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Prisoners of the Market


Technofeudalism, by Yanis Varoufakis

I first learned about capitalism in high school.

Money is death, Umbria.

The free market, our teachers told us, is the foundation of American democracy.

On its basis, the free world had created an optimal basis for human flourishing. Imagine my shock when, later on, I discovered that none of it was true.

Maybe that’s a little harsh. But at the very least, it was less than the sum of its parts.

Even in childhood, one could not help but notice that if this was paradise, it had an awful lot of people begging for change.

Even so, everyone in a position of authority assured me that the system’s outcomes were the best possible. If some folks didn’t make the cut, Jesus doesn’t save them all.

The Cold War was still raging, and anticommunism had done its work.

The rightness of capitalism was so thoroughly ingrained in people that questioning it was not only disloyal but nuts.

Of course, readers who grew up in Europe will have a slightly different take. But even there, by the 1970s, qualms about capitalism left over from its failures in the 1930s had mostly dissipated.

Certainly, there were some on the left on both sides of the Atlantic who called for its demise during the 1960s. Responsible opinion would always respond, “To be replaced with what?”

As Yanis Varousfakis claims in his latest book, Technofeudalism, we’re all currently in the process of finding out.

Varoufakis is hardly the first to point out that the economy’s structure has changed.

The stereotype of freewheeling entrepreneurs using their ingenuity to brave the storms of creative destruction has been replaced by fortified castles surrounded by moats to forestall competition.

But Greece’s former finance minister does bring a lot to the table.

Technofeudalism is written in a conversational style, like his best-selling Talking to My Daughter: A Brief History of Capitalism.

In this case, the interlocutor is Varoufakis’ father, who spent time in a prison camp as a leftist during the Greek junta (1967-74) and who taught him as a boy how to understand the world using iron, fire and the writings of Hesiod.

Yanis Varoufakis writes in a clear, informal way. He tends to eschew jargon, the major exception being his use of the term feudalism.

This is no small matter. In the 1980s, feudalism was among the most highly contested historical concepts.

The debates were wide-ranging but centred on the economic and political differences between feudalism and capitalism and the transition between the two.

Recently, the debate reignited, but in the other direction. Now, the discussion tends to centre on “refeudalisation”, with academics such as Sighard Neckel and Alain Supiot claiming that the current variety of capitalism approximates feudalism, such as in the move to privatise various state institutions and services.

This, too, has been the subject of passionate debate, with critics often noting the lack of substantive similarities between feudalism and late capitalism (or whatever it is we have now).

At a broader level, the question is often raised as to whether the sort of conceptual transposition attempted here is actually useful.

Concepts are only valuable to the extent that they do work.

As the conceptual creep that has afflicted fascism over the last decade suggests, the fact that two phenomena share some characteristics does not justify making them versions of the same thing.

Further, making one thing a version of another because the second thing has a greater capacity to motivate tends to strip the power from the latter rather than create engagement with the former.

Varoufakis is clearly aware of these issues and stakes out a clear basis for the comparison. The salient difference between feudalism and capitalism is that in feudal societies, land and labour don’t have a price, which they do under capitalism.

Critics of capitalism are fond of noting that everything has a price under its reign. This may not be strictly true, but it’s close enough that the point stands.

In our era, in which neoliberalism seems dominant, how can Varoufakis argue that we are approaching the former condition?

The central issue for Technofeudalism is ownership. Under feudalism, the returns from land and labour came from ownership rather than making things. The feudal seigneur took a portion of what his serfs produced as a rent.

Capitalism, by contrast, was driven by plucky entrepreneurs creating and governing processes of production.

As Adam Smith, one of the bitterest critics of rent-seeking, once noted, “As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed and demand a rent even for its natural produce.”

From there, it’s a short step to noting the degree to which the owners of various instances of platform capitalism long ago gave up on producing things in favour of skimming rents off the labour of others.

Jeff Bezos, for example, isn’t rich because of the things he’s made. He’s rich because he devoured investor capital until he built an enterprise whose central premise was crowding out other buyers and sellers from the market.

Technofeudalism doesn’t discuss the details of various strategies of exploitative rent-seeking, as Cory Doctorow does in Chokepoint Capitalism.

The book stays above that particular fray, looking more at the constitutive role of computers, algorithms, and AI in creating systems that profit from our unpaid behavioural labour.

Yanis Varoufakis offers a more macro-level picture. One of his main points is that the system, now driven by unlimited quantities of virtual money, is no longer about profit. It’s about control.

Technofeudalism argues that modern human beings are caught in a technologically driven vicious circle. We train our AI-driven devices to train us.

We give up information about our appetites, interests, and identities, which the Olympic gods of the platforms use to create ever-larger flows of money and information.

Near the end of the book, Varoufakis suggests that the solution to cloud-based oligarchy is some sort of cloud-based activism.

Where the Soviets and their top-down model failed to take advantage of the possibilities generated by Soviet advances in cybernetics, Technofeudalism perceives the seeds of an emancipatory politics that would allow the formation of a right life out of the current wrong one.

Still, its solutions are thin, at least in terms of shovel-ready projects. If this is a flaw, it is not a catastrophic one.

Yanis Varoufakis has written a very useful book that clearly understands the problem it is trying to solve and communicates that effectively.

If it does not provide a map to liberation, the reader is at least left with a good idea of where one might search for the road.

Photograph courtesy of Joel Schalit. All rights reserved.