Yanis Varoufakis's "Technofeudalism: What Killed Capitalism?"  ## Metadata - Author: [[Cory Doctorow]] - Full Title: Yanis Varoufakis's "Technofeudalism: What Killed Capitalism?" - Category: #articles - Document Note: --- tags: - #Technofeudalism - #Capitalism - #Feudalism - #RentierEconomy - #CloudCapital - #Cloudalism - #IP - #Antitrust - #PlatformPower - #Climate Author: Cory Doctorow (reviewing Yanis Varoufakis) Source: Pluralistic (article) Reference: https://pluralistic.net/2023/09/28/cloudalists/#cloud-capital date created: 2025-08-23 00:00 --- # Title: Technofeudalism: What Killed Capitalism? — Notes, Analysis, and Advocacy Lens ## Table of Contents: - [📚 References](#-references) - [📝 Summary](#-summary) - [📖 Main Content](#-main-content) - [🗒️ Notes](#-notes) - [📖 References (Full List)](#-references-full-list) - [🗣️ Paraphrase](#-paraphrase) - [📰 Newsletter](#-newsletter) - [✅ Action Items](#-action-items) - [🧪 Hypotheses](#-hypotheses) - [📊 Methodology](#-methodology) - [❓ Questions](#-questions) - [🔮 Future Research](#-future-research) - [💡 Implications](#-implications) - [🧠 Learning Styles Assessment](#-learning-styles-assessment) - [📊 Accessibility Assessment](#-accessibility-assessment) - [🌍 DEIB Assessment](#-deib-assessment) - [✅ Logical Validity](#-logical-validity) - [🛡️ DARVO Analysis](#-darvo-analysis) - [🔍 SEO Evaluation](#-seo-evaluation) - [🎯 Conclusion](#-conclusion) Note on position: You’ve read 33% of this article. ### References: - Yanis Varoufakis, Technofeudalism: What Killed Capitalism? (Penguin) - Cory Doctorow, Pluralistic essay on “cloudalism,” rent vs profit, and platform power - Doctorow’s related essays on free markets and IP power - External reporting and scholarship linked throughout (FCC Net Neutrality news, FTC v. Amazon, NBER paper on Consumer Surveillance and Financial Fraud) ## 📝 Summary: The article summarizes Yanis Varoufakis’s thesis that capitalism has morphed into “technofeudalism,” where rent eclipses profit as the dominant income form. Following the 2008 crisis and massive central bank interventions, asset inflation (“everything rally”) empowered rentiers over productive capitalists. Tech platforms amassed “cloud capital” and now function as feudal lords (“cloudalists”) who control access, take large cuts, and can erase businesses “with a click.” IP regimes extend platform power beyond their boundaries. Varoufakis warns this order undermines innovation, competition, and climate coordination; he calls for a “cloud rebellion,” which Doctorow argues can be advanced via interoperability, antitrust, and policy reforms. ## 📖 Main Content: The core argument pivots on a precise distinction: - Capitalism: profits via competitive production and investment in new capital. - Feudalism: rent via control over scarce assets and chokepoints. Post-2008 policy choices flooded asset holders, privileging rent extraction over productive investment. Most firms rewarded shareholders (buybacks/dividends) instead of R&D, while tech uniquely invested in cloud infrastructure—creating a dependency web. Platforms dictate terms for sellers, creators, rivals, and users through recommendation systems, search index inclusion, app store gatekeeping, and IP-based restraints. Green energy, if built atop proprietary grids/protocols, risks becoming a new rent frontier. The book’s remedies section is brief; Doctorow complements it with a program for “seizing the means of computation” through interoperability mandates, competition policy, and user rights. Personal insight: This lens clarifies why open protocols and portability (e.g., ActivityPub, Mastodon) matter: they convert feudal chokepoints into competitive interfaces, lowering switching costs and restoring profit-driven innovation. ### 🗒️ Notes - Capital vs. Feudal Rent - Profit is competition-exposed; rent is insulated. - Rent “flows from privileged access to things in fixed supply.” - 2008 and the “Everything Rally” - Bailouts enriched asset holders irrespective of profits. - Asset values rose broadly, consistent with rentier dominance. - Rentier Behavior vs. Capitalist Investment - Rentiers buy more rent-bearing assets; capitalists invest to compete. - Corporate shift to buybacks/dividends indicates feudal turn. - Cloud Capital and Platform Feudalism - Tech firms built “cloud capital” others must rent to operate. - Platforms take large cuts, control product display, and can delist at will. - IP as Extramural Control - IP enables platforms to dictate behavior of competitors, critics, customers. - Climate and Coordination - Proprietary grids/protocols risk locking renewables into rent regimes. - Varoufakis doubts cloudalists’ ability to coordinate for public good. - Geopolitics and the New Cold War - US/China tech rivalry framed as contest among aspiring fiefdoms. - Remedies - Varoufakis: calls for “cloud rebellion” (brief on specifics). - Doctorow: interoperability, rights to connect/repair/exit, antitrust, net neutrality. ## 📖 References (Full List): - Varoufakis, Technofeudalism (Penguin) - The New York Times review context - Doctorow on free markets and rents - Doctorow on IP as beyond-the-firm control - Doctorow: The Internet Con (Verso) - FCC net neutrality news - NBER Consumer Surveillance and Financial Fraud - FTC + 17 states v. Amazon ## 🗣️ Paraphrase: 1) Original idea: “Profit is vulnerable to market competition, rent is not… If you own the building, more coffee shops raise your rent.” - Paraphrase: Competitive pressure can slash a café’s margins, but a landlord benefits from every new café on the block because the increased foot traffic boosts property values and justifies higher rents. 2) Original idea: “Cloudalists can destroy a vassal’s business with a click—delisting, blocking, shadowbanning, or app removal.” - Paraphrase: Platform lords wield instant, existential leverage: a single policy change or delisting can evaporate a dependent firm’s traffic, sales, or distribution overnight. ## 📰 Newsletter: This week in the WordPress world: learning pathways, platform shifts, and new tools! - Learn Web Dev, Faster: We’ve refreshed our go-to roadmap for PHP, JavaScript, HTML/CSS, and Git. Pair core concepts with hands-on repos and contributor-first tutorials to move from “it works!” to “it scales.” - Updates You’ll Love: Core performance improvements continue to land; keep an eye on emerging Patterns workflows to speed content builds. Also, ongoing accessibility fixes aim to make block editing smoother for everyone. - Community Highlights: Shout-out to first-time contributors who joined our mentorship cohorts—your PRs are already making the rounds. If you’ve been waiting to start, this is your nudge. - New Plugins to Try: A privacy-first analytics plugin with lightweight scripts, plus a consent-management helper that plays nicely with major cache tools. - Must-Read: For a bigger-picture view of platforms and power, check out the analysis of “technofeudalism” and why open standards, interoperability, and user freedom matter for the open web. Resources: - FCC moves to restore net neutrality: CNN coverage - FTC and 17 states sue Amazon: Ars Technica explainer Question of the week: What would “interoperability by default” look like in your stack—and how would it help your users switch without friction? ## ✅ Action Items: Prompt for aligning articles with your role (Developer Advocate, GoDaddy; OSS/WordPress; aspiring OSPO director) Use this prompt with any article you read: “Analyze how this article intersects with open-source advocacy, contributor engagement, and education in the WordPress ecosystem. Specifically: - Open Source Strategy: Identify where interoperability, open standards, licensing, or governance models are discussed or implied. Explain how these elements could inform OSPO policies at a large web company. - Contributor Experience: Extract concrete opportunities to onboard, mentor, and retain contributors. Map proposed practices to contributor ladders, docs, and mentorship programs. - Education Design: Translate key ideas into learning objectives, tutorials, workshops, or curriculum for PHP/JS/HTML/CSS/Git audiences. Include inclusive pedagogy and assessment plans. - Sustainability & Funding: Highlight mechanisms that reduce rent-seeking, encourage shared infrastructure, and fund maintainers (e.g., sponsorships, public - Summary: Yanis Varoufakis argues in his book "Technofeudalism: What Killed Capitalism?" that capitalism died a decade ago and transformed into a new form of feudalism called technofeudalism. He explains that capitalism is a system where capital rules and the richest individuals coerce workers into using their capital to generate profits. In contrast, feudalism is organized around people who own things and charge others to use them, with rent being the most important form of income. Varoufakis suggests that the 2008 financial crisis marked a turning point, as central banks bailed out banks and bankers, leading to wealth gains without profits. This shift led to the dominance of rent over profit, with rentiers becoming more powerful and capitalists becoming subservient to them. Varoufakis explores the implications of technofeudalism in areas such as energy, geopolitics, monetary policy, and the tech wars between the US and China. He calls for a "cloud rebellion" to challenge technofeudalism. - URL: https://pluralistic.net/2023/09/28/cloudalists/#cloud-capital [](https://pluralistic.net/2023/09/28/cloudalists/)  Socialists have been hotly anticipating the end of capitalism since at least 1848, when Marx and Engels published *The Communist Manifesto* – but the *Manifesto* also reminds us that capitalism is only too happy to reinvent itself during its crises, coming back in new forms, over and over again: <https://www.nytimes.com/2022/10/31/books/review/a-spectre-haunting-china-mieville.html> Now, in *Technofeudalism: What Killed Capitalism,* Yanis Varoufakis – the "libertarian Marxist" former finance minister of Greece – makes an excellent case that capitalism died a decade ago, turning into a new form of feudalism: technofeudalism: <https://www.penguin.co.uk/books/451795/technofeudalism-by-varoufakis-yanis/9781847927279> To understand where Varoufakis is coming from, you need to go beyond the colloquial meanings of "capitalism" and "feudalism." Capitalism isn't just "a system where we buy and sell things." It's a system where *capital* rules the roost: the richest, most powerful people are those who coerce workers into using their capital (factories, tools, vehicles, etc) to create income in the form of *profits*. By contrast, a *feudal* society is one organized around people who *own* things, charging others to use them to produce goods and services. In a feudal society, the most important form of income isn't *profit*, it's *rent*. To quote Varoufakis: "rent flows from privileged access to things in fixed supply" (land, fossil fuels, etc). Profit comes from "entrepreneurial people who have invested in things that wouldn't have otherwise existed." This distinction is subtle, but important: "Profit is vulnerable to market competition, rent is not." If you have a coffee shop, then every other coffee shop that opens on your block is a competitive threat that could erode your margins. But if you own the building the coffee shop owner rents, then every other coffee shop that opens on the block raises the property values and the amount of rent you can charge. The capitalist revolution – extolled and condemned in the *Manifesto* – was led by people who valorized profits as the heroic returns for making something new in this world, and who condemned rents as a parasitic drain on the true producers whose entrepreneurial spirits would enrich us all. The "free markets" extolled by Adam Smith weren't free from *regulation* – they were free from *rents*: <https://locusmag.com/2021/03/cory-doctorow-free-markets/> But rents, Varoufakis writes, "survived only parasitically on, and in the shadows of, profit." That is, rentiers (people whose wealth comes from rents) were a small rump of the economy, slightly suspect and on the periphery of any consideration of how to organize our society. But all that changed in 2008, when the world's central banks addressed the Great Financial Crisis by bailing out not just the *banks*, but the *bankers*, funneling trillions to the people whose reckless behavior brought the world to the brink of economic ruin. Suddenly, these wealthy people, and their banks, experienced enormous wealth-gains *without* profits. Their businesses lost billions in *profits* (the cost of offering the business's products and services vastly exceeded the money people spent on those products and services). But the business still had billions more at the end of the year than they'd had at the start: billions in public money, funneled to them by central banks. This kicked off the "everything rally" in which every kind of asset – real estate, art, stocks, bonds, even monkey JPEGs – ballooned in value. That's exactly what you'd expect from an economy where rents dominate over profits. Feudal rentiers don't need to invest to keep making money – remember, their wealth comes from *owning* things that *other people* invest in to make money. Rents are not vulnerable to competition, so rentiers don't need to plow their rents into new technology to keep the money coming in. The capitalist that leases the oil field needs to invest in new pumps and refining to stay competitive with other oil companies. But the rentier of the oil field doesn't have to do anything: either the capitalist tenant will invest in more capital and make the field more valuable, or they will lose out to another capitalist who'll replace them. Either way, the rentier gets more rent. So when capitalists get richer, they spend some of that money on new capital, but when rentiers get richer, them spend money on more assets they can rent to capitalists. The "everything rally" made all kinds of capital more valuable, and companies that were transitioning to a feudal footing turned around and handed that money to their investors in stock buybacks and dividends, rather than spending the money on R&D, or new plants, or new technology. The tech companies, though, were the exception. They invested in "cloud capital" – the servers, lines, and services that everyone else would have to pay rent on in order to practice capitalism. Think of Amazon: Varoufakis likens shopping on Amazon to visiting a bustling city center filled with shops run by independent capitalists. However, all of those capitalists are subservient to a feudal lord: Jeff Bezos, who takes 51 cents out of every dollar they bring in, and furthermore gets to decide which products they can sell and how those products must be displayed: <https://pluralistic.net/2022/11/28/enshittification/#relentless-payola> The postcapitalist, technofeudal world isn't a world without capitalism, then. It's a world where capitalists are subservient to feudalists ("cloudalists" in Varoufakis's thesis), as are the rest of us the cloud peons, from the social media users and performers who fill the technofuedalists' siloes with "content" to the regular users whose media diet is dictated by the cloudalists' recommendation systems: <https://pluralistic.net/2023/01/21/potemkin-ai/#hey-guys> A defining feature of cloudalism is the ability of the rentier lord to destroy any capitalist vassal's business with the click of a mouse. If Google kicks your business out of the search index, or if Facebook blocks your publication, or if Twitter shadowbans mentions of your product, or if Apple pulls your app from the store, you're toast. Capitalists "still have the power to command labor from the majority who are reliant on wages," but they are still mere vassals to the cloudalists. Even the most energetic capitalist can't escape paying rent, thanks in large part to "IP," which I claim is best understood as "laws that let a company reach beyond its walls to dictate the conduct of competitors, critics and customers": <https://locusmag.com/2020/09/cory-doctorow-ip/> Varoufakis points to ways that the cloudalists can cement their gains: for example, "green" energy doesn't rely on land-leases (like fossil fuels), but it *does* rely on networked grids and data-protocols that can be loaded up with IP, either or both of which can be turned into chokepoints for feudal rent-extraction. To make things worse, Varoufakis argues that cloudalists won't be able to muster the degree of coordination and patience needed to actually resolve the climate emergency – they'll not only extract rent from every source of renewables, but they'll also silo them in ways that make them incapable of doing the things we need them to do. Energy is just one of the technofeudal implications that Varoufakis explores in this book: there are also lengthy and fascinating sections on geopolitics, monetary policy, and the New Cold War. Technofeudalism – and the struggle to produce a dominant fiefdom – is a very useful lens for understanding US/Chinese tech wars. Though Varoufakis is laying out a technical and even esoteric argument here, he takes great pains to make it accessible. The book is structured as a long open letter to his father, a chemical engineer and leftist who was a political prisoner during the fascist takeover of Greece. The framing device works very well, especially if you've read *Talking To My Daughter About the Economy*, Varoufakis's 2018 radical economics primer in the form of a letter to his young daughter: <https://us.macmillan.com/books/9780374538491/talkingtomydaughterabouttheeconomy> At the very end of the book, Varoufakis calls for "a cloud rebellion to overthrow technofeudalism." This section is very short – and short on details. That's not a knock against the book: there are plenty of very good books that consist primarily or entirely of analysis of the problems with a system, without having to lay out a detailed program for solving those problems. But for what it's worth, I think there *is* a way to plan and execute a "cloud rebellion" – a way to use laws, technology, reverse-engineering and human rights frameworks to shatter the platforms and seize the means of computation. I lay out that program in *The Internet Con: How the Seize the Means of Computation*, a book I published with Verso Books a couple weeks ago: <https://www.versobooks.com/products/3035-the-internet-con>  * FCC to reintroduce rules protecting net neutrality <https://www.cnn.com/2023/09/26/tech/fcc-net-neutrality-internet-providers/index.html> (h/t Boing Boing) * Consumer Surveillance and Financial Fraud <https://www.nber.org/papers/w31692> (h/t Naked Capitalism) * FTC and 17 states sue Amazon in long-awaited lawsuit targeting monopoly power <https://arstechnica.com/tech-policy/2023/09/ftc-files-the-big-one-a-lawsuit-alleging-amazon-illegally-maintains-monopoly/>  #10yrsago FBI: We know you’re innocent, but you’re not getting off the No-Fly list unless you rat out your friends <https://www.aclu.org/news/national-security/no-fly-list-where-fbi-goes-fishing-informants> #10yrsago EFF racks up another courtroom victory over the NSA: damning docs to follow <https://www.eff.org/deeplinks/2013/09/after-nsa-court-hearing-government-must-unseal-documents-december-20> #10yrsago How Miss Teen USA’s sextortionist got caught <https://arstechnica.com/tech-policy/2013/09/miss-teen-usas-webcam-spy-called-himself-cutefuzzypuppy/> #10yrsago Judge requires patent troll to explain its “Mr Sham” business <https://www.techdirt.com/2013/09/26/judge-takes-patent-troll-with-sham-employee-forces-troll-to-defend-practice-before-jury/> #5yrsago Modern Monetary Theory: why government spending isn’t like household checkbooks <https://www.npr.org/sections/money/2018/09/26/651948323/episode-866-modern-monetary-theory> #5yrsago Defcon Voting Village report shows that hacking voting machines takes less time than voting <https://defcon.org/images/defcon-26/DEF CON 26 voting village report.pdf> #1yrago Maintaining monopolies with the cloud: Microsoft, Oracle and other cloud giants use their terms of service to prevent competition <https://pluralistic.net/2022/09/28/other-peoples-computers/#clouded-over>  Today's top sources: Currently writing: * A Little Brother short story about DIY insulin PLANNING * Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. FORTHCOMING TOR BOOKS JAN 2025 * The Bezzle, a Martin Hench noir thriller novel about the prison-tech industry. FORTHCOMING TOR BOOKS FEB 2024 * Vigilant, Little Brother short story about remote invigilation. FORTHCOMING ON TOR.COM * Moral Hazard, a short story for MIT Tech Review's 12 Tomorrows. FIRST DRAFT COMPLETE, ACCEPTED FOR PUBLICATION * Spill, a Little Brother short story about pipeline protests. FORTHCOMING ON TOR.COM Latest podcast: How To Think About Scraping <https://craphound.com/news/2023/09/24/how-to-think-about-scraping/> Upcoming appearances: * An Evening with VE Schwab (Boise), Oct 2 <https://www.thecabinidaho.org/all-events/ve-schwab> * Wired Nextfest (Milano), Oct 7-8 <https://eventi.wired.it/nextfest23-milano> * The Internet Con at Moon Palace Books (Minneapolis), Oct 15 <https://moonpalacebooks.com/events/30127> * 26th ACM Conference On Computer-Supported Cooperative Work and Social Computing keynote (Minneapolis), Oct 16 <https://cscw.acm.org/2023/index.php/keynotes/> * 41st annual McCreight Lecture in the Humanities (Charleston, WV), Oct 19 <https://festivallcharleston.com/venue/university-of-charleston/> * Seizing the Means of Computation (Edinburgh Futures Institute), Oct 25 <https://efi.ed.ac.uk/event/seizing-the-means-of-computation-with-cory-doctorow/> Recent appearances: * Seize the Means of Computation (Movement Memos) <https://open.spotify.com/episode/3OXPCnbiZHdIxUf8UTFnnu> * How to Seize the Means of Computation (rHatchery) <https://www.podpage.com/rhatcherylive/how-to-seize-the-means-of-computation/> * Give Them An Argument <https://www.youtube.com/watch?v=yhTphllBUEM> Latest books: * "The Internet Con": A nonfiction book about interoperability and Big Tech (Verso) September 2023 (<http://seizethemeansofcomputation.org>). Signed copies at Book Soup (<https://www.booksoup.com/book/9781804291245>). * "Red Team Blues": "A grabby, compulsive thriller that will leave you knowing more about how the world works than you did before." Tor Books <http://redteamblues.com>. Signed copies at Dark Delicacies (US): [and Forbidden Planet (UK):](https://www.darkdel.com/store/p2873/Wed%2C_Apr_26th_6pm%3A_Red_Team_Blues%3A_A_Martin_Hench_Novel_HB.html#/) <https://forbiddenplanet.com/385004-red-team-blues-signed-edition-hardcover/>. * "Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin", on how to unrig the markets for creative labor, Beacon Press/Scribe 2022 <https://chokepointcapitalism.com> * "Attack Surface": The third Little Brother novel, a standalone technothriller for adults. The *Washington Post* called it "a political cyberthriller, vigorous, bold and savvy about the limits of revolution and resistance." Order signed, personalized copies from Dark Delicacies <https://www.darkdel.com/store/p1840/Available_Now%3A_Attack_Surface.html> * "How to Destroy Surveillance Capitalism": an anti-monopoly pamphlet analyzing the true harms of surveillance capitalism and proposing a solution. <https://onezero.medium.com/how-to-destroy-surveillance-capitalism-8135e6744d59> (print edition: <https://bookshop.org/books/how-to-destroy-surveillance-capitalism/9781736205907>) (signed copies: <https://www.darkdel.com/store/p2024/Available_Now%3A__How_to_Destroy_Surveillance_Capitalism.html>) * "Little Brother/Homeland": A reissue omnibus edition with a new introduction by Edward Snowden: <https://us.macmillan.com/books/9781250774583>; personalized/signed copies here: <https://www.darkdel.com/store/p1750/July%3A__Little_Brother_%26_Homeland.html> * "Poesy the Monster Slayer" a picture book about monsters, bedtime, gender, and kicking ass. Order here: <https://us.macmillan.com/books/9781626723627>. Get a personalized, signed copy here: <https://www.darkdel.com/store/p2682/Corey_Doctorow%3A_Poesy_the_Monster_Slayer_HB.html#/>. Upcoming books: * The Lost Cause: a post-Green New Deal eco-topian novel about truth and reconciliation with white nationalist militias, Tor Books, November 2023 * The Bezzle: a sequel to "Red Team Blues," about prison-tech and other grifts, Tor Books, February 2024 * Picks and Shovels: a sequel to "Red Team Blues," about the heroic era of the PC, Tor Books, February 2025 * Unauthorized Bread: a graphic novel adapted from my novella about refugees, toasters and DRM, FirstSecond, 2025  This work – excluding any serialized fiction – is licensed under a Creative Commons Attribution 4.0 license. That means you can use it any way you like, including commercially, provided that you attribute it to me, Cory Doctorow, and include a link to pluralistic.net. <https://creativecommons.org/licenses/by/4.0/> Quotations and images are not included in this license; they are included either under a limitation or exception to copyright, or on the basis of a separate license. Please exercise caution. Blog (no ads, tracking, or data-collection): Newsletter (no ads, tracking, or data-collection): <https://pluralistic.net/plura-list> Mastodon (no ads, tracking, or data-collection): <https://mamot.fr/@pluralistic> Medium (no ads, paywalled): <https://doctorow.medium.com/> (Latest Medium column: "How To Think About Scraping: In privacy and labor fights, copyright is a clumsy tool at best <https://doctorow.medium.com/how-to-think-about-scraping-2db6f69a7e3d>) Twitter (mass-scale, unrestricted, third-party surveillance and advertising): <https://twitter.com/doctorow> Tumblr (mass-scale, unrestricted, third-party surveillance and advertising): <https://mostlysignssomeportents.tumblr.com/tagged/pluralistic> "*When life gives you SARS, you make sarsaparilla*" -Joey "Accordion Guy" DeVilla, Yanis Varoufakis's "Technofeudalism: What Killed Capitalism?", Cory Doctorow, 01hbe09b0hq75vbzqanh2b4wv1.