Technofeudalism: What Killed Capitalism

by Yanis Varoufakis

at replenishing cloud capital’s own stock (e.g. to upload photos and videos on Instagram or TikTok, or submit film, restaurant and book reviews) Helping us switch off the lights while recommending to us books, films and holidays, etc., so impressively in tune with our interests that we become predisposed to other goods sold on cloud fiefs or platforms (e.g. Amazon.com), which are running on exactly the same digital network that helps us switch off the lights while recommending to us books, films and holidays, etc. Utilising AI and Big Data to command workers’ labour (cloud proles) on the factory floor while driving the energy networks, the robots, the trucks, the automated production lines and the 3D printers that bypass conventional manufacturing

Cloud Capital’s Third Nature: A produced means of behavioural modification and individuated command

Cloud capital’s third nature straddles three types of algorithmic behaviour modification. One strand commands consumers to reproduce cloud capital (i.e. turns them into cloud serfs). A second strand commands waged labour to work harder (i.e. turns proletarians and members of the precariat into cloud proles). And a third strand replaces markets with cloud fiefs. In a sense, cloud capital’s third nature grants its owners (the cloudalists) a great brand-new power to extract surplus value produced in the traditional capitalist sector – as Figure 3 on p. 239 illustrates.

For the first time in history, capital has been (re)produced by unwaged labourers. Cloud capital’s platforms make it easy for work to move out of the labour market into an economy that is disguised with the paraphernalia of gaming, chance and lotteries when, in reality, it is all about mechanical, repetitive, Fordist work. Digital spaces that appear modern, snazzy, friendly and neutral are in fact well-designed projects of cutting much of paid labour out of the labour market, making the wage optional and even altogether replacing it with a sequence of wagers.[13]

The reason they cannot be thought of as markets is that the cloudalists’ algorithms succeed in isolating every buyer from every other buyer, and every seller from every other seller. As a result, the cloudalist’s algorithm concentrates in itself the power to match buyers and sellers – which is the exact opposite of what a market is meant to be: decentralised. Such power vested in the cloudalist’s algorithm grants its owner the capacity to charge sellers (i.e. conventional capitalists) large amounts of rent (cloud rent) for access to customers.

Cloud Fiefs are digital trading platforms on which buyers and sellers are matched by the algorithms of cloud capital. While they look like markets, their perfect centralisation (achieved by the algorithm’s power to match and to determine the full information set of each buyer and each seller) renders them a form of cloud fief belonging to whoever owns the algorithm or cloud capital which (a) built the platform and (b) attracts cloud serfs to play the role of buyers (as well as contributors to its cloud capital) and vassal capitalists in the role of sellers. 9.2.2 Vassal Capitalists are capitalist producers who, in order to sell their commodities, must pay cloud rent for access to the cloudalists’ cloud fiefs. 9.2.3 Cloud Rent is the payment cloudalists extract from the vassal capitalists for access to cloud fiefs.

In summary, cloud capital’s greatest accomplishment was increasingly to induct into its AI-algorithmic-digital network not only the processes of modifying workers’ and consumers’ behaviour in the interests of cloudalists but, also, the market itself – turning whole segments of the capitalist class into its vassals.

Universal Exploitation – Whereas capitalists can only exploit their employees, cloudalists benefit from universal exploitation, i.e. cloud serfs work for free to increase the stock of the cloud capital which allows cloudalists to appropriate more and more of the surplus value that the capitalists extract

Cloud Capital – Cloud capital’s third nature (see 1.3.3) made possible the full automation of the technostructure’s service sectors (8.1 and 8.2) whose purpose was to modify, in the interest of capital, the behaviour of workers and consumers. The result was a new type of capital (cloud capital) which became a produced means of, on the one hand, commanding labour and, on the other, of extracting cloud rent from capitalists for access to consumers (9.1 and 9.2).

Profit and Markets Dethroned – Technofeudalism replaced capitalism’s twin pillars – Profit (2.4 and 3.3) and Markets (1.0 and 3.4) – with its own twin pillars – Cloud Rent (9.2.3) and Cloud Fiefs (9.2.1). 11.3 Technofeudal Class System – Under technofeudalism, the cloudalists (a segment of the capitalist class who managed to accumulate considerable cloud capital) became our new ruling class, confining the rest of the capitalists (lacking sufficient access to cloud capital) to vassal class status (9.2.2). Meanwhile, waged workers are turning into increasingly precarious cloud proles (9.1.1) and almost everyone acts as a cloud serf (9.1.2) helping cloud capital accumulate and construct the cloud fiefs (9.2.1) that are replacing markets.

cloud capital accumulates at another two levels most forcefully: on the back of cloud-serf labour (9.1.2) provided by almost all of us. And, with massive funding directly from the West’s main central banks – see Chapter 4.

Technofeudalism is synonymous with the universalisation of exploitation (see 10.1) and with the shrinking of the value base (in proportion to the rise of cloud rent’s share of all incomes – see Figure 3). This dynamic accentuates the system’s propensity to deeper and more frequent crises. As a result, the central banks that funded the initial accumulation of cloud capital (see Chapter 4) will be forced perpetually to print more and more monies to replace the role that profits and wages used to play under capitalism. But this only helps cloud capital accumulate further (since cloudalists will always have a greater capacity than every other class to appropriate the printed central bank money). In short, technofeudalism is condemned to exhibit a dynamic doom-loop more volatile and explosive than even that of capitalism.

courage that I was not wrong to believe that something more fundamental was in play, and that capitalism itself was in question, is McKenzie Wark’s 2019 exquisite Capital Is Dead: Is This Something Worse?