Yanis Varoufakis’ Technofeudalism: What Killed Capitalism presents a bold thesis: capitalism, as we know it, is already dead, replaced by a new system he calls technofeudalism. The book argues that capitalism’s defining features—markets and profits—have been marginalized, with digital platforms and rent-extraction mechanisms taking over the economy. This transformation, he claims, has made us modern-day serfs, enriching a new class of feudal overlords: the owners of cloud capital.
The Death of Capitalism and the Rise of Technofeudalism
Varoufakis traces capitalism’s historical metamorphoses, showing how it has evolved over time. Traditionally, capitalism functioned through competitive markets where profits were extracted from wage labor. However, recent economic shifts—particularly the privatization of the internet by Big Tech and the state’s response to the 2008 financial crisis—have fundamentally altered this system.
Instead of markets, we now have platforms, which resemble markets but operate as feudal fiefdoms controlled by tech giants like Google, Amazon, and Facebook. Instead of profit, the primary economic driver has become rent extraction. Large tech firms no longer compete to sell goods and services but rather to control access to digital spaces, monetizing our online interactions and harvesting data. This is what Varoufakis calls cloud rent—the new currency of technofeudalism.
The Role of the State and the Financial Crisis
A key argument in the book is that governments and central banks, particularly in the wake of the 2008 financial crisis, have accelerated capitalism’s transformation into technofeudalism. The crisis, which should have been a moment of financial reckoning, instead led to an unprecedented expansion of state intervention. Governments and central banks funneled trillions into financial markets, not to stimulate productive investment but to prop up existing corporations and financial institutions.
Rather than reinvesting in productive enterprises, large firms used this influx of cheap money to buy back their own shares and invest in speculative assets, further shifting the economy away from production and towards rent-seeking. This process has concentrated wealth and power in the hands of a few, reinforcing the feudal-like dynamics of the new system.
Big Tech as the New Feudal Lords
Varoufakis emphasizes that the digital economy has created a new ruling class, which he calls cloudalists. Unlike traditional capitalists, cloudalists do not generate profits by selling goods or services. Instead, they control access to platforms where economic transactions take place, much like medieval lords controlled access to land.
In this model, corporations and even traditional capitalists have become vassals—dependent on Big Tech’s platforms to reach consumers, advertise products, and conduct business. Meanwhile, ordinary people have been reduced to digital serfs, providing free labor in the form of data generation, content creation, and online engagement, all of which are monetized by the cloudalists.
The Global Impact and the New Cold War
The book extends this analysis to geopolitics, arguing that technofeudalism is reshaping international relations. The competition between the United States and China is framed as a struggle over control of digital platforms, supply chains, and data networks. Varoufakis suggests that this New Cold War is not just about economic supremacy but also about controlling the infrastructure of the digital age.
At the same time, he explores how traditional economic tools—such as central banking, monetary policy, and taxation—are becoming ineffective in a world where economic activity is dominated by private digital fiefdoms. Governments are struggling to regulate these new economic structures, as they lack the means to tax or control the digital rent-extracting empires.
Escaping Technofeudalism
In the final chapters, Varoufakis explores possible ways to resist and escape technofeudalism. He argues that traditional leftist approaches—such as higher taxation on corporations or stronger labor protections—are insufficient, as they fail to address the fundamental shift in economic power. Instead, he advocates for radical solutions, such as the socialization of digital platforms and the creation of alternative economic structures that prioritize democratic control over digital infrastructure.
He suggests that only by reclaiming control over the digital commons and challenging the rent-extracting power of cloud capital can society break free from the new feudal order. This, he argues, would require political movements that recognize the urgency of confronting technofeudalism head-on.
Conclusion
Varoufakis’ Technofeudalism is both a warning and a call to action. He argues that capitalism is no longer the dominant economic system; it has been replaced by a more exploitative and monopolistic form of control centered around digital rent extraction. The book challenges readers to recognize this shift and to consider new forms of resistance that move beyond traditional economic and political frameworks.
By weaving together economic history, political theory, and cutting-edge analysis of digital platforms, Varoufakis presents a compelling case that we are living through a new feudal era—one where power is no longer concentrated in industrial capitalists but in the owners of digital infrastructure. Whether society can break free from this system remains an open question, but Varoufakis makes it clear that ignoring technofeudalism’s rise is not an option.
