Greek economist/politician Yanis Varoufakis “was briefly Greek finance minister in 2015,” remembers the Conversation. Now his new book asks the question, “What killed capitalism,” with the title’s first word providing an answer.

“Techno-feudalism.”

Varoufakis argues that we no longer live in a capitalist society… “Today, capitalist relations remain intact, but techno-feudalist relations have begun to overtake them,” writes Varoufakis. Traditional capitalists, he proposes, have become “vassal capitalists”. They are subordinate and dependent on a new breed of “lords” — the Big Tech companies — who generate enormous wealth via new digital platforms. A new form of algorithmic capital has evolved — what Varoufakis calls “cloud capital” — and it has displaced “capitalism’s two pillars: markets and profits”.

Markets have been “replaced by digital trading platforms which look like, but are not, markets”. The moment you enter amazon.com “you exit capitalism” and enter something that resembles a “feudal fief”: a digital world belonging to one man and his algorithm, which determines what products you will see and what products you won’t see. If you are a seller, the platform will determine how you can sell and which customers you can approach. The terms in which you interact, share information and trade are dictated by an “algo” that “works for [Jeff Bezos’] bottom line”…

Access to the “digital fief” comes at the cost of exorbitant rents. Varoufakis notes that many third-party developers on the Apple store, for example, pay 30% “on all their revenues”, while Amazon charges its sellers “35% of revenues”. This, he argues, is like a medieval feudal lord sending round the sheriff to collect a large chunk of his serfs’ produce because he owns the estate and everything within it.

There is “no disinterested invisible hand of the market” here. The Big Tech platforms are exempted from free-market competition.

And in the meantime, users are unknowingly training their algorithms for them — so “In this interaction, we are all high-tech ‘cloud serfs’… [T]he ‘cloud capital’ we are generating for them all the time increases their capacity to generate yet more wealth, and thus increases their power — something we have only begun to realise.”
Approximately 80% of the income of traditional capitalist conglomerates go to salaries and wages, according to Varoufakis, while Big Tech’s workers, in contrast, collect “less than 1% of their firms’ revenues”… For Varoufakis, we are not just living through a tech revolution, but a tech-driven economic revolution. He challenges us to come to terms with just what has happened to our economies — and our societies — in the era of Big Tech and Big Finance.
Thanks to Slashdot reader ZipNada for sharing the article.