Yanis Varoufakis is a Greek economist and the leader of the DiEM25, the left-wing, pan-European political alliance that he co-founded in 2016 with the Croatian philosopher Srećko Horvat with the aim of “democratising Europe”. Varoufakis came to prominence as Greece’s finance minister during the 2015 eurozone crisis and has since authored several best-selling economics books, most famously Adults in the Room: My Battle with Europe’s Deep Establishment, which was turned into a movie by the Oscar-winning film director Costa-Gavras in 2019. Here, he speaks to Equal Times about his last title, Technofeudalism: What Killed Capitalism (Vintage, 2024), which chronicles the epochal shift wrought by Big Tech, and what can be done to counter it.

Your book argues that we live in a new “technofeudalist” economic system. But it didn’t require a social revolution like capitalism, or massive agricultural upheaval like feudalism. Why do you believe it is a new mode of production?

Technofeudalism is based on a new-fangled, mutated form of capital which is qualitatively and quantitatively different from all hitherto known varieties. Until 10 years ago, every form of capital was produced, whether a plough, a hammer, a steam engine, or an industrial robot. But over the last decade we’ve seen a new form of capital that lives in our phones, tablets and fibre optic cables, which I call “cloud capital”.

Amazon, Alibaba, Uber, Airbnb are not markets. They’re not even monopolies. They’re trading platforms. The algorithm – the cloud capital – that builds them doesn’t produce anything except a cloud fiefdom where we congregate as creators, consumers and users. We all work on those, whether as taxi drivers or content producers, and the owner of this digital landscape collects rents just like under feudalism. Now they’re not ground rents, they’re digital rents. I call them cloud rents.

In this process, the owners of cloud capital can modify your behaviour – or mind. It’s a produced means of behavioural modification that creates a totally new socio-economic mode of production, distribution, communication and exchange. It’s not capitalism, even though it’s based on capital. Capitalism has two pillars: markets and profit. Cloud capital is fast replacing markets with cloud fiefdoms and as a result, it is syphoning off capitalist profits that are still essential for the system in the form of cloud rent.

The socialist commonsense used to be that capitalism created its own gravedigger – in the form of workers who make profits. Is that still true with technofeudalism or will it ultimately just be robots making robots to make more robots?

Marxist analysis is the best way of understanding technofeudalism. Value is still produced by human beings, not by robots, algorithms or cloud capital. It springs out of human activity. It does not spring out of machines building machines. What’s changed is that now we have a lot of capital which is being produced by free labour.

Before, Henry Ford used machines to help produce his cars. He had to place an order with another capitalist who would employ wage labour to produce that equipment. Now, the vast majority of cloud capital is produced by free labourers that I call “cloud serfs.” Every time you upload a video to TikTok, you add to its capital stock. Of course, for the system to be able to reproduce itself it still needs wage labour, so if you take wage labour out, the whole system collapses. Robots building robots to build robots happens, but the system is even more unstable and crisis-prone than capitalism because its foundation – surplus value produced by wage labour – is shrinking.

If a company produces electric bicycles, 40 per cent of the price you pay for them over Amazon goes to [Jeff] Bezos [the founder and executive chairman of Amazon], not to the capitalists who produced it, so it’s skimmed off in a form of cloud rent. This money doesn’t go back into production, or the traditional capitalist sector so aggregate demand, which was always scarce under capitalism, is even more scarce now. This creates pressure on the central banks to print more money to replenish their loss of purchasing power, and that creates more inflationary pressures. So technofeudalism is a far worse and more crisis prone system than capitalism.

Your idea seems to suggest that a kind of algorithmic filter is now dominating even our perception of reality. What impact does that have on class consciousness?

It has a huge impact. When I say our free labour replenishes and reproduces the cloud capital of Bezos, Google and Microsoft, they say: “Yeah, but you love doing it.” We do it voluntarily. Well, that doesn’t change the fact that it’s free labour. There is also what my friend [the science fiction writer and digital rights activist] Cory Doctorow refers to as a process of “enshittification”. The more you engage with platforms where you voluntarily contribute your labour, the shittier the experience that you have, and the angrier you get with other users, not with the cloud capitalist who owns the thing, so it’s a solvent of class consciousness.

Would you say that the authoritarian populism we’ve been experiencing since 2008 is, in part, the political expression of this new mode of production?

2008 was our generation’s 1929. It has nothing to do with cloud capital because cloud capital didn’t exist, back then. It was the result of a collapse of the post-Breton Woods financialised capitalist system but, inadvertently, the response to it – bailing out the banks and essentially printing US$35 trillion dollars for the bankers – helped to speed up the accumulation of cloud capital because these were the only investments that took place between 2009 and 2022. That was because the money printing from quantitative easing coincided with universal austerity, so traditional capitalist firms didn’t invest. They took money from the central banks and bought back their own shares. It was only the owners of cloud capital that invested in machinery, causing an amazing rise in the quality and quantity of cloud capital, leading to ChatGPT and OpenAI.

Every time there’s such a massive buildup of capital there’s a parallel shift in society. Elon Musk for instance was a latecomer to the cloud capital game. He was a traditional capitalist. He made cars and rockets. He was not a cloudalist until he realised that Tesla’s and Starlink’s platforms were absolutely crying out for a connection with cloud capital and he didn’t have an interface, so he bought Twitter [now called X] for a song. This is my view that clashes with everybody else’s, but US$44 billion [the amount Musk paid to purchase Twitter back in 2022] is nothing. It’s peanuts for him and he’s creating, out of X, an everything app which connects Starlink to every Tesla car in the world. He’s even melded his wires within the federal government’s computing systems and his quasi, maybe fully-fledged, fascist ideology goes hand in hand with that.

When [Peter] Thiel [the billionaire venture capitalist and far-right libertarian] said recently that capitalism is incompatible with democracy, something in me applauded. He was completely right but it took cloud capital and Palantir [Technologies, the software company founded by Thiel that primarily provides data and surveillance support for military, security and intelligence agencies] and X for these people to say “You know what? Democracy – even very timid democracy – is a chore and a break on our power and therefore we opt for fascism.” But they wouldn’t have done it if they didn’t have a direct link with our brains, because unlike Henry Ford and Thomas Edison, who had to buy newspapers to find ways of influencing us, if you own cloud capital you essentially own the mind chains of billions of people.

Is the alternative utopian view – that a fully-automated luxury communism could liberate us from work – more likely than algorithmic population control, or even internment decided by algorithms?

I finished my book (Talking to My Daughter About the Economy) in 2017 by saying that the future of humanity is going to go either toward The Matrix or Star Trek. The Star Trek path is to luxury libertarian communism and The Matrix path is to technofeudalism in its worst variant. Which we move toward will depend on our capacity to revive democratic politics, and that’s up in the air.

How can cloud capital be cut down to a more human level? What sort of regulation would be effective?

I think the most obvious one is interoperability. For instance, I wanted to leave Twitter [X] because it’s become such a cesspit of poison and sludge, but I have 1.2 million followers. I went to Bluesky and I had 100 – now I have 30,000 – so I can’t abandon X. But imagine if regulators imposed interoperability on X, and said: “If you want to continue operating, then you have to allow the followers of anyone who leaves X for Bluesky, to continue receiving their Bluesky posts on X?” This is the equivalent of how telecoms companies were forced to allow people to keep their telephone numbers after leaving them for a competitor.

Interestingly, interoperability was legislated last year in China for [digital] providers, or apps. It will never happen in the West of course but if it did, it would be a major strike against the power and privileges of cloudalists.

Antitrust legislation has been effective, like when [the former US president] Teddy Roosevelt used it to break up Standard Oil [in 1911], a monopoly across the USA, into 50 different companies, one per state. But how do you do this with Google and YouTube? You can’t break them up because it makes no sense. In the end, the question is who owns them? The only way of ending technofeudalism decisively is by moving from the capitalist corporate law framework of, “You can own as many shares as you have dollars or euros” to a system where each worker gets one share in the company they work in, and you can’t own a company share unless you work there. You can legislate for self-managed and owned worker corporations in one go. If you add to this, a citizens’ jury to judge on the social performance of enterprises, you can still have markets, but without capitalism.

To achieve that, what should trade unions be doing? Do you still see them as key actors in this new world?

Absolutely! But they have to move beyond the project of securing fair wages. Wages can never be fair whatever their level under a technofeudalist system because you have this vast inequality of power between the owners of cloud capital and the workers. You see this now in Silicon Valley. You also have lots of workers who don’t receive a penny for the free labour they provide. What I’d like to see is radicalised trades unions that are demanding “One worker, one member, one share, one vote,” rather than fair wages.

Do you think the political left is naturally suited to this new world? So far, it’s been the far right that’s made all the running. How can we subvert technofeudalism?

Firstly, by raising awareness of the fact that the present system of creating value and distributing it is guaranteed to lead us to an early grave, and to a constant diminution of the prospects of the vast majority, in ways that are far worse than under capitalism.

Secondly, by making clear that technology can be improved massively by being socialised. If your municipality had its own app that replaced Airbnb or Deliveroo, as well as a bankers payments app, and good quality jobs were created at the municipal level for coders to create these apps, the advantages would be easily available.

Thirdly, to highlight how the gross bipolar concentration of cloud capital in the hands of very few people, particularly in Silicon Valley and the east coast of China, gives rise to a new Cold War which may very easily turn into a thermonuclear war. This is what’s behind the increasing attacks by the US on China. It’s not about Taiwan. Taiwan and the One China policy have always been with us. It’s not the buildup of the Chinese military. This is absurd. It’s about a challenge to the hegemony of the dollar by the merger of Chinese big tech with Chinese finance and the digital currency of the Central Bank of China. So world peace is the third advantage.

Do you still see extra-parliamentary action as key to bringing this change about?

There’s no substitute for extra-parliamentary movement-building. But strikes and climate action require a programme that will excite people to take action at the local level, so the two should be complimentary. Because you now have a massive precariat which is increasingly difficult to organise around the lines of traditional trades unions and you have all this free labour provided particularly by youngsters, on TikTok and Instagram. We need to find ways of bringing together the proletariat with the cloud serfs and the precariat. In practical terms, it’s not enough for unions to organise a strike in a factory. It needs to be combined with consumer boycotts and militant cloud-based campaigns at the same time.