- by Eileen Whitehead
- The Guardian
- Issue #2195
Yanis Varoufakis believes that capitalism as we know it is on its last legs and we’re now in a stage called ‘techno-feudalism’ where big technology companies are like feudal lords controlling digital platforms, data, and online markets, which exploit the people and smaller businesses that rely on these platforms. Multinational companies like Google, Amazon, Facebook, and Apple do not simply compete in markets – they own and control them, just as feudal lords once controlled land in medieval times.
These companies wield significant influence over global governance, surpassing the power of nation-states. What are the implications of this shift in power for human rights and social justice, particularly in developing countries? We need stronger international regulatory frameworks to hold them accountable and ensure they operate in a way that benefits society and upholds democratic principles.
Digital platforms extract wealth from users, workers and businesses without true competition. Today’s economy is no longer based on traditional capitalism, where businesses compete, but on a system where a few tech giants rule over digital space.
Jodi Dean, calls this the rise of “platform capitalism,” where workers and users do not own the means of production but rely on tech companies to access work, social connections, and even basic services. Rather than creating a free and open internet, digital platforms have built a system where power is concentrated in the hands of a few.
Simultaneously, corporations are ruling the world, their interests seemingly taking precedence over states and their citizens. It’s the end of capitalism’s neoliberal phase. The political power these corporations now wield threatens old free market policies and neoliberal ideology. Global corporations are the embodiment of economic power and differing national and regional contexts institutionally inform the political power these corporations possess. These differing institutional contexts are not just contained within state borders but are now projected and compete on the world stage between states via their global corporations.
What we are experiencing now are powerful states allowing global corporations to act in their own interests, which in turn shapes international relations. Their economic interests affect foreign policy and often cause armed conflicts. Their influence can be analysed through several historical and structural frameworks:
Resource Control and Protection: Multinational corporations, particularly in extractive industries like oil, minerals, and agriculture, have historically pressured governments to intervene militarily to protect their assets, supply chains, and concessions.
The Military-Industrial Complex: The close relationship between government defence departments and private defence contractors creates powerful lobbying forces, often influencing foreign policy decisions, sometimes favouring interventionist strategies that increase demand for military hardware and services.
Economic Sanctions and Statecraft: Modern corporate power operates through economic statecraft. Global tech, finance, and energy companies often comply with or drive state sanctions, effectively acting as geopolitical instruments that can escalate or manage international tensions.
Lobbying and Policy Influence: Corporate lobbying groups, think tanks, and industry associations exert direct pressure on policymakers. Their goal is often to secure favourable trade agreements, deregulation, or geopolitical alignment, which heightens interstate competition and conflict.
Varoufakis may be right about capitalism as we’ve known it, but it won’t be replaced by anything better without a lot of work.
