Xabier Villares reviews Technofeudalism: What Killed Capitalism, by Yanis Varoufakis (Penguin, 2023)
Yanis Varoufakis’s latest book is written as a letter to one of the author’s early mentors: his father. It begins with an analogy between the 2008 crisis and classical Greece, summarising his explanation in his 2011 book, The Global Minotaur, of the labyrinthine systems that allowed the USA to hold a permanent deficit while maintaining hegemony across the world and controlling money’s circulation so that, sooner or later, it ended up in New York City. Central banks printed $35 trillion after the crash, stimulating huge liquidity amidst very low levels of demand for investment and austere fiscal policy. Under these circumstances, private bankers were willing to invest the money in nothing but cloud capital. Between 2008 and 2023, serious amounts of money flowed into the realm of big tech, from software and AI-driven algorithmic machinery to communications hardware, from optic fibres to server farms, mostly in the USA and China.
On this foundation, the author lays down his main premise: capitalism is now a zombie system, and it isn’t a result of a transition to socialism. Both free markets and profit have been eliminated, the former replaced with algorithmically personalised platforms and the latter substituted with public money and rent. If both are dead, there is no sense still talking about the same socio-economic system. Varoufakis calls the new system technofeudalism. The book’s appendix, ‘The Political Economy of Technofeudalism’, presents a new set of categories for understanding the reorganisation of production and distribution. These include cloud capital (with the capacity to modify desires, beliefs and propensities of cloud serfs through AI-powered tools), cloudalists (owners of cloud capital), cloud proles (the precarious proletariat, working in cloud-based services and products), cloud vassals (capitalists dependent on cloud captial), and of course, cloud serfs, who play a remarkable role in this new structure. Cloud serfs help to reproduce cloud capital by working – mostly for free – through ‘gamification’ strategies which prompt users and customers to work for tokens and/or pitiful payments. The genealogy of these cloud serfs bears some resemblance to the changing relationships to work described by philosopher Byu Chul Han, who explores what alienation and work actually mean in a world where people happily exploit themselves until entering a perpetual state of anxiety and depression.
The panorama doesn’t look good. However, the author refuses to leave us alone in the dark. Recalling Marx’s enthusiasm for new technological advances, Varoufakis talks about innovation and technology as an opportunity to create something better for the world. We cannot go backwards, but we can definitely choose
how we want to go forward. In an analysis unmistakably embedded within the emancipatory tradition, Varoufakis remarks that only solidarity can bring change, by building hope and inspiring action. He calls for a coalition of cloud serfs, cloud proletariat and even some of the cloud vassals as the only way to subvert and overthrow the power of the cloudalists. While he recognises the crucial role of workers, he suggests that worker organising is not enough. Effective cloud mobilisation depends on the action and active understanding of the general public to achieve the likes of massive boycotts of Amazon and other big tech companies, that can disrupt the industry. His call for mobilisation is also a call for internationalism: a response must come from multiple, diverse places at once.
He also offers hints about the better world he thinks can come, sharing images from his earlier book, Another Now, that is set in an alternative world where technologies are used in completely inverted ways. It is a world that has echoes of the internet project dreamed of by Salvador Allende and the Santiago Boys back in the 1970s Chile; an imaginative vision of a feasible socialism, going beyond stereotypes, standing as Black Mirror’s negative. Perhaps there is something of that spirit in local and national initiatives that exist today in Scotland. While the effects of AI technology are notoriously unregulated, unsteady and unjust, the efforts of the Scottish AI Alliance will test whether AI can be inverted to be used in trustworthy, ethical and inclusive ways. And while digital technologies are used to drive workers into the ground by pushing and incentivising unrewarded productivity increases, the Workers’ Observatory in Edinburgh is enabling communities of resistance in the city to give workers tools to understand how new technologies are reshaping their conditions.
Reading Technofeudalism generates an urgent impulse to imagine new techno-utopias. It is an entertaining read for anyone interested in how the socio-economic structure is morphing across the globe, and what that means for the working class. How seriously, as an economist and thinker, does Varoufakis take his depiction of this new system? Does he actually consider this situation the end of capitalism? I’m not sure. But maybe the book is best treated as a provocation to shake the left from its technological acclimatisation and galvanise disconnected groups to refresh their interest in how the world is changing. Those are reasons good enough to write this book – and to read it.
Yanis Varoufakis will be in Edinburgh at the Assembly Rooms on the 13th November, in a live conversation with the philosopher Slavoj Zizek to mark the latter’s 75th birthday.
