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Servants of the Tech Moguls?
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Servants of the Tech Moguls?

Yanis Varoufakis’ ‘Technofeudalism’ rehashes a decade’s worth of anti-capitalist talking points. The future of tech, however, is far brighter.

(Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)

I have some sympathy for the left-wing Greek economist Yanis Varoufakis, author of the recent book Technofeudalism: What Killed Capitalism. I, too, found myself in the middle of writing a book about technology and economics just as OpenAI rolled out ChatGPT, an advance in artificial intelligence that may be the most powerful digital innovation to emerge since the internet birthed the New Economy in the 1990s—if not far more consequential.

I was fortunate, however, in that ChatGPT and other large language models—generative AI systems designed to process and generate human language based on patterns learned from massive textual datasets—reinforce the thesis explored in my book, The Conservative Futurist. In essence, I argued that a cluster of new technologies (including AI, CRISPR, humanoid robots, nuclear fusion, reusable rockets, etc.), supported by good public policy, could accelerate the American economy and mass prosperity far beyond what Wall Street and Washington currently consider plausible. Lucky me. 

Varoufakis? Not so much.

Despite the astonishing headlines about ChatGPT since November 2022, Varoufakis still chose to produce a book (published in February) that uses Amazon’s Alexa(!) to illustrate how the power of Big Tech is reshaping the global economy into a new post-capitalist “technofeudal” order. These “cloudalists”—a reference to the “cloud” server and data center infrastructure of the internet they dominate—generate wealth by extracting “cloud rent,” a fat cut of all economic activity that occurs on their platforms. As Varoufakis—who was briefly Greece’s finance minister in 2015 as the country tried to negotiate its debt following the Global Financial Crisis—sees things, this economic relationship resembles how feudal lords extracted rent from serfs working their land. Thus, we non-tech-billionaires have all become “cloud serfs,” providing our supposedly valuable unpaid labor (and data) to the cloudalists via doomscrolling Twitter and making fancam videos of super-couple Taylor and Travis.

Not only is technofeudalism economically exploitative, in his view, but the way it concentrates vast wealth and power in a few hands is toxic to democracy and social cohesion. And right there, at the malevolent center of it all, is that cute little cylinder-shaped speaker. But don’t be fooled about what’s really going on: Alexa is merely the friendly, consumer-facing instrument of “the great algorithmic network hiding in the cloud behind it, an entity that gathers our personal info and uses it to compel us to buy things we don’t really need or want,” Varoufakis writes. “For once we have trained its algorithm, and fed it data on our habits and desires, Alexa starts training us.”

Varoufakis mentions Alexa nearly three dozen times, often in tones befitting Tolkien’s One Ring (“ … its power to command is systemic, overwhelming, galactic”). But out here in the real world—outside of Marxist intellectual text chains or something—the device has been kind of an expensive bust for Amazon. It doesn’t command or persuade us to do much of anything. We occasionally ask Alexa to play a song or give us the weather forecast, but not much more. To Varoufakis, however, all gadgets must serve socialist theories about late capitalism.

ChatGPT, on the other hand, gets just a couple of passing mentions, despite the vast economic potential of large language models to automate some of what we do, help us do other things better, and create new industries and jobs. (And maybe cure a disease or two.) My speculation as to why: Generative AI makes hash of Varoufakis’ whole “technofeudalism” argument, which is nothing more than a best-hits compilation of a decade’s worth of anti-capitalist complaints about the “surveillance capitalism” business models of Amazon, Facebook, and Google that make use of aggregated user data to serve us relevant ads. “If you’re not paying for the product, you are the product!” he writes. 

Which is just silly. You’re paying in terms of time, of course, which lots of us are willing to do because we value what that time purchases for us—so much so that we would need to be bribed with hundreds or thousands of dollars a year to ignore these services. As tech analyst Ben Thompson has noted,

On the internet, though, where distribution is effectively free, alternatives are only a click away; [audience aggregators like Facebook] are extremely motivated to make sure that click doesn’t happen, which means giving the users what they want. … Users are a priority, not a product.

But Varoufakis’ ideological worldview has no place for the preferences of actual humans, folks like Axios business reporter Erica Panda, who wrote back in 2019:

I, like scores of others, have decided that I’m OK with giving up personal data in order to keep getting convenient, cheap (or free) services. Despite the known episodes of firms misusing data, the ease and quality of life under the reign of Big Tech generally seems worth it.

Indeed, the entire book reads like it should have come out in 2019, back when concern was running high about the content moderation policies of digital platforms, especially Facebook, as they became an ever bigger part of our lives and the American economy. But with some of the current having gone out of an issue most Americans never really cared about—normies enjoy Amazon and care so little about their online privacy that maybe 1 in 10 of Google users changes their privacy settings—activists and policymakers have attempted to glom their concerns about digital platforms onto the chatbots, from data privacy to corporate power. To them, it’s all just another technology that will be used to make us buy things we don’t want, at least until it takes our jobs and kills us. 

But a left-winger with an open mind and without a book deadline staring at them could tell a different story, one that might be more pleasing to many on the left. It would be a story about how generative AI could represent a historic leap toward creating actual thinking machines of human-level intelligence or greater, ushering in a post-scarcity world of vast prosperity. Robots could take all the jobs, creating a world where work is largely unnecessary and endless luxury and leisure are available to all. From each not much will be asked and to all a universal basic income en route to what has been termed “fully automated luxury communism.”

Unfortunately for Varoufakis and other lefties obsessing about Big Tech, this would be a future that, for now, needs these mega-companies intensely competing with each other to push AI forward. Even Varoufakis concedes it would be a “tall order” to create a new global socioeconomic order based on collective company ownership, paying people for their data, and citizen assemblies chosen by lottery to complement elected legislatures. Achieving supersmart AI seems more likely.

James Pethokoukis is a senior fellow and the DeWitt Wallace Chair at the American Enterprise Institute.