Outside the lecture hall following his talk, a handful of us students circled the guest lecturer. “Compared to the powers that be, we are shit kickers, you and I,” he explains. “We kick the shit.” True enough. But unlike you and I, he was once an important political figure: for 5 months, Yanis Varoufakis was the finance minister of Greece during their debt crisis. He tried desperately to implement a repayment plan that avoided massive austerity in Greece.
Compared to the institutional might of the Troika, everyone’s a shit kicker. Negotiations break down. Varoufakis resigns. The most anticipated left-wing reformist project of the 21st century implodes, and itself introduces the harshest austerity in Europe. But now the King is back — in more ways than one.
Two weeks ago, Varoufakis was invited to speak at the University of Sydney by the Political Economy department, where he once taught. It began with a historical overview of global capitalism from World War Two until the GFC. Here Varoufakis shone, showing his talent for explaining economic developments and their relation to American imperialism in an engaging and accessible way. After his insightful history lesson, Varoufakis gets to the crux of his argument:
“Ladies and gentleman, this is no longer capitalism.”
This is not just inflammatory rhetoric to boost book sales; it is the genuine analysis featured in his 2023 book Technofeudalism: What Killed Capitalism. According to Varoufakis, traditional industrial capital has been displaced by ‘cloud capital’; “an agglomeration of networks, software, communications’ hardware and AI algorithms” that function as “a produced means of behavioural modification”. Think of Spotify recommendations based on your music taste or your oddly specific TikTok ‘For You Page’.
Pointing to his phone, Yanis proclaimed “the most Hegelian dialectic happens here”; as cloud capital watches us consume, it trains us through recommendations in an endless feedback loop. This creates an individually targeted advertising model whereby cloud based retailers like Amazon bypass the market. These monopolised digital spaces, which Yannis calls ‘cloud fiefdoms’, generate revenue by extracting rent on ‘vassal capitalists’ who are seeking to sell their products. “Welcome to technofeudalism”, where profit and markets have been replaced by rent and cloud fiefdoms and capitalists by ‘cloudalists’.
There is some value in his empirical understanding; the degree to which modern capitalism is unproductive, unprofitable, monopolised, and increasingly relies on assets, rents, and finance to make money. Yet any useful insights that Varoufakis has are obscured by his technofeudalism framework. What Marx identifies as the core of capitalism — generalised commodity production and the wage-labour social relation — still reigns. Social surplus, the lifeblood of any class society, is still extracted via the exploitation of the worker by the capitalist. Any peripheral rents extracted by so-called ‘cloudalists’ are only facilitated because of this. Cloud capital itself is engaged primarily in advertising, possessing its own market — cloudalists compete for our attention. If we are free to move between platforms, then how can we be understood as ‘cloud serfs’? After explaining this ‘new mode of production’, Varoufakis pivots to discussing the technofeudal dynamics of the ‘New Cold War.’
“Why is the US provoking China?”
The answer: because of cloud capital and technofeudalism. China is the only other nation that competes with US cloud capital. Not only does it compete, but it surpasses Silicon Valley as it has effectively fused with sections of the global financial system. The inability of Europe and Australia to foster native cloud capital has spelled their increasing geopolitical irrelevancy in the ‘New Cold War.’ Varoufakis identifies part of the structural economic basis to the ‘New Cold War’; it is not just a matter of individuals like Donald Trump or Joe Biden, as there is a clear continuity in foreign policy. However, the phenomenon he describes, monopoly capitalists competing on the global stage through geopolitical conflict, can be understood simply as a manifestation of capitalist imperialism. Indeed, the U.S. trade war with China began with tariffs imposed on solar panels, washing machines, aluminium and steel. The one-sided weight given to cloud capital through the technofeudal explanation ignores the geopolitical struggle occurring on industrial, financial, and technological fronts.
Before discussing what is to be done, Varoufakis reminds us “we are the losers of history.” After one hundred years, the Left has faced only catastrophe and cascading failure; nearly every social movement has been co-opted or crushed. Varoufakis’ solution for the Australian Left in the ‘New Cold War’ is to have a government willing to stand up to Washington. But how, in the era of His Majesty Bezos and King Tencent, can this be achieved? The answer lies in Vaourakis’ book: an alliance of workers, cloud consumers, and vassal capitalists against the cloudalists. Invoking the Communist Manifesto, Varoufakis ends his text by proclaiming “we have nothing to lose but our mind-chains!” As Marx foretold, history repeats itself, but “the first time as tragedy, the second time as farce.”
Ultimately, Varoufakis’ proposal reinvents the same tired reformist project. Indeed, almost a century ago, Karl Kautsky declared the need for socialists to ally with industrial capital against the regressive force of finance. If this unholy alliance is the Left’s strategy, perhaps we will continue to be shit kickers.
