Yanis Varoufakis discusses his book 'Technofeudalism' and the unsustainability of the current economic model. He explores the power of big online players, manipulation through algorithms, income disparity, and the need for governments to respond. The podcast also touches on personal experiences and critiques of politics.
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Quick takeaways
Cloud capital, characterized by algorithms and behavior modification, has enabled a few individuals to manipulate desires, bypass markets, and accumulate immense wealth, leading to the rise of techno-feudalism.
To counter the negative impacts of techno-feudalism, governments can implement taxation on online players' revenues, demand proportional share ownership, and promote cooperative models that democratize the ownership and control of capital.
The unsustainability of techno-feudalism necessitates democratic politics, collective action, and regulation by governments to address algorithm-driven rent extraction, the privatization of the internet commons, and worker exploitation.
Deep dives
Techno-feudalism and the Rise of Cloud Capital
The podcast episode delves into the concept of techno-feudalism, which describes the dominance of big online players like Amazon, Google, and Facebook, who extract wealth from users and have become the new ruling class. The transformation from feudalism to capitalism involved a shift from rent accumulation to profit through the ownership of machinery, factories, and networks. However, with cloud capital, a new form of capital has emerged, characterized by algorithms that modify behavior and extract rent. The ownership and control over this mutant capital by a few individuals gives them immense power to manipulate desires, bypass markets, and accumulate wealth. The enclosures of the internet commons and the money printing by central banks since the 2008 financial crisis have accelerated the rise of cloud capital. While this techno-feudal model seems unsustainable, it can persist for an extended period, causing societal and environmental damage. However, governments and communities can take steps to address the power imbalances by implementing taxes on the revenues of online players, demanding the deposit of shares into public trust funds, and pushing for cooperative models that democratize the ownership and control of capital.
Challenges and Solutions for Sustainable Techno-Feudalism
The podcast explores the unsustainability of techno-feudalism and its detrimental impact on local economies, businesses, and societies. The concentration of wealth and power in the hands of a few online players leads to the closure of shops, loss of revenue for local councils, and widening inequality. While taxation on revenues and proportional share ownership can help redistribute wealth and limit the accumulation of capital, the ultimate solution lies in democratic politics and collective action. Governments need to prioritize the interests of the majority and tackle issues such as algorithm-driven rent extraction, the privatization of the internet commons, and the exploitation of workers. By implementing regulations, like limiting the number of days Airbnb rentals are allowed or promoting cooperatives that use algorithms to maximize efficiency and benefit both workers and the public, governments can curb the negative effects of techno-feudalism and create a fairer economy.
The Role of Taxes and Power Dynamics in Techno-Feudalism
The podcast highlights the significance of taxation in challenging power imbalances in techno-feudalism. By levying taxes on online players' revenues, governments can tackle the unequal distribution of wealth and disrupt the accumulation of capital. However, influential individuals and companies are likely to resist such measures and launch campaigns against them. Yet, several countries have already introduced digital taxes, and collective international action can further support taxation efforts. Redirecting the funds generated through taxation towards reducing inequality and providing benefits to the working and middle classes can help stimulate demand and promote local economies. It is essential for governments to exercise their power and effectively address the challenges posed by techno-feudalism, keeping in mind the long-term sustainability and well-being of their societies.
The Importance of Democracy and Cooperative Models
The podcast emphasizes that democratic politics and collective action are crucial in countering the influence of techno-feudalism. The power of online players can only be effectively challenged through political movements and public support. To democratize the ownership and control of capital, cooperative models can be implemented, wherein algorithms prioritize the well-being of workers and communities rather than extracting rent. This approach involves depositing shares into public trust funds, where dividends accumulate to provide a basic income and benefit society as a whole. By promoting these cooperative models and using taxation to curb the accumulation of wealth, the negative effects of techno-feudalism can be mitigated, enhancing the representation and well-being of the many rather than the few.
Sustainability and Future Considerations
The podcast raises concerns about the sustainability of techno-feudalism and its long-term impacts on societies and economies. The current trajectory, driven by the dominance of cloud capital, can lead to inadequate demand, reduced income for workers, and increased inequality. However, the unsustainability of this model does not guarantee its end as historical transformations can persist for prolonged periods. To address this, governments must take actions such as implementing taxation, introducing cooperative models, and prioritizing the democratic interests of their citizens. By curbing the accumulation of wealth and promoting equitable distribution, a more sustainable and inclusive future can be envisioned, where the negative effects of techno-feudalism are minimized for the benefit of society as a whole.
Yanis Varoufakis joins Steve nd Phil this week to talk about the thinking behind his new book technofeudalism. The ‘cloudists, as he calls them, aren’t operating in the market, they have replaced the market. They learn from us tell us what we want to buy and then sell it to us. Their capital is the algorithm they have developed, but also the information we provide in the records of our behaviour and the posts that we make. The result is a massive accumulation of wealth. But how sustainable is a model that sees so much money being made by so few people? Yanis says it’s not at all sustainable, and suggests a couple of ways that the governments of the world can respond, so that we benefit from the technology without destroying our respective economies.
