Yanis Varoufakis says Big Tech’s cloud rent has killed capitalism and left a feudalism in its place. But rent has kept capitalism company since the enclosures, and so have monarchs, and Ernest Mandel named this exact engine fifty years before Varoufakis mistook it for a manor.
The claim is everywhere now, from the Financial Times to the seminar room to whatever is left of the left’s corner of YouTube. Capitalism is over. It died sometime in the last two decades, quietly, without a funeral, and what replaced it is a thing Yanis Varoufakis calls technofeudalism: Amazon and Google and Meta as digital fiefs, the rest of us as serfs producing free data, the businesses on the platforms as vassals paying tribute for the right to trade. Rent, not profit, runs the world now, and ‘there is no going back to capitalism’, because, in his telling, capital itself is what killed it. Cédric Durand had got there first and more carefully, in French and with fewer capital letters. But it is Varoufakis who turned it into a paperback and a slogan, and slogans are what travel.
Grant the observation, because it is not wrong. The rent is real and it is enormous. A handful of American firms are now worth more between them than the yearly output of most nations on earth, and they make their money less by making things than by owning the toll booths between the people who make things and the people who buy them. Amazon takes its cut from the seller and the buyer both; Google charges for the road to the customer. The platform produces almost nothing and skims almost everything. If you have ever handed a landlord more each month than you could ever hope to put by, you already grasp the shape of it: rent is the charge you pay for access to something someone else got to first.
But the whole case rests on a confusion, and it is a confusion about rent. Rent has kept capitalism company since the enclosures; there is nothing feudal about it. Ask any tenant. The landlord who lets a flat in Salford is not a baron and the flat is not a fief; the rent he charges is a slice of the wages his tenant earned as a wage-worker, prised out of him through the ownership of a thing he needs and cannot buy. Marx gave the last part of the third volume of Capital to exactly this, and was precise about what rent was. Profit and ground-rent, he wrote in the chapter on the Trinity Formula, are ‘no more than particular components of surplus-value’, the same unpaid labour carved up under different headings. The landlord, on his account, has nothing to do with production at all; his part is to transfer to himself a share of the surplus the capitalist has already pumped out of the worker. Rent is a slice of what wage-labour makes, intercepted by whoever owns the thing the worker cannot do without. And Marx set the feudal form firmly on the far side of the line, in a world of serfdom where the domination of the producer is direct and undisguised, not mystified into a gift of the soil. A system can run on rent and be capitalist to the marrow.
Push on the thing the word actually leans on, the feel of the feudal. Monarchy is feudal too. The crown, the anointing, the hereditary line, the subjects kneeling: nothing could be more medieval. And yet Britain is a capitalist state with a king on its coins, as are a handful of others with crowns still to their name, Spain and Japan among them, and no serious person calls them feudalisms because a monarch has survived at the top. The form persists and the mode has changed underneath it. A feudal residue lodged inside capitalism does not make the thing feudal, any more than the fork in your hand makes your kitchen a Bronze Age hall. Varoufakis has found a feudal-shaped feature, the rent, and reasoned backwards from the shape to the substance. The monarchy should have warned him off that road.
And a Marxist named this engine half a century ago without losing his head over it. Ernest Mandel, writing Late Capitalism from Brussels in the early seventies, trying to work out what monopoly had done to Marx’s categories, put technological rent at the centre of the picture. Technological rents, he wrote, are ‘surplus-profits derived from a monopolization of technical progress’, from discoveries and inventions the monopolies keep to themselves through their control of patents and the sheer cost of the machinery nobody else can build. The great firms took their surplus not by producing more cheaply than the average but by owning the progress and charging the rest of the world for the use of it. That is Varoufakis’s cloud rent, named in Brussels in 1972, down to the mechanism, in a book you can still buy. Mandel counted it a feature of late capitalism and not the end of it, because he could see the thing Varoufakis cannot: that the rent still rests on production, that somewhere down the chain a worker in a warehouse or a delivery van is making the surplus value the platform skims, that the cloudalists claw at one another as ferociously as any Lancashire mill owners ever did, and that capital is accumulating and not sitting still collecting dues. Take the surplus value away and the whole cloud evaporates. No fief ever behaved like that.
Which is where the wrong name stops being a quibble and starts to cost. Call it feudalism and you have quietly moved the enemy. The problem becomes the rentiers, the overmighty digital lords, and the remedy becomes their taming: break them up and regulate the platforms, so a healthier and more competitive capitalism can breathe again underneath. That is an anti-feudal programme, a bourgeois-democratic one, and it is the direction a good deal of Varoufakis’s own politics has drifted. Name it capitalism instead and the enemy is capital entire, the wage and the warehouse and not merely the toll booth, and the remedy is not a kinder landlord but the end of landlordism as a principle. Varoufakis pitches out the baby of capitalism with the bathwater of the rent. Neither needed disposing of. The rent is a symptom you can read off the surface; capitalism is the condition underneath that you still have to name before you can fight it.
None of this is Red Mole’s discovery, and it would be shabby to pretend it. Evgeny Morozov made the case at length in New Left Review three years back, under the title ‘Critique of Techno-Feudal Reason’; Nicholas Gane put it more flatly, that capitalism is capitalism and not technofeudalism. What Mandel adds is the part the critics reach for less often: the positive name for the engine, technological rent, which shows the rentier turn was written into monopoly capitalism half a century before the cloud.
Which is not to pretend nothing has changed, or to wave the platforms away as merely bigger mills. Something is different in the way these firms fold themselves around the whole of daily life and take, unpaid, the data we shed, and in the way a few of them now sit closer to the state than to the market: Starlink strung over a battlefield and chip subsidies written to order and tariff wars fought to keep the toll booths American. Durand is worth reading precisely because he takes that seriously, more seriously than the paperback does. Whether the sheer accumulated weight of rent has grown enough to bend late capitalism into something that genuinely needs a new name, or whether this is monopoly capitalism doing exactly what Mandel said it does, only harder and with better cables, is a real argument, and not one that gets settled in a paragraph near the end of an article. What can be said is narrower: that ‘feudalism’ is the wrong name for it, because the word points back to a world without wage-labour, and wage-labour is the one thing the cloud cannot run without.
Capitalism has always survived by mutating, by finding a new engine when the old one seized, and every mutation gets mistaken by somebody for a change of species. Kidron looked at the altered engine of imperialism and signed the death certificate; Varoufakis looks at the altered engine of accumulation and signs another. Both saw something real. The obituary was premature in each case. The system is not immortal, and the people drafting its death notices are not always wrong to feel an ending in the air. But a mode of production is not defeated by the announcement that it has already died, and you cannot organise the class against a thing you have talked yourself into believing expired quietly while you were reading the book about it.
Postscript: Francisco Louçã and Gilbert Achcar debate neofascism
This argument has already been had in the Fourth International’s own press, and this post should have mentioned it. In February 2025 Francisco Louçã, a founder of Portugal’s Left Bloc, asked the question every strategy starts from: who is the enemy? (“Quem é o inimigo? A super-oligarquia”, Anticapitalista no. 79.) He set aside “techno-feudalism” for the reason given above. A metaphor taken from the past imprisons us in its own meaning, and looking backwards leaves what is new ambiguous. Yet the tell is in his own text. A paragraph later he calls the platform owners the latifundiários of techno-feudalism, the great landlords. The image is hard to put down even for someone who has just rejected it. He is right to use it, because the landlord is precisely the capitalist figure, as Marx described him and as the post argues. The lord is the feudal one.
Louçã’s own answer is “the super-oligarchy”: the section of capital that controls human communication and uses that control to bend the state to its own enrichment. His account of how it does so is close to the one above. Surplus value is redistributed between firms, and wages are drawn off through taxes and interest, so the rent is still a slice of what labour makes. He also adds what the post leaves at “the data we shed”. On the platforms, the producers of commodities have themselves become commodities. Their attention and emotions are sold in what he calls “the digital prison”. That is the change a reader of this post was asking about (see the comments).
Gilbert Achcar answered him a month later (“Sur la caractérisation de l’ennemi à l’époque du néofascisme”, ESSF, March 2025), and his reply cuts in both directions. Against Louçã, he points out that oligarchy is a Greek word, older than any feudalism. All capitalism concentrates economic power in a few hands, so calling this a super-oligarchy says nothing about what is specific to now. Against this post, he defends techno-feudalism as a limited but useful analogy for the dependence of users and small firms on whoever owns the infrastructure. “Political capitalism”, Riley and Brenner’s term, gets short shrift from him. As he notes, Max Weber had named “politically determined capitalism” a century earlier, and much of the global South has never known any other kind.
Achcar’s own candidate is neo-fascism. He chose it not for its economic precision but because it sends us back to the left’s strategic arguments about fighting fascism, which are the arguments we need now. Here the three positions stop competing. Louçã’s oligarchs and Achcar’s neo-fascists are largely the same people: the richest man of his time bought the main social network and put it at the service of the far right. And the case made above, that the underlying condition is capitalism and not a new mode of production, is what keeps either name honest. Name the oligarch alone and the remedy shrinks to taxing him. Name the fascist alone and the temptation is to shelter behind liberals who have never troubled the wage or the warehouse. Achcar names both dangers himself, and his conclusion is the right one: build the broadest alliances to defend democratic rights, and alongside them an anticapitalist pole of the class. The name of the enemy matters because it decides which of those two tasks gets forgotten.
Thanks for the great article!! Maybe just an unpopular opinion, but here it goes. I wonder if after all, the whole revolving around technofeudalism from Varoufakis has not helped to focus on technooligarchs? I’m talking about people not so involved in politics.
Anyway I do not disagree with the arguments here, and always found wrong the naming of technofeudalism (also from Durand).