Yanis Varoufakis, the former Greek finance minister and economist, has convincingly argued that our modern economic system has entered a new phase.
In his recent book Technofeudalism: What Killed Capitalism, he claims that the old model of competitive markets driven by profit is dying. Instead, Varoufakis presents the idea that we now live under a system resembling medieval feudalism, powered by technology. In this technofeudal order, tech giants become modern-day “lords” controlling digital fiefdoms, whilst ordinary people act as unpaid “serfs” working the digital land.
To explain the concept with an example, imagine a town where every shop belongs to a single owner, with an algorithm deciding what each person should buy. On the surface, it may appear like a market, but actually monopolistic online marketplaces act like a feudal landlord: “Jeff doesn’t produce capital… he charges rent. Which isn’t capitalism, it’s feudalism”. In this view, users’ online activities, every post, click or search, build value for platform “lords” at user expense, whilst they remain blissfully unaware.
Varoufakis underlines two major shifts from the classical understanding of free markets. First, profit-driven production is being supplanted by rentier economics. In traditional capitalism, businesses invest in factories or products and compete for profits. Technofeudalism, by contrast, is about extracting rent from others’ activity. ‘Big Tech’ firms are beginning to prioritise charging for access or slicing off fees as a revenue source rather than purely producing new and better products. For example, every time an iOS developer sells an app, Apple takes 30% of the revenue as a “ground rent”, acting as the digital landlord. Similarly, on Amazon, each vendor pays fees (with Bezos’ “algo-sheriff” enforcing the rules) for the privilege of a digital storefront.
Secondly, the market itself changes form – platforms like Amazon or Airbnb may appear like free markets on the surface, but Varoufakis reminds us how easy it is to forget these are markets operated under a single ownership rule. As Nicholas Gane summarises Varoufakis’ view: Amazon “exercises power through fiefdoms that abolish the two central features of capitalist society: markets and profits”.
In simple terms, traditional free markets have been overshadowed by a handful of gatekeepers who extract rents, reshaping the economy into a modern-day digital form of feudalism.
Big tech platforms as digital fiefs
Social media and online search illustrate the hidden rent-extraction of attention-based markets. Varoufakis explains that every time we post on Twitter (X), we are “toiling the estate like a medieval serf”. Users pay nothing to use the platform, whilst X gains free content and data, allowing for ads to be sold more efficiently on the platform. Likewise, on Facebook, we are drawn in by interacting with friends, which is consequently turned into a commodity by selling advertisers the attention of its users. A publisher using Facebook may see early success, only to find its reach sharply throttled unless it pays again, part of a larger process of slow product quality decline, in the name of maximising shareholder value that Cory Doctorow calls “enshittification”.
All of these examples show a core pattern: platform owners extracting value from the labour and data of others, whilst charging tolls and fees rather than generating profits through traditional investment and production. In Varoufakis’s terms, we have become “cloud serfs” who jointly build “cloud capital” for these new overlords.
The Digital Panopticon: Control, transparency, Subjectivity
Beyond economic analysis, commentators have noted how technofeudalism is affecting our individual experience of the world. In Byung-Chul Han’s analysis of the digital age, power today works not by direct force, but by a more subtle control through openness and perceived freedom. In The Transparency Society, Han warns that the demand for “more information” actually creates a society of control rather than trust. When everything is available to us, all the time, hidden influence thrives. In Han’s view, social media and other apps function as a “digital panopticon”: users voluntarily expose themselves online, under the impression they are free, but in doing so are obeying unseen rules.
He writes that transparency makes human beings “glassy,” stripping away privacy and otherness so people self-discipline under constant exposure. In this sense, each of us becomes a kind of self-exploiting worker in the digital realm, constantly performing and optimising our data for an audience we can’t see.
Han further argues that individuals have been turned into entrepreneurs of themselves, always striving for achievement and visibility. In The Burnout Society, he suggests this self-optimisation leaves people exhausted and atomised, undercutting collective experience or resistance. In Varoufakis’s technofeudal world, these insights help explain how “cloud-serfs” stay compliant. We willingly feed the fiefdoms by sharing personal data, opinions (and even critical work) on platforms we cannot escape. The result is a subtle but pervasive regime: we are not forced by armies, but massaged by algorithms and social media norms into uniform patterns. As Han puts it, the digital use of freedom is a “perfection of control”.
Capitalist Realism & Ideological Capture
Cultural theorist Mark Fisher described our era as one of “capitalist realism,” the sense that there is no alternative to this system, and even dystopias can’t escape it. Fisher famously quipped that “it is easier to imagine the end of the world than it is to imagine the end of capitalism”. This ideological frame helps explain why Varoufakis’s dark diagnosis may not feel urgent to some: if we all subconsciously assume this is just the way the economy must be, questioning it is never considered.
In the age of technofeudalism, that ideological hold may even tighten. On one hand, Varoufakis’ argument is a challenge to capitalist realism: by naming a “new feudal” stage, he forces us to re-imagine the economic rules. On the other hand, critics say the tech giants continue to feed capitalist fantasies. Many of the platforms’ own narratives emphasise progress, convenience and personal fulfilment, selling us back our data-fueled lives as “freedom.” This mirrors Fisher’s idea of ideological capture, where capitalism absorbs dissent. In Varoufakis’s account, however, the old hope in markets or shareholder democracy has faded: he suggests the cycle of corporate bailouts and money printing shows that “the world of money has finally decoupled from the capitalist world”. Whether you agree or not, the fusion of Fisher’s and Han’s ideas paints a picture of subjects living inside a system that shapes and limits both what we see and what we can imagine.
Debate: Metaphor or new paradigm?
Varoufakis’s technofeudalism thesis has ignited debate. Supporters find it a powerful metaphor that highlights how platform monopolies extract rent and control infrastructure. Critics argue the term risks overstating the case. Economist Nicholas Gane, for example, acknowledges the rise of rentier capitalism but insists we are not actually back in a feudal era. He contends that capitalism has simply reconfigured itself, taking forms beyond state oversight. In Gane’s view, ‘Big Tech’ is better seen as an extreme form of monopoly capitalism.
Similarly, a critical commentary in Developing Economics argues that calling digital platforms “lords” is “conceptually flawed and politically misleading,” since they don’t wield power by land ownership or legal bondage but by market monopoly and data control. These critics caution that platform rents are not medieval ground-rent but should be defined as a new form of rent, arising from controlling data and networks rather than inheriting estates.
Others strike a middle path. Shoshana Zuboff (who coined “surveillance capitalism”) explicitly rejects Varoufakis’ feudal imagery: “technology is not the independent variable nor are we feudal serfs,” she says, yet she agrees we face a “totalising power” unlike anything seen in classic capitalism. Mariana Mazzucato similarly speaks of “algorithmic rents” in tech, without invoking feudalism. In practice, many policymakers and thinkers find that whether we call it feudal or not, the problem remains: gigantic platforms extract value and wield power far beyond any single nation’s control. Varoufakis’s framing has sparked discussion about what kind of solutions are needed: regulation? new public infrastructures? collective data rights? Some critics worry that Varoufakis’s own solution, a consumer boycott of big tech, ignores the fact that these companies dominate indispensable services.
Following the argument to the end, the discussion comes down to definitions. Is “technofeudalism” literally a new economic mode, or a provocative metaphor for late-stage capitalism? The answer may be: both and neither. Varoufakis uses the feudal analogy to underline a real shift, the rise of platform rent-seeking and algorithmic dominance, that feels qualitatively different to many users. Yet strictly speaking, as critics note, these firms still operate on capitalist principles (for now) and live off profits and market capture. What is clear from the discussion is that something unprecedented is happening in our economy. Whether we label it “technofeudalism” or otherwise, the concentration of wealth and control into a handful of companies raises urgent questions.
Looking forward
Varoufakis’s technofeudalism argues that Big Tech firms have become digital overlords, extracting rent from what were once public commons and competitive markets. He warns of a new kind of servitude: users and small businesses unknowingly enrich platform owners without the protections of traditional capitalism. Byung-Chul Han’s ideas remind us how this regime seduces us into compliance via transparency and self-surveillance. Mark Fisher’s capitalist realism spotlights how our imaginations are trapped by existing, seemingly irreplaceable structures. Together, these perspectives frame technofeudalism as both a timely critique and a lens on our moment.
Contemporary economists and commentators remain divided: some see it as a wake-up call to reshape the system, others as an overstated metaphor. The debate continues, but few doubt the core truth Varoufakis highlights: digital platforms now hold unprecedented sway over the economy and society. Recognising this, and understanding how it differs from the capitalism we thought we knew, is the first step in discussing the key idea of how to reclaim agency in the digital era.
