Yanis Varoufakis on the fall of capitalism and social democracy, and the rise of techno-feudalism

I’m working on a long-ish piece about eugenics and the pandemic, but it’s a topic I want to get as right as I can, so I want to allow another day to work on it. In the meantime, I heartily recommend this interview with Yanis Varoufakis on the state of the world:

I think his perspective is an important one to take seriously. If we are going to deal with climate change, injustice, and authoritarianism, it’s important to understand how power is currently distributed. Without that, I don’t see how we have a shot at making changes that would take wealth and power away from those who currently rule the world. This isn’t fun stuff to think about, bit it is important.


  1. flex says

    Interesting video, although after thinking about it for a couple days, I have a few comments on what Varoufakis says.

    First, while we couldn’t break up an Amazon monopoly by geographical regions due to the nature of the internet, it would be possible to break up Amazon (or other sales companies with pseudo-monopolistic power) into independent product divisions. I.e. Amazon electronics, Amazon books, Amazon shoes, etc. This was the same suggestion made when Microsoft was sued over its monopolistic practices in the browser wars. It was thought that splitting Microsoft into an OS company and a Browser company would reduce Microsoft’s impact on the marketplace. Facebook, who’s product (user’s) is regional, already has regional divisions could be split up and off. Of course, a seeing a path to reduce the power of tech companies is not the same as having the political will to make those changes.

    Second, I understand Varoufakis’ point about closed-marketplaces like Amazon where the company controls what it is showing you is available and even can tries to direct your attention to products which the companies algorithm thinks you will want (or they want to sell) rather than giving the user full control over what they are browsing for. However, that is only true once you enter Amazon’s website. This is more like walking into a large department store than a company store. If a customer is looking for an item on the internet, there are usually many sellers. While I’m certain some people start with Amazon and don’t look elsewhere, other people use search engines, compare prices, etc. In fact, I could argue that companies like Walmart, which displace competition in small towns, are a greater problem with capturing a market because in many places Walmart is the only place to shop. The barriers to entry to establishing an alternative supermarket, and the additional costs incurred for a shopper to avoid Walmart (e.g. drive an additional 45-60 min.) create a more feudal, trapped, local economy than Amazon does.

    Third, Varoufakis’ point about companies in countries hoarding cash, he gives Germany and the USA as an example, are due (in my opinion) to different economic factors. The reason German is sucking up the money in the EU is probably more because of the common currency of the EU than because Germany is trying to starve cash from other countries. This was one of the fears which economists had when the EU formed with a common currency. Take away the ability of a nation to maintain a sovereign currency and regional differences in employment, manufacturing capacity, purchasing power, etc, start to have an impact on where the money flows. It has been argued, somewhat convincingly, that the USA is really too big for a common currency and there are really four regions of economic production which might perform better for it’s citizens if each region managed it’s currency. The regions are: the North-east/Mid-west to Chicago, and the Mason-Dixon line, which is traditionally strong in heavy manufacturing; the South, to Arkansas/Louisiana, traditional associated with some agricultural and some light manufacturing; the plains/mountain states, associated with agricultural or natural resource extraction; and California, agricultural and entertainment. The solution for the EU problem of a single-currency pushing cash into the more industrialized nations can be solved by have a single EU government, and that government taking cash from the industrialized sectors in the north and building infrastructure in the southern countries. Or giving individual countries their sovereign currency back again. Right now, a common currency without a common government, is really the worst of both worlds.

    I think Varoufakis is spot-on for the reason USA-based companies have large cash reserves. For 50 years people have been told that the wealthy (people or companies) are the job creators. So when the economy loses jobs, falters, the government gives money to the people they believe will create jobs. Even when, during the last give-away, companies admitted they were not going to use any of the money they were given to create jobs. The reality is that wealthy companies and/or people do not create growth. They look for the best ROI they can get, and insist on some ROI. If a bank gives a loan for $100K to start a business, they want $110K out of it. That’s not all that unreasonable. But a private investor doesn’t just want $110K out of it, they also want a piece of the company. They’ll get their $110K out of a successful business, but if they have a stake in the profits they will continue to get money, for doing nothing more than providing the startup funds. This is a perpetual rent on a startup, and allows perpetual accumulation of wealth by the rich. There are a lot of regulations which would do good here, but again, we appear to lack the political will to put those regulations in place.

    I also agree with Varoufakis about the unholy marriage of socialist groups (like trade unions) working with capitalism for the past 70 years, and how the strategies used in the 1950s are no longer effective today. But what Varoufakis doesn’t say is that there isn’t any reason to believe that socialist groups couldn’t abandon the alliances made 70 years ago and look for new strategies. This is, I believe, one of the real problems we face in the USA, and probably the world. The leaders are too god-damn old. The world has changed a lot in the last 50 years, but most of the leadership were already adults 50 years ago. Their view of the world was already settled 50 years ago. The things I see as problems are not perceived the same by people 20 years older than I am, and I’m certain my son, in his thirties, sees problems (and possible solutions) which I don’t see.

    What I see happening is that we will start skipping generations for leaders. A generation will remain in power until they are too old to retain it. That used to happen when politicians started getting into their late 50’s and by the time most politicians were in their 70’s only a few remained, they were replaced with people in their late 40’s and early 50’s. The medical advances which have extended our life-span have had a knock-off affect of allowing people in power, who will fight to remain in power, to stay until they are in their 80’s. By the time they retire, the next generation will be jaded and uninterested in putting the effort into politics, they will be in their late 50’s and early 60’s. Which means the following generation will have the energy and drive to gain power, people in their 30’s.

    Cultural change has always been made by bumps and short leaps. Each generation sees problems and some sort of solution is proposed and often implemented. Then the people who got into power to solve those problems stay in power until they are kicked out because they can’t deal with or even acknowledge that new problems exist. But people in power have a large ability to ignore what’s happening to their citizens. When a famine hits, it’s not the politicians who starve. People in power also have a lot of authority to say that nothing is going wrong, which a lot of people will believe until it directly affects them. So instead of short jumps of progress, and every generation seeing and solving the problems they see, when we start skipping generations we will see the status quo last for a long time, then a large cultural change at once. It would be nice if we identified and found a way to dampen the oscillations of cultural change, since too much pent-up frustration and privation leads to the tumbrels.

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