

While Yanis Varoufakis’s notion of technofeudalism has sparked interest, it remains contentious. Though the rise of “cloud capital” is very real and demonstrates a shift in how we monetise human behaviour – we’re not quite inaugurating an entirely new economic system just yet. 

The technofeudalist model involves establishing a monopoly position and using sophisticated data extraction to secure it. Morozov argues that the tech sector does not fit the classic stereotype of a neo-feudal economy. Morozov points out that monopoly is not new to capitalism. Large corporations consolidating power is a hallmark of capitalism, not a signal of its end. He echoes Lenin’s observation that monopoly capital has long been a feature of capitalism. What we’re seeing, Morozov suggests, is a more aggressive form of capitalism, not a shift toward feudalism.

How does technofeudalism challenge the future of our digital economy?

The flow of data now contributes more to world GDP than the flow of physical goods. The rise of technofeudalism urges us to critically examine the influence of tech companies in our lives, especially as we adapt to an era dominated by artificial intelligence. As our daily experiences are increasingly digitised, tech giants are gaining unprecedented wealth and power by controlling vast amounts of data about us. This dynamic challenges us to consider what kind of digital future we want to create – and who will hold the power in it:

• Data as Capital: The control of personal and commercial data has become a new form of capital, driving profit-making strategies for corporations.
• Influence on Society: Tech companies use their extensive knowledge of our preferences to inform algorithmic decisions that affect everything from the news we see to judicial outcomes.
• Power Imbalance: Just as medieval lords held dominion over their serfs, today’s tech giants render individuals and small businesses vulnerable, prioritising their self-interests over genuine innovation.
• Dependency on Platforms: Small businesses are increasingly reliant on platforms like Amazon and Google for visibility, often paying high fees just to reach potential customers.
• Collective Ownership is Key: As Varoufakis states, “To own our minds individually, we must own cloud capital collectively.” Without a unified approach to digital platforms, we risk becoming modern serfs under the control of tech oligarchs, shaping our future without our input.

Further reading

Can we fix capitalism? – The Beautiful Truth 

The rise of techno-authoritarianism – The Atlantic 

Capitalism Isn’t Working. Here’s An Alternative – The Guardian