Yanis Varoufakis first captured global attention in 2015 during the peak of the Greek financial crisis. He was all over the news as the motorcycle-riding, leather jacket-wearing, smooth-talking, confident economics professor who dared to stand up to the troika (EC, IMF and ECB) with his intellect and game theory wizardry. He was the ultimate anti-establishment hero in a David and Goliath story: the mighty Europeans (mostly German banks) loaded the Greeks with debts with attractive interest rates that they knew were not coming back and the Greeks inevitably defaulted on them.

First, a quick background on the crisis:

Depending on their political leanings, the Greeks blamed:

• Usurious interest rates of the German banks
• Reckless spending of Greek politicians of the other side or their civil servants
• Or — inevitably — the Ottoman legacy of corruption and tax dodging

The Troika, on the other hand, blamed:

• Sun-soaked Greeks playing backgammon when they should be working
• Greeks building useless 4-lane autobahns
• Politicians who avoided uncomfortable reforms

During the negotiations that followed Varoufakis was in the centre of it all. To me however, he was the husband of Danae Stratou—the woman who probably inspired Pulp’s iconic Britpop hit Common People, arguably the best song that came out of the UK in the 90s.

According to my cultural leanings and the place I stand on the political spectrum, I had mixed feelings about Varoufakis, and followed him closely with caution.

During the holidays on December 2024, following my post-50 birthday decision to read people I probably disagree with, I read his latest book about how capitalism was killed by a new system he called technofeudalism. I found it clever with a certain Ottoman-level scheming flair.

How Technofeudalism Hinders Capitalism

Varoufakis argues that traditional capitalism (which given the circumstances he seems to appreciate) was built on markets and profit-driven enterprises, however it has been replaced by a system where “cloud capital”—a combination of server farms, AI algorithms, and platforms—rules. Unlike traditional capital, which creates goods and services, cloud capital exists to modify human behavior to collect rent and is driven by low marginal cost and huge network effects, snowballing to create behemoths like Amazon, Apple and Meta using Alexa, Siri, and Instagram’s algorithmic rabbit holes.

These tools don’t just predict what you’ll want; they are “cloud fiefs” that shape your desires, turning us, the users, into serfs who generate value for their overlords. Which not only strips us of true choice but also constantly generates data that fuels the system without compensation to the “serfs”.

Technofeudalism dismantles capitalism’s core principles —competitive markets, innovation, and the fair exchange of value. Platforms like Amazon and Google create monopolistic ecosystems where competition is not just stifled but is rendered obsolete. These “walled gardens” control all aspects of interactions, from how products are marketed to how they’re sold, replacing the dynamic, competitive markets that capitalism depends on.

Innovation, another pillar of capitalism, is similarly eroded. Instead of fostering competition, technofeudal platforms squash it, acquiring or sidelining smaller players and focusing solely on maintaining control.

The result is a system that prioritises surveillance, rent-seeking, and consolidation of power over growth, progress, or meaningful production.

Ultimately, technofeudalism doesn’t just evolve capitalism—it actively destroys it, leaving behind a system of inequality and exploitation.

I’m Not an Economist…

I’ve never formally studied the subject, and my grasp of economic theory is far from comprehensive. Reading Varoufakis, I found myself using Google, Perplexity and ChatGPT and texting human friends for explanations. As I read, I underlined a lot, scribbled notes on the sides, and found more holes in his arguments. In the end, I spent as much time reading the book as I did researching and scrutinising his claims. Which is a sign of a good book, in my book.

I found out that although some of his arguments were solid, interesting and illuminating, some did not quite add up or felt overly simplified. It was almost as if they were intended for a specific audience who, trusting Varoufakis, will take his word and feel vindicated about their distaste for these companies, organisations, politicians, the world elite and the western neoliberal order. Obviously I was not the intended audience.

His sweeping analogy between technofeudalism and medieval feudalism felt dramatic and useful, but not entirely accurate. Unlike medieval serfs, we do have choices—even if they’re limited or inconvenient. And while Varoufakis claims technofeudalism marks the end of capitalism, it feels more like a mutation of the same system rather than a completely new beast.

He mentions that a good portion of the stockmarket is owned by three companies, BlackRock, Vanguard and State Street. This is true, but he builds an argument about them without telling the reader what an ETF is. I own shares through BlackRock and Vanguard myself, via ETFs¹. If I wanted to, I could sell tomorrow and reduce their influence. Sure, they hold the voting power on my behalf, but does that really mean they own my shares? It feels like Varoufakis is massaging facts to fit his thesis — and that, to me, feels a little intellectually slippery.

Sometimes to support his arguments, he provides points that do not make full sense. German capitalists are not only suffering because they have not invested in cloud capital, they are also suffering because the Chinese produce the same products cheaper and with better quality (with huge economies of scale and government subsidies). It is just like how the Germans and the Japanese did, and took over from the Americans after WW2. Chinese may have companies using cloud capital, but this is not why they will take over the world.

Some of his predictions (probably made in 2023) are a bit optimistic. He thinks bitcoin is a fad like NFTs. He claims since the money printing has stopped, the cloud capital companies’ shares have tanked. He claims China’s belt and road initiative is for expanding China’s cloud fiefdom. And of course, he expects the US Dollar’s dominance to end, to be replaced by the Chinese Yuan².

We’ve all made such arguments over a table of mezze with the aid of tzipouro, but I write these blogposts that get read by a few people every year, even my mum does not read them, I do not have a million followers (yet).

But What Can We Do?

To protect the world from technofeudalism, Varoufakis prescribes a cloud rebellion by the masses. This boycott would be relatively easy if we can all coordinate and act together. Acting together is much easier now, we just do not use their tools on some days. However he himself seems to use these techofeudalist companies to his liking.

As I write this in January 2025, Varoufakis has 1.2 million followers on X (Twitter) and, in the past 24 hours, he’s tweeted (X’ed?) 10 times, citing other sources and adding commentary, and has retweeted twice. On Instagram, he has over 90,000 followers and a total of 786 posts. For someone so critical of the platforms, he seems to embrace them with enthusiasm. Is this savvy pragmatism of attacking the mighty with their own weapons having breached the walls with a Trojan horse or simple hypocrisy? Perhaps both.

Varoufakis is right to sound the alarm about the power of tech platforms. But as much as I agree with his critique of technofeudalism, his actions leave me conflicted. Maybe that’s the point: we’re all complicit. We criticise Big Tech while bingeing Netflix. We decry Amazon while hitting “Add to Cart.” We lament Instagram’s grip while curating our latest posts and watching our likes accumulate indulging on the dopamine that’s generated by the technofeudalists.

Ultimately, Technofeudalism is a thought-provoking read, cleverly structured around a conversation with his late father, peppered with Greek myths, the usual Greek etymology flexing, some questionable takes (Disney+ doesn’t benefit the consumer?), and the occasional detour into colonial guilt.

I’m glad I read it. But I can’t fully trust Varoufakis — his grand agenda and ideological biases seem to shimmer just beneath the surface. He shows the reader valid problems without solutions and seems to be heeding Jarvis Cocker’s advice to class tourists because he craves attention:

Rent a flat above a shop

Cut your hair and get a job

And smoke some fags and play some pool

Pretend you never went to school – Common People, Pulp

(And post about it on Instagram.)

1. Historically, asset managers like BlackRock have voted on behalf of their ETF investors based on their internal policies or stewardship guidelines.
   Recently, due to criticism over their influence, BlackRock has started allowing certain institutional and retail investors to participate in voting through a program called Voting Choice—but this is still limited and applies mainly to institutional clients, not all ETF holders. ↩︎
2. I do not believe I will live to see this, but you never know with the advance of healthcare with AI. ↩︎