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I haven't read the book but in this pull quote from a related article linked in the comments >Traditional capitalists, he proposes, have become “vassal capital

I haven't read the book but in this pull quote from a related article linked in the comments >Traditional capitalists, he proposes, have become “vassal capitalists”. They are subordinate and dependent on a new breed of “lords” – the Big Tech companies – who generate enormous wealth via new digital platforms. A new form of algorithmic capital has evolved – what Varoufakis calls “cloud capital” – and it has displaced “capitalism’s two pillars: markets and profits”. How is it that creating a new type of capital paradoxically brings about the end of capital? Also, in this definition, why are the "lords" able to "generate enormous wealth" just like capitalists? In feudalism, lords were lords over their vassals due to violent power, literally the threat of the sword, and did not create wealth the way a capitalist does by directing the application of capital to generate more wealth, but instead used the threat of violence to take a portion of what their vassals would otherwise generate anyway, in exchange for using that violence against foreign enemies as well. So.. is Facebook forcing me to hand over some of my wealth by using violence, with the agreement that they will also use their monopoly on violence to protect me from Snapchat, if I sign up to Facebook? If not, this seems like someone wanted a book about "technofeudalism" and "capitalism" because they are words that will sell books, and worked backwards to make whatever claims they wanted to make without any real interest in what feudalism or capitalism even actually are.

arrosenberg 3y ago
> Also, in this definition, why are the "lords" able to "generate enormous wealth" just like capitalists? Feudal lords generated their wealth from exploiting the lands they held. Generally, they don't make more land, but when the world wide web came into being, there was suddenly a ton of new land! Between 2000-2015, the tech giants consolidated much of that land (and thus the wealth) - giants like Alphabet, Meta, Amazon, Adobe and MSFT can absolutely be viewed as imperialist, and they operate in that manner internally. > So.. is Facebook forcing me to hand over some of my wealth by using violence, with the agreement that they will also use their monopoly on violence to protect me from Snapchat, if I sign up to Facebook? Kind of. Facebook is using economic and legal violence, rather than physical. They won't send a squad of knights to your house to punish you, but they are attempting to create a system where your only options are to use their service, in the manner they want you to use it (i.e. the one that maximizes their revenues). Why run a business when you can collect the gabelle? Sure, they don't own Snapchat, they certainly tried, but they own Instagram, Whatsapp, and hundreds of other startups they've taken out of the market. You still have some options (TikTok, Snapchat) because Meta's dominance is incomplete and the state doesn't fully support them having a monopoly.
n_ary 3y ago
You are picking very specific points. Think about the online death, if you misbehave or the google seo index misunderstand something, your business is theoratically dead. If FB decides to suddenly block you by automoderator a few times, you lose access to your community. If paypal bans your account by mistake or whatever, they can withold your assets in that account and you have no remedy. These techs are like feudal lords, they can perform "virtual" violence to cut you off but most of your actions actually builds them wealth (you engage to build community, your views brings them ad money, your content may bring their advertisers sales, you using a particular service will bring them cut of any transaction that you perform, your bid on their platform will make them money despite you having zero control, you selling products on their platform will have to give them a big cut while you also need to spend more for their platform to promote your stuff etc.) It is a bit complex and needs some deeper thought than simply looking at the surface.
- yamazakiwi 3y ago
  You are also picking very specific points, there are many ways that these techs are NOT like feudal lords. Good examples though! It is a bit complex and needs some deeper thought than these few comparisons make FB a Feudal Lord and you are a Cloud Slave.
RandomLensman 3y ago
Because large banks don't have enormous revenue or profits while not being super reliant on the tech lords? Traditional capitalist are doing quite well, I think.
- GabeIsko 3y ago
  What bank do you know that doesn't rely on cloud services these days? Heck, when was the last time you even made a transaction that didn't involve a computer? I think the respect to which this worldview holds up is the definition of the "cloud capital" that Yanis has constructed, but isn't really able to make a concrete definition of. He isn't an engineer. But in a banking system, the series of transactions are liable to the bank itself, but can only happen really with the assistance of cloud service providers. In the book, he argues for a more centralized system of payment guaranteed by a government, preferably democratically. Whether you agree or not, it is a compelling lens to look through the emergence of Wechat payments in China, or the rolling out of Fed Now servicing, where governments themselves are trying to centralize computation around payments and transaction settling.
  - RandomLensman 3y ago
    They do use them, but at times more than one cloud provider as well as their own data centers. Certainly, the top banks do not fear the large tech companies and I think similarly, it isn't that Amazon wants to pick a fight with JPMorgan. They (simply) do business with each other and banks have been using computers far longer then "big tech" has been around. Also, depending on jurisdiction, using cloud services in banking comes with audit/certain oversight obligations (via the bank and more regulation at least being contemplated). Btw., Europe has had some central bank(s) run settlement system (TARGET and its succesors) for a long time now.
    - GabeIsko 3y ago
      It's not about fearing them - it's about them not having any choice but to do business with cloud providers, and that being the case in every industry. The whole thing gets set by whatever prices a handful of companies decide to charge. You are even starting to see cloud subsume the holdout big iron that is generally used to handle large transaction volume processing. IBM is pivoting towards cloud. AWS is rolling out mainframe emulation. Etc. We accept regulations on financial industries because of how influential they are, but why not regulation on cloud companies and services which offload much of their liabilities? I also don't really think you can point to banks as especially profitable businesses in today's environment. They are getting hammered by high interest rates. I'm not committed to this new construction of the economy, but it is interesting that SVB failed despite being the sole bank for cloud focused start ups. It points to a system where normal finance rules we have taken for granted no longer apply.
danwee 3y ago
> literally the threat of the sword Obviously, we need to find contemporary analogies: - the other day I opened (manually) a bunch of Linkedin profiles (each in one browser tab). Apparently, Linkedin thought it was a suspicious activity and blocked my account for some time (I don't remember, but in the range of hours). Luckily me, I still got my account... but it would be hard to find jobs and keep working connections without Linkedin. I dodged the sword I'm sure one can find similar examples (or worse) for all the big companies out there (never heard of "google banned me. help!"?)
- marcusverus 3y ago
  Being rate-limited by LinkedIn isn't a contemporary analog to being extorted by force. You're choosing to use their service. You can choose to not use it. The closest contemporary analog to being extorted by force is, of course, our relationship to our governments. One of the most interesting aspects of libertarian thought is their notion that the liberal revolution (which began in 1776 and spread to Europe in 1789) is not, as we are inclined to think, complete. They argue that it is still in its infancy, and in some ways has regressed. This becomes clear when you consider the number of ways in which our modern governments are similar to those states (some feudal) which existed prior to the onset of the liberal revolution. You can now leave your lord's land without permission... but only if some other lord gives you permission to enter theirs. Our lords take far more of our incomes than was taken in the past (even under feudalism), and just as in the days of old, our lords dole that money out in a way which is best suited to their retention of power. If your entire village (or entire region!) doesn't support the elected lord, and endeavors to create a state of your own with a new lord (perhaps because you have been influenced by dangerous ideas like "[sometimes] it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them") then your lord reserves the right to reestablish the "consent of the governed" by force of arms! The primary difference is that they had no say in who their lord would be, whereas you decide (or, you are at best 120,000,000th of the decider) who yours is (so long as they come from one of the two established factions, of course). When put in the appropriate context, the use of the term feudalism to refer to LinkedIn seems rather a stretch.
bparsons 3y ago
The political power these companies have is unprecedented, and makes violence unnecessary. Governments fear these companies because their black box algorithms can easily make or break elections and even drive people into the streets to protest or riot. Also, these companies have unlimited amounts of money to promote the policies and politicians that they want to see succeed. With the exception of the East India Company at its height of its powers, no private entity has ever been permitted to accumulate this amount of political and economic power.

arrosenberg 3y ago

> Also, in this definition, why are the "lords" able to "generate enormous wealth" just like capitalists? Feudal lords generated their wealth from exploiting the lands they held. Generally, they don't make more land, but when the world wide web came into being, there was suddenly a ton of new land! Between 2000-2015, the tech giants consolidated much of that land (and thus the wealth) - giants like Alphabet, Meta, Amazon, Adobe and MSFT can absolutely be viewed as imperialist, and they operate in that manner internally. > So.. is Facebook forcing me to hand over some of my wealth by using violence, with the agreement that they will also use their monopoly on violence to protect me from Snapchat, if I sign up to Facebook? Kind of. Facebook is using economic and legal violence, rather than physical. They won't send a squad of knights to your house to punish you, but they are attempting to create a system where your only options are to use their service, in the manner they want you to use it (i.e. the one that maximizes their revenues). Why run a business when you can collect the gabelle? Sure, they don't own Snapchat, they certainly tried, but they own Instagram, Whatsapp, and hundreds of other startups they've taken out of the market. You still have some options (TikTok, Snapchat) because Meta's dominance is incomplete and the state doesn't fully support them having a monopoly.

n_ary 3y ago

You are picking very specific points. Think about the online death, if you misbehave or the google seo index misunderstand something, your business is theoratically dead. If FB decides to suddenly block you by automoderator a few times, you lose access to your community. If paypal bans your account by mistake or whatever, they can withold your assets in that account and you have no remedy. These techs are like feudal lords, they can perform "virtual" violence to cut you off but most of your actions actually builds them wealth (you engage to build community, your views brings them ad money, your content may bring their advertisers sales, you using a particular service will bring them cut of any transaction that you perform, your bid on their platform will make them money despite you having zero control, you selling products on their platform will have to give them a big cut while you also need to spend more for their platform to promote your stuff etc.) It is a bit complex and needs some deeper thought than simply looking at the surface.

yamazakiwi 3y ago
You are also picking very specific points, there are many ways that these techs are NOT like feudal lords. Good examples though! It is a bit complex and needs some deeper thought than these few comparisons make FB a Feudal Lord and you are a Cloud Slave.

RandomLensman 3y ago

Because large banks don't have enormous revenue or profits while not being super reliant on the tech lords? Traditional capitalist are doing quite well, I think.

GabeIsko 3y ago
What bank do you know that doesn't rely on cloud services these days? Heck, when was the last time you even made a transaction that didn't involve a computer? I think the respect to which this worldview holds up is the definition of the "cloud capital" that Yanis has constructed, but isn't really able to make a concrete definition of. He isn't an engineer. But in a banking system, the series of transactions are liable to the bank itself, but can only happen really with the assistance of cloud service providers. In the book, he argues for a more centralized system of payment guaranteed by a government, preferably democratically. Whether you agree or not, it is a compelling lens to look through the emergence of Wechat payments in China, or the rolling out of Fed Now servicing, where governments themselves are trying to centralize computation around payments and transaction settling.
- RandomLensman 3y ago
  They do use them, but at times more than one cloud provider as well as their own data centers. Certainly, the top banks do not fear the large tech companies and I think similarly, it isn't that Amazon wants to pick a fight with JPMorgan. They (simply) do business with each other and banks have been using computers far longer then "big tech" has been around. Also, depending on jurisdiction, using cloud services in banking comes with audit/certain oversight obligations (via the bank and more regulation at least being contemplated). Btw., Europe has had some central bank(s) run settlement system (TARGET and its succesors) for a long time now.
  - GabeIsko 3y ago
    It's not about fearing them - it's about them not having any choice but to do business with cloud providers, and that being the case in every industry. The whole thing gets set by whatever prices a handful of companies decide to charge. You are even starting to see cloud subsume the holdout big iron that is generally used to handle large transaction volume processing. IBM is pivoting towards cloud. AWS is rolling out mainframe emulation. Etc. We accept regulations on financial industries because of how influential they are, but why not regulation on cloud companies and services which offload much of their liabilities? I also don't really think you can point to banks as especially profitable businesses in today's environment. They are getting hammered by high interest rates. I'm not committed to this new construction of the economy, but it is interesting that SVB failed despite being the sole bank for cloud focused start ups. It points to a system where normal finance rules we have taken for granted no longer apply.

danwee 3y ago

> literally the threat of the sword Obviously, we need to find contemporary analogies: - the other day I opened (manually) a bunch of Linkedin profiles (each in one browser tab). Apparently, Linkedin thought it was a suspicious activity and blocked my account for some time (I don't remember, but in the range of hours). Luckily me, I still got my account... but it would be hard to find jobs and keep working connections without Linkedin. I dodged the sword I'm sure one can find similar examples (or worse) for all the big companies out there (never heard of "google banned me. help!"?)

marcusverus 3y ago
Being rate-limited by LinkedIn isn't a contemporary analog to being extorted by force. You're choosing to use their service. You can choose to not use it. The closest contemporary analog to being extorted by force is, of course, our relationship to our governments. One of the most interesting aspects of libertarian thought is their notion that the liberal revolution (which began in 1776 and spread to Europe in 1789) is not, as we are inclined to think, complete. They argue that it is still in its infancy, and in some ways has regressed. This becomes clear when you consider the number of ways in which our modern governments are similar to those states (some feudal) which existed prior to the onset of the liberal revolution. You can now leave your lord's land without permission... but only if some other lord gives you permission to enter theirs. Our lords take far more of our incomes than was taken in the past (even under feudalism), and just as in the days of old, our lords dole that money out in a way which is best suited to their retention of power. If your entire village (or entire region!) doesn't support the elected lord, and endeavors to create a state of your own with a new lord (perhaps because you have been influenced by dangerous ideas like "[sometimes] it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them") then your lord reserves the right to reestablish the "consent of the governed" by force of arms! The primary difference is that they had no say in who their lord would be, whereas you decide (or, you are at best 120,000,000th of the decider) who yours is (so long as they come from one of the two established factions, of course). When put in the appropriate context, the use of the term feudalism to refer to LinkedIn seems rather a stretch.

bparsons 3y ago

The political power these companies have is unprecedented, and makes violence unnecessary. Governments fear these companies because their black box algorithms can easily make or break elections and even drive people into the streets to protest or riot. Also, these companies have unlimited amounts of money to promote the policies and politicians that they want to see succeed. With the exception of the East India Company at its height of its powers, no private entity has ever been permitted to accumulate this amount of political and economic power.