I have sympathy for the Greek left-wing economist Yanis Varoufakis, who recently wrote a book in which he writes: Techno-feudalism: What killed capitalismI was in the middle of writing a book on technology and economics when OpenAI announced ChatGPT. ChatGPT is an advancement in artificial intelligence that may be the most powerful digital innovation since the Internet gave birth to the new economy in the 1990s. Or it may have a much bigger impact than that.
But fortunately, ChatGPT and other large-scale language models – generative AI systems designed to process and generate human language based on patterns learned from massive text datasets – have strengthened the thesis I explored in my book. Conservative FuturistEssentially, I argued that a set of new technologies (AI, CRISPR, humanoid robots, nuclear fusion, reusable rockets, etc.) supported by good public policy could accelerate the U.S. economy and public prosperity far beyond anything Wall Street or Washington can currently imagine. Luckily for us.
Despite the continued alarming headlines about ChatGPT since November 2022, Varoufakis has chosen to use Amazon’s Alexa (!) to publish a book (out in February) explaining how the power of Big Tech is remaking the world economy into a new post-capitalist “techno-feudal” order. These “cloudarians” (referring to the internet’s “cloud” server and data center infrastructure they control) generate wealth by collecting “cloud rent” – a hefty cut of all economic activity that takes place on their platform. In Varoufakis’s view, who briefly served as Greek finance minister in 2015 during Greece’s debt negotiations after the global financial crisis, this economic relationship is similar to how feudal lords collected rent from serfs who worked the land. Thus, we non-tech billionaires have all become “cloud slaves,” providing our valuable unpaid labor (and data) to the cloudarians by doomscrolling on Twitter or making fancams of supercouple Taylor and Travis.
In Varoufakis’s view, techno-feudalism is not only economically exploitative, but the way it concentrates vast amounts of wealth and power in the hands of a few is harmful to democracy and social cohesion. And at its very sinister center is that cute little cylindrical speaker. But let’s not misunderstand what’s really going on: Alexa is simply the consumer-friendly vehicle for a “great algorithmic network” hiding in the cloud behind it, “that collects our personal information and uses it to trick us into buying things we don’t really need or want,” Varoufakis writes. “Once we train its algorithms, feeding them data about our habits and desires, Alexa starts to train us.”
Varoufakis mentions Alexa nearly 30 times, often in a tone befitting Tolkien's The Lord of the Rings (“…its command is systemic, overwhelming, galactic”). But outside the real world, that is, Marxist intellectual text chains or whatever, the device has become a kind of costly failure for Amazon. Alexa rarely commands or persuades us; we might occasionally ask it to play a tune or tell us the weather, but nothing more. But for Varoufakis, every gadget must serve a socialist theory of late capitalism.
Meanwhile, ChatGPT is only mentioned briefly a few times, despite the enormous economic potential of large-scale language models to automate some of our tasks, make others better, and create new industries and jobs. (And maybe cure a disease or two.) Here's my guess as to why: Generative AI undermines Varoufakis' entire “techno-feudalism” argument, which is nothing more than a greatest-hits collection of a decade's worth of anti-capitalist complaints about the “surveillance capitalism” business models of Amazon, Facebook, and Google, which use aggregated user data to serve relevant ads. “If you're not paying for the product, you are the product!” he writes.
That's ridiculous. Sure, you'd be paying by the hour, but most of us are happy to do that because we value what we get for our time, so ignoring these services would require hundreds or thousands of dollars in bribes per year. As technology analyst Ben Thompson points out:
But on the Internet, where distribution is virtually free, alternatives are just a click away. [audience aggregators like Facebook] We are very keen to avoid clicks, which means giving users what they want. … The user is the priority, not the product.
But Varoufakis' ideological worldview leaves no room for actual human preferences. As Axios business reporter Erica Panda wrote in 2019:
Like many others, I've decided that I'm willing to give up my personal data in order to continue receiving convenient, cheap (or even free) services, and despite some high-profile stories of companies misusing my data, the comfort and quality of life under the control of big tech companies generally seems worth it.
Indeed, reading the book in its entirety, it seems like it should have been published in 2019, a time when digital platforms, especially Facebook, were becoming an increasingly large part of our lives and the U.S. economy, and concerns were growing over their content moderation policies. But some of the current issues are off issues that most Americans didn’t actually care about (roughly one in ten Google users has changed their privacy settings because the average person enjoys Amazon and cares little about online privacy), and activists and policymakers have tried to push their concerns about digital platforms, from data privacy to corporate power, onto chatbots. To them, chatbots are all just another technology used to get us to buy things we don’t want, at least until they take our jobs and kill us.
But an open-minded leftist who doesn't have a looming book deadline could tell a different story that might be more palatable to many on the left: one in which generative AI represents a historic leap toward the creation of actual thinking machines with human-level or higher intelligence, ushering in a world of vast prosperity with no scarcity of goods. We might see a world in which robots take all jobs, where work is largely unnecessary and everyone can enjoy unlimited luxury and leisure. Not much would be expected of anyone, everyone would be given a universal basic income, and we would move toward something called “fully automated luxury communism.”
Unfortunately for Varoufakis and other Big Tech-obsessed leftists, this is a future in which, for now, these giants will need to compete aggressively with each other to advance AI. Even Varoufakis acknowledges that creating a new global socio-economic order based on collective corporate ownership, rewards for data, and a lottery-selected citizen assembly that complements an elected legislature is a “daunting task.” Achieving super-smart AI seems more feasible.
