Challenging Yanis Varoufakis’s claims in “on Crypto, the Left and Techno-Feudalism.

Gido Fawkes
7 min readFeb 6, 2022


So I want to challenge a number of claims that Yanis makes in the article titled: on Crypto, the Left and Techno-Feudalism.

Whilst I am in agreement with what he says — that of it being a disaster for governments to reduce spending in times of economic slowdown — what his argument fails to appreciate is whilst it may limit a governments ability to increase spending to kick-start the economy, it also limits the governments ability to overspend beyond it’s means in times of peace. If let’s say a government wanted to go to war, let’s say in Iraq, but to pay for this war, they were unable to print money to spend for this war, then they would be forced to raise the money via other means such as increasing taxes. This would then directly and instaneously be felt by the citizens of the nation which would create resistance to the war. Even if the nation went to war, the wars would be greatly reduced in length as the costs would be directly felt. It is precisely because a government can just print money at will that we hand them unprecedented power to do things that they shouldn’t have the power to do or at least would need a very good reason to do so. Today, governments — infected by lobbyists from the military industrial complex — print money and hand that money to private military corporations for unneccessary military projects and products (such as the trident submarine).

Secondly, what Yanis fails to recognise is that Bitcoin was created as a reaction to the 2008 crisis and all of the banking bailouts that occured after it. It was a reaction to the oligarchic hold upon the economy. It wasn’t and isn’t meant to be ‘the fix’. What is required — and where Yanis and I agree — is that of the need for a takeover of power in the legislatures of our government houses. But as of right now, the left is fragmented. It fights against free-speech yet espouses freedom. It seems to have forgotten its historical roots when it fought against government censorship. I don’t fully understand the left’s stance, and I don’t think the left does either. The left is fragmented. It has no vision. So, until it finds this vision bitcoin and crypto-currencies are the best hope we have of forcing the governments to change. As their power is weakened as more people opt out of the fiat monetary system, they will be forced to act. They will be forced to implement the democratic central bank digital currencies.

Next, he then goes on to say:

“No smart contract can, for example, subvert the labour contracts that underpin society’s layered patterns of exploitation”.

This is just fundamentally not true. A smart contract that automatically applies a tax on transactions in society and then used that money to distribute a universal basic income directly to peoples digital wallets would do exactly that. That would be outside the realm of the state. An algorithmic smart contract would be entirely in control of the distribution of money in this system.

He talks next about DAOs stating:

“DAOs will be useful in a digital anarcho-syndicalist future society but they will not bring about this new society in which DAOs will be useful”.

The only place I can see such a view coming from is the ignorance of someone who does not understand what a DAO is or what a DAO can do. If Diem25 converted itself into a DAO with it’s own funding mechanism, and with it’s own treasury, and allowed everyone an equal opportunity to distribute the treasury funds then the chance of success would be greatly increased. As it stands, diem25 is centralised. It’s incredibly complex. The User Interface is atrocious. And I see no way of raising funds other than a simple donation mechanism. It’s not enough.

He further states:

“The only thing that will work is: To take over parliaments so as to legislate a corporate law that ends tradeable shares, and introduces the one-share-one-employee principle in its stead. To take over central banks and make them issue digital currencies on a distributed ledger that makes basic income possible. To take over governments and implement personal ownership of our data. In short, no algorithm will remove the need for a genuine revolution.”

Here I couldn’t agree more. But to also claim earlier that DAOs won’t be useful is misunderstanding what a DAO can do. Diem25 should be a DAO. It’s current organisational structure is soviesque. More people need a say in diems direction, and diem needs a better way of building funds. And it needs a way to distirbute those funds. Until it has those three things, it will be impotent in it’s potential.

He then states:

“The Left, radicals, progressives, etc. have either refused to acknowledge the genuine ingenuity of blockchain or have fallen for it. We seem to have forgotten how Marx and Engels had the nous and the ability, on the one hand, to admire and celebrate the technological and scientific wonders of their era and, on the other hand, grasp that these potentially liberating technologies were bound to enslave the many if they became instrumentalised by the very few. The two Germans believed in the emancipatory potential of the steam engine and of electromagnetism. But, they never believed that society would be liberated by the steam engine and/or electromagnetism. Liberation required a political movement that first overthrows the bourgeoisie and only then presses these magnificent technologies into the service of the many. This seems to me an excellent way of approaching today’s potentially liberating technologies, including blockchain.”

Has Yanis forgotten that we already had the revolution and it was terrible. Truly awful. Why? Because power was centralised and when power is centralised, corruption always exists. Humans are corruptable. That will never change. So what do we do? We eliminate the possibility of corruption in the first place. We prevent the centralisation of power from existing. That would be through distributed ledger technologies such as the blockchain. And through the decentralisation of power using organisations such as the DAO. Yes, it’s true that most DAOs are not decentralised. They are feudal techno-kingdoms whereby a few large token holders control the direction of the DAO. But there are solutions to this problem of ‘one token one vote’ to a system based upon the ‘coop’ model of ‘one employee or one member one vote’. As of yet, diem25 is an organisation that is neither democratic, nor decentralised. And converting itself into a cooperative DAO (perhaps with its own currency) might be just what it needs.

I fear that Yanis is making the mistake of reductionism. He makes sweeping generalisations upon the crypo-economy. The space is moving so fast. Far faster than the dotcom boom of 2001. Far faster than any one person can keep up with. New projects are coming out daily. It’s very hard to keep up with everything even following it full time. So for Yanis to make such sweeping generalisations against the crypto-community is frustrating. He has influence upon many, and they trust him. But I fear that his resistance and fear against the revolutionary potential of this technology is putting many people from venturing into this incredibly deep and complex rabbit hole.

At the end of this article he talks about techno-feudalism. He mentions how the banks have their hands around the central bankers throats. If the central bankers stop with the money printing, the economy crashes. Millions will be out of work. So they continue printing inflating asset prices expanding the already enormous wealth gap. Well, what would happen if they did actually stop printing. Millions of people would lose trillions of dollars. People would be angry. And revolution would be in the hearts and minds of many more people. The pensioners who currently sit incredibly healthy due to this non-stop money printing who saw their values halved for example. Now whether the market should be allowed to enter price discovery mode is a political issue which I won’t explore here.

I agree with him that blockchain by itself will not liberate us from the extractive power of the few and that instead what is required is a “broad internationalist movement that overthrows the oligarchy’s property rights over the means of production”. What I do have issue with is what Yanis means when he uses the terms ‘means of production’. Assuming the marxist perspective, means of production includes land labour and capital. What I don’t see being addressed is how labour is being controlled and what we should be doing about it.

Whilst its true that labour is increasingly becoming obsolete in our modern world, much of the worlds production is still based around labour (as evidenced by the billions of people who continue to labour each day).

How is this labour-means-of-production controlled? By the system of closed borders. A system that is held intact by the immature tribalistic mentality of nationalism. It is precisely these divisions that create such enormous global wealth gaps. And it is exactly this euro-centric nationalism that exists within Diem25.

Whilst there is much talk about how labour is being exploited by capitalism, I hear nothing about labour being exploted by nationalism.

In the Diem25s 2022 draft manifesto, pledge #11 states that diem25 aspires to be:

An Internationalist Europe that treats non-Europeans as ends-in-themselves

Having international and Europe in the same sentence is a contradiction. How can a pan-european organisation achieve the overthrow of the oligarchic powers when what is required is (in Yanis’s own words) “a broad internationalist movement”? Paneuropeanism stinks of colonialism. What Diem25 needs is to be true to its word and evolve into an international movement, not a pan-european one. Our brothers and sisters in Africa, Asia and Latin-America all share the same ambitions as us Europeans. It’s time we stopped thinking of them as noble savages and appreciate that they exist as an integral part in the revolution we desire and the sweat of their labour makes Europe what it is today.

If we truly want to ‘fix capitalism’ (whatever that means), then its not just goods and services that should be allowed to be freely transacted across borders, but also labour. Capital will stop exploiting labour only once human movement is deregulated and the movement of labour is unchained from it’s nationalist chains.

If Yanis would like to respond then that would be welcomed. I have made a post in the DIEM25s forum.



Gido Fawkes