This episode explores the concept of technofeudalism and the role of digital platforms in governing the lives of individuals. How has the cloud created a feedback loop that removes agency from those who produce data? And what are the effects of technofeudalism on democratic politics? Listen to consider what democratic societies must do to shift control of the algorithms toward the interests of the many.
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Glossary
Feudalism
(03:10 or p.1 in the transcript)
Feudalism as a historiographic construct designated the social, economic, and political conditions in western Europe during the early Middle Ages between the 5th and 12th centuries. Feudalism and the related term feudal system are labels invented long after the period to which they were applied. They refer to what those who invented them perceived as the most significant and distinctive characteristics of the early and central Middle Ages. The expressions féodalité and feudal system were coined by the beginning of the 17th century, and the English words feudality and feudalism (as well as feudal pyramid) were in use by the end of the 18th century. They were derived from the Latin words feudum (“fief”) and feodalitas (services connected with the fief), both of which were used during the Middle Ages and later to refer to a form of property holding. Use of the terms associated with feudum to denote the essential characteristics of the early Middle Ages has invested the fief with exaggerated prominence and placed undue emphasis on the importance of a special mode of land tenure to the detriment of other, more significant aspects of social, economic, and political life. source
The Great Depression (1929)
(19:44 or p.5 in the transcript)
Great Depression was the worldwide economic downturn that began in 1929 and lasted until about 1939. It was the longest and most severe depression ever experienced by the industrialized Western world, sparking fundamental changes in economic institutions, macroeconomic policy, and economic theory. Although it originated in the United States, the Great Depression caused drastic declines in output, severe unemployment, and acute deflation in almost every country of the world. Its social and cultural effects were no less staggering, especially in the United States, where the Great Depression represented the harshest adversity faced by Americans since the Civil War. The timing and severity of the Great Depression varied substantially across countries. The Depression was particularly long and severe in the United States and Europe; it was milder in Japan and much of Latin America. Perhaps not surprisingly, the worst depression ever experienced by the world economy stemmed from a multitude of causes. Declines in consumer demand, financial panics, and misguided government policies caused economic output to fall in the United States, while the gold standard, which linked nearly all the countries of the world in a network of fixed currency exchange rates, played a key role in transmitting the American downturn to other countries. The recovery from the Great Depression was spurred largely by the abandonment of the gold standard and the ensuing monetary expansion. The economic impact of the Great Depression was enormous, including both extreme human suffering and profound changes in economic policy. source
Shalini Randeria (SR): Welcome to a new episode of Democracy in Question, the podcast series that explores the challenges democracies are facing around the world. I'm Shalini Randeria, Rector and President of Central European University in Vienna and senior fellow at the Albert Hirschman Centre on Democracy at the Graduate Institute in Geneva.
This is the second episode of season eight of Democracy in Question. I am really pleased to welcome today Yanis Varoufakis, a well-known Greek economist, politician, and public intellectual at large. He is currently Secretary General of the Democracy in Europe Movement 2025, a left-wing pan-European party he co-founded in 2016, and he is also founding Secretary General of the Greek political party European Realistic Disobedience Front. Having served as George Papandreou’s economic advisor some two decades ago, Varoufakis later became a staunch critic of Pasok, the Greek socialist party. He joined the radical leftist Syriza alliance, becoming finance minister in Alexis Tsipras’s government in 2015. His uphill battles with the Troika in this capacity may be the most publicized period of his career. His own memoirs about this doomed fight titled “Adults in the Room”[i] offer unparalleled insight into the political mismanagement of the so-called Eurozone crisis.
Besides his political accomplishments, he has also had an illustrious academic career as an economist. He has held professorships the universities of Essex, East Anglia, Cambridge, Sydney, Texas at Austin, and Athens in Greece, where he established and directed The University of Athens Doctoral Program in Economics. Besides a number of books on game theory, he has published several influential books about the 2008 global financial crisis, the Eurozone crisis, and contemporary capitalism, such as “The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy”[ii] (2011), “And the Weak Suffer What They Must”[iii] (2016), “Talking to My Daughter about the Economy”[iv] (2017), and “Another Now: Dispatches from an Alternative Present”[v] (2020). In his latest book, provocatively titled “Technofeudalism: What Killed Capitalism”[vi], Varoufakis addresses the rise of large web-based oligopolies that have of late transformed almost every aspect of our lives. The rise of “cloud capital”, as he terms it, has fundamentally altered the logic of contemporary capitalism, to the extent that profit may have been displaced by rent as the core logic of wealth accumulation. I will begin by asking Yanis Varoufakis why we should adopt the concept of feudalism to grasp the defining features of this emergent system. How can we make sense of a historical conjuncture in which technological innovations had an important a role to play as much as have central banks in the wake of the 2008 financial crisis? And how did a set of path-dependent political choices lead to its unintended but rather worrisome consequence for ordinary working people as much as for traditional capitalists themselves? We will also discuss the role that the turn to neofeudalism has played in the geopolitical tensions between China and the US. What are the prospects of democratic politics, perched as they are between the gloomy implications of his analysis and his trademark dedication to worthy political causes.
Yannis, welcome to the podcast, and thank you very much for making the time to join me today.
Yanis Varoufakis (YV): It's a great pleasure. Thank you for having me.
SR: You famously called yourself an erratic Marxist. And your latest book will certainly annoy the Orthodox camp as it stands on its head to use Marx's well-known phrase about Hegel, one of the cornerstones of historical materialism, that is the transition from feudalism to capitalism. You don't question, of course, Marx's foundational narrative of primitive accumulation written in letters of blood and fire, as he put it. But you show that centuries after this transition, we face another in the opposite direction, from capitalism to a new form of feudalism. Your account goes a step further than influential critical histories of the present, such as formulated by my previous guest on the podcast, Nancy Fraser. She argues that structural processes of expropriation and dispossession, as well as systemic plunder, are constitutive of contemporary capitalism as much as is the law of value and the exploitation of labor. Your argument is that the two main pillars of capitalism, profit and markets, have in fact been displaced by rent. A transformation that demands that we use a new term to describe it, and you call it technofeudalism, the title of your book. What exactly is technofeudalism and why should we all worry about it?
YV: Thank you for a very rich question. I may be an erratic Marxist, but that's only because I wanted, as you said, to annoy the traditional Marxists by reminding them that Marx was very erratic in his thinking and in his writing, in the sense that every now and then he would contradict himself, which is a fabulous thing to do if you have a genuinely open mind.
I'm not arguing that we're going back to feudalism. I'm arguing that we're going forward to a new far more sophisticated form of capital than the one we had; that capital has triumphed and evolved and mutated to such an extent that it has clashed with what we call the capitalist mode of production to produce a brand new mode of production that has many elements of feudalism, that's why I call it technofeudalism, within which the capitalist sector plays a very central role. So, nothing of what Nancy Fraser said contradicts my theory because labor, the exploitation of labor, remains at the heart of the production and accumulation and distribution of value under the system that I refer to, the mode of production which I refer to as technofeudalism. The capitalist process of extracting surplus value from wage labor remains at the heart of value creation, but what justifies me arguing that this is a different mode of production, not simply a turbocharged version of capitalism is, as you said, that these two basic pillars of capitalism have been replaced.
And what are the two basic pillars of capitalism? One is profit. Whereas under feudalism, power was concentrated in the hands of owners of land who used that ownership in order to extract rent from the peasantry and from others and from vassals, operating on their land. Capitalism replaced at the epicenter of power the landowners with the owners of capital and rent with capitalist profit. And the second thing, of course, which happened especially after the enclosures in England, in Wales, and in Scotland, with the creation of a large landless mass of working-class men and women was the creation of markets. Not simply the creation of markets, but the channeling of most of economic production activity through markets. So, profits and markets are two pillars.
The reason why I think that this is not simply platform capitalism, rentier capitalism, digital capitalism, big tech capitalism, or surveillance capitalism, but this is something beyond capitalism is because, especially after the great financial collapse of 2008, and the amazingly huge, gigantic production of central bank money. Thirty-five trillion (U.S.) dollars were printed by the central banks of the G7 alone, you have a replacement as the fuel that drives our exploitative socioeconomic mode of production and distribution. You have a replacement of private profits, private capitalist profits with central bank money, on the one hand, and what I call cloud rents, 40 percent of the price of anything you buy from amazon.com, which goes to the owner of the algorithm, not to the vassal capitalist who sells on that platform their goods and services.
And secondly, the fact that we have a new form of capital now, which is, from a technological perspective, not very different to the steam engine or to the industrial robot. So if you look at what's inside your phone, if you look at what I call cloud capital, the kind of machinery combined with software, which is running amazon.com, or Alibaba, or Uber, or X, Twitter, TikTok, the technology is not too dissimilar to what is running a car produced by Tesla or an industrial robot that builds Teslas or Volkswagens or cameras. But the difference with the technology inside your phone or laptop or amazon.com is that for the first time we have a form of capital which is not at all a produced means of production. Unlike steam engines or industrial robots who were created in order to produce other things, cloud capital, as I call it, which lives inside your phone and inside our platforms, is a produced means of behavioral modification, which grants its owner, people like Jeff Bezos, Elon Musk, Mark Zuckerberg, it grants them an opportunity, a power, to extract rents from capitalists who use conventional forms of capital.
So the moment you enter amazon.com, you've exited capitalism. You've exited the markets. You have an algorithm that trains you to train it to train you to train it to put fantastic ideas into your head as to what you want to buy, and usually the recommendations are splendid. I know that when amazon recommends a book to me, I usually want to read it, and when I read it, I don't regret it, or Spotify recommends a piece of music, I usually like it, 80 percent, 90 percent probability, which is a very high probability. But primarily the important thing is that advertisers used to be able to put things in your head that you neither needed nor wanted, and you went out and bought them. But this time, it is the same algorithm that has manufactured that desire in your head, which is actually selling it to you by bypassing markets.
So, if I'm right in my hypothesis that increasing quantities of GDP are no longer profits, they've been siphoned off to a new form of rent, which are called cloud rent. And increasing amounts of trading take place outside markets and inside digital fiefdoms, in which the owners that extract the cloud rents are not the producers, but the producers are vassals to them. Then we have a new socioeconomic mode of production. And now finally to your last bit of the question, which is I think the most crucial, why should people care? We should care for two main reasons.
The first reason we should care is that this system, which I call technofeudalism, is far more prone to crisis than capitalism, which was the mother of all crises-inducing machines. And technofeudalism is far worse. Why is it far worse? Because compare and contrast General Motors with Facebook or any company, Alstom, British Aerospace, Exxon Mobil, anystandard conventional capitalist conglomerate with Facebook or Meta. General Motors and all these companies, Bayer, Monsanto, all of them, pay out around 85 percent of their total revenue to wages. And those wages find themselves in the circular flow of income. In the case of the big tech companies that I mentioned, the technofeudal conglomerates, less than one percent of their revenues goes to wages. The rest is rent, which is stashed away, extracted from the circular flow of income. Therefore, they depress aggregate demand globally.
And therefore, by depressing aggregate demand, they're depressing investment in produced means of production, in capital goods, especially the green energy that we need in order to ameliorate the climate catastrophe. And therefore, it puts the onus on central banks to print even more money in order to make amends for the reduction in aggregate demand in order to stabilize the global system. But at the same time, the central banks can't really do this because they're fighting an inflationary bout. So, they are caught in between a rock and a hard place. And the result is the diminution of investment in good quality jobs, the increasing of the precariat, and the increasing capacity of the techno-feudal lords to exploit the precariat. Think of this remarkably dystopic example of Amazon's Mechanical Turk, where as we speak, 35 million people are working piece-rates for a variety of employers who never even meet their workers, who work for them at home making the chapter in "Das Kapital" Volume 1 of Karl Marx on piece-rates look like a walk in the park.
SR: Let me summarize two bits of your argument and then ask you aquestion. The point you've made is that what you have is a replacement of what many have called cannibal capitalism or rentier capitalism by quasi-fiefdoms of digital trading platforms and they extract a certain form of rent, which you call cloud rent, which then means that capitalism as a socioeconomic system, is dying indirectly of its own hand, as you say, having created a peculiar class of revolutionary capitalists, cloud capitalists, from Jeff Bezos to Jack Ma, who have turned most of us into so-called cloud serfs.
Why do you focus on the constitutive roles of rentiers, vassals and serfs rather than on the technological impact of the internet and digital platform on traditional circuits of capitalist labor, exploitation, and production? Let me play devil's advocate for a moment. Is the argument that cloud-based platforms of commodity circulation and platform-based exploitation have become a structurally inescapable moment of the valorization process in its social and economic totality? Have profits from core industries, some of which are not traded through Amazon or Alibaba...I'm thinking of real estate, of mining, which is needed in order to produce a lot of the things needed on which to run these platforms. Have profits from these core industries been eclipsed by the rents being collected and the manipulation of our attention in this algorithm-dominated cloud sphere?
YV: I think that the two examples you gave, real estate and mining, add to my case because they are examples not of profit but of rent. Real estate does not produce profits. Real estate produces rent. So real estate and mining, oil exploration and so on, were always the remnants of feudalism within capitalism. And indeed, libertarians actually loathe both landlords and miners and the oil companies. A true-blue libertarian thinks that they are parasites. So effectively what I'm saying is that this kind of parasitic rent extraction has now infected capitalism itself. The actual hardcore of technologically-advanced capitalism has been taken over by the same rent-seeking behavior as that in real estate and mining.
Mind you, I would like also to add that it's not true that I do not focus also on the effect of cloud capital on this technological revolution that involves algorithms, IT and AI, on waged labor. I have another category in there which I spend quite some time discussing. I call them cloud proles. If you go into an Amazon warehouse, an Amazon warehouse is not digital. It is a physical space, very ugly space. Lots of rows of stacks and of shelves with human beings, proletarians, running around like headless chicken, carrying packages and ordering them and with the help of robots, of course, as in, you know, a kind of "Modern Times" 2.0; I'm referring, of course, to the film by Charlie Chaplin here. But if you look at the wrist of those workers, you'll see that they have strapped onto it a device that looks like a large telephone, something like a small iPad. Andthat device has GPS location and knows exactly where the worker is at every point in time within the space of the Amazon warehouse. It keeps beeping and pointing the arrows in directions where the cloud prole has to run, exactly like Charlie Chaplin in the "Modern Times" movie, only digitized.
I do focus on the effect that cloud capital has on proletarians, non-proletarians, capitalists, central bankers, policymakers, as well as on the effect on geopolitics because it is my hypothesis that the growth of cloud capital and the concentration of cloud capital has two geographical coordinates. One is Silicon Valley and the other, of course, is the East Coast of China because you have a massively concentrated American big tech and a massively concentrated Chinese big tech. And to understand the emerging New Cold War between the United States and China, you can't do much better than by focusing on the clash between those technofeudal agglomerations.
SR: Let me turn to another constellation which you address in your book, Yanis.You mention the big three of the asset management universe, BlackRock, Vanguard, and the State Street, which you say de facto own American capitalism. Could you say something about the complementary role of these non-cloud-based companies in the metrics of technofeudalism?
YV: The point there is that the shift away from capitalist profit, as explained in Marx's "Das Kapital" so vividly, to wholesale rent extraction needs to be understood in the context of the events after 2008 because that was a pivotal moment, exactly like 1929 was a pivotal moment. The world after 1929 cannot be explained in terms that made sense before 1929. Similarly, I believe that the world after 2008 cannot be made sense of in terms of narratives that made sense before 2008. The massive printing of money for the finances, for big finance, not only created a permanent stagnation for the capitalist sector because the combination of huge liquidity for financiers and harsh austerity for the majority of peoples in a majority of Western countries meant that there was a historically large disconnect between the supply of money, that's liquidity, and the demand for money, which is the demand for investment, which was very low because of austerity. Why would any large corporation invest when the "little people" out there couldn't afford to buy? That depressed the value of money. Interest rates were sometimes below zero, and that stagnated capital.
At the same time, this huge availability of money financed two forms of capital. One is cloud capital. We've already discussed that.And the other is private equity. So, if you are a rich New Yorker or Parisian and you have a stockbroker that you have used for years to select stock that you should purchase or bonds that might go up in value and generally multiply your riches, you took risks there because your broker's, your advisor's advice might turn out to be the wrong one. But with the huge amount of money which was made available to the people who started BlackRock, who started State Street, who started Vanguard, they could do away with risk. Because what BlackRock does and State Street does and Vanguard does, they buy the whole of the New York Stock Exchange.
So, imagine if you had the opportunity to buy shares into the whole index, then you wouldn't care as to whether,United Airlines goes down or Coca-Cola goes up. If you own a chunk of all of those together, and the Federal Reserve makes sure that the stock exchange in its totality goes up, because the money that it prints is effectively taken by the financiers, simply because big business does not want to invest in goods for the little people, they all take it back to the stock exchange to buy back their own shares, then you have a guaranteedrapid wealth accumulation on the back of central bank money.
Let's not forget that one of the reasons why the New York Stock Exchange was always going up and up and up was the Federal Reserve, which was buying, which was producing the money. Another reason was that it was based on cloud capital, which were the firms that pushed the New York Stock Exchange up, and Nasdaq up. It was Apple, it was Google, it was Facebook, it was those cloud capitalists. So, the whole thing comes together into a magnificent triumph of rent over profit and the replacement of the ideals of market competition, which you will find both in Adam Smith and Karl Marx, with something which is nothing like a competitive market, whether this is amazon.com or BlackRock.
SR: Let me turn to a different argument or a different facet of the argument in the book. It's a very interesting recurrent motive in the book, which is the question that your father once posed to you, whether the internet will prove the Achilles heel of capitalism, or its secret for securing eternal life. And you come back to it in many forms. Your answer to it is very interesting because it brings politics into play. You argue that computers, the internet, artificial intelligence should neither be blindly celebrated nor feared irrationally, since as you put it, and I quote you, "It's up to us to collectively determine which of the two it'll be." And that's where politics comes in.
And you point out that the result of the use of this technology was the result of political choices and realignments. The outcomes were often unintended. You say, "The rise of cloud lists happened out of sight and behind the back of the vast majority, including the most powerful of historical agents." I found your emphasis on the political here very important, especially because it helps address a criticism that people like Evgeny Morozov have made about the literature on the turn to neofeudalism. Morozov points to the relative neglect of the nexus between state and capital in these accounts of new feudalism. And that's something that you don't miss out. Could you explain what kinds of political acts of both omission and commission paved the way to the privatization and to this new enclosure, the enclosure of digital commons?
YV: Well, to begin with, with the new enclosures, it was more or less the repercussion of the war economy and the Cold War that gave rise to the original internet as a commons. It was a time when without the state there would have been no war economy in the United States. The emergence of the United States as a boisterous capitalist hegemon was a result of a planned economy. This is a great contradiction. And the original Cold War could not have been conducted by the markets. It needed the RAND Corporation, the Pentagon. It needed all the research into game theory, into John von Neumann's computers, and a vast network of voluntary labor contributed by researchers all over the world. The Joint Academic Network was the first internet that I ever participated in, well before the internet, and it was a genuine socialist enterprise, which, of course, had its origins in the Cold War.
The moment the commercial value emerged became evident. Of course, people like Bill Gates and Steve Jobs and others focused in on how to monetize this. This is not at all different to the manner in which the original enclosures took place. There was no plan to bring about capitalism. Nobody wanted capitalism. If there was a referendum in the 1750s or 1780s, if there were democracy in the British Isles, 99.99 percent would have voted against any fundamental change.History does not progress democratically as we all know, especially the transformation from one socioeconomic mode of production to another. There was no conspiracy. There was no design. There was no plan. It was all unintended consequences from the original enclosures to the emergence of capitalism.
Similarly, we have the new enclosures with people like Bill Gates effectively privatizing and erecting fences around what used to be an internet commons and charging you for things that were free until then. And then companies like Google and Facebook created what I call the cloud capital way of extracting rent from all of us using the new enclosures, Internet 2.0 if you want. Then you throw in the massive financial crisis of 2008, which was not, of course, part of the plan, but which had the unintended consequence of massive quantitative easing, that is money printing, which then funded the emergence of these big tech, technofeudal conglomerates. And this is how history proceeded to bring, from crisis to crisis and unintended consequence to unintended consequence, the transformation of capitalism to technofeudalism, in my estimation.
But if I may finish off this over-long answer with mentioning my dad again, whom you so kindly mentioned at the beginning of your question. He was a very romantic scholar of the past and he used the age of iron as a way of introducing me as a six-year-old to the beauty and the horrors of technology in the same way that in ancient Greek mythology fire was supposed to be something that humans could not handle, and the gods kept it to themselves. But there was one demigod, Prometheus, who believed that humans could handle it, that if they were only given the opportunity of using fire in order to then progress and move from stones to copper and from copper to steel, steel instruments and technologies based on steel, that we could be relied upon or the gods could trust us to use them properly.It's up to us, it's up to our politics, it's up to the demos to decide what to do and how to use, for evil or for good, its technological prowess.
SR:Can I ask you to say something about this notion that you introduced about a “New Cold War”? In the book, you characterize it as with little politics behind it just naked technofeudal interests. This is the New Cold War between the U.S. and China. A gigantic power struggle between the cloudless class of the United States as a global hegemon and the formidable cloudless class of the People's Republic of China as a rising challenger. Could you say a little bit about how you see this conflict unfolding?
YV: The United States of America is a unique hegemon, historically speaking. It's the only empire that has managed to become stronger and more hegemonic as a result of going into the red. When the Roman Empire went into the red, it collapsed. When the British Empire went into the red, it collapsed. When the American Empire went into the red, it grew much, much stronger because it managed to recycle other people's profits using the power of the dollar, the dollarized payment system being the monopoly system. The only system, if you want to transfer money to make payments, to buy oil, to buy commodities, you have to use the dollar. So the dollar is the only currency in the history of the world whose demand is independent of demand for American goods and services. That has never happened before. Now, that is the strength, together with the American military, it is a dollar payment system which dominates the world and empowers the United States of America to keep building strengths on the basis of deficits.
Nowthis is a rhetorical question. So why has Trump started the Cold War against China? And let's say that Trump is a madman in authority for four years. Why did Biden not only not reverse this New Cold War but turbocharged it by effectively announcing to China that it will not be allowed to become a technologically advanced country with a Microchip Act. My explanation, if I may be so blunt, is really very simple. Not only did China produce the only alternative to big tech. So, Google has an alternative, it's called Baidu in China. We don't have one of those things in the European Union. You don't have them in India. They don't have it in Africa. It's only China that has an alternative to Google. It's only China that has an alternative to Amazon, Alibaba. For every American Silicon Valley big tech company there is a corresponding and even better, bigger, and more technologically advanced Chinese one.
But on its own, that's not the main concern that Washington has. The main concern is that in China, because of the predominance of the Chinese Communist Party and its oversight over both big tech and big finance. Big finance in China and the Chinese big tech collaborate. There is an app called WeChat in China, which does everything that Google, Facebook, TikTok, Airbnb, Uber, all of those do. Plus, it provides hundreds of millions of userswith an opportunity to trade, to actually transact money for free, for free. In the United States, that's not possible. And it's not possible because Wall Street, JP Morgan, Citigroup and so on, will never allow Apple or Google to trade into their territory. If you look at Apple Pay, there's a huge, huge ground rent extracted by Apple Pay and by Wall Street separately. They cannot collaborate together because Wall Street will never allow Apple to become a financial company. You see that the Chinese central bank introduced Yuan, a digital currency which effectively cuts out the middleman of private banks and massively reduces the cost of transactions while making it possible for people all over the world to transact in digital Yuans. German exporters, Dutch importers can use, as we speak, the digital Yuan to bypass the private bankers and all the fees that private bankers charge. Now, the (U.S.) Federal Reserve coulddo it at the drop of a hat, but they will never do it because Wall Street are going to throttle them if they dare.So, this is a clear danger for the dollarized digital payment system posed by this alliance between Chinese big tech and Chinese big finance.
That, to me, is the main reason for the escalation of the New Cold War and it is an explanation which I think gathers strength, especially after the Ukraine War, which was followed by a very interesting and fascinating and puzzling, initially, observation.Countries like Saudi Arabia whose ruling class has always been absolutely integrated in the dollar payment system and with the United States government suddenly are making noises regarding their willingness and interest in joining the BRICS payment system and the Chinese payment system. And the reason for that is thatthe United States and the European Union confiscated $400 billion of the Russian Central Bank. If you are one of the sheiks in Saudi Arabia or Dubai or whatever, you may thinkquite rationally, well, they took Putin's money, maybe they'll take mine tomorrow. So, let's look at that alternative payment system to the dollarized payment system. That is a clear and present danger for American hegemony.
SR: Let me come to my final question. Yanis, in the book, you are reticent when it comes to the negative effects of the transition to techno-feudalism on democratic politics. Now, if I may say so, your political career has, in a way, overshadowed your considerable academic and intellectual achievements. And since your heroic, though doomed, struggles as finance minister of Greece during the Eurozone crisis a decade ago, you've been active in several radical democratic projects and initiatives from the Democracy in the European Movement 2025 to the new party that you have formed in Greece.
And yet, surprisingly for me, the new book avoids taking a strongpolitical position. You outline a politics of, sort of, anarcho-syndicalist, techno-socialism, if I may call it that, drawing largely on your fictional account in another book of yours, which is called "Another Now: Dispatches from an Alternative Present," where you express a cautious hope in the liberating potential of technology. You gesture towards the possibility of digitally mobilizing a grand coalition of disaffected multitudes, including even some of those whom you would now call, in the new book, vassal capitalists. So let me conclude by asking you to reflect about the chances of putting the demos back into democracy.
YV: This book was not meant as a political manifesto. It was meant as a book which analyzes the socioeconomic mode of production in which we find ourselves. The more the analysis progressed, the more gloomy the book became and the greater the danger that my reader would feel, oh my god, this is a new form of capital which is so powerful that maybe there is no hope. That is why I dedicated one last chapter not to a manifesto of what we need to do, but of how things could be different because nothing stems progressive politics more than the dictum of TINA, that there is no alternative. So, as you said, I dipped into my science fiction novel, "Another Now," whose purpose was more or less the same.
I wouldn't want to live in a totalitarian regime that justifies authoritarianism on the basis of the interests of the many. I would like to live in an economic democracy where people can havechoice regarding what they do, who their partners are and what their projects are. So, in that sense, yes, I am, I think that so was Marx, a libertarian communist. The idea that we care about overthrowing exploitation and systemic exploitation because we love liberty and freedom. In my estimation, the greatest mistake of the left internationally in the 20th century was that we allowed the word freedom to be taken over by those who use it to call for the freedom of the very few and the enslavement of the many.
So, I finished (the book) off on the basis of how could things be different. Instead of coming out with a programmatic manifesto at the end of the book, let's get together and do A, B, C, D, I thought that it was best to finish off with an alternative vision. And then, you know, once the book is finished and either you've written it as I did or you've read it as a reader, then let's talk about how we will band together to use our political freedom, whatever is left of our political freedom, and our capacity to communicate, and use cloud capital in order to organize resistance and the transition to what you called anarcho-syndicalist, libertarian, communist, whatever world that I do believe is possible. I don't think it's likely, but I think it's possible. And if I didn't struggle for it every day, I wouldn't have the will to wake up in the morning.
SR: On this optimistic note, after a rather pessimistic diagnosis of the present, we call the interview to a close. Thank you so much, Yanis, for this fascinating and wide-ranging discussion of the present moment. And why should we worry about technofeudalism. Thanks so much for being with me today.
Yanis: I thank you.
SR: I hope my conversation with Yanis Varoufakis has aroused your interest in his provocative new book titled “Technofeudalism: What Killed Capitalism”. Its main argument as we heard is that quasi-monopolistic platforms such as Amazon or Alibaba have given rise to a new form of capital. This “cloud capital” as he calls it or “digital fief” has effectively displaced, or even replaced capitalism, in the conventional sense of a mode of production resting on profits and on markets. While capitalist production continues to play a key role in value creation, it is the extraction of algorithm-based digital rent which bypasses traditional markets that is the main mechanism of wealth accumulation today. This epochal shift was made possible technologically by the privatization of the internet, that is, by the enclosure of the digital commons. It was fuelled by the enormous amount of cheap money that central banks made available after the 2008 crisis. Even if the transition to techno-feudalism may be an unintended consequence of the conjunctural combination of technological and financial factors, Yanis Varoufakis’s powerful account emphasizes the decisive role of politics in determining these outcomes. It also situates many of our major social and political issues, like the prospect of a new cold war between the US and China, the dilemmas of green transition, within the context of technofeudalism. Not only does this change of perspective allow us to grasp what he refers to as “naked technofeudal interests”, which are shaping our societies today, but it also creates in his view the very possibility of reclaiming a form of democratic politics that is both soberly realist but also cautiously utopian.
Join us again for the next episode in a fortnight when my guest will be Dilip Gaonkar, Professor of Rhetoric at Northwestern University. We will talk about his critique of liberal democracy and the rhythmic oscillation of democracy, which in his view can only be regenerated currently through direct political action.
Please go back and listen to any episodes that you might have missed, and of course, let your friends know about the podcast if you've enjoyed it. You can stay in touch with the work of the Central European University at www.ceu.edu and the Albert Hirschman Center on Democracy at www.graduateinstitute.ch\democracy.
[i] Varoufakis, Y. (2018). Adults in the room. Random House UK.
[ii] Varoufakis, Y. (2011). The global minotaur: America, the true origins of the financial crisis and the future of the World Economy. Zed Books.
[iii] Varoufakis, Y. (2016). And the weak suffer what they must? Europe, austerity and the threat to global stability. Penguin Random House.
[iv] Varoufakis, Y., & Moe, J. (2019a). Talking to my daughter about the economy: A brief history of capitalism. Vintage.
[v] Varoufakis, Y. (2021). Another now: Dispatches from an alternative present. Vintage.
[vi] Varoufakis, Y. (2023). Technofeudalism: What killed capitalism. Bodley Head.