In his new book, ‘Technofeudalism: What Killed Capitalism’, Yanis Varoufakis explores how giant tech firms, both in the US and China are expanding their control over the planet. His analysis is that, whilst material resources certainly matter, the real battle ground is over digital real estate. Aaron Bastani sat down with Yanis to talk about how Europe’s power has faded, Elon Musk’s wet dreams and why the US is really afraid of China.
Here is a summary of the key points from the podcast transcription:
Janis Varoufakis argues that capitalism has been replaced by a new system he calls “techno-feudalism.” This is a result of the rise of “cloud capital” owned by big tech companies like Amazon, Google, Facebook, etc.
He believes cloud capital has enabled a new form of economic rent extraction, allowing tech lords like Jeff Bezos to collect huge rents from digital platforms that increasingly replace market transactions. This parallels feudal lords extracting rents from their land.
The massive money printing by central banks after the 2008 crisis provided the funding for this rapid expansion of cloud capital, further entrenching the power of techno-feudal lords.
Varoufakis sees the rise of figures like Donald Trump as a backlash against this new techno-feudalism from “petit bourgeois” capitalists and workers left behind by deindustrialization.
However, Europe is now irrelevant compared to the techno-feudal spheres of influence in the US and China, as it has no cloud capital of its own.
The euro has locked countries like Italy and Greece into permanent austerity and decline. Leaving would be painful but may be necessary.
Covid provided an opportunity for more debt and money distribution to elites. Liberal individualism is dying as big tech shapes desires.
In summary, Varoufakis argues contemporary capitalism has been replaced by a neo-feudal system ruled by tech oligarchs extracting rents via cloud platforms.