I’ve just finished Chapter 5 of Technofeudalism by Greek economist Yanis Varoufakis, and I can’t recommend it enough. Retiring from being a professional economist, I’d paused reading economic fare in favour of philosophy and fiction. Recently, I picked up Hobbes’ Leviathan and Graeber’s Bullshit Jobs, but this one called to me. I recall when it was released. I read some summaries and reviews. I heard some interviews. I thought I understood the gist. I did. But it goes deeper. Much deeper.

I considered Technofeudalism or Feudalism 2.0 as more of a political statement than a sociopolitical one. Now, I know better. Rather than review the book, I want to focus on a specific aspect that occurred to me.

In a nutshell, Varoufakis asserts that with Capitalism, we moved from a world of property-based rents to one of profits (and rents). We’ve now moved past this into a new world based on platform-based rents (and profits and property rents). Rent extraction yields more power than profits, again reordering power structures. Therefore, I think we might want to handle (read: tax) rents separately from profits.

A Radical Proposal for Modern Taxation

Introduction: The Old Dream Reawakened

Economists have long dreamt of a world in which rent — the unearned income derived from control of scarce assets — could be cleanly distinguished from profit, the reward for productive risk-taking. Ricardo dreamt of it. Henry George built a movement upon it. Even today, figures like Thomas Piketty hint at its necessity. Yet rent and profit have grown entangled like ancient ivy around the crumbling edifice of modern capitalism.

Today, under what some call “technofeudalism,” the separation of rent from productive profit has become not merely an academic exercise but a matter of existential urgency. With rents now extracted not only from land but from data, networks, and regulatory capture, taxation itself risks becoming obsolete if it fails to adapt.

Thus, let us lay out a theoretical and applied map for what could — and arguably must — be done.

I. The Theoretical Framework: Defining Our Terms

First, we must operationally define:

• Profit: income generated from productive risk-taking — investment, innovation, labour.
• Rent: income generated from ownership or control of scarce, non-replicable assets — land, intellectual property, platforms, regulatory privilege.

Key Principle: Rent is unearned. Profit is earned.

This distinction matters because rent is an economic extraction from society’s collective value creation, whereas profit rewards activities that enlarge that pie.

II. Mapping EBITA: Where Rent Hides

EBITA (Earnings Before Interest, Taxes, and Amortisation) is the preferred metric of modern corporate reporting. Within it, rents hide behind several masks:

• Property rental income
• Intellectual property licensing fees
• Monopoly markups
• Platform access fees
• Network effect premiums
• Regulatory arbitrage profits

Parsing rent from EBITA would thus require methodical decomposition.

III. Theoretical Approaches to Decomposing EBITA

1. Cost-Plus Benchmarking
   • Estimate what a “normal” competitive firm would earn.
   • Treat any surplus as rent.
2. Rate-of-Return Analysis
   • Compare corporate returns against industry-normal rates adjusted for risk.
   • Excess returns imply rent extraction.
3. Monopolistic Pricing Models
   • Apply measures like the Lerner Index to estimate pricing power.
   • Deduce the rentier share.
4. Asset Valuation Decomposition
   • Identify earnings derived strictly from asset control rather than active operation.
5. Economic Value Added (EVA) Adjustments
   • Assign a competitive cost of capital and strip out the residual super-profits as rents.

IV. Toward Applied Solutions: Imposing Sanity on Chaos

In theory, then, we could pursue several applied strategies:

1. Mandated Rent-Adjusted Reporting
   • Require corporations to file a “Rent-Adjusted EBITA” metric.
   • Auditors would have to categorise income streams as “productive” or “rentier.”
2. Differential Taxation
   • Tax normal profits at a competitive corporate rate.
   • Tax rents at punitive rates (e.g., 70-90%), since taxing rents does not distort incentives.
3. Sector-Specific Rent Taxes
   • Levy special taxes on land, platforms, patents, and monopoly franchises.
   • Create dynamic rent-extraction indices updated annually.
4. Platform Rent Charges
   • Impose data rent taxes on digital platforms extracting value from user activity.
5. Public Registry of Rents
   • Create a global registry classifying rents by sector, firm, and mechanism.
   • Provide public transparency to rent-seeking activities.

V. The Political Reality: Clouds on the Horizon

Needless to say, the aristocracy of the digital age will not go gentle into this good night. Rentiers — whether in Silicon Valley, the City of London, or Wall Street — are deeply entwined with the political machinery that might otherwise regulate them.

Yet the costs of inaction are higher. If rent extraction continues to eclipse productive activity, the very legitimacy of markets — and democracy — will erode into cynicism, stagnation, and oligarchic decay.

Conclusion: The Choice Before Us

Separating rent from profit is not merely a technocratic tweak. It is a radical act — one that could reorient economic activity away from parasitic extraction and back toward genuine value creation.

In a world where algorithms are castles, platforms are fiefdoms, and data is the new serfdom, reclaiming the ancient dream of taxing rent is no longer optional. It is, quite simply, the price of our collective survival.