Former Greek Finance Minister Yanis Varoufakis declares the end of capitalism, believes that this return to a feudal past in the era of technology and Artificial Intelligence is the central idea of the Greek economist’s new book“Technofeudalism – Or the end of capitalism”, now launched in Portugal by the publisher Objectiva (Penguim Random House).
“Looked at as a whole, it becomes evident that the world economy is driven less and less by profit and more and more by cloud rent”, writes Varoufakis, then distinguishing between the concepts of income and profit, in the latter case a good or commodity to which value is added.
The companies that hold technological power, which they call “cloudalists”, are the new overlords of the political system to whom traditional capitalists pay allegiance, in the form of paying rent.
At the base of the pyramid are the proletarians and servants of the system, users of platforms and social networks who, simultaneously, feed them and give them clues and information for the algorithms to then work out the best ways to capture their attention, placing themselves at the service of the capitalist vassals to sell their goods.
For the former Greek Finance Minister from the times of the ‘troika’, “capitalism withers as a result of expanding capitalist activity”.
“It was through capitalist activity itself that technofeudalism was born, and that is how it is gaining power. After all, how could it be any other way”, he asks.
In a dialogue with his late father, with references ranging from Greek mythology to pop culture, Varoufakis seeks the technological changes of the last two decades to show how they led to the predominance of technological platforms over traditional markets.
Numerous examples are given in the North American economy, including companies such as Apple, Google, Tesla or Amazon, but also, in the Chinese case, Tik-Tok, Alibaba, Tencent, Baidu, Ping An or JD.com.
“From factory owners in the US Midwest to poets struggling to sell their latest anthology, from Uber drivers in London to street vendors in Indonesia, everyone now depends on some cloud fiefdom to access their customers. It’s progress, in a way,” he writes.
Varoufakis notes that “the time when, to collect rent, feudal lords ordered thugs to break the legs or spill the blood of their vassals is long gone.”
In his opinion, “cloudalists do not need to resort to enforcement agents to confiscate assets or carry out evictions. All they need to do is remove a link from the cloud vassal’s page for him to lose access to the majority of his clients. And it would be enough to remove one or two links from the Google search engine or some social networking and e-commerce sites to completely disappear from the online world.”
“Technofeudalism is based on sanitized and technological terror”, concludes the former Greek minister, after pointing out the power of certain companies, such as Tesla, to turn off the operating system of their cars, or Google or Apple, by removing their operating systems from a certain brand of mobile phones.
The Greek economist, with a doctorate from the University of Essex, in the United Kingdom, predicts a new “Cold War”, this time between the United States and China in defense of their respective rentiers, without forgetting the creation of the digital yuan by Chinese authorities to circumvent obstacles and with serious losses for Europe, but especially for developing countries such as India and all countries in Africa and Latin America.
“The absence of cloud capital in Europe means that the new Cold War, combined with the energy shock that the war in Ukraine inflicted on its industrialists, has already caused this continent to become geostrategically irrelevant”, he maintains.
Varoufakis points out the dangers of this new system for liberal values and democracy itself and points out possible ways to reverse it.