A Review of Technofeudalism: What Killed Capitalism

Book Review by Zaine Ahmed (Grade 10)

Surprisingly enough, I spent my hard earned winter break reading a nonfiction book for the first time in many years, frying my brain during a time when I was supposed to be resting. However, I am thankful that I finished it because it helped me understand how much is going on within this world that I was blind to before. Technofeudalism: What Killed Capitalism by Yanis Varoufakis explores how the world is shifting from one fundamental driving force to another, almost like a cycle. It opened my eyes to the previously weird, but equally worrying, goings on of the world’s powerful elite.

Technofeudalism is exactly that: a further mode of feudalism. Varoufakis suggests that instead of capital or the control of tools used to make goods (essentially selling shovels in a gold rush) control of technology has become the leading force driving the global economy. He suggests that modern conditions mimic the Great Change from original feudalism into capitalism, accelerated by the global economic damage of the 2008 recession and the pandemic.

Varoufakis posits that profit no longer keeps the windmills of the world’s leading companies turning; instead, central bank subsidies and grants post 2008 as well as shareholder dollars spin those wheels. This fundamentally alters both global markets and approaches to consumers. Generally speaking, consumers are redundant in these situations; we have no power to control the companies or the environment we live in, thereby undermining the only real benefits capitalism offered.

Varoufakis furthers this by commenting on the increase of both data brokers and passive support for technological platforms post pandemic. He likens modern people to cloud serfs: workers contributing to the earnings of an overlord in return for simply existing. Because of social media and algorithms, these systems are able to train and improve themselves based on our use. Social media users entice us to use these algorithms, all linking back to an overarching trend of hands off rent rather than traditional profit.

This is all well and good I hear you asking but why should I care? Understandably, you’re skeptical. There is enough going on in the world and in your own life that it may feel futile to worry about who holds the chains, as you remain bound either way. However, this rise in power of the technological class will have extreme consequences.

The first and foremost of these is the rise of a second Cold War. China can capitalize on their own territories, using their own people and those aligned with them to stave off the imperialism of the US dollar. Before this rise, and before the Russia Ukraine war, Chinese factories had no problems creating goods for America to buy; it drove both economies, and the suits in charge benefited most at the teeny tiny expense of the working class.

However, cloud markets are inherently more efficient than physical exchanges. This was furthered by the creation of the Chinese e-currency. On the internet, a Chinese seller and a buyer only need to interact to finish an exchange using electronic currency. Conversely, when selling to the USA, a Chinese seller needs the corresponding materials, the American buyer needs the right amount of USD, and all the banks in between must exchange the relevant currencies but not before each middleman takes his fee.

Due to increased Chinese technological infrastructure, there only needs to be a Chinese bank account and a corresponding amount of e currency, regulated by the Chinese government. This leads to an ultimatum where every country and person with internet access must choose a fief to occupy: the Chinese fief or the Western fief.

Secondly, product centric economies, such as the EU or Japan, will be decimated. The European Union was slow to catch on to this game and is going to suffer for it. With an economy reliant on German manufacturing and other physical goods, there is no way to continuously and efficiently improve products in the same way technofeudalists can, leading to Europe being left in the dust.

Thirdly, algorithms will eventually be so fine tuned that every post on social media will be optimized for maximum engagement. This seems reasonable until you realize that anger sells better than happiness. Technofeudalists will polarize us further, putting us in extreme echo chambers that lead to maximum engagement, furthering tensions and increasing extremism often on the right wing.

All of this points to a worrying future: one even more polarized and divided than today, with the tensions of the Cold War but none of the innovation. These advances in technology pose a threat, especially given the ambitions of tech giants. I suspect that the rise in government mandated spyware not just in the EU, but in the US and other countries is a direct consequence of technofeudalism, where nations need data to compete on a level playing field with China, all at the expense of the citizens.

Governments will be effectively useless in regulation, as there is no way for them to regulate access to one platform over another. This means two things: first, there is no way to limit monopolies or break up power, increasing the wealth of a select few while harming the 99%. Second, and more worryingly, this will lead to hyper competition between the top cloudalists to influence the government in their favor.

There is no way to attract consumers with price or quality, as most technological platforms are effectively free. Therefore, the only way they can grab our attention is not by appealing to us as consumers, but by sweet talking the government. We have already seen this, as billionaires like Musk, Bezos, and Gates have gathered to flatter various administrations.

Finally, unions will be effectively useless. Workers and consumers have zero power in this future; workers no longer keep the country running, as they perform busywork that makes up a minority of the economy, leading to lower power, higher union busting, and a steaming pile of nothing for the proletariat.

All of this points to a bleak future, but it is not set in stone. Along with the book on technofeudalism, I also read Brave New World over the break and saw a surprising number of parallels between that fictional world and our own but I digress.

The world isn’t all bleak; the conditions needed to shift from one system to another are extremely variable, and power might slip away from the tech giants sooner rather than later. Things like the internet, even if contributing to this new system, might prove to be its undoing.

Finally, as political administrations shift, there may be real consequences for the increasingly bold and vindictive upper classes. It is possible for this world to improve; different doesn’t always mean worse.