December 1, 2023
A study of how the tech giants have fundamentally changed the structure of capitalism--and not for the better. Varoufakis, a "libertarian Marxist," was finance minister in his native Greece for a period in 2015, a career move that he's managed to turn into a successful occupation as an author (e.g., And the Weak Suffer What They Must?) and commentator. The author clearly has a talent for synthesizing complex economic issues into fodder for a variety of leftist bumper stickers. He argues that traditional capitalism has been replaced by a handful of American and Chinese digital platforms that have built massive stocks of cash by, in effect, charging people to provide content. This system is not so much profit-making as rent-seeking, creating a system that's less like modern corporate practice and more like that of the Middle Ages, when barons used serfs to farm their estates. The author's theory is valid, although not as novel as he seems to think. He makes numerous references to Greek myths and TV shows, although the connections are not always clear, and his tendency to make sweeping generalizations that don't stand up to scrutiny makes the book difficult to follow in many places. This type of book usually requires an optimistic concluding chapter, so Varoufakis revisits the ideas of employee ownership of companies and stakeholder councils for oversight, which were popular in the 1970s, as remedies. Much of the narrative is entertaining, in a shoot-from-the-lip sort of way, and the author's arguments are sure to be popular among economic theorists and students. The text's shortcomings are a pity because the rise of the tech behemoths is an issue that deserves a more thoughtful, sustained analysis. Varoufakis makes some important points about big tech, but his erratic style makes the book hard to take seriously.
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Starred review from January 15, 2024
The revolution has already occurred—and while capitalism lost, communal ownership certainly didn’t win, according to this sweeping polemic. Economist and former Greek finance minister Varoufakis (Talking to My Daughter About the Economy) contends that capitalism died when the physical means of production—machines, factories, and services—were superseded by virtual platforms that, in feudal style, seek “rent” rather than surplus profit derived from labor. He calls this new economic reality “technofeudalism,” a system dominated by enormous companies existing largely online that transform users into the equivalent of medieval serfs, toiling (posting and networking) for free on land they don’t own (apps). Walking readers through the economic developments that led to this point, Varoufakis cites the flood of cash that flowed through banks and governments in the wake of the 2008 financial crisis as the catalyst behind the monopolization of the internet by corporations like Amazon and Apple that silo users into “cloud fiefs.” Throughout, Varoufakis’s exuberant prose amuses. (On the financial deregulation that led to the 2008 crash: “The social democrats had become the era’s lotus eaters. As they gorged on financialization... its honeyed juice lulled them into the belief that what had once been risky was now riskless.”) Readers who feel burned out by intrusive apps, relentless advertising, and inexorable algorithms will revel in this fiery complaint.