Technofeudalism, Telecommunications, and the Infrastructure of Control

Taking a closer look at two books -- Yanis Varoufakis's 'Technofeudalism' and Eva Dou's 'House of Huawei' -- reveals the deep entanglement of technology and politics.

Yanis Varoufakis (2023), Technofeudalism: What Killed Capitalism. Vintage.

Eva Dou (2025), House of Huawei: Inside the Secret World of China's Most Powerful Company. Portfolio.

Yanis Varoufakis’s much-touted Technofeudalism: What Killed Capitalism is essentially built atop hyperbole: Varoufakis subscribes to the peculiar thesis that “capitalism is now dead.” By this he means that “its dynamics no longer govern our economies”—and while that takes some unpacking, in essence Varoufakis appears to believe that capitalism has now been “replaced by something fundamentally different”: the titular technofeudalism.

On Varoufakis’s view, rent (a notoriously ambiguous term) has replaced profits and markets have been replaced by digital platforms. Instead of profit, in the form of skimmed-off surplus value from wage-laborers, our new captains of industry, the techno-oligarchs, seek to extract “cloud rent,” a “form of rent that must be paid for access” to digital platforms, “and to the cloud more broadly.” Varoufakis deploys a cloud-heavy terminology: “Cloudalists” vie for control over “cloud fiefs” in order to exploit “cloud serfs,” aiming to build up their stocks of “cloud capital.” For as we go about our digital lives, Varoufakis thinks we are all playing the role of feudal-style serfs:

The most valuable part of the stock of cloud capital is not its physical components but rather the stories posted on Facebook, the videos uploaded to TikTok and YouTube, the photos on Instagram, the jokes and insults on Twitter, the reviews on Amazon or, simply, our movement through space, allowing our phones to alert Google Maps to the latest spot of traffic. In providing these stories, videos, photos, jokes and movements, it is we who produce and reproduce – outside any market – the stock of cloud capital.

One could just as easily flip the argument around and say that all the posts, texts, images, and videos flooding digital platforms would be economically worthless without capital. It isn’t content that makes capital, but capital that turns so many signs into “content,” which is to say, the capitalization of the symbolic. While it’s true that Meta would effectively go bankrupt if we all stopped posting on Facebook and deleted our accounts, it takes an awful lot of physical capital and labor to sustain the mediation of that content.

Varoufakis isn’t the first to have noticed the central role played by data or digital assets of various kinds under late-modern capitalism. Shoshana Zuboff emphasized the role of “behavioral surplus” in her 2019 bestseller, The Age of Surveillance Capital. Some academics have described the formation of an “asset economy.” Controlling the “vectors of information,” as McKenzie Wark has described them, is no doubt an increasingly important source of power and wealth.

But at their best, such analyses have been careful to note that data is just one piece of the overall puzzle of contemporary political economy; data may be important, but so too are the four billion tons of cement produced worldwide in 2024, to take just one example of capitalism’s continued hard material edge. While lots of people have written about notions like “information capitalism” or “digital capitalism,” rather fewer seem willing to write about cement capitalism, maybe because of a certain novelty-pursuing theory effect in the academic field, where analysts are always in search of the next new thing—a sensationalizing mechanism that tends to blow up phenomena disproportionate to their underlying reality. It’s all too easy for these theorists to forget that there have likely never been more industrial proletarians in the world than today; they just happen not to be, by and large, in the Global North.

Varoufakis’s overarching argument systematically undervalues the real materiality of still-existing capitalism, which certainly isn’t “all up in the cloud,” humming along in digital abstraction, but relies on physical infrastructure, from subsea fiberoptic cables to server parks, microchip foundries and computer factories. It ignores the huge amount of waged labor that is required to maintain even the digital infrastructure of “the cloud,” never mind the continuous industrial production that still takes place today, even in our “knowledge societies”; Meta alone employed nearly 75,000 full-time employees in 2024.

Varoufakis also seems to believe that while once upon a time capitalists cared only about profit maximization, our new digital overlords now seem more focused on market shares than profits as such—allegedly enough to have pushed us beyond capitalism. “The undermining of one capitalism’s core principles,” Varoufakis writes, that is, “the profit motive,” plays a major role in the supposed shift from capitalism to technofeudalism. But business historians have long known that maximizing market share and “throughput” have sometimes been far more important as guiding principles for capitalist enterprises than “the bottom line” as such. There’s nothing particularly postcapitalist about the prioritization of market share over profits: Market-share competition is just profit-seeking by other, more circuitous (and often necessary) means. The fact that many Silicon Valley enterprises have been able to forgo immediate profits, bankrolled by investors who take the long view, isn’t evidence of capitalism’s devolution into atavistic-yet-futuristic neofeudalism; if anything, it shows that smart capitalists are willing to delay immediate gratification for longer-term control and even greater profitability.

Varoufakis himself offers us the most succinct counter to his book’s core argument:

Is life under the cloudalists’ reign fundamentally different from living under capitalism? Are the cloudalists really so different from the capitalists that we need a newfangled term – technofeudalism – for the system we live in today? Why not just call it hyper-capitalism or platform capitalism?

Of course, Varoufakis goes on to answer the latter in the negative, though not very persuasively. But rebranding workers “cloud serfs” and capital “cloud capital,” or capitalism “technofeudalism,” does not a new mode of production or accumulation make. If anything, we’re more deeply embedded in capitalism than ever.

What Varoufakis does get right is his concern with the enormous concentration of power in the hands of a Silicon Valley owner-class. That’s worrying enough, and something we need to study and think about relentlessly in the age of Musk and Trump. But best leave feudalism out of it: It can only cloud our judgment.

* * *

If one wants to understand China’s economic rise since the new millennium, smartphones—and the networks and hardware they rely on—are not a bad place to start.

In the early 2000s, as 3G networks were being rolled out, China lagged far behind the West: The country didn’t launch its 3G networks until late 2009—more than six years after countries like the UK and Italy. Over the next decade and a half, however, China underwent rapid economic modernization, and by the time 5G technology matured, it had surged ahead of its Western competitors: By mid-2024, 5G connections accounted for more than 40 percent of all cell phone connections in China, compared with just 12 percent in France, and the country had roughly two and a half times more 5G base stations than the United States. If the smartphone is the beating artery of late capitalist modernity—the medium through which much of life is lived—China’s ascent to the world’s second-place economic power could plausibly be told through its transition from telecoms laggard to leader.

A key player in this transition is the controversial company Huawei, which has faced criticism for alleged links to Chinese human rights abuses in Xinjiang, security concerns over potential backdoors, its role in surveillance programs like the Great Firewall of China, and its business dealings in Iran, among other major issues raised.

Enter Eva Dou’s House of Huawei, a thorough, if at times plodding, journalistic account of how this once tiny electronics outfit rose from obscurity in the 1980s to become a global telecommunications giant by the 2010s, before being cut down to size by U.S. restrictions by the decade’s end.

House of Huawei is both a work of corporate history and a case study in political-economic policy. The Chinese state undoubtedly played a key role in Huawei’s rise, and the company’s controversial nature is indisputable, including extensive contracts in Xinjiang, where it participated in surveillance and control of the Uyghur minority population—part of a Chinese state crackdown which fifty-one UN member states declared to be “crimes against humanity.” Huawei also helped transformed the Beijing 2008 Olympics into one of the most heavily surveilled events in recent history.

Perhaps surprisingly, Huawei was at one point promoted by Western celebrities like Scarlett Johansson and Henry Cavill, who gladly posed with the P9 smartphone in 2016. Major universities like Stanford and Berkeley lined up to work with the company, before a moratorium was instated in the wake of intensified U.S.-China competition under Trump and Xi.

While China’s state-led growth model helped fuel Huawei’s rise, American neomercantilism—a term used by the political scientist Eric Helleiner in describing both China’s and Trump’s trade policies—also undoubtedly foreclosed Huawei’s rapid growth. As Dou observes in the book’s closing pages:

The US government has succeeded in halting Huawei’s rise. Huawei is no longer setting new sales records each year but is instead working to regain its 2020 levels. It is no longer expanding farther into the West but is instead defending its turf in emerging markets. The company has lost valuable R&D partnerships with US and European universities, which had helped drive its innovation.

Still, Huawei reported revenues of $118 billion in 2024, and U.S.-led actions against the company have hardly stopped it in its tracks entirely; its footprint in the Global South remains considerable, in part because of its affordable products. But Huawei certainly lacks the meteoric thrust it possessed only a decade ago.

As in the Global South, not all Western U.S. allies were equally enthusiastic about jumping on the anti-Huawei bandwagon. The European Union remains split, with only 11 out of 27 member states explicitly banning the company through the use of legal powers. In Britain, it wasn’t just that Brexit had made authorities hesitant to get embroiled in an economic dogfight with China, a key trading partner, even though it did eventually instate a 5G ban; the country also recognized the difficulties involved in establishing worthy competitors to Huawei:

One former senior British security official recalled a heated meeting at which a British minister demanded that they work harder with Five Eyes partners to build alternatives to Huawei. “What do you want me to do?” he said he retorted. “Do you want me to phone up Admiral Rogers at the NSA, or General Nakasone at the NSA, and say, ‘Do you fancy building a telco to rival Huawei?’

As Dou shows, launching Huawei onto the world stage took decades of investment, research, and development, propelled by government investments and support—a slow, steady expansion from its local foothold in Shenzhen to wider China and the world beyond. The story of Huawei, then, is also a tale of the hollowness of free-market ideals. Ours is an essentially neoliberal-and-neomercantile world: Trade and markets are continuously being forged and reforged by the state, often in illiberal ways.

Dou—a seasoned reporter for the Washington Post—notes that many industry insiders believe most forms of communication are already under some form of surveillance: “When AT&T conducted a survey of cybersecurity professionals in 2016, 64 percent said they did not expect to be able to have a private conversation on any device.” Given the nefarious power that control over telecoms hardware potentially offers states, Dou’s work prompts a reflection about the obverse side of the Huawei story, especially pertinent to global audiences after Trump 2.0’s apparent realignment with Putin: Should countries also be concerned about potential U.S. control over global telecommunications infrastructure?