Krakow Film Festival 2024

Global cloud capitalism

CAPITALISM / 'Techno-feudalism' is a global expansion with an omnivorous, boundless development of non-material phenomena. According to Yanis Varoufakis, social democracy can no longer make a difference here.

Techno Feudalism: What Killed Capitalism
Author: Yanis Varoufakis
Publisher: Bodley Head, UK

Yanis Varoufakis is a Greek economist, politician, and author. He has also served as Greece’s finance minister (January-June 2015) and was an active minister in the midst of the Greek debt crisis. In other words, the man should know what he is writing about. So, what is actually claimed in this book?

In short, According to Varoufakis, we are now living in a new era. Capitalism has died by its own hand, it became a fatal victim of the new reality, ‘techno-feudalism’, which is what you might call cloudialism in English, and which is a bit difficult to find an adequate word for in Norwegian. You could call it ‘cloud capitalism,’ but the point is that this phenomenon is not a form of capitalism. According to the author, the phenomenon is not one of capitalism’s many transformations. We still trade in money, but the new feudalism is unlike anything capitalism created. The phenomenon can also be called ‘cyber feudalism.’ Moreover, it is not based on free market competition but on global expansion and an omnivorous, boundless development of non-material phenomena. Who is buying, who is selling, and what is actually being sold is highly unclear.

In this reality, you are the commodity.

Think of what happens when you enter Amazon’s website. You don’t enter the marketplace because there are no other people there. At the same time, you are giving up parts of your life to the online company. Ultimately, the algorithms know what you think and feel better than you do. You give up a lot of information that can then be used to build a profile of you. The algorithms choose for you and ultimately know better than you what you want.

Historical materialism

This book opens with the author’s father introducing his son to his best friend, iron. First, the father removes the gold ring on his finger, holds it up, and says to his son: «See this gold ring here? Nothing special about it.» Gold, when heated and then cooled down again, remains exactly the same, like tin and bronze. Then the father holds up a piece of iron and says: «If you want to feel a truly magical substance, this is it – iron. It’s a magical material.» The father takes the piece of iron, heats it, and starts hitting it with a hammer, moulding it into a sword. Then he cools it down and heats it again. Then he takes out a hammer and invites his son to strike the tip of the sword: «But I don’t want to break it,» says the son. «Come on!» the father shouts. The son strikes with the hammer, but the hammer does not react as expected: It recoils from the iron. Each time the hammer strikes, the iron gets harder and harder. «In the hardness of this iron,» the father concludes, «you see the foundation of much of our civilisation.»

Later, his son, now a grown man, looks back on those cold winter days in 1966 and realises that he was actually being introduced to historical materialism.

Yanis Varoufakis

The algorithms choose

The author has a well-developed eye for the dual nature of all things, not least labour. With the legacy of Marx, it can be argued that what is extracted from labour is pure profit, and not everything else. The Eureka moment has no value. «The teacher’s living and direct tear yields no return,» the author writes. This value cannot be measured in production costs and money and, therefore, has no value measured in pure capital values.

Unlike the author’s father, who always looked forward to the death of capitalism so that socialism could be introduced, Yanis never believed that something better would and should come after capitalism. And he may have been right. Amazon has transcended capitalism. And it’s definitely not a better alternative, at least not for the people who work there. But what about the buyers? What are they really paying for the global availability of goods?

Buyers can’t talk to each other in the marketplace; they can’t exchange information, and they can’t discuss prices. It’s the algorithms that choose for them. The algorithms manufacture our desire. The purchase contract is not just physical. It is a kind of contract between people in the feudal system, guaranteeing a connection between the overlord and the vassal.

The author discusses with his father, who sees this new phenomenon, cloud feudalism, as one of the many transformative processes of capitalism. The author objects: «No, this is the proof that the old money reality is finally decoupled from the new world.»

The father objects that this is capitalism on steroids. And the son doesn’t disagree. Cloudialism, which Mark Zuckerberg, Jeff Bezos, Steve Jobs and others have helped create, definitely has certain things in common with the old capitalism, the author recognises. But there is one crucial difference: The truly rich get rich without having to organise any kind of physical market. They have not become free from the market’s pressure to produce cheaper goods and develop better production methods. In this reality, you are the commodity.

This has killed the liberal individual. They have made social democracy impossible and have created the madness of derivatives, the author argues.

Under techno-feudalism, alienation has become global: We no longer own our own minds. Instead, we represent a new feudal working class and live in a reality that has transformed into a cloud-contracted reality. Every worker has mutated into a cloud vassal. To regain ownership of our own minds, we must take ownership of cloud feudalism. Is it a kind of cloud collectivism or cloud communism? Where worker and consumer can meet in new ways?

Algorithms manufacture our desire.


I would argue that social democracy is far from dead. People still go to their regular jobs and take their salaries in the usual way. Not all jobs have become like Cloud Feudalism.

It’s probably more accurate to say that several different realities exist alongside each other. So, the author’s father is, in my opinion, just as right as the author himself. The author is perhaps a little too enamoured of his own explanatory models. Seeing the dual nature of all things is not just easy; you also have to be able to see reality from your father’s perspective. And that reality is that the worker is still being exploited in the old way.

Henning Næss
Henning Næss
Henning Næss is a literature critic, Modern Times Review

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