PHM-Exch> The idea of techno-feudalism Yanis Varoufakis

[People's Health Movement Uganda]

Hello People's Health Movement Comrade

PHM Uganda's conference on Advancing Health Equity Through Collaborative
Action started yesterday on the 22nd February 2024 and the Global Health
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We hope to see you as we join the discussion on health Equity
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this session will be led by Ravi Ram and Peninah Khisa the regional
Cordinator of People's Health Movement East and Southern Africa.

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Denis Joseph Bukenya
PHM Uganda coordinator

On Thu, Feb 22, 2024 at 1:46 PM Claudio Schuftan <cschuftan at phmovement.org>
wrote:

> *The idea that we are entering an era of techno-feudalism that will be
> worse than capitalism is chilling and controversial. We asked former Greek
> finance minister Yanis Varoufakis to elucidate this idea, explain how we
> got here, and map out some alternatives.*
>
>
>
> The controversial
> <https://jacobin.com/2023/10/cloud-capitalism-technofeudalism-serfs-cloud-big-data-yanis-varoufakis>
> concept of techno-feudalism suggests we have transitioned from capitalism
> to something even worse — a new era that exhibits disturbing feudal
> characteristics. On this view, capitalists now primarily rely on
> consolidated political power and rents to extract capital. If true, this
> form of feudal extraction represents a drastic shift away from the
> conventional mechanisms of capitalism. Importantly, it would mark a move
> from capitalism’s claimed foundational attributes of competition and
> innovation.
>
> *Jacobin*’s David Moscrop <https://jacobin.com/author/david-moscrop>
> recently talked to economist and former Greek finance minister Yanis
> Varoufakis <https://jacobin.com/author/yanis-varoufakis> about his latest
> book *Technofeudalism: What Killed Capitalism*
> <https://www.penguinrandomhouse.com/books/751443/technofeudalism-by-yanis-varoufakis/>.
> Varoufakis makes the case for techno-feudalism, arguing that rents have
> displaced profits. He delves into the rise of cloud capital, the
> implications of what a new feudal order would mean for us, and the
> possibilities of an alternative future.
>
> *Capitalism, But Not as We’ve Known It*
>
> David Moscrop
>
> In *Technofeudalism*, you argue capitalism has brought about its own
> demise, but not in the way that, say, Marx would have expected. Capitalism
> has its own contradictions — most fundamentally in the antagonism between
> capital and labor — and yet those contradictions seem to have produced a
> mutation that is perhaps worse than anyone might’ve expected. So how did
> capitalism kill itself and what is replacing it?
>
> Yanis Varoufakis
>
> This book falls squarely within the Marxist political-economic tradition.
> I wrote it as a piece of Marxist scholarship. So, from my Marxist
> perspective, this is a tragic book to have to write.
>
> The contradictions of capitalism didn’t lead to the anticipated resolution
> where, after all these centuries of class stratification, society would be
> distilled into two classes, poised for a high-noon clash. This decisive
> confrontation between oppressor and oppressed would result in the
> liberation of humanity — the emancipation of humanity from all class
> conflict. Instead of that, however, this clash between the capitalist — the
> bourgeoisie — and the proletariat ended up in the complete victory of the
> bourgeoisie: a complete loss after 1991, especially.
>
> In the absence of a competitor in the form of trade unions — the organized
> working class — capitalism went into a rampant dynamic evolution that
> caused this mutation into what I call cloud capital. This transformation
> effectively marked the end of traditional capitalism. It killed capitalism
> — a development that embodies a Marxist-Hegelian contradiction, but not the
> kind of contradiction we would have hoped for.
>
> Cloud capital has killed off markets and replaced them with a kind of a
> digital fiefdom where not just proletarians — the precarious — but
> bourgeois people and vassal capitalists are all producing surplus value for
> the vassal capitalists. They are producing rents. They’re producing cloud
> rent, because the fiefdom is a cloud fiefdom now, for the owners of cloud
> capital.
>
> Cloud capital created a kind of power, which we as Marxists must recognize
> as being structurally, qualitatively different from the monopoly power of
> somebody like Henry Ford, Thomas Edison, or the great robber barons.
> Because those people concentrated capital, concentrated power, bought out
> governments, and killed off their competitors to sell their stuff. Today’s
> “cloudalists” — cloud capital owners — they don’t even care about producing
> anything and selling their stuff. This is because they have replaced
> markets — they have not simply monopolized them.
>
> If capitalism is market-based and profit-driven, well then this is no
> longer capitalism, because this is not marketplace-based. It’s based on
> digital platforms that are closer to techno-fiefdoms or cloud fiefdoms, and
> they’re driven by two forms of liquidity. One is cloud rent, which is the
> opposite of profit, and the other is central bank money, which funded the
> building of cloud capital. And that is not capitalism.
>
> Now you can choose to call it capitalism if you want, if you redefine
> capitalism and if you say that anything that stems from the power of
> capital is capitalism, but it’s not capitalism as we’ve known it. To
> paraphrase Spock in Star Trek: “It is life but not life as we’ve known it.”
>
> And I think that it’s important to make the linguistic transition from the
> word “capitalism” to something else, which is very difficult to make,
> because we’re all wedded to the idea that we’re fighting against
> capitalism. After all those decades of feeling that we came to this planet
> to overthrow capitalism, it’s really very difficult to have an idiot like
> me coming along and saying, “But this is not capitalism anymore.” You say,
> “Bugger off. Of course it is capitalism. If it’s not socialism, it must be
> capitalism.” That’s what a fellow Marxist said to me. And I killed myself
> laughing because I remember my Rosa Luxembourg. No, it can be barbarism.
>
> *Vampire-Like Parasitism*
>
> David Moscrop
>
> If techno-feudalism has replaced capitalism, as you’ve suggested, it has
> also led to the emergence of “cloud serfs” and “cloud proles,” modern
> equivalents of the serfs and proletarians discussed in historical contexts.
> How do these contemporary classes differ from their counterparts in the
> traditional capitalist model?
>
> Yanis Varoufakis
>
> From a Marxist perspective, the simple answer is that cloud serfs directly
> produce capital with their free labor. That has never happened before.
> Serfs under feudalism produced agricultural commodities. They did not
> produce capital — that was up to the artisans who produced tools and
> instruments and plows and stuff. In contrast, modern users contribute to
> capital formation simply by engaging with platforms, offering free labor to
> augment cloud capital for the capitalist. That never happened under
> capitalism.
>
> Techno-feudalism remains deeply reliant on the capitalist sector,
> mirroring the dependence of capitalism on the agricultural sector and the
> feudal sectors for sustenance. And just as capitalism needed feudalism to
> ensure a food supply, techno-feudalism is parasitic, drawing essential
> support from the capitalist sector to sustain itself.
>
> So, the capitalist sector remains foundational. It is producing all value
> — it’s why this analysis is distinctly Marxist. All surplus value is
> produced in the capitalist sector, but then it is usurped. It is
> appropriated by this mutant capital — cloud capital — most of which is not
> reproduced by proletarians. It’s reproduced by people in their leisure time
> who work for no pay. That has never happened. That’s why I’m saying this is
> not capitalism. And it doesn’t help to think of this as capitalism, because
> if you remain wedded to the word capitalism, the mind fails to comprehend
> the great transformation.
>
> David Moscrop
>
> You mentioned that the rise of techno-feudalism is driven by two primary
> causes: the enclosure and privatization of the internet, similar to pasture
> enclosure in eighteenth- and nineteenth-century England, and a steady,
> heavy flow of central bank money, particularly after 2008. Could things
> have gone otherwise?
>
> Yanis Varoufakis
>
> Well, everything could be different. That’s what David Graeber
> <https://jacobin.com/author/david-graeber> has taught us, right? And as
> leftists, we have to believe that nothing was foretold. Otherwise, we don’t
> believe in human agency — otherwise, what’s the point of living? We might
> as well become couch potatoes watching the world go by. So, everything can
> always be different. The historical counterfactual is always interesting,
> but I cannot do it. I really cannot do it. I mean, I tried to do it often
> in my previous book, which was a political science-fiction novel called *Another
> Now*
> <https://www.penguinrandomhouse.com/books/696968/another-now-by-yanis-varoufakis/>.
> Effectively, I created another time line where in 2008 we did things
> differently with Occupy Wall Street to bring about socialist
> transformation. And that’s a great game to play with your own mind, but I
> don’t think it’s historically pertinent.
>
> How could things have been different? Well, one could say that the
> privatization of the internet was inevitable because we live under
> capitalism. And capitalism has this capacity of eating up and infecting
> every capitalist-free zone. The reason why I could never align with utopian
> socialism, like that of Robert Owen in the nineteenth century. Despite his
> efforts to create capitalism-free zones, history shows that capitalism
> inevitably invades and corrupts these spaces. You cannot have pockets of
> socialism surviving for long within capitalism.
>
> *Now With More Crisis*
>
> David Moscrop
>
> You say techno-feudalism is parasitic on capitalism. If that’s the case,
> techno-feudalism will still require the existence of classical capitalist
> production. Amazon still needs producers to manufacture goods to sell on
> its platform. Uber and Tesla require physical vehicles. How will that
> relationship work in the long run under a techno-feudalist order?
>
> Yanis Varoufakis
>
> Again, I need to make this point very clearly. Capitalism in the
> eighteenth century and nineteenth century, when it emerged, overthrew
> feudalism, but it needed the feudal sector to continue producing food
> because otherwise we would all have died. That’s why I’m saying that
> capital was parasitic on the feudal agricultural sector. So, it’s not that
> one dies and the other lives. What happens is that capital takes over the
> hegemony of the system, but it is parasitic on the previous system. That’s
> a standard Marxist, historical, material analysis.
>
> Now what is happening is that at the center of techno-feudalism you have a
> capital sector, which is absolutely necessary. The capital sector is the
> only sector that produces value — exchange value in Marxist terms — but the
> owners of that capital, of old-fashioned capital, are vassals to the cloud
> capitalists. Their profits are being skimmed off. So surplus value is
> withdrawn from the circular flow of income by the “cloudalists.”
>
> Now that makes the system even more unstable, even more prone to crisis,
> and even more contradictory and even less viable than capitalism was.
> That’s what I’m saying in the book: that the takeover by cloud capital —
> the supplantation of capitalism by techno-feudalism — is making our
> societies more fraught with conflict. They’re becoming more stupid, more
> conflictual, more poisoned, and less capable of allowing space within them
> for social democracy, for the liberal individual — for values that even the
> Right cherished under capitalism.
>
> The Left was never against the idea of liberty; our critique lies in the
> limiting of liberty to a select few. But now even this limited form of
> liberty is under threat, and therefore the contradictions are getting
> worse. I hold on to hope that perhaps these growing tensions will push
> humanity into a decisive showdown between good and evil — between the
> oppressors and the oppressed. But the rapid approach of climate catastrophe
> poses the risk that we may reach the point of no return before that
> resolution takes place. So, we have our work cut out for us, and humanity
> is staring extinction in the face — unless we pull our socks up.
>
> *Not Your Parents’ Rentiers*
>
> David Moscrop
>
> You spend a lot of time making the case that rents have usurped profit. Is
> it not the dream, though, of every “capitalist” to extract rent? Does any
> capitalist really want to be a capitalist? It seems to me every capitalist
> wants to be a rentier.
>
> Yanis Varoufakis
>
> Well, the era when capitalists wanted to be capitalists was gone a long
> time ago. I trust that Henry Ford liked being a capitalist in the same way
> that, in a strange and completely warped manner, Rupert Murdoch likes to be
> a newspaperman — even though he has done so much to destroy newspapers. But
> these people are either dead or on their way to hell. So, yes, capitalists
> don’t want to be capitalists, especially here in Europe, especially in my
> country. All the capitalists, and I’ve known quite a few, have stopped
> being capitalists; they’ve become rentiers.
>
> The difference is that the capitalists who were transforming themselves
> into being rentiers, until the emergence of cloud capital, were essentially
> passing their capital stock onto others or possibly to private equity.
> These former capitalists extracted rent from the monopoly profits of these
> highly concentrated capitalist firms.
>
> But what happens with people like Jeff Bezos and Elon Musk, I mean, they
> *want* to do what they’re doing. They want to be cloud capitalists or
> “cloudalists,” as I call them. They love it. These people, a bit like
> Thomas Edison, love what they do. They’re not like standard rentiers.
> They’re not like the feudal lords of the past. They are not like the
> capitalists who no longer want to be capitalists. These people are
> enthusiastic’ and they’re very talented, and, unfortunately, they’re very
> smart. The combination of their drive with the exorbitant power of the
> cloud capital that they own creates a highly potent, concentrated form of
> “cloudalist” power, which we have to take very seriously.
>
> David Moscrop
>
> The end of the Bretton Woods system transformed global capitalism and
> ultimately made possible, among other things, techno-feudalism. Could we
> imagine a contemporary Bretton Woods cast in the mold of deep egalitarian
> multilateralism and a socialist financial system?
>
> Yanis Varoufakis
>
> Oh, yes, I have done that. That was the reason why I wrote my previous
> book. *Another Now* envisions exactly what you say. It features a new
> Bretton Woods system inspired by John Maynard Keynes’s original proposal —
> rejected by Harry Dexter White and the Roosevelt administration — merged
> with a participatory democratic socialist framework. This setup has been
> designed for ongoing redistribution of income and wealth from the Global
> North to the Global South, especially in the form of green investment. So,
> I’ve mapped all that and can answer your question of how things could work
> today, with the technologies that we have, if property rights were equally
> distributed — which is what I believe socialists should be aiming at. But
> that was my political science fiction. This book is about what we’re facing.
>
> *The World’s Biggest Excel File to the Rescue?*
>
> David Moscrop
>
> As part of an alternative order, you advance this idea of a central bank
> digital wallet system and monthly dividend. How would that work?
>
> Yanis Varoufakis
>
> Well, technically it’s dead easy. It can be done in a week because it is
> so straightforward. Imagine something like an Excel file, which is kept by
> the Fed, and every single resident in the United States is one row. And
> when a payment is made, the corresponding value transfers from one cell to
> another, representing the payer and payee. This process would be free,
> instantaneous, and anonymized. By creating a separation between the
> software operators and the identities of individuals, identified only by
> codes similar to Bitcoin addresses, privacy can be assured. And checks and
> balances could be established to ensure that the state is not watching what
> each one of us is doing.
>
> And because the money will be shuffled through the same spreadsheet,
> nothing stops the central bank from adding the same number to everybody
> every month. And that’s a universal basic income (UBI), which is not, and
> this is crucial, funded by taxation. Because the problem with the idea of
> UBI is that it is vulnerable to complaints like, “What are you talking
> about? You’re going to tax me, tax the dollars that I earn, to give to a
> bum, a surfer in California or to a drug addict or to a rich person?” But
> this proposal leverages the central bank’s capacity to generate funds. And
> we should let no one tell us that it would be inflationary or would be a
> problem — because they’re printing trillions on behalf of financiers. Why
> not print them on behalf of the little people? Of everyone equally?
>
> Now, the reason why you don’t have this system in the United States and
> why you are very far away from a digital dollar is because if anybody in
> the Fed dares move in that direction, they will be murdered by Wall Street
> — they’ll experience political and character assassination. Wall Street
> will never allow it because it would spell the end of Wall Street. Because
> why would you want to have a bank account with Bank of America if you can
> have a digital wallet with the Fed?
>
> Bank of America would be compelled to justify their services and fees.
> They’d have to come and convince you that you need to have an account with
> them because they want to give you something at a decent price — like a
> loan — without scamming you. And they can’t do that because the whole point
> of Bank of America or Citigroup is to extract rents from you by
> monopolizing payment systems and holding deposits. You keep your money with
> them because, currently, there’s no other way of keeping your money.
>
>
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