Technofeudalism: What Killed Capitalism

by Yanis Varoufakis

In 2021 Goldman Sachs, one of Wall Street’s least likeable banks, stunned the financial world by publishing a ‘Non-Profitable Technology Index’, which perfectly demonstrates capitalism’s emancipation from profits: between 2017 and the beginning of the pandemic, loss-making cloudalist companies saw their share value rise by 200 per cent. By the middle of the pandemic, their value had exploded to 500 per cent their 2017 level. During 2020, Amazon’s best year since its inception, when its pandemic-fuelled sales went through the roof, Bezos’s company booked sales worth €44 billion at its global headquarters in Ireland but paid exactly zero corporate tax because it posted not a cent of profits. Similarly with Tesla: even though its profit margins hovered just above zero, Tesla’s share price soared from around $90 at the beginning of 2020 to over $700 at year’s end. Using their appreciating shares as collateral, the cloudalists mopped up many of the billions sloshing around within the financial system. With them, they paid for server farms, fibre optic cables, artificial intelligence laboratories, gargantuan warehouses, software developers, top-notch engineers, promising start-ups and all the rest. In an environment where profit had become optional, the cloudalists seized upon the central bank money to build a new empire.