Varoufakis's technofeudalism and the claim that it is still capitalism
Yanis Varoufakis says capitalism is dead and that 'cloud capital' now extracts rent from digital fiefs rather than profit from markets. We set out the technofeudalism thesis as an argument to be tested, then weigh the strongest objections from Morozov, Snow and Gane, and Varoufakis's 2026 reply to his Marxist critics.
Capitalism has been pronounced dead many times, usually by people who hoped to bury it. Yanis Varoufakis would like to bury it too, but his argument is odder than the usual obituary. In Technofeudalism: What Killed Capitalism, published by The Bodley Head in Britain and by Melville House in the United States in 2023, the Greek economist and former finance minister claims that the system did not fall to revolution, nor collapse under the weight of its own contradictions. It was supplanted, quietly and from within, by something its own machinery produced: a mode of extraction he calls technofeudalism, in which the largest digital platforms no longer merely compete in markets but own them outright.
The book argued loudly and sold well, and it found admirers across an improbable range of readers. More usefully, it found serious opponents. By the summer of 2026 the dispute had sharpened into a real exchange. In Jacobin on 4 August, under the title 'The Marxist Case for the Technofeudal Hypothesis', Varoufakis replied at length to the Marxists who had accused him of deserting Marx. The quarrel is worth taking seriously, and worth taking apart.
The question underneath it is not whether the big technology firms are powerful; on that everyone agrees. It is whether the vocabulary we inherited from the nineteenth century can still name what those firms do. Treat the thesis, then, as a hypothesis to be tested rather than a banner to be waved. What follows sets out the argument at its strongest, puts the sharpest objections to it, and asks what survives.
It helps to know who is speaking, because the thesis comes out of a particular life rather than down from a lectern. Varoufakis was born in Palaio Faliro, Athens, on 24 March 1961. He trained in mathematical economics and game theory in Britain, and taught at Essex, Cambridge, Sydney and Athens. In 2012 he took an unusual post for an academic economist: economist-in-residence at the games company Valve, where he watched the vast virtual economies of online players from the inside. He has said the experience marked him. What he saw looked like a market and behaved like one, yet a single firm wrote its rules, set its prices and decided what players could see and reach.
Then came the more public chapter. From 27 January to 6 July 2015, in the months when Greece stood at the edge of insolvency, Varoufakis served as finance minister in the Syriza government, negotiating with the country's European creditors. He resigned the day after the bailout referendum and recounted the episode in his memoir Adults in the Room. In 2016 he helped found the pan-European movement DiEM25. The technofeudalism thesis draws on both halves of this biography: the digital economy he observed at Valve, and the power beyond any market that he met across the table from the so-called troika.
Alasdair MacIntyre died in May 2025 insisting that modern moral argument is interminable because the words outlived the world that made sense of them. His diagnosis in After Virtue, the disquieting suggestion, emotivism, Nietzsche or Aristotle, the wait for another Benedict, reads differently in a year of shouting. Here is what holds and what does not.
Charles Taylor, Alasdair MacIntyre, Friedrich Nietzsche
Classical capitalism, as Marx studied it in its purest form, is an anarchic system of competing firms. They make things, sell them in a market, take a profit and plough it back in. Varoufakis's claim is that the digital economy has broken this circuit. Amazon does not simply sell goods; Google does not simply answer queries; Apple does not simply make handsets; Meta does not simply run social networks. What these firms share is ownership of the digital spaces in which the rest of us now conduct our economic and social lives.
He gives this new power a name. In his 2026 essay he defines it precisely: cloud capital, he writes, is 'a network of remarkable machines that produce no commodities but generate enormous rent-extracting powers by interfacing directly with us, outside anything that can usefully be called a market'. The decisive shift is that the platform is no longer one seller among many but the proprietor of the marketplace itself. Open Amazon and you enter not a market but what Varoufakis calls a cloud fief: an algorithm decides which products you see, which sellers rise, what the price will be, and the sellers hand over a slice of their takings as cloud rent. Apple collects its thirty per cent on every transaction in the App Store; Varoufakis treats that cut as the model of the whole arrangement.
The feudal analogy turns on this dependence. A medieval peasant needed access to the lord's land in order to produce at all, and surrendered part of the harvest for the privilege. Today, he argues, the seller depends on Amazon, the developer on Apple or Google, the creator on the platform that carries their work. From this he sketches a new class map. The billions who generate data free of charge through their posts, searches and movements are cloud serfs; the warehouse and delivery workers driven by algorithmic management are cloud proletarians; and the traditional firms that must now trade through the platforms and pay for the privilege become vassal capitalists, renting their access from the cloudalists above them.
The economic heart of the thesis is the old distinction between profit and rent. Profit is won by competing in a market and is eroded by competition; rent flows from owning a scarce asset, land or a monopoly, and competition does not touch it. Classical political economy, from Smith to Ricardo, told the story of capitalism as the victory of productive profit over a parasitic rentier aristocracy. Varoufakis says the arrow has reversed. Amazon's strength lies less in what it sells than in the share it draws from the millions of sellers trading on its marketplace; Apple's lies less in the iPhone than in the toll on every App Store sale. Firms that once operated inside the market have become the market's owners.
He pushes the point to a macroeconomic claim. The cheap money that central banks created after the crash of 2008, he argues, did not flow into productive investment but into cloud capital, so that rent's share of the economy has swelled while profit's has thinned. This is the claim his Marxist readers find hardest to swallow, and the reason is instructive. For Marx, rent is not the opposite of capitalism but a category within it: the third volume of Capital devotes hundreds of pages to ground rent as a form that surplus value takes. If rent has always lived inside the system, the critics ask, why should its growth mark the system's death rather than its continuation? The quarrel is partly about Marx's own text, and readers who want the groundwork will find it in our account of Marx on alienation and commodity fetishism.
The objections arrive from several directions, and the first is that nothing has died at all. Evgeny Morozov made the case early, in a long essay for New Left Review in 2022 and again in a 2023 interview for Jacobin whose title gives the game away: 'No, It's Not Techno-Feudalism. It's Still Capitalism'. Coercion and extraction, he argues, are not departures from capitalism but part of how it has always worked. 'Forms of political dispossession and expropriation, as well as coercive acts like rent terrorism,' he says, 'are central features of capitalism rather than aberrations or departures from it.' To see platform rent as post-capitalist, on this view, is to mistake a narrow picture of capitalism for the real thing; the remedy is to 'drop the factory bias' and recognise extraction as capitalism's ordinary face.
Henry Snow, writing in Jacobin in October 2023, pressed a second objection. His title too is blunt: 'We're Still Living Under Capitalism, Not Techno-Feudalism'. The enemy, he argues, is capitalism in a new dress, and to call it something else is to misread a mutation as a new epoch. His sharper worry is about the figure of the cloud serf. To describe users as serfs, Snow suggests, risks making the wage labour that still runs beneath the platforms harder to see; the warehouse worker and the delivery rider are exploited as workers, not as tenants.
The most sustained critique comes from Nicholas Gane, a sociologist at Warwick, in an article for the Journal of Classical Sociology whose title answers Varoufakis in kind: 'Capitalism is capitalism, not technofeudalism'. Gane grants that the power of Amazon and its peers is real and historically novel. What he denies is that this makes profit and the market marginal. Amazon, he notes, remains a listed company whose shares one can buy and sell, operating alongside rivals and reporting to shareholders; its own annual report still names the creation of shareholder value as the measure of its success. Firms that accumulate capital, invest it, chase profit and compete are doing what capitalist firms do. Gane also finds a political contradiction in the thesis. Varoufakis proposes consumer-side resistance, boycotts and payment strikes, to discipline the cloudalists; yet such tactics only bite because markets and profit still matter, which is precisely what the thesis says has ceased to be true.
A quieter objection concerns the metaphor itself. Medieval historians have spent decades arguing that 'feudalism' is a poor category even for the Middle Ages. Susan Reynolds's Fiefs and Vassals, published in 1994, remains the standard statement of the doubt: the neat pyramid of lords, vassals and fiefs is largely a construction of later lawyers and historians rather than a description of how medieval society actually held together. If the original is a caricature, borrowing it to describe Google and Amazon imports the caricature wholesale.
There is also a question of priority that bears on the argument. The economist Cedric Durand had already published Techno-feodalisme with La Decouverte in 2020, three years before Varoufakis's book, and used the same word. But Durand meant something more cautious by it: a stage of rentier capitalism, the digital frontier of a system still recognisably capitalist, not its successor. The disagreement between the two men who share the term is itself a clue. If the most careful user of 'technofeudalism' treats it as an adjective for late capitalism rather than a name for what comes after, the burden on Varoufakis's stronger claim is heavy.
His August 2026 essay is aimed squarely at this third, Marxist line of attack, and it is more disciplined than his critics expected. Marx's method, he argues, was to set aside moral complaint and study capital by its own laws of motion. Apply that method honestly to cloud capital, he says, and you find a different law of motion. Traditional capital must buy labour and sell commodities to valorise itself; cloud capital reproduces through the unpaid labour of users and gathers rent without selling a commodity at all. The machines, in his phrase, 'produce no commodities'.
He also refuses the charge that he is romanticising the past. 'The technofeudal hypothesis never implied that history had gone into reverse,' he writes; history, on his account, 'is hurtling forward towards an entirely new socio-economic mode'. Technofeudalism belongs not before capitalism but after it, and it is capital's own offspring. Asked what killed capitalism, his answer is deliberately provocative: capital itself did. Whether or not one accepts the conclusion, the move changes the shape of the debate. The live question is no longer only 'is Varoufakis right?' but whether the paired concepts of rent and profit can still do their work once the platform owns the market in which both are supposed to appear.
Here a rival Marxist reading is worth setting beside his. In our profile of David Harvey's account of how capital produces space we noted his idea of accumulation by dispossession: for Harvey, platform rent is not a new stage beyond capitalism but the latest form of something capital has always done, enclosing a commons and charging for re-entry. Varoufakis and Harvey agree that enclosure is the mechanism; they disagree, pointedly, about whether it adds up to a new mode of production or an old one wearing new clothes.
Where the thesis is most suggestive is in joining economics to a question about knowledge. Power in feudal Europe meant controlling access to land; under industrial capitalism it meant owning the means of production. In the digital economy, Varoufakis suggests, it increasingly means owning the machinery that decides what is visible. Which result Google returns, which video is recommended, which post reaches millions and which vanishes: these are not only commercial matters but questions about who shapes the world we take to be real. His emphasis on cloud capital's power to modify behaviour overlaps with Shoshana Zuboff's account of surveillance capitalism, with one difference that matters. Zuboff reads that power as a deformation of capitalism; Varoufakis reads it as the sign that we have passed beyond it. The same facts, a different diagnosis.
Artificial intelligence raises the stakes of the argument rather than settling it. Training the largest models demands data, computing power and infrastructure concentrated in a handful of firms, and those firms already own the clouds in which the models run. In Varoufakis's terms the technology deepens cloud capital's capacity to reproduce itself: a model trained on text its users wrote for nothing is then sold back to them as the interface through which they think. Yet the strongest recent work points away from feudalism and towards the state. In Jacobin in November 2025, Durand, Morozov and Susan Watkins argued in 'How Big Tech Became Part of the State' that the real mutation is not a drift into lordship but the fusion of the platforms with government power, security and procurement included. The labour-process scholars who study algorithmic management on the ground tell a parallel story in which the worker, not the serf, remains the central figure. Varoufakis and these critics are often describing the same elephant and disagreeing about which animal it is.
His own remedy follows from the diagnosis. If cloud capital is the new commanding height, he argues, it should be socialised: the platforms turned into user-owned cooperatives and data recognised as a public good, a programme his movement has tried to spell out. Critics call this utopian. Varoufakis answers that the alternative, a settlement in which the cloudalists and the state merge into a single apparatus, is the less attractive utopia of the two.
So has capitalism died? The honest answer is that the label may be the least interesting thing about the book. Gane and Durand are probably right that this is still capitalism, mutated and monopolistic; Varoufakis may still be right that the mutation is deep enough to change the terrain on which every older argument was fought. Both camps agree on the fact that matters: the market is no longer a neutral meeting place but a privately governed space, and capital now accumulates less in factories than in the infrastructure of digital life. That is why the thesis keeps drawing philosophers back to older questions, among them the one we raised in asking who gets to author the public sphere. Kant defined enlightenment as the courage to use one's own understanding without the guidance of another. If the guide in the cloud fief is an algorithm one neither sees nor chooses, that old question has been reopened, and it is no longer only an economic one.
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