First published in Russian at /spichka. Translated by Dmitry Pozhidaev for LINKS International Journal of Socialist Renewal. Boris Kagarlitsky wrote this review from a Russian penal colony, where he is currently serving a five-year sentence for his opposition to Russia’s war on Ukraine.
Technofeudalism: What Killed Capitalism Yanis Varoufakis Penguin Books that reach a prisoner are always important. They are read attentively, without skipping details that, in the outside world, would probably escape our notice. Yet I think the book by Greek economist and left-wing politician Yanis Varoufakis, Technofeudalism, which was sent to me some time ago, deserves attention regardless of the circumstances in which we read it. Alongside Nick Srnicek’s Platform Capitalism and Shoshana Zuboff’s The Age of Surveillance Capitalism, this work represents an attempt to provide a broad account of the transformations that have already taken place in the economy and society as a result of new technologies: the internet, artificial intelligence, cloud data storage, messaging applications, social networks, and so forth. Varoufakis enjoys a distinct advantage here. First, his book is superbly written and, it should be added, excellently translated into Russian by A. Snegirov under the editorship of A. Kvachko and A. Pavlov, who also contributed an afterword. Second, rather than focusing exclusively on technology, Varoufakis demonstrates how these new economic practices are connected to the crisis of 2008-10, known as the Great Recession. When the crisis erupted across the world in 2008 (having already struck the US housing market and banking sector in 2007), most analysts, including many liberals, agreed that major structural reforms were inevitable, many of them resembling proposals long advocated by the left. Yet this did not happen. The crisis was “extinguished” simply by flooding the economy with money. This occurred everywhere, though on different scales, with the US Federal Reserve playing the central role. In many countries — including Greece, where Varoufakis, after teaching at a US university, briefly served as finance minister — the private debt crisis was transformed into a public finances crisis. Governments, in rescuing banks, pushed themselves to the brink of bankruptcy. Yet the basic characteristics of the system appeared unchanged. Everything seemed to continue as before. At least, that is what we thought. Varoufakis argues the situation was rather different. The defining feature of the anti-crisis policies of 2008-2010 was that generous financial support for banks and corporations was accompanied by austerity measures imposed on ordinary citizens. As a result, the rescued companies and financial sector as a whole found themselves sitting on mountains of money with nowhere productive to invest it. Impoverished households and governments preoccupied with saving the banking system were no longer generating sufficient demand for goods. In fact, this was a classic case of capital overaccumulation, one already described by Rosa Luxemburg. Such crises of overaccumulation usually lead, over time, to a redistribution of resources among industries and countries. And this time was no exception. Funds that, under different circumstances, might have been directed toward industry, agriculture or social infrastructure instead flowed into firms developing and deploying new technologies. A social network, for example, requires relatively little investment compared to building new factories, while appearing entirely free to users already battered by the crisis. Yet those same users generate content and information that raise the platform owner’s market valuation. Around these networks emerge platforms for classified advertisements, advertising services, taxi coordination and countless other activities. All of this generates revenue. This gave rise to what Varoufakis, by analogy with cloud data storage, calls “cloud capital.” Its prosperity no longer depends primarily on profits from the sale of goods but on rent extracted from other businesses that sell products and communicate with customers through the platform. Varoufakis places particular emphasis on this point, arguing that rent has triumphed over profit. At the same time, the mass of users enjoying free access to these networks continually fills them with content and data, valuable and otherwise, which in turn fuels further business expansion. Companies that sell goods through the networks can no longer leave them without risking the loss of customers. As for the redistribution of influence among countries and regions, Varoufakis highlights Europe’s relative decline. Europe lacks homegrown giants comparable to Amazon, Google or Meta, while the clear winners have been the US and China, the latter having built its own digital networks that, in some respects, are even more powerful than their US counterparts. I would add that, in this context, Russia also appears relatively successful due to the creation of platforms such as Yandex. Whether these platforms are truly “ours” is another matter. Varoufakis calls China and the US “cloud fiefdoms”, predicting a struggle between them for global dominance. Up to this point, I found myself agreeing with virtually every sentence Varoufakis wrote. Then the problems began. Read rest at https://links.org.au/yanis-varoufakiss-technofeudalism-review-boris-kagarlitsky -=-=-=-=-=-=-=-=-=-=-=- Groups.io Links: You receive all messages sent to this group. View/Reply Online (#42142): https://groups.io/g/marxmail/message/42142 Mute This Topic: https://groups.io/mt/119916755/21656 -=-=- POSTING RULES & NOTES #1 YOU MUST clip all extraneous text when replying to a message. #2 This mail-list, like most, is publicly & permanently archived. #3 Subscribe and post under an alias if #2 is a concern. #4 Do not exceed five posts a day. -=-=- Group Owner: [email protected] Unsubscribe: https://groups.io/g/marxmail/leave/13617172/21656/1316126222/xyzzy [[email protected]] -=-=-=-=-=-=-=-=-=-=-=-
