Technofeudalism: What Killed Capitalism

by Yanis Varoufakis

The early internet was a capitalism-free zone. If anything, it seemed like an homage to Soviet Gosplan – the State Planning Committee whose job was to replace the market mechanism: a centrally designed, state-owned, non-commercial network. At the same time, it featured elements of early liberalism, even tributes to what I call ‘anarcho-syndicalism’: a network without hierarchy, it relied on horizontal decision-making and mutual gift exchange, not market exchanges. What is unimaginable today made perfect sense at the time. America was transitioning from its War Economy to the realities of the Cold War. Even the most ardent free-marketeers understood that planning for a nuclear confrontation with the Soviet Union was too important to be left to market forces. As the nuclear arms race gathered pace, the Pentagon chose centrally to finance the design and construction of a network of decentralised computers. Its single purpose? To work out how to make different silos housing nuclear weapons communicate with each other, and all of them with Washington, without a central hub that a Soviet nuclear bomb could take out in one go. That’s how history’s greatest ever antinomy came about: a US government-built and -owned, non-commercial computer network that lay outside capitalist markets and imperatives but whose purpose was the defence of the capitalist realm.