Technofeudalism: What Killed Capitalism is a good book, by for Greek minister Yanis Varoufakis though probably longer than it needed to be. It is already a short book however, so anything shorter than it likely would have been a pamphlet or long article. And that, likely would have mean fewer people read it, a real loss. Because the book, though it does have flaws, has a powerful if not entirely convincing argument to make.
The main flaw of the book is its central conceit— that it is written as a letter to his now deceased farther, a former communist who served time in the prison camps of the former fascist Greek government of the post-World War 2 era (his father sounds like a fascinating man, and I would love if the son would write the father’s biography). The letter is ostensibly an attempt to explain to the father why the internet did not replace capitalism with some form of humane socialism but rather with something worse. The framing device an unnecessary distraction that disappears from the book for huge stretches, only to reappear in confusing fashion. It is not needed and does nothing to help the argument.
The argument itself is simply enough: the power of technology platforms has grown so much that they essentially extract rents, whether in currency or labor, from every aspect of the economy. What you see as a market is actually the equivalent of a medieval fair, running only because the landlord (such as Amazon or Facebook or TenCent) is allowed to take his cut. Furthermore, zero interest rates have allowed these firms to grow to such a size that they are now essentially outside the control of governments or economies to reign in. Even though he sees two major blocks of rentiers, or technofeudalists, emerging to fight the next Cold War (one US based, one China based), he doesn’t see that as a form of check but rather a form of capture by these companies. New technologies, such as AI, still require these platforms to run upon and as such are still subject to the cost of their rents. Neither government nor competition can help.
I am not entirely sold on this vision. Indisputably, we live in a time when the largest firms rely on rents, not competition. But his choice of a medieval faire rather than what seems to be to be a much more accurate comparison — mob bosses — is telling. Medieval feudal relationships had an element of loyalty and mutual aid to them that the modern rentier relationships do not. We pay these rents because we need to, because all of the power resides with these companies, and they make no bones about what happens when we don’t. By focusing on feudalism rather than gangsterism, he paints a picture of an accepted form of government rather than an outsider form of excess and abuse.
But power can and does come from many sources. What happens to their financial advantage now that zero interest rates are a thing of the past? The revived anti-trust movement has set its eyes on the largest of these rentiers and while the outcome is still uncertain, the intellectual tide has certainly turned in such a way that blind acquiescence to monopolies, and therefor the rentier economy, is no longer taken for granted. The EU is directly attacking the mechanisms by which many of these companies extract their rents. These platforms are not the settled power structure, at least not now, at least not yet.
I am no Pollyanna, and these coming years are likely to be difficult. But Marxists have always had the problem of mistaking the economic for the inevitable. It is not. And while this book highlights a way in which people are being abused and alienated, and a way in which this era of economic power is different than the last, there are and have been people who have noticed it before now. And there are and have been people who have been working to dismantle it before now. Technfuedalism is a good introduction to one aspect of the economic changes we now face, but the author’s insistence on totalizing everything under his new umbrella is both misleading and not especially helpful as a guide to handling our new rentier overloads.
Read the book, just don’t take it as the whole truth. As the author’s father would surely point out, we have been here before, since the time of Hesiod. It is incumbent upon us to find our way out again.