Has capitalism been replaced by “technofeudalism”?
Nicholas Vrousalis has a helpful perspective on the concept of “technofeudalism,” which at least suggests that capitalism has already been replaced by a different economic system based on “cloud capital.”1 He reviews two books on the subject, How Silicon Valley Unleashed Techno-feudalism: The Making of the Digital Economy by Cédric Durand (2024) and Technofeudalism: What Killed Capitalism by Yanis Varoufakis (2024).
The technofeudalism argument assumes that users of a website are giving the site owners via the Internet “cloud” information about themselves, which the owners use for their business benefit and profits, and therefore the users are unpaid serfs for the website owners.
Users as serfs, cloud capital owners as feudal lords
Vrousalis notes: “But attention is not a productive activity; my Facebook activity does not constitute work.” He argues that users “are almost certainly wronged in other ways - manipulated, dominated, robbed of their data - but they are not exploited.” Or, to use the familiar phase of Marx (which he derived from Adam Smith), they are not producing surplus value for the owners of capital.
Rentiers and financialization
The economies of advanced countries have been heavily financialized in recent decades, bringing all sorts of problems for those economies. Vrousalis reminds us, “Progressive economists agree that capitalism, since the late 1990s, has become increasingly financialized — or better, rentierized. John Maynard Keynes’s fantasy that low interest rates would bring about the ‘euthanasia of the rentier’ has failed to materialize.”
But neither employees of tech companies nor the users of their services have a feudal-type situation with the cloud companies, one in which the companies have an ownership-type relationship with the companies like feudal lords had with their serfs and the property on which the serfs worked.
Secular decline in profit rates
He summarizes a third aspect of the Varoufakis-Durand “technofeudalism” concept this way: “The cloudalists can, through a combination of political corruption and cheap money, preserve their dominance without completely destroying the basis of capitalist reproduction.”
This has to do with an economic concept not so often discussed in the financial press called the “secular decline in profit rates.”2 This has to do with various factors in economic processes. In Marxist economics, a driving factor in this secular decline is automation. Because only human labor can generate surplus value in that view, the more efficient companies become, the less human labor is required and that puts downward pressure on profit rates. It’s a fascinating if convoluted set of arguments involved that I won’t go further into here.
Vrousalis describes the Varoufakis-Durand take on this topic: “Advocates of the technofeudal hypothesis believe that the cloudalists can, through a combination of political corruption and cheap money, preserve their dominance without completely destroying the basis of capitalist reproduction.”
And he argues for what he calls the “faucet theory” in rejecting that concern, i.e., “other things equal, when money is cheap, the cloudalists will turn to rents and rely less on profit; when money is dear, they will turn from rents to productive investment. All the while, their d ecision will largely depend on labor costs.” It’s not so clear how this addresses the secular decline of profits concern. In this case, the Varoufakis-Durand approach seems to take the secular decline of profits more seriously than Vrousalis’ explanation does.
But Vrousalis makes an important point about the dystopian TechBro futurism, which he describes as “the ideological affinity between a feudal ethos and the technolibertarianism that pervades Silicon Valley,” i.e., the TechBro dystopian futurism we hear from people like Peter Thiel and Elon Musk. He thinks Durand and Varoufakis give that ideological aspect short shrift:
As a theory of the state, much of contemporary American libertarianism consists in the idea that all political power emanates from private power — the sum total of private property and contract. This is a feudal idea in the sense that feudal ideology only recognizes private power as the source of legitimate power. The contrasting idea of a public power acting exclusively in the name of free and equal citizens is an innovation of modernity. Given its commitment to that form of libertarianism, Big Tech is ideologically aligned with a feudal account of the state, which also explains its distrust of democracy, its penchant toward anarchism, and its love for Friedrich Nietzsche and Ayn Rand. But these affinities are true of all libertarians of that vintage, not just technolibertarians.
Varoufakis can be quirky. But he knows an awful lot about how international finance and currencies work. In this 17-minute video, he explains his own take on technofeudalism3:
Vrousalis, Nicholas (2025): Technofeudalism Is Just Capitalism. Catalyst 9:1, 102-110.
Trofimov, Ivan D. (2018): The secular decline in profit rates: time series analysis of a classical hypothesis. MPRA 06/08/2018. <https://mpra.ub.uni-muenchen.de/88248/1/MPRA_paper_88248.pdf> (Accessed: 2025-08-07).
Technofeudalism - the video. Yanis Varoufakis YouTube channel 02/04/2025). (Accessed: 2025-08-07).