Yanis Varoufakis: Big Tech's Power and Wealth Signals Rise of Technofeudalism

Yanis Varoufakis, the former Greek Finance Minister, argues in his latest book, "Technofeudalism: What Killed Capitalism," that the wealth and power of tech companies derived from online user data represents a new economic system he calls technofeudalism. According to Varoufakis, users are essentially "serfs" paying "rents" to big tech "cloudalists" or cloud capitalists, rather than participating in traditional capitalism.

Why this matters: The rise of technofeudalism has significant implications for the distribution of power and wealth in society, potentially leading to a concentration of control in the hands of a few tech giants. The rise of technofeudalism has significant implications for the distribution of power and wealth in society, potentially leading to a concentration of control in the hands of a few tech giants. It is vital that we examine the consequences for democracy and individual freedom as Big Tech's influence continues to grow.

Varoufakis points to two key developments that led to the shift from capitalism to technofeudalism: the privatization of the internet by America's and China's Big Tech, and the response of Western governments and central banks to the2008 great financial crisis. These events have enabled the rise of cloud capital and the decline of traditional capital, fundamentally altering the economic environment.

In the technofeudal system, markets have been replaced by digital trading platforms controlled by a new class of feudal overlords, the owners of cloud capital. "Cloud rent," which must be paid for access to these platforms and the cloud, has taken the place of profit. Real power now resides with the owners of cloud capital, who have become the new ruling class, while traditional capitalists have been relegated to the role of vassals. The rest of us, Varoufakis argues, have become serfs, contributing to the wealth and power of the new ruling class with our unpaid labor, in addition to waged labor.

Varoufakis places this transformation in historical context, noting that it is a reversal of the historic triumph of capitalism over feudalism three centuries ago, when profit overwhelmed rent. He acknowledges that rent survived capitalism's golden age, with remnants of feudalism persisting and some rentiers even flourishing by feeding on the scraps left by profit. However, the rise of technofeudalism represents a significant shift in the balance of power.

In "Technofeudalism," Varoufakis further explores how users do not actually own the digital content they purchase, such as music and movies, and how tech companies use behavioral modification techniques to influence user behavior. He suggests that a "Star Trek"-like future, where technology is used to benefit humanity, could be a potential solution to this issue and could help save democracy.

Varoufakis' argument raises important questions about the nature of the current economic system and the role of technology in shaping it. The influence of Big Tech continues to grow, it is vital that we examine the implications for individuals, businesses, and society as a whole, and explore potential solutions that prioritize the well-being of humanity. The rise of technofeudalism, as described by Varoufakis, presents a significant challenge to traditional economic models and power structures, and its impact will likely be felt for years to come.

Key Takeaways

• Yanis Varoufakis argues that tech companies' wealth and power from user data represents a new economic system called "technofeudalism".
• In technofeudalism, users are "serfs" paying "rents" to big tech "cloudalists" rather than participating in traditional capitalism.
• The rise of technofeudalism concentrates power and wealth in the hands of a few tech giants, threatening democracy and individual freedom.
• Varoufakis identifies privatization of the internet and the 2008 financial crisis response as key events leading to technofeudalism.
• Technofeudalism reverses the historic triumph of capitalism over feudalism, with "cloud rent" replacing profit and users becoming serfs.