Why Varoufakis is right about what is broken, and wrong about how it can be fixed
Yanis Varoufakis is one of the most incisive critics of contemporary political economy alive today. Technofeudalism proves this beyond doubt.
It is also a frustrating book — not because its argument is weak, but because it stops precisely where the real danger begins.
Varoufakis is brilliant at naming structures. He is far less convincing when he tries to imagine how those structures might be dismantled.
The result is a book that feels intellectually devastating in its critique, yet oddly evasive when confronted with the consequences of its own analysis.
Capitalism Is Not “Evolving” — It Has Been Replaced
Varoufakis’ central claim is not rhetorical provocation; it is an empirical assertion:
Capitalism no longer governs our economic reality.
We live under technofeudalism.
This is not “late capitalism,” “platform capitalism,” or “digital capitalism.”
Those labels imply continuity.
Varoufakis argues for rupture.
Classical capitalism depended on:
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competitive markets
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wage labor
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profit derived from production
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the disciplining force of exit and entry
Big Tech violates every one of these assumptions.
Google, Apple, Meta, Amazon, Microsoft — they do not primarily produce value in the capitalist sense.
They control access.
Search, app distribution, cloud infrastructure, digital identity, advertising markets — these are no longer competitive spaces. They are gated territories.
Once inside, you pay rent.
Not metaphorical rent.
Actual, structural rent extracted through unavoidable chokepoints.
This is not capitalism malfunctioning.
It is capitalism superseded.
Profit Is Secondary; Rent Is Sovereign
A useful way to read Technofeudalism is to forget economics textbooks and think politically.
Feudal lords did not innovate.
They did not compete.
They did not need efficiency.
They owned land.
Today’s cloud lords own:
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digital infrastructure
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behavioral data
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algorithmic mediation
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AI training pipelines
And like medieval peasants, users and businesses must pass through their domains simply to exist.
The market no longer disciplines power.
Power disciplines the market.
This insight alone justifies the book.
From Marx to Metadata: Exploitation Rebranded
Varoufakis is unapologetically Marxian — but not nostalgically so.
He understands that factory labor is no longer the primary site where power extracts value. What replaces it is not a new “factory,” but a new extraction interface: the platform.
In Varoufakis’ framing, users are not “workers” in the old wage-labor sense.
They are cloud serfs, performing unpaid, free voluntary labour inside cloud fiefs — searching, scrolling, posting, rating, uploading, navigating. Much of what we experience as “normal online life” is continuously captured as data and fed into the machinery of cloud capital.
This distinction matters, because “free voluntary labour” is not a metaphor.
It is the mechanism by which platforms reproduce and strengthen their dominance — and by which cloud rent (rather than profit in the classical capitalist sense) becomes the primary form of extraction.
So no: users are not secretly factory workers.
They are something arguably worse for politics — contributors to a system of exploitation that feels voluntary, frictionless, and even pleasurable.
Human experience becomes an input:
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attention
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clicks and browsing patterns
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location traces
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reactions, ratings, and reviews
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social graphs and behavioral signals
And the value harvested from that input accrues overwhelmingly to the owners of cloud capital.
The Core Loop of Technofeudal Extraction
Stripped of theory, the system works like this:
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Users generate data simply by living digitally
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That data trains increasingly powerful AI systems
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AI strengthens platform dominance and lock-in
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Rent extraction intensifies
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Exit becomes impossible
Varoufakis is absolutely right:
this is not a market failure — it is the market doing exactly what unchecked power allows.
But here is where the book pulls its punch.
The Step Varoufakis Avoids
There is a missing stage in Varoufakis’ loop — one that is now impossible to ignore.
AI trained on cloud serfs’ unpaid (free voluntary) labour does not merely exploit users.
It eventually replaces them.
The same data that:
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optimizes advertising
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predicts behavior
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automates decision-making
also automates labor.
White-collar work, creative work, analytical work — none are immune.
The result is not just exploitation, but economic self-cannibalization:
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users provide data
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data builds AI
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AI destroys user labor value
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demand collapses
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society destabilizes
This is no longer Marx’s capitalism.
It is not even feudalism.
It is something closer to algorithmic autophagy — a system consuming its own human substrate.
Varoufakis gestures toward this danger but never fully confronts it.
The Politics of Wishful Thinking
When Technofeudalism turns to solutions, its confidence evaporates.
We are offered:
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democratized firms
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data commons
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citizen-controlled platforms
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participatory digital governance
These ideas are morally appealing and politically convenient.
They are also profoundly unserious as institutional proposals.
They assume:
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informed publics
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rational collective decision-making
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slow deliberation in fast-moving systems
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voluntary surrender of power by dominant actors
None of these assumptions hold.
Worse, they reproduce a familiar failure mode of the intellectual left:
confusing ethical desirability with structural feasibility.
Power does not dissolve because it is exposed.
It dissolves only when counter-power exists.
Varoufakis diagnoses domination but prescribes persuasion.
That is not politics.
That is pedagogy.
Why the Book Still Matters — and Why It Is Not Enough
Despite all this, Technofeudalism is essential reading.
Not because it tells us how to win,
but because it tells us what game we are already losing.
Varoufakis provides:
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a precise vocabulary
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a structural lens
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a clear break with obsolete capitalist narratives
What he does not provide is a credible path forward in a world where:
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AI replaces labor faster than politics can react
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demand erodes
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legitimacy collapses
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and platforms become de facto sovereigns
That task remains unresolved.
Final Judgment
Technofeudalism is not a roadmap to liberation.
It is a warning siren.
It tells us that:
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capitalism is over
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democracy is structurally outmatched
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and human agency is being quietly hollowed out
If the future still contains something worth calling freedom,
it will not come from the solutions Varoufakis proposes —
but from confronting the consequences he only partially acknowledges.
The book explains why we are trapped.
It does not yet explain how we escape.
And that, unfortunately, may be the most honest ending possible.