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The tech giants have overthrown capitalism. That’s the argument of former Greek finance minister Yanis Varoufakis, who became famous trying to defend debt-laden Greece from its German creditors. Varoufakis has never quite regained the notoriety of 2015. But he has remained a prominent left-wing voice. After a failed campaign for a seat in the European Parliament in 2019, he plans to run again this June. This time, his adversary isn’t Berlin or the banks. It’s the tech companies he accuses of warping the economy while turning people against one other.

Varoufakis is also a prolific author; his 17th book, written as a letter to his techno-curious father, chronicles the evolution of capitalism from the 1960s advertising boom, through Wall Street in the 1980s, to the 2008 financial crisis and the pandemic. In its most compelling stretches, Technofeudalism argues that Apple, Facebook, and Amazon have changed the economy so much that it now resembles Europe’s medieval feudal system. The tech giants are the lords, while everyone else is a peasant, working their land for not much in return.

To Varoufakis, every time you post on X, formerly Twitter, you’re essentially toiling Elon Musk’s estate like a medieval serf. Musk doesn't pay you. But your free labor pays him, in a sense, by increasing the value of his company. On X, the more active users there are, the more people can be shown advertising or sold subscriptions. On Google Maps, he argues, users improve the product—alerting the system to traffic jams on their route.

The feudal comparison isn’t novel. But Technofeudalism attempts to introduce the idea to a wider audience. Its US release, launched the month before regulators in the US and European Union simultaneously initiated antitrust actions against Apple, also had impeccable timing.

Over Zoom, I spoke to Varoufakis, from his home near Athens, about how the tech giants have changed the economy—and why we should car

You are one of several theorists, along with Cédric Durand, Jodi Dean, Mariana Mazzucato and others, who have speculated that the hegemony of Big Tech – using algorithms to build data empires that function as a seemingly limitless source of value – may be pushing beyond capitalism’s frontiers. In your 2023 book Technofeudalism you claim that, just as the early modern period saw land supplanted by productive capital as the dominant factor in production, the early twenty-first century has seen productive capital replaced by ‘cloud capital’, signalling a shift to a new accumulation regime. Why, in your view, is cloud capital qualitatively distinct from other forms of capital? What was its historical evolution?

First, allow me a short preface. Technofeudalism is not a post-Marxist analysis of a post-capitalist system. It is a fully Marxist analysis of the workings of contemporary capital, which tries to explain why it has undergone a fundamental mutation. Of course, over the previous centuries the character of fixed capital has evolved from fishing rods and simple tools to complex industrial machinery, but all these shared a basic feature: they were produced as means of production. Now, we have capital goods that were not created in order to produce, but in order to manipulate behaviour. This occurs through a dialectical process in which Big Tech incites billions of people to perform unpaid labour, often without their even knowing it, to replenish its cloud capital’s stock. That is an essentially different type of social relation.

How did it come about? As always, through steady, gradual, quantitative changes in technology, which at a certain point yielded a larger qualitative change. The preconditions were twofold. One was the privatization of the internet, the original ‘internet commons’. There came a moment when, in order to transact online, you had to get either your bank or a platform like Google or Facebook to verify who you are.

ATHENS  —  Elon Musk had good reasons to feel unfulfilled enough to buy Twitter for $44 billion. He had pioneered online payments, upended the car industry, revolutionised space travel and even experimented with ambitious brain-computer interfaces. His cutting-edge technological feats had made him the world’s richest entrepreneur. Alas, neither his achievements nor his wealth granted him entry into the new ruling class of those harnessing the powers of cloud-based capital. Twitter offers Musk a chance to make amends. 

Since capitalism’s dawn, power stemmed from owning capital goods; steam engines, Bessemer furnaces, industrial robots, and so on. Today, it is cloud-based capital, or cloud capital in short, that grants its owners hitherto unimaginable powers. 

Consider Amazon, with its network of software, hardware and warehouses, and its Alexa device sitting on our kitchen counter interfacing directly with us. It constitutes a cloud-based system capable of probing our emotions more deeply than any advertiser ever could. Its tailor-made experiences exploit our biases to produce responses. Then, it produces its own responses to our responses, to which we respond again, training the reinforcement-learning algorithms, which trigger another ripple of responses. 

Unlike old-fashioned terrestrial or analogue capital, which boils down to produced means of manufacturing things consumers want, cloud capital functions as a produced means of modifying our behaviour in line with its owners’ interests. The same algorithm running on the same labyrinth of server farms, optic fiber cables, and cell-phone towers performs multiple simultaneous miracles. 

Cloud capital’s first miracle is to get us to work for free to replenish and enhance its stock and productivity with every text, review, photo, or video that we create and upload using its interfaces. In this manner, cloud capital has turned hundreds of millions of us into

Yanis Varoufakis is an economist, politician, and the former Greek Minister of Finance. Varoufakis is the author of Another Now: Dispatches from an Alternative Presentand Technofeudalism: What Killed Capitalism.

In this week’s conversation, Yascha Mounk and Yanis Varoufakis discuss whether the extraction of “cloud rent” by Big Tech heralds a return to an earlier, pre-capitalist form of commerce; the technological and economic future of Europe (and of the European Union); and the geopolitics of a new cold war between China and the United States.

This transcript has been condensed and lightly edited for clarity.

Yascha Mounk: You have an interesting and distinguished political career and have also made a lot of forceful arguments in the public sphere. One of the interesting contributions you've made recently is to say that we live in a moment of “technofeudalism.”

To those of my listeners who think that's a catchy phrase but aren’t quite sure what it means, what does that entail? What makes this moment an instance of technofeudalism?

Yanis Varoufakis: Well, to get to that point we have to agree on where we were. Capitalism, as far as I'm concerned, is a socioeconomic mode of production that came out of feudalism and what characterises it is that we shifted from a society where power stemmed from owning land, land ownership granting you the extractive power to amass economic rent from your peasants and from vassals and so on to a situation where power stemmed from owning not the land, per se, but the machines—the electricity networks, railway networks and so forth. And then your wealth accumulation took the form of accumulating profits, which is not at all the same as rents.

The point I'm making, to cut a very long story short, is that in the last 10 years after the 2008 crisis, we have now shifted to another socioeconomic mode of production where it is the ownership of a particular mutation of capital which I call cloud capital (it's wha