What is Technofeudalism?

Why "Feudalism"?

Technofeudalism is a hypothesis suggesting that digital platforms have transformed the economy to the point where it is no longer capitalist. In this system, the source of power and wealth shifts from the production of goods to the rents extracted by a handful of corporations for access to their owned infrastructure.

The analogy with feudalism is quite straightforward. In the Middle Ages, peasants worked on land owned by lords, giving a portion of their harvest in exchange for the right to reside there. Proponents of this theory argue that digital platforms represent a new form of land. Sellers, developers, and users depend on these platforms just as peasants depended on estates, surrendering a portion of their income to the owners.

Who Coined the Term?

When discussing technofeudalism, Yanis Varoufakis—an economist, former Greek finance minister, and author of the bestseller "Technofeudalism: What Killed Capitalism" (2023)—is often mentioned. However, the idea of digital networks and platforms as a new form of dominance emerged at least two decades earlier.

In 2002, Alexander Bard and Jan Söderqvist described "netocrats"—a new elite of the digital society controlling information flows—in their book "Netocracy: The New Power Elite and Life After Capitalism."

In 2004, media theorist McKenzie Wark introduced the concept of the "vectoralist class"—owners of information transmission channels—in her "Hacker Manifesto."

In 2014, researchers Vasilis Kostakis and Michel Bauwens proposed the concept of "netarchical capitalism" in their book "The Network Society and Future Scenarios for a Collaborative Economy," describing a regime where centrally controlled platforms organize user interactions for capital accumulation. They referred to it as a "new feudal form of cognitive capitalism": users create value, while platform owners monetize it.

The modern understanding of technofeudalism has been significantly influenced by economist Cedric Durand in his book "Technofeudalism: A Critique of the Digital Economy" (2020).

Political scientist Jodi Dean further developed the idea in her book "Capital's Grave: Neofeudalism and the New Class Struggle" (2025), arguing that capitalism is gradually giving way to a new system of power and dependency.

Thus, technofeudalism is not the theory of a single individual but a concept that has evolved through years of discussions among philosophers and researchers of digital society. Varoufakis popularized it and drew media attention, but he is more of a promoter than a pioneer.

What is Cloud Capital and Cloud Rent?

Cloud capital is a new form of capital embodied in digital platforms, algorithms, and data sets. It allows not only for profit extraction from user activity but also for shaping their preferences by managing attention and behavior through search engines, recommendation algorithms, and other services. Wark would refer to this as control over the "vector," while Varoufakis would call it ownership of "behavior modification tools."

Varoufakis considers the distinction from traditional capital to be fundamental. Factory machinery or agricultural equipment is used to produce goods. Cloud capital does not directly produce anything; it creates and controls the digital environment in which people trade, communicate, and work, with platform owners profiting from their control and access to this environment.

This income is termed cloud rent. For instance, a developer releases an app through the App Store, and the store owner receives a portion of the sales revenue and in-app purchases. In the logic of technofeudalism, the source of these revenues is not the creation of the product itself but the power over the digital infrastructure through which data and payments flow.

Who are Vassal Capitalists, Cloud Proletarians, and Serfs?

Varoufakis categorizes participants in the technofeudal economy into four groups:

• Owners of cloud capital—owners of digital platforms and algorithmic systems. They control the infrastructure where purchases, information searches, communication, and entertainment occur, extracting rent from it;
• Vassal capitalists—companies that produce real goods and services but depend on platforms. An electric bike manufacturer on Alibaba or a seller on Amazon gives a portion of their profits to the platform owner and finds themselves in a subordinate position, even though they remain capitalists in name;
• Cloud proletarians—couriers, taxi drivers, warehouse workers, and others whose labor is organized by algorithms. They are paid per shift or order but do not own the platform and do not set the working conditions;
• Cloud serfs—ordinary users. Every post, like, comment, or search query turns into data and content that the service monetizes. Unlike wage workers, cloud serfs typically do not receive payment for their contributions.

"Every time you upload a video to TikTok, Facebook, or Instagram, you increase the value of these platforms. We do this with our labor, our activity, and simply our presence. Therefore, we are not just serfs. We are cloud serfs creating capital. And nothing like this has ever happened in history," Varoufakis explained in an interview with WIRED.

Is This Really Not Capitalism?

Not everyone agrees with Varoufakis's conclusion that capitalism has given way to a new system. Critics acknowledge that digital platforms have radically altered the economy, but this does not necessarily imply a shift to feudalism.

One of the most comprehensive critiques was offered by technology researcher Evgeny Morozov. In his essay "Critique of Technofeudal Reason" and an interview with Jacobin, he argues that proponents of the concept mistake features of modern capitalism for signs of a fundamentally new order.

When corporations control platforms, collect fees, manage user data, and dictate market rules, there is a temptation to declare, "This is no longer capitalism."

Morozov believes this conclusion is hasty. He reminds us that capitalism has never been solely about free competition and innovation. Large businesses have always sought to consolidate power, monopolize key resources, and exploit their position for additional profit. Platforms like Google, Amazon, or Meta do this in new ways, but the underlying logic remains the same.

Tech giants continue to invest: building data centers, expanding digital infrastructure, developing new products, pouring billions into research, and hiring hundreds of thousands of employees. For Morozov, this is a crucial argument, as corporations are not merely collecting rent from platforms but are growing and competing with one another.

Therefore, he suggests viewing the platform economy not as a post-capitalist or feudal system but as one form of contemporary capitalism. In his view, digital platforms have intensified existing trends within the capitalist system—power concentration, market monopolization, and rent extraction—but have not created a fundamentally new way of organizing the economy.

What Does Varoufakis Say About Bitcoin?

Varoufakis dedicates a separate section of his book to digital assets—"The False Promises of Cryptocurrencies." He begins with a historical parallel. In "Utopia," Thomas More contemplated how to rid society of the vices of feudalism. Tommaso Campanella, in "The City of the Sun," argued that power should belong to craftsmen rather than parasitic elites. Varoufakis views crypto enthusiasts as continuators of this tradition seeking a more just social order.

"[Their] faith in the power of crypto technologies is a similar reaction to technofeudalism as the original 'Utopia' was a reaction to feudalism," Varoufakis writes.

According to him, after the 2008 financial crisis, Bitcoin inspired a diverse range of people, but over time, the "libertarian faction of the crypto movement" gained prominence.

"For them, the number one enemy has always been central banks, which they portrayed as a sort of Catholic Church insisting on acting as an intermediary between people and their sacred profits, while they saw themselves as modern Martin Luthers proclaiming the Protestant Reformation. Thus, the crypto movement, initially attracting both anarchists and socialists, turned into an extremely volatile currency market where anyone sufficiently knowledgeable about the new blockchain technology could issue their own 'coins,' trying to inflate their dollar value before cashing out. Their ideological disdain for fiat or state-created money turned out to be a ruse for issuing their own fiat money. By the time Bitcoin was trading for over twenty thousand dollars in 2017, the early liberating aura of cryptocurrency had evaporated," the book states.

Varoufakis observes that the main beneficiaries of the technology have become the very institutions it originally opposed. He lists examples: JPMorgan's blockchain platform and Microsoft, along with solutions from Goldman Sachs, Mastercard, and Visa.

"Instead of gradually leading us to utopia, cryptocurrency has become yet another tool of cloud finance and a driver of cloud capital accumulation," the author concludes.

Varoufakis describes blockchain as a brilliant answer to a question "we have yet to articulate." But if the question is how to fix capitalism or overthrow technofeudalism, he believes it is not the right tool.

"This does not mean that crypto technologies may not be useful for progressives at some point. If and when we manage to socialize cloud capital and democratize our economy, blockchain technologies will come in handy," he concedes.