Techo Feudalism by Yanis Varoufakis
Yanis Varoufakis gained a measure of fame beyond his field, economics, when he was elevated to the role of Greece’s finance minister during the Great Recession of 2008. Left to him was the task of negotiating with the grim Teutons of the European Union and other international organizations bent on imposing austerity to cue economic ills. In practice, austerity meant cutting public spending and slashing social programs. Varoufakis argued that the investment banking behavior that triggered the Great Recession was decidedly un-austere, a Mardi Gras of unchecked risk-taking and colorful schemes dressed up for a party the bankers hoped would never end.
In Techno Feudalism, Varoufakis advances a provocative theory: capitalism as we knew it is dead, not so much from the Great Recession but at the hands of the tech titans that have seized the commanding heights of the world economy. What ended old school capitalism, he writes, was “a new form of capital, a mutation” so powerful that it “killed off its host.” The old markets continue but have been pushed from the seat of honor by digital trading platforms, “which look like, but are not, markets, and are better understood as fiefdoms.” And what about that old-fashioned profit motive? According to Varoufakis, it’s been superseded by its “feudal predecessor: rent,” meaning the money we must pay to access the digital universe. He calls it “cloud rent.”
Varoufakis describes himself as a “libertarian Marxist,” not the sort of fellow traveler welcome in China or any nation governed by Leninist dogma. He is influenced by Marx’s theory of economics as the engine of historical development, and like all big theories of history, those ideas tend to simplify, favoring neat categories over the messy granular. And yet, Varoufakis’ Marxism 4.0 can offer a way of understanding the global economy over the past century whose developments he summarizes with flair. Techno Feudalism is an economics text for liberal arts, not business majors. As he puts it, for Wall Street after the 1970s, liberated from government supervision, “prudence was for wimps.”
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But that was recent history. In the amazon.com world of now, “everything and everyone is intermediated not by the disinterested invisible hand of the market but by an algorithm that works for Jeff’s bottom line and dances exclusively to his tune,” Varoufakis writes. Our desires are trained by those algorithms, which are capable of delivering the goods overnight. In this digital feudalism, Amazon grants power to vendors as “cloud-based digital fiefs.” But Amazon isn’t the only feudal overlord. He then points out the scarry part of owning a Tesla. “Merely by driving around, Tesla owners are uploading in real time information (including what music they’re listening to!) that enriches the company’s cloud capital.” And by the way, Tesla can even turn off your car by remote control.
Are the billions of users chained to their smart phones and other devices “cloud serfs”? Is Varoufakis exaggerating to make an impression on a public whose attention span is measured in nano seconds? Perhaps, but many actual (as opposed to MAGA) conservatives might agree with several of his arguments, including the miraculous rise of the stock market in the face of catastrophe as central banks printed more money and handed the cash to the financiers.
Not unlike Marx, Varoufakis is an astute critic of the present day whose prognostications for the future sound utopian. His proposal for “democratized companies,” where every employee receives a single vote, is a recipe for group think or manipulation by canny (or bullying) staff members. However, his interesting spin on universal guaranteed income, a “digital wallet” provided to everyone by their nation’s central bank, is worth considering but has little chance of advancing in America’s political climate.
Varoufakis is an intelligent, provocative idealist who encourages his readers to imagine a better society, another now. But his proposals often have the gossamer texture of dreams. A general strike by digital serfs who refuse to buy from Amazon? The greatest obstacles are political apathy and consumer convenience, high mountains to scale on the way to utopia.
Get Techo Feudalism at Amazon here.
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