Technofeudalism: What Killed Capitalism. By Yanis Varoufakis. Bodley Head. 304 pages.
Following up on his Explaining capitalism to my daughter, this latest book from Yanis Varoufakis takes the form of a poignant imagined conversation with his recently deceased father. It seeks to answer his Dad’s question about the internet: ‘Now computers speak to each other, will this make capitalism impossible to overthrow? Or might it finally reveal its Achilles heel?’ His answer is that they have overthrown capitalism, in favour of what he terms ‘Technofeudalism’.
He’s not the first to claim the end of capitalism in a form of new class society. In this case, his analysis is based on several strands. ‘Cloudalists’ (as he terms the owners of social media platforms and web services, like Amazon or Meta) have inserted themselves as an essential part of the market, both in acting as middlemen to merchants, as well as producing demand, and so are able to demand rent from productive capitalists.
To do this, they use the free labour of ‘technoserfs’, ie, all of us who feed the data streams of these cloudalists in our free time through interacting with these platforms and teaching them all about ourselves. The cloudalists, he claims, do not make profits, they rely on asset appreciation, fed by the money creation by governments that cannot afford to let the quantitative easing process ever end.
There are several flaws in this thinking. Firstly, rent is not an inherently feudal notion, although it is the form by which aristocrats managed to convert their assets to cope with the advent of capitalism. At feudalism’s height, an aristocrat did not get his income from owning estates, but because of his rank, and the subordination of people below him: he was free to demand their surplus product (which was anything beyond that which they needed to live on).
As commodity production became more generalised it became easier to accept money payments. The aristocrat’s estates were transformed into a type of property. When commodity production led to capitalist production, it became possible to turn the rental claim into a demand for a share of surplus value produced. This is the type of rent ‘cloudalists’ extract, it still depends on the exploitation of waged labour.
Their position as middlemen is exactly the same as when Woolworths held a prime spot on the high street, and was able to make profits by being the first port of call for many shoppers who, seeing the goods displayed, might find new things they wanted to buy. All the ‘cloudalists’ have done is concentrate this capacity into fewer hands to ensure that the surplus value comes their way.
Similarly, that we are ‘cloud serfs’ is inaccurate, we are not giving a surplus of our product to the owners of Amazon, it is an externality, a primary accumulation, something that has always been a part of capitalism. The search for things that can be gathered for free and turned into commodified wealth has always been a part of the way capitalism amasses wealth (most notably and horrifically in the form of mass enslavement of Africans in the 17th and 18th centuries).
Even the notion that these tech companies don’t need to make a profit anymore is suspect, as we’ve shown in these pages before, the likes of Jeff Bezos and Bill Gates arguably structure their wealth to avoid showing any income (and thus avoid taxation), likewise massive companies are adroit at showing little or no taxable profits: that doesn’t mean that surplus value has not been extracted, it simply means the accounting categories can be manipulated to disguise it.
As he shows, this has led to massive concentration of capital ownership: three companies, Vanguard, BlackRock and State Street ‘effectively own American capitalism’. These are investment funds: ‘Together, the Big Three are the largest single shareholder in almost 90 per cent of firms listed in the New York Stock Exchange, including Apple, Microsoft, ExxonMobil, General Electric and Coca-Cola’. They are a vehicle for passive investing, and although they do concentrate the wealth, the competition between firms comes to be attractive to such investment.
Of course, there are political implications to this: concentration of wealth is concentration of political power, and the need for the owners of stock to keep the nominal asset value up does drive the political decisions of governments; but what Varoufakis analyses is just the ongoing rivalry between owners of different types of capital to get their hands on a share of the surplus value. What ‘cloudalists’ do is concentrate and generalise the cloud of surplus value. The tendency of capitalist production is to divorce prices from values, ensuring returns go to those who own the most capital. What Varoufakis is analysing is not the downfall of capitalism, but its purest application.
Pik Smeet
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