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When I admit to my fandom as we sit down for a zoom interview,\u00a0 he immediately tells me off. (This is exactly what I wanted.)<\/p>\n
\u201cI don\u2019t want fans in life, you know,\u201d he says. \u201cEver since I entered politics, I acquired two things that I never wanted to have: enemies and fans.\u201d You see, Varoufakis insists, polarization is a greater problem than whether you\u2019re left or right, whatever your beliefs are. <\/p>\n
\u201cHumanity\u2019s escape from tribalism was the one thing that we could celebrate and now we are going back to a kind of tribalism,\u201d he says. But that\u2019s not why we\u2019re here. We are here to talk about humanity\u2019s escape from something else entirely: the economic system of capitalism. Because Varoufakis\u2019 new book, now out in the U.S. after a European release in 2023, is his theory of \u201cTechnofeudalism: What Killed Capitalism<\/a>.\u201d<\/p>\n I am such a fan of Varoufakis that I had to write my own critique in the pages of Fortune<\/em><\/a>, insisting that while his and others\u2019 concept of technofeudalism is compelling, what we saw in 2023 was the return with a vengeance of \u201cretro capitalism.\u201d Supply chains and energy independence were the major economic stories of that year as inflation continued its long descent from a 40-year peak in 2022, while so far 2024 is showing that old-school automobiles are still the rage<\/a> as the electric vehicle revolution stumbles<\/a> out of the gates.<\/p>\n But when Varoufakis, at 62 years old a very distinguished type of provocateur, is sitting across from you on a Zoom call, it\u2019s hard to argue some of his points. But it\u2019s more fascinating to know what his friends and, yes, his fans had to say about his new book that argues capitalism has already been dead for over a decade, and we\u2019re only just now beginning to realize it.<\/p>\n \u201cI have to say I was expecting a far worse reception than I got,\u201d he tells me, and he says the left (his own \u201ctribe,\u201d so to speak) was more upset with it, and not because they disagreed with it. \u201cPeople on both left and right are wedded to the idea of capitalism\u201d he says, likening it to \u201cthe air we breathe.\u201d\u00a0<\/p>\n He mentioned the case of an old-school Communist in London who confronted him. \u201cHe was spot on. He said, \u2018I can\u2019t accept what you\u2019re saying, because if what you\u2019re saying is right, then it\u2019s not enough to organize auto workers and nurses.\u2019\u201d At least he was honest, Varoufakis adds. \u201cHe was saying that, you know, [your book is] making my life so unbearably difficult that I can\u2019t possibly accept your premise.\u201d<\/p>\n Here\u2019s how Varoufakis broke down his own journey to realizing that capitalism died without (almost) anyone realizing it, how it has especially \u201cpoisoned\u201d Gen Z, how the Fortune 500 is in danger of becoming the Fortune 7, and why we all need to act like one of this Gen Xers\u2019 favorite bands, and \u201crationally\u201d rage against the machine.<\/p>\n Shortly after telling me about his Communist friend, Varoufakis clarifies that he\u2019s not saying he\u2019s like Adam Smith<\/a>, the Scottish Enlightenment genius who saw the capitalist world to come with The Wealth of Nations<\/a><\/em>, but he\u2019s not not<\/em> Adam Smith, either. <\/p>\n Feudalism had been the way of the world for hundreds of years, so who could really believe that free markets and capital would take over? Similarly, we are now living through a \u201cgreat transformation whereby everything we took for granted is no longer,\u201d he said, adding, \u201cyou\u2019re not going to have many converts\u201d to that idea, \u201cat least not at the beginning.\u201d<\/p>\n Varoufakis\u2019 own mind rebelled at his conclusions. \u201cIt took me years before I accepted that, before I could say to myself that capitalism is dead. When I first said that to myself, I thought, \u2018Come on, you\u2019re being stupid.\u2019\u201d<\/p>\n But just consider: The Global Financial Crisis<\/a> and the collapse of century-plus-old banks on Wall Street. Just like the crash of 1929<\/a> that brought on the Great Depression<\/a>, says Varoufakis, the crash of 2008 got him worrying about the state of the world. Even still, he didn\u2019t imagine that something would emerge that would be other than capitalism.<\/p>\n After his combustible, short-lived political career, Varoufakis tells me (as he details in his new book), he went back to his mathematical training and began really looking at the algorithms driving the major winners of post-crash capitalism: Big Tech. What he found wasn\u2019t capitalism, wasn\u2019t even a marketplace, at all.<\/p>\n \u201cThe moment you enter Amazon.com, you\u2019ve exited capitalism,\u201d he says, adding that it\u2019s a trading platform, not a market, and you must not confuse the two. And here, the self-described Marxist appeals to the wisdom of not just Adam Smith, but also the arch-free-market economists Milton Friedman and Friedrich Hayek<\/a>. \u201cIf they were alive, they would agree with me\u201d that every market has to be decentralized, at least to some degree, he says.\u00a0<\/p>\n \u201cWe all walk into a market, even if there\u2019s only one seller, at least we can talk one to one another as buyers and exchange views.\u201d For Amazon, Google, Facebook and all of what he calls \u201ccloud capitalists<\/a>,\u201d there is no conversation of economic exchange that isn\u2019t mediated by the algorithm, \u201cwhich is owned by one man,\u201d adding that such an outcome would be a \u201cwet dream\u201d of the Soviet Union\u2019s State Planning Committee, or Gosplan<\/a>. \u201cIf Gosplan had the algorithm, they would be over the moon, because it\u2019s the ultimate in centralization.\u201d<\/p>\n I have to ask him at this point about the major markets story of 2023 and early 2024, as the exceptional American stock market shook off its bear market and stormed into a bull run with the so-called \u201cMagnificent Seven,\u201d the tech companies that include the very same names Varoufakis accuses of ruining capitalism. Does he see their dominance of the stock market as a sign that he\u2019s right or that he\u2019s wrong? Of course, he says, it just shows that the Fortune 500 risks becoming irrelevant if all the value is going to accrue to the tech firms that operate their own fiefdoms. \u201cIt\u2019s going to become the Fortune 7 very soon,\u201d he says with a smile on his face.<\/p>\n And this gets to why you are reading about a Marxist provocateur in the pages of Fortune<\/em> magazine: He is also a committed individualist and, yes, a liberal.<\/p>\n This is not to say liberal in the recent American political context of center-left, or liberal in the Adam Smith sense of free markets being the most efficient, but liberal in the tradition of Enlightenment philosophers such as John Locke or Thomas Hobbes, prizing the importance of the individual in society. (To be clear, this is my interpretation of Varoufakis\u2019 thought, not his own.)<\/p>\n Varoufakis does have an example of liberalism in his book: Ironically, it\u2019s his father, a chemical engineer who was a committed Communist<\/a> while being a very successful bourgeois capitalist, thriving within a system he was ideologically committed to overthrowing\u2014much like his famous son today. Varoufakis writes movingly in Technofeudalism<\/em> about how his father was the \u201cpersonification of the liberal individual,\u201d free to have his own political beliefs and his own hobbies, publishing articles on archeology, dabbling in metallurgy, teaching his son about the Greek mythology that animates his thinking even today.<\/p>\n This separation of work, leisure and hobbies is gone in the age of the algorithm, Varoufakis argues. Just look at Gen Z and the lie of Big Tech. The Silicon Valley mythology encourages the indulgence of self-expression, but how can you do that in a culture mediated by an algorithm owned by one man? \u201cIf you are an upper middle class kid. and you have aspirations for life, you know that every video you upload on TikTok, everything you write on Twitter, everything you put on Facebook is going to be thrown at you during a job interview.\u201d There are only two reactions: apathy or inhibition.<\/p>\n In an argument that recalls Kyle Chayka\u2019s Filterworld<\/em><\/a> and Taylor Lorenz\u2019s Extremely Online<\/em><\/a>, Varoufakis says the digital native Gen Z generation is not being driven by a sense of \u201cinner liberty,\u201d but rather by what they think Google considers to be a free person. \u201cThere\u2019s no nice, clean separation between work and play anymore. And that cannot leave that generation untouched. It really poisons their way of relating to one another, because even [that] is going to become part of their CV.\u201d<\/p>\n It\u2019s a \u201cdepressed society,\u201d where aggregate demand is low, he says (agreeing with Larry Summers\u2019 arguments about \u201csecular stagnation<\/a>\u201d). Every effort by central banks to stimulate the economy goes largely to the cloud fiefdoms described in his book, as economic activity is sucked out of marketplaces into the trading platforms of the cloud. In the real world, the \u201ccloud serfs\u201d with depressed prospects<\/a> face increased asset prices<\/a> and a housing market that Varoufakis calls \u201cunapproachable.\u201d<\/p>\n The zeitgeist agrees with much of what Varoufakis says. From \u201cquiet quitting<\/a>\u201d among western Gen Zers to \u201clying flat<\/a>\u201d in China to even the surgeon general\u2019s remarks about the \u201cloneliness epidemic<\/a>,\u201d the emerging culture of young adult professionals is one of grappling with mental health struggles<\/a>, if not outright depression<\/a>. <\/p>\n The Gen Z that Varoufakis sees are \u201calienated\u201d people who are cynical because of the pervasive effects of social media on all of culture. \u201cThey get much older, much faster as a result of living in a social media world in which they are compelled to try to find an identity which in the end is not self-driven. That\u2019s why I am talking about the death of the liberal individual, because then it\u2019s no longer autonomous.\u201d<\/p>\n He even waxes a bit nostalgic for the supposedly \u201ctyrannical\u201d days of mid-20th century capitalism, when to work for IBM, \u201cyou had to be dressed in the IBM way<\/a>,\u201d or to work for Toyota, \u201cyou had to sing the Toyota anthem<\/a>.\u201d In those times, you could be a corporate person during the day and an anarchist poet in the evening at night, he says, and that\u2019s lost to us now.<\/p>\n So, I ask, what he describes sounds a lot like one of my favorite bands from the proto-digital 1990s: Rage Against The Machine. Does he want us to take that away from his book?<\/p>\n \u201cI loved Rage Against The Machine,\u201d he responds. \u201cI\u2019ve danced to many of those songs. So obviously my answer to you is yes,\u201d but then he pauses and emphasizes that \u201cIt has to be a rational rage, a very moderate rage.\u201d Every rebellion is pregnant with authoritarianism, he responds, and after all, he adds, he is a liberal.<\/p>\n \u201cSome people think that sounds like a contradiction, to be liberal and left wing.\u201d But the whole point of liberalism, he adds, is the importance of the autonomous individual.<\/p>\n It\u2019s a message you could almost be a fan of.<\/p>\n<\/div>\nHow the 2008 crash turned capitalism into a Soviet \u2018wet dream\u2019 <\/strong><\/h2>\n
The poisoning of Gen Z and \u2018death of the liberal individual\u2019<\/strong><\/h2>\n