YANIS VAROUFAKISThis book falls squarely within the Marxist political-economic tradition. I wrote it as a piece of Marxist scholarship. So, from my Marxist perspective, this is a tragic book to have to write.

The contradictions of capitalism didn’t lead to the anticipated resolution where, after all these centuries of class stratification, society would be distilled into two classes, poised for a high-noon clash. This decisive confrontation between oppressor and oppressed would result in the liberation of humanity — the emancipation of humanity from all class conflict. Instead of that, however, this clash between the capitalist — the bourgeoisie — and the proletariat ended up in the complete victory of the bourgeoisie: a complete loss after 1991, especially.

In the absence of a competitor in the form of trade unions — the organized working class — capitalism went into a rampant dynamic evolution that caused this mutation into what I call cloud capital. This transformation effectively marked the end of traditional capitalism. It killed capitalism — a development that embodies a Marxist-Hegelian contradiction, but not the kind of contradiction we would have hoped for.

Cloud capital has killed off markets and replaced them with a kind of a digital fiefdom where not just proletarians — the precarious — but bourgeois people and vassal capitalists are all producing surplus value for the vassal capitalists. They are producing rents. They’re producing cloud rent, because the fiefdom is a cloud fiefdom now, for the owners of cloud capital.

Cloud capital created a kind of power, which we as Marxists must recognize as being structurally, qualitatively different from the monopoly power of somebody like Henry Ford, Thomas Edison, or the great robber barons. Because those people concentrated capital, concentrated power, bought out governments, and killed off their competitors to sell their stuff. Today’s “cloudalists” — cloud capital owners — they don’t even care about producing anything and selling their stuff. This is because they have replaced markets — they have not simply monopolized them.

If capitalism is market-based and profit-driven, well then this is no longer capitalism, because this is not marketplace-based. It’s based on digital platforms that are closer to techno-fiefdoms or cloud fiefdoms, and they’re driven by two forms of liquidity. One is cloud rent, which is the opposite of profit, and the other is central bank money, which funded the building of cloud capital. And that is not capitalism.

Now you can choose to call it capitalism if you want, if you redefine capitalism and if you say that anything that stems from the power of capital is capitalism, but it’s not capitalism as we’ve known it. To paraphrase Spock in Star Trek: “It is life but not life as we’ve known it.”

And I think that it’s important to make the linguistic transition from the word “capitalism” to something else, which is very difficult to make, because we’re all wedded to the idea that we’re fighting against capitalism. After all those decades of feeling that we came to this planet to overthrow capitalism, it’s really very difficult to have an idiot like me coming along and saying, “But this is not capitalism anymore.” You say, “Bugger off. Of course it is capitalism. If it’s not socialism, it must be capitalism.” That’s what a fellow Marxist said to me. And I killed myself laughing because I remember my Rosa Luxembourg. No, it can be barbarism.

YANIS VAROUFAKISFrom a Marxist perspective, the simple answer is that cloud serfs directly produce capital with their free labor. That has never happened before. Serfs under feudalism produced agricultural commodities. They did not produce capital — that was up to the artisans who produced tools and instruments and plows and stuff. In contrast, modern users contribute to capital formation simply by engaging with platforms, offering free labor to augment cloud capital for the capitalist. That never happened under capitalism.

Techno-feudalism remains deeply reliant on the capitalist sector, mirroring the dependence of capitalism on the agricultural sector and the feudal sectors for sustenance. And just as capitalism needed feudalism to ensure a food supply, techno-feudalism is parasitic, drawing essential support from the capitalist sector to sustain itself.

So, the capitalist sector remains foundational. It is producing all value — it’s why this analysis is distinctly Marxist. All surplus value is produced in the capitalist sector, but then it is usurped. It is appropriated by this mutant capital — cloud capital — most of which is not reproduced by proletarians. It’s reproduced by people in their leisure time who work for no pay. That has never happened. That’s why I’m saying this is not capitalism. And it doesn’t help to think of this as capitalism, because if you remain wedded to the word capitalism, the mind fails to comprehend the great transformation.

YANIS VAROUFAKISWell, everything could be different. That’s what David Graeber has taught us, right? And as leftists, we have to believe that nothing was foretold. Otherwise, we don’t believe in human agency — otherwise, what’s the point of living? We might as well become couch potatoes watching the world go by. So, everything can always be different. The historical counterfactual is always interesting, but I cannot do it. I really cannot do it. I mean, I tried to do it often in my previous book, which was a political science-fiction novel called Another Now. Effectively, I created another time line where in 2008 we did things differently with Occupy Wall Street to bring about socialist transformation. And that’s a great game to play with your own mind, but I don’t think it’s historically pertinent.

How could things have been different? Well, one could say that the privatization of the internet was inevitable because we live under capitalism. And capitalism has this capacity of eating up and infecting every capitalist-free zone. The reason why I could never align with utopian socialism, like that of Robert Owen in the nineteenth century. Despite his efforts to create capitalism-free zones, history shows that capitalism inevitably invades and corrupts these spaces. You cannot have pockets of socialism surviving for long within capitalism.

YANIS VAROUFAKISAgain, I need to make this point very clearly. Capitalism in the eighteenth century and nineteenth century, when it emerged, overthrew feudalism, but it needed the feudal sector to continue producing food because otherwise we would all have died. That’s why I’m saying that capital was parasitic on the feudal agricultural sector. So, it’s not that one dies and the other lives. What happens is that capital takes over the hegemony of the system, but it is parasitic on the previous system. That’s a standard Marxist, historical, material analysis.

Now what is happening is that at the center of techno-feudalism you have a capital sector, which is absolutely necessary. The capital sector is the only sector that produces value — exchange value in Marxist terms — but the owners of that capital, of old-fashioned capital, are vassals to the cloud capitalists. Their profits are being skimmed off. So surplus value is withdrawn from the circular flow of income by the “cloudalists.”

Now that makes the system even more unstable, even more prone to crisis, and even more contradictory and even less viable than capitalism was. That’s what I’m saying in the book: that the takeover by cloud capital — the supplantation of capitalism by techno-feudalism — is making our societies more fraught with conflict. They’re becoming more stupid, more conflictual, more poisoned, and less capable of allowing space within them for social democracy, for the liberal individual — for values that even the Right cherished under capitalism.

The Left was never against the idea of liberty; our critique lies in the limiting of liberty to a select few. But now even this limited form of liberty is under threat, and therefore the contradictions are getting worse. I hold on to hope that perhaps these growing tensions will push humanity into a decisive showdown between good and evil — between the oppressors and the oppressed. But the rapid approach of climate catastrophe poses the risk that we may reach the point of no return before that resolution takes place. So, we have our work cut out for us, and humanity is staring extinction in the face — unless we pull our socks up.

YANIS VAROUFAKISWell, the era when capitalists wanted to be capitalists was gone a long time ago. I trust that Henry Ford liked being a capitalist in the same way that, in a strange and completely warped manner, Rupert Murdoch likes to be a newspaperman — even though he has done so much to destroy newspapers. But these people are either dead or on their way to hell. So, yes, capitalists don’t want to be capitalists, especially here in Europe, especially in my country. All the capitalists, and I’ve known quite a few, have stopped being capitalists; they’ve become rentiers.

The difference is that the capitalists who were transforming themselves into being rentiers, until the emergence of cloud capital, were essentially passing their capital stock onto others or possibly to private equity. These former capitalists extracted rent from the monopoly profits of these highly concentrated capitalist firms.

But what happens with people like Jeff Bezos and Elon Musk, I mean, they want to do what they’re doing. They want to be cloud capitalists or “cloudalists,” as I call them. They love it. These people, a bit like Thomas Edison, love what they do. They’re not like standard rentiers. They’re not like the feudal lords of the past. They are not like the capitalists who no longer want to be capitalists. These people are enthusiastic’ and they’re very talented, and, unfortunately, they’re very smart. The combination of their drive with the exorbitant power of the cloud capital that they own creates a highly potent, concentrated form of “cloudalist” power, which we have to take very seriously.

YANIS VAROUFAKISOh, yes, I have done that. That was the reason why I wrote my previous book. Another Now envisions exactly what you say. It features a new Bretton Woods system inspired by John Maynard Keynes’s original proposal — rejected by Harry Dexter White and the Roosevelt administration — merged with a participatory democratic socialist framework. This setup has been designed for ongoing redistribution of income and wealth from the Global North to the Global South, especially in the form of green investment. So, I’ve mapped all that and can answer your question of how things could work today, with the technologies that we have, if property rights were equally distributed — which is what I believe socialists should be aiming at. But that was my political science fiction. This book is about what we’re facing.

YANIS VAROUFAKISWell, technically it’s dead easy. It can be done in a week because it is so straightforward. Imagine something like an Excel file, which is kept by the Fed, and every single resident in the United States is one row. And when a payment is made, the corresponding value transfers from one cell to another, representing the payer and payee. This process would be free, instantaneous, and anonymized. By creating a separation between the software operators and the identities of individuals, identified only by codes similar to Bitcoin addresses, privacy can be assured. And checks and balances could be established to ensure that the state is not watching what each one of us is doing.

And because the money will be shuffled through the same spreadsheet, nothing stops the central bank from adding the same number to everybody every month. And that’s a universal basic income (UBI), which is not, and this is crucial, funded by taxation. Because the problem with the idea of UBI is that it is vulnerable to complaints like, “What are you talking about? You’re going to tax me, tax the dollars that I earn, to give to a bum, a surfer in California or to a drug addict or to a rich person?” But this proposal leverages the central bank’s capacity to generate funds. And we should let no one tell us that it would be inflationary or would be a problem — because they’re printing trillions on behalf of financiers. Why not print them on behalf of the little people? Of everyone equally?

Now, the reason why you don’t have this system in the United States and why you are very far away from a digital dollar is because if anybody in the Fed dares move in that direction, they will be murdered by Wall Street — they’ll experience political and character assassination. Wall Street will never allow it because it would spell the end of Wall Street. Because why would you want to have a bank account with Bank of America if you can have a digital wallet with the Fed?

Bank of America would be compelled to justify their services and fees. They’d have to come and convince you that you need to have an account with them because they want to give you something at a decent price — like a loan — without scamming you. And they can’t do that because the whole point of Bank of America or Citigroup is to extract rents from you by monopolizing payment systems and holding deposits. You keep your money with them because, currently, there’s no other way of keeping your money.