A combat economist

Yanis Varoufakis teaches economics at the University of Athens. He was finance minister of Greece during the country’s 2015 sovereign debt crisis, an experience reported in his book Adults in the Room: My Battle with Europe’s Deep Establishment. He later co-founded the Democracy in Europe Movement 2025 (DiEM25), which campaigns for transparency, social justice, environmental sustainability and constitutional advance (but is yet to embrace Peace with Nature as a constitutional principle). Talking to a capacity crowd at Greenside Church in Edinburgh, an event organised by Toppings Booksellers , he outlined the thinking in his new book, Techno-feudalism: What Killed Capitalism. These are my notes on what he said there.

Death of an egalitarian community

The Internet developed in the 1970s and 1980s as an egalitarian community dedicated to the free exchange of knowledge among everyone, everywhere. It began to be privatised in the 1990s when opportunities to do so in a big way became obvious, especially when it became possible to share photos and videos. The privatisation of the Internet commons is reminiscent of the land enclosures and clearances of the 16th-19th centuries, when rural peoples were displaced en masse from farms to cities and factories. This harsh process replaced the relics of feudalism, which was based on land rent and tied labour (‘serfdom’), and facilitated the advance of capitalism, which is based on profits, markets and investment in the means of production.

The Cloud

Privatisation of the Internet continued in the 2000s and exploded in the 2010s when private capitalist endeavour created the Cloud. This is a boundaryless digital soup of messages, images, identities, texts, thoughts, fears, aspirations and connections that made real the old idea of the Noosphere. Taking biology as a metaphor, like any nutritious medium this one quickly spawned herbivores, parasites, predators, and the viruses that live on them. A competitive and creative frenzy followed, the carnage unregulated, with only the strong and lucky few surviving to shape  the future (not unlike the Cambrian Explosion in evolutionary history).

A mutant Cloud virus

A ‘virus’ soon arose in the form of a new way of seeing the whole Cloud and all its users and content as an exploitable resource. This required parts of the Cloud to be captured and turned into private fiefdoms, within which people would be used to create value for the local baron. These fiefdoms were called things like ‘Facebook’ and ‘Amazon’, and the barons had names like Zuckerberg and Bezos. In each case, users could be studied and their likes and dislikes recorded and exploited to ensure that their needs were met more and more effectively. Positive feedback between what users liked and what they were offered led to an ever-greater machine capacity to predict and shape their behaviour. And so ‘artificial intelligence‘ (AI) was born.

The return of the rentiers

Power under feudalism and early capitalism came mainly from capturing rents (often extremely high ones, and often at sword-point) from physical space in which people lived and worked. This was replaced under capitalism proper by a vast panoply of markets and market transactions, companies and waged employees, profits on the sale of goods and services, and returns from investment in ways to increase and diversify production. The Cloud is replacing all this. Its barons do not make ‘profits’ but only rents from users. Those users themselves create the content and rewards that satisfy themselves enough to keep on paying rent. Facilitated by AI, what each user gets from paying rent becomes ever-more satisfying (or at least addictively mesmerising) to them. This includes the opportunity to buy things, not from a ‘market’ but from algorithm-personalised offers in a captive space. Thus Cloud-users have become Cloud-serfs.

The end of capitalism?

With no profits or markets to speak of, the Cloud-baron/Cloud-serf system is much more like feudalism than capitalism, but it is divorced from the real world and depends entirely on technology. Hence: techno-feudalism.  Still very new, its relationship with the real economy is fluid: the ‘virus’ is still spreading, and its genes are settling into the root code of its host. But it is already clear that if a typical Cloud enterprise pays hardly anything for labour (about 1% of revenues in the case of Facebook, compared with about 85% for a traditional business), then it will tend to suck money out of the real economy. As this wealth is frozen away in private vaults and tax havens, society is deprived of the circulating wealth that is essential for everyone else to live their lives.

The end of society?

As more of all economic activity is captured by the Cloud, more of the Cloud is captured by Cloud-barons, and more people become Cloud-serfs in thrall to manipulative algorithms, the results will be dire for human society. Yanis made clear that as a socialist he is appalled by techno-feudalism, and even more so because the death of capitalism has been followed by something even worse, rather than by socialism. He therefore sees his role not as predicting the future but only as describing what has happened – rather like Adam Smith describing capitalism in The Wealth of Nations (except that Smith liked what he saw). But there is also a duty to try to mitigate harm, he says, “to have an historically virtuous role”, even without hope of success.

Existential angst

Yanis described what he sees as existential angst among young people everywhere. This is because they no longer see a meaningful role for themselves, sensing that the only jobs on offer are pointless make-work activities to keep them quiet so they can be used by Cloud feudalists. He drew attention to potential remedies in the last chapter in his book, but meanwhile stressed the importance of being aware of being a Cloud-serf. Painfully dragging these things into consciousness is the only way to engage a creative search for solutions. He made it clear that the Cloud and AI are wonders of human creativity and are capable of immensely positive contributions. His warnings are focused only on the concentration of ownership in the hands of a few Cloud-barons, and the resulting lack of merit and constructive purpose (or worse) in all their intentions and deeds.

But what about ecological reality?

Yanis did not mention the relationship between techno-feudalism and ecological reality, so I looked in my copy of his book. Here the message seems to be that the baronial distribution of Cloud ownership is unlikely to help and may well hinder environmental negotiations among the pre-techno-feudal states of the United Nations. I guess the problem is that both ecological reality and social reality are equally irrelevant to the new Cloud-barons. And this attitude will continue until society and ecology collapse and the Cloud itself is extinguished, possibly in this mid-century. Meanwhile, the more people are in thrall to virtual reality, the less attention they are likely to pay to ecological reality. Worse, the more existential angst that people feel, the greater the attraction of virtual reality. This is daft but, like comfort-eating, understandable.

Restoring meaning to life

Prompted by Yanis’ words (and Tyson Yunkaporta’s transformative book Sand Talk: How Indigenous Thinking Can Save the World), my view is that we are a custodial species with responsibility for the stewardship of all life on Earth. Living obsessively in the Cloud while the biosphere over-heats and dies is mad and wrong. And we are a very social species, so treating society like a bad dream is self-destructive (and wrong). We are happier and healthier when we feel engaged and useful, so the remedy for existential angst is hard work, with other people and companion animals, on protecting and restoring the ecological health of the world. Community-based ecosystem restoration and building peace with nature are real jobs that no one can take away from us. But getting back to meaningful work involves realising that Cloud feudalism is merely, at heart, a gigantic scam.

Recapturing the Cloud

There are the ruins of a cathedral on the Black Isle in Scotland where legend tells of a weird cloud of mist that was frightening the people, who sought help from the clerics. This was before the Reformation, so the clerics were well-fed and out of practice. Even so, they managed to trap the cloud, drag it away, and bury it. How they did this is not recorded, but the precedent could be useful as we have our own Cloud to deal with, and Yanis has reminded us to be scared of it. So at least let us tax the Cloud-barons very hard, while limiting their tax deductions to socially-useful investments like climate change mitigation and adaptation, ecosystem restoration, and biodiversity conservation. Both feudal and techno-feudal systems are oppressive and deadly to ordinary people, so we must protect ourselves. And the sooner the better.

 © Julian Caldecott 2023