Neoliberalism has been with us from the 1980s. Since then, capitalism has undergone multiple crises and transformations. Most recently, capitalism endured a global financial crisis and a pandemic that brought trade to a halt, locked people in their homes, and ushered the state back at the forefront of economic policy.

There are many ways in which the term neoliberalism is understood. I use the concept primarily referring to two things: firstly, an era in the history of capitalism, which starts with the elections of Margaret Thatcher in the UK and Ronald Reagan in the US; secondly, the predominance of an economic policy package which includes the liberalisation of international trade, the privatisation of public services and the flexibilization of labour markets. A key characteristic of neoliberalism is that it fuelled a process that many refer to as ‘financialisation’, namely the growing dominance of the financial sector over everything else in the economy.

Scholars seem to increasingly imply that the term neoliberalism has become passé. Capitalism has changed too much since the 1980s and this begs for a different conceptualisation of its contemporary articulation. Diagnosing contemporary capitalism as either ‘surveillance’ (Zubboff 2019), ‘rentier’ (Christophers 2020), ‘platform’ (Srnicek 2017), ‘asset manager’ (Braun 2022), ‘cannibal’ (Fraser 2022), or ‘precarity’ (Azmanova 2020), also points to different prognoses of the possibility of progressive social transformation. Varoufakis (2023) and Dean (2020) go so far as to invite us to question whether we are still speaking of capitalism at all.

If we have surpassed neoliberalism, how should we understand the form of capitalism that we now inhabit? In this piece I argue that any answer to the question of what comes after neoliberalism must account for the rise of Big Tech and asset management corporations – that is, their growing grip on our lives. I will draw on two frameworks that focus on these recent transformations of contemporary capitalism, namely ‘technofeudalism’ as conceptualised by Yanis Varoufakis and what Benjamin Braun has called ‘asset manager capitalism’.

In fact, a key to understanding the latest transformation of contemporary capitalism may be found in exploring the links between what Varoufakis calls ‘cloud capital’ and the ubiquitous (as Braun convincingly argues) asset managers. Taking a short detour into the history of economic thought, I will argue that what both phenomena suggest is the triumph of rent over profit, of appropriation over production, such that the doubts regarding the survival of capitalism may indeed be warranted.

 

Technofeudalism

In Technofeudalism: What Killed Capitalism (2023) Varoufakis argues that the use of AI, digital and algorithmic networks has transformed the nature and power of particular pockets of capital. That is, a new form of capital has emerged – what he calls ‘cloud capital’ – that has the power to subjugate capitalist production to its own needs and logic. Production is still capitalist, in the sense that it relies on private means of production and the exploitation of wage labour, but it is embedded into a technofeudal structure (I will return to the ‘feudal’ part in the last section). While traditional (or ‘terrestrial’, as Varoufakis calls it) capital is able to only exploit workers, cloud capital can also exploit consumers as well as other capitalists who do not possess cloud capital. This adds an additional layer not only to capitalism’s hierarchy of economic stratification, but also to the societal hierarchy of power and capacity for control.

As Varoufakis claims, consumers are exploited because their leisure time is being mined for profit by Big Tech. Leisure time spent by searching on Google, interacting with Alexa, posting on Instagram, or scrolling through TikTok, has been instrumentalised for the accumulation of cloud capital, without consumers bearing any direct benefits of their ‘labour’. A large part of the personal data that we share on all these platforms ultimately forms what Shoshana Zuboff (2019) calls a ‘behavioural surplus’ (i.e. the surplus of data on consumer behaviour accumulated over and above what is needed to improve the consumer experience). This surplus is sold to advertisers in the hope not only of predicting, but also affecting our future behaviour.

Varoufakis notes that every time we interact with a digital servant, such as Alexa, we effectively train its algorithm to recognise our habits and preferences and give us good recommendations. But ultimately the time comes, after an inevitable building of trust, when Alexa starts exploiting our consumer profile to change our habits and preferences, pushing for products we would not otherwise purchase. At that point, it is no longer clear who trains whom, who the master and who the servant is. 

In short, the production of cloud capital does not solely rely on wage labour (the labour of people directly employed by the likes of Google or X), but also free rides on the unwaged labour of consumers. Consequently, while traditional capitalist firms such as General Motors and General Electric spend around 80% of their revenue on wages, Big Tech firms end up spending only around 1%. It is this feature of producing while relying on unwaged labour that bears resemblance to the feudal order.

cloud fiefs isolate buyer from buyer, seller from seller, such that only the algorithm has the power to connect them

Cloud capital also has the capacity to exploit other capitalists who do not possess it, by replacing markets with cloud fiefs. Varoufakis argues that e-commerce platforms such as Amazon are not markets. He views markets as public institutions that house spontaneous, decentralised interactions between consumers and producers. Instead, cloud fiefs isolate buyer from buyer, seller from seller, such that only the algorithm has the power to connect them. Entering Amazon is like entering a town where everything is owned and controlled by one person, here Jeff Bezos. Contrary to the public and open nature of markets, this describes a privatised institutional arrangement of centralisation. This allows cloudalists (owners of cloud capital) to demand excessive commission charges (up to 40% in the case of Amazon) from other capitalists to gain access to their fief – what Varoufakis calls ‘cloud rents’.

As for cloud capital’s effect on workers, Varoufakis implies that its capacity for total monitoring and control leads to the even further exploitation of the worker – more than the traditional capitalist could hope for. This is epitomised by Amazon warehouses where wearable tech and algorithms tirelessly work to optimise packing targets, squeezing warehouse workers to the point of collapse. Instead of being answerable to a boss, workers become answerable to an algorithm which tracks their every move. As a result, not only are workers pushed to work harder, but their capacity for collective action to safeguard minimal working conditions (such as the right to go to the restroom) significantly diminishes.

In the context of neoliberalism, this amounts to a further disempowering of workers, a pattern that has been evident for the past several decades. Since the 1980s, productivity gains have almost exclusively benefited employers in the US, with employees seeing their real wages stagnate, if not decline (Economic Policy Institute 2024, see Figure below).

Nancy Fraser (2022) calls this phenomenon the rise of the ‘hybrid worker’ – a worker who is at the same time exploited and expropriated. Following Marx, Fraser understands capitalist exploitation as occurring because the employer pays a wage that covers the necessary costs of the worker’s reproduction but retains most of the surplus value produced. However, Fraser (2022) claims, the expansion of debt has allowed employers to pay workers even less. That is, many workers under neoliberalism were paid less than what they needed to survive as functioning workers, which pushed them further and further into indebtedness. Thus, as well as being exploited, their labour was also expropriated. To this, Varoufakis (2023) adds that the arrival of cloud capital makes matters even worse due to its greater capacity for monitoring and control that, along with debt, renders workers’ labour even more expropriable.

Varoufakis claims that the arrival of cloud capital implies the impossibility of social democracy, at least as it was conceived in the latter part of the 20th century. It is far from obvious how platform Big Tech companies are to be regulated. Price regulation is impossible since they offer their products for free, while anti-trust regulation is hard to enforce since the raison d’etre of a platform is its capacity for economies of scale. Whether it is a platform for renting apartments or hailing taxis, the main product that a platform offers to both buyers and sellers is access to a large network of buyers and sellers. More often than not, having a small platform is akin to offering a bad product. 

Furthermore, under technofeudalism workers are tightly monitored to prevent their collective action, while consumers are physically isolated, making boycotts difficult to organise. Still, the recent success of the Amazon Labor Union in the US and the consumer boycotts of Starbucks, Pizza Hut, and McDonald’s show that all hope is not lost. In fact, Varoufakis argues that these impediments can be overcome by a grand coalition of workers, consumers, and small capitalists who do not possess cloud capital (e.g. your neighbourhood restaurant or bodega whose profits are squeezed by the exorbitant fees of Uber Eats). One must think beyond the traditional strategies of progressive politics, engaging in what he calls ‘cloud mobilisation’ – namely using the capacities of the cloud against cloud capital itself. 

 

Asset Manager Capitalism

While analysing the current social order as ‘technofeudal’ centres one’s attention on the social power of platform and Big Tech companies, the diagnosis of ‘asset manager capitalism’ invites us to reckon with the phenomenal rise of asset management corporations. Benjamin Braun and Brett Christophers (2024) start with some stylised facts. The so-called Big Three asset managers (BlackRock, Vanguard, and State Street) used to own some 13.5% of all S&P 500 companies in 2008, which is now up to 22%. Varoufakis (2023) adds that they are the largest shareholders in 90% of firms in the NYSE. Moreover, asset managers jointly control 126 trillion dollars of financial resources, totalling 526 billion in revenues, while their profits are estimated at around 200 billion per year (equivalent to the GDP of Greece) (Braun & Christophers 2024). The numbers undoubtedly speak for themselves.

Asset managers wield their immense access to financial resources to actively influence the behaviour of other capitalists. In the case of ‘conventional’ asset managers, such as the Big Three, a large part of those assets come from insurance schemes, pension and sovereign wealth funds who are looking for someone to invest their vast sums of capital. Due to their sheer size, asset managers tend to hold significant equity that implies substantial control over company policy. This has turned asset managers into the “central nervous system of contemporary capitalist society” (Braun & Christophers 2024, p.553) as well as into important shapers of capitalism at large.

Many states have also increasingly become dependent on asset managers for the design and implementation of their own policies, for instance regarding the green transition and even basic public goods provision.

States are also held hostage to the policy preferences of large asset managers. Especially in the Global South, where countries depend on foreign denominated bonds to finance their state services, asset managers can directly affect their access to the sovereign bond market. Hence, they become the arbiters of the creditworthiness, solvency and ultimately also of the sovereignty of a number of countries. Many states have also increasingly become dependent on asset managers for the design and implementation of their own policies, for instance regarding the green transition and even basic public goods provision. Not only that, but state dependence and weakening (or altogether non-existent) monetary sovereignty, coupled with immense access to resources imply that asset managers also have the capacity to directly lobby governments. This either happens with the purpose of preventing regulation, or to actively promote their policy agenda.

An example of a policy space where the influence of asset managers has been pivotal is monetary policy. Benjamin Braun (2022) argues that the dovish approach that most central banks initially took towards inflation is related to the influence of asset managers. Traditionally, monetary policy has been a field of class conflict. Banks, creditors and savers usually prefer low inflation and high interest rates, even if it comes at the cost of some unemployment. Conversely, workers and debtors prefer low interest rates since they facilitate investment and job creation. In fact, debtors are often willing to shoulder some inflation because it eats into the real value of their debt. Alas, the rise of asset managers has aligned the interests of Wall Street with those of the working class on this issue. Persistently low interest rates caused asset price inflation which ballooned asset valuations, increasing the fee revenues of asset managers. By making borrowing cheaper, low interest rates also reduced the financing costs of highly leveraged asset managers. Hence, the interests of banks and savers were trumped by the sheer power that asset managers have amassed.

What remains unclear in this presentation of asset manager capitalism is whether the rise of asset managers presents us with a radical break from neoliberalism or rather is merely an outcome of the deepening of financialisation. A very common critique of neoliberalism is that it brought the triumph of financial capital over the rest of the economy. This triumph though, instead of productive, has become parasitic. Speculative activities have become more remunerative than productive investment, a condition that breeds financial instability. Not only that, but it stifles productivity gains as capital is increasingly funnelled away from other activities and into finance (see Mazzucato 2018, Harvey 2024, Lapavitsas 2013).

Perhaps the first economist who made an explicit link between neoliberalism and the increasing influence of institutional investors, such as pension funds, was Hyman Minsky (Whalen 2010). For Minsky, the 1980s ushered in the era of ‘money manager capitalism’, where money managers and their funds became the new masters of the economy. His concerns about this phenomenon were largely similar to those discussed just above, namely the crisis-prone nature of the system, as well as its unwillingness to finance productive investments. While it seems that Minsky’s diagnosis was prolific, it is doubtful that he could have imagined the extent of concentrated ownership and power that asset managers have now amassed.

Therefore, if the rise of asset managers represents the culmination of the longstanding process of financialisation of the economy (i.e. the increasing dominance of finance over all other productive sectors), then many of the critiques of neoliberalism from the past few decades perhaps still remain relevant. We may be witnessing new levels of concentration of capital, but reigning in finance and ensuring it functions for the public good would still be a major policy priority. This is not, however, the case for the diagnosis that Varoufakis proposes. As suggested in the previous section, accepting the hypothesis of technofeudalism leads to a radical rethinking of policy priorities as well as strategies for progressive social transformation.

 

So, What Comes After Neoliberalism?

It is undeniable that the rise of cloud capital and asset managers are two fundamental phenomena that structure contemporary capitalism. Perhaps, it is these two types of corporations that will shape, at least to an extent, that which will come (or has come) after neoliberalism.

While the two critiques of contemporary capitalism discussed point our attention to different phenomena, the implications one can draw from them have much in common. Indeed, they both imply a greater concentration of capital and power in the hands of the few as well as increasing inequality. However, what I wish to emphasize here is that both frameworks suggest the dominance of rent over profit, of appropriation over production. 

Whatever is in the process of replacing neoliberalism, it is making matters even worse.

Many have viewed the advent of neoliberalism and financialisation as coming hand in hand with the return of the figure of the rentier. For example, Harvey (2024) argues that financialisation and monopolisation unleashed the modern rentier who produces nothing except for monetary profit through asset ownership or financial speculation. Azmanova (2020) finds that rentiers have been actively created by state policy that aims to increase the competitiveness of national or regional ‘champions’, to the detriment of market competition and anti-trust regulation.

It seems that whatever is in the process of replacing neoliberalism, it is making matters even worse. Cloudalists and asset managers are rentiers par excellence. They are in the business of taking, not making. They profit from ownership and control – instead of production – under conditions of limited competition. Brett Christophers (2020) holds the same view, suggesting that platform rents are playing a key role in what he calls ‘rentier capitalism’. In his book devoted to asset management corporations, he also concludes that asset managers are “pure rentiers” (Christophers 2023, p.45). An asset manager may own a wind farm in Norway, or a real estate complex in Florida, but they have nothing to do with the everyday operation and maintenance of these assets, all of which are contracted out to other companies. They produce nothing, while “their business is maximising and extracting the income – rent – that that asset generates” (Christophers 2023, p.45).

These scholars, myself included, view capitalist production as simultaneously relying on profit and rent, production and appropriation, exploitation and expropriation. While the emergence of capitalism sidelined rent, appropriation and expropriation, it never achieved to overcome them altogether. These duplets are not equivalent to each other, but they all point to the fact that capitalism is not merely a system of contractual exchange where the most efficient, the most productive and the smartest benefits accordingly. Behind contractual exchange stands the hidden abode of unearned income, patrimonial capital, hereditary power, and outright expropriation. For Varoufakis (2023), the triumph of profit over rent was what ultimately defined the transition from feudalism to capitalism. In this sense, the comeback of rent that cloud capital has brought implies that we must question whether we are living under capitalism at all. 

In Marxist political economy the importance of the balance between profit and rent was most clearly expressed by Rosa Luxemburg who argued that primitive accumulation was a structural feature of capitalism, rather than merely its enabling condition. Alternatively, in classical political economy, David Ricardo viewed rentier landlords as vestiges of feudalism that stood in the way of the full flourishing of the capitalist mode of production. Keynes, similarly, called for the euthanasia of the rentier, primarily referring to parasitic financiers who enriched themselves by keeping capital artificially scarce (Mann 2019). Even in mainstream neoclassical economics, the term monopoly rent refers to profits accrued over and above normal profits attainable under an efficient and competitive market design.

In short, across many schools of economic thought, as well as political affiliations, rent-seeking, appropriation and expropriation are viewed as burdens on a capitalist economy, if not wholly morally and politically reprehensible. Thus, if indeed what we are witnessing now is a further shifting of the balance towards rent and appropriation, even further than the one brought by neoliberalism, then trouble lies ahead.

Attempting to square the rise of cloud capital with that of asset managers might be the key to understanding the profound transformations that capitalism is undergoing as we speak.

Varoufakis (2023) locates the source of trouble (i.e. rent-seeking) in Big Tech, while Braun and Christophers (2024) in asset management corporations. However, what is missed is how these two phenomena relate to each other. Since Blackrock et al. are major shareholders in Big Tech companies, how does that imbricate them in the novel dynamics that cloud capital introduces? Are asset managers the ultimate cloudalists? As seen in the Table below, it seems that the answer is in the affirmative (Hyppolite & Michon 2018). BlackRock, Vanguard, State Street and Fidelity own the largest stakes (collectively over 20%) in the top 10 US tech companies. 

If public and open markets are no longer the main mechanism of distribution of goods and services, if the allocation of financial resources is subject to the idiosyncratic whims of a few gargantuan corporations, if Big Tech companies acquire a significant part of their capital for free because consumers do not own their data – that is, if rent has displaced profit in our political economies – then indeed, are we still speaking of capitalism? Theorising the now is often challenging. However, attempting to square the rise of cloud capital with that of asset managers might be the key to understanding the profound transformations that capitalism is undergoing as we speak. What must follow from the above, taking up the glove from Varoufakis, is an attempt to link theory and practice. That is, facing up with the fact that along with neoliberalism, the familiar toolbox of progressive politics (e.g. taxation, regulation and mobilisation), has also become passé – or at least inadequate for the challenges that lie ahead. Perhaps we must think and act more radically.

 

 

References:

Azmanova, A. (2020). Capitalism On Edge: How fighting precarity can achieve radical change without crisis or utopia. Columbia University Press: NY, USA.

Braun, B. (2022). Exit, Control, and Politics: Structural power and corporate governance under asset manager capitalism. Politics & Society. 50(4): 630–654.

Braun, Β. & Christophers, Β. (2024). Asset manager capitalism: An introduction to its political economy and economic geography. Economy and Space. 56(2): 546-557.

Christophers, B. (2023). Our Lives in Their Portfolios: Why Asset Managers Own the World. Verso: London, UK.

Christophers, B. (2020). Rentier capitalism: who owns the economy, and who pays for it? Verso: London, UK.

Dean, J. (2020). Neofeudalism: The End of Capitalism? Los Angeles Review of Books. Economic Policy Institute (2024). The Productivity-Pay Gap. https://www.epi.org/productivity-pay-gap/. 

Fraser, N. (2022). Cannibal Capitalism: how our system is devouring democracy, care and the planet – and what we can do about it. Verso: London, UK.

Harvey, D. (2024, forthcoming). The Story of Capital: What everyone should know about how capital works.

Hippolyte, P.A. & Michon, A. (2018). Big Tech Dominance (1): The New Financial Tycoons. Fondation Pour L’Innovation Politique Study. https://www.fondapol.org/en/study/big-tech-dominance-1-the-new-financial-tycoons/. 

Lapavitsas, C. (2013). Profiting Without Producing: How Finance Exploits Us All. Verso: London, UK.

Mann, G. (2019). In the Long Run We Are All Dead: Keynesianism, Political Economy, and Revolution. Verso: London, UK.

Mazzucato, M. (2018). The Value of Everything: Making and Taking in the Global Economy. Public Affairs: NY, USA.

Srnicek, N. (2017). Platform Capitalism. Polity Press: Cambridge, UK.

Varoufakis, Y. (2023). Technofeudalism: What Killed Capitalism. Bodley Head: London, UK.

Whalen, C. J. (2012). Money Manager Capitalism found in Chapter 34 of Toporowski, J. &

Michell, J. (2012). The Handbook of Critical Issues in Finance. Edward Elgar: Cheltenham, UK. https://econpapers.repec.org/bookchap/elgeebook/14083.htm 

Zuboff, S. (2019). The Age of Surveillance Capitalism: the fight for a human future at the new frontier of power. Public Affairs: NY, USA.

 

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Panos Tsoukalis is a fellow at the World Inequality Database and a graduate student at the New School for Social Science Research.