IN FULL Yanis Varoufakis welcomes us to the age of Technofeudalism | Full interview

The Institute of Art and Ideas2 minutes read

Prominent economist Yanis Baracus discusses the shift from capitalism to tech feudalism, citing central bank actions post-2008 crisis as a key driver. The rise of big Tech companies like Amazon and Meta, with minimal investment in workers, has led to economic instability and a concentration of wealth, prompting the need for legislative action.

Insights

  • The shift from capitalism to techn feudalism is marked by the replacement of profits with state money and rents retained by big Tech companies, altering the economic landscape significantly.
  • Central banks printing money post-2008 financial crisis to boost big Tech capital inadvertently fueled the rise of tech companies, concentrating wealth and highlighting the necessity for legislative actions to redirect funds towards public investments.

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Recent questions

  • What is techn feudalism?

    A system where big Tech companies dominate economic activity.

  • How did central banks respond to the 2008 financial crisis?

    By printing around $35 trillion through quantitative easing.

  • How do big Tech companies impact the economy?

    By extracting economic energy through Cloud rent.

  • What challenges do central bankers face in the current economic landscape?

    Dealing with the power of big companies and rising inflation.

  • How did the 2008 financial crisis impact central bank policies?

    By transferring significant amounts of money to financiers.

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Summary

00:00

"End of Capitalism: Rise of Techn Feudalism"

  • Yanis Baracus, a prominent economist and politician, discusses the end of capitalism and the rise of techn feudalism in his latest book.
  • Capitalism, as traditionally understood, involved the shift of power from landowners to owners of capital and the dominance of economic activity through markets.
  • Following the 2008 financial crisis, central banks printed around $35 trillion through quantitative easing, leading to asset price inflation and price deflation.
  • Profits have been replaced by state money and massive rents retained by big Tech companies like Amazon, leading to a shift from capitalism to techn feudalism.
  • Traditional capitalist firms like General Motors or Volkswagen spend about 85% of their revenues on wages, while companies like Meta (formerly Facebook) pay less than 1% to workers.
  • The extraction of economic energy through Cloud rent forces central banks to keep printing money, leading to a cycle of economic instability.
  • The shift to a techn feudal environment, with precarious employment and a depreciation of job quality, makes the economy more prone to crisis.
  • While technology like Alexa and Siri are useful, their addictive nature and the extraction of Cloud rent by a few individuals pose challenges for society.
  • Central banks, in response to the 2008 crisis, printed money to boost big Tech capital, inadvertently contributing to the rise of tech companies and concentration of wealth.
  • Central bank policies, driven by panic after the financial crisis, transferred significant amounts of money to financiers, highlighting the need for legislative action to direct funds towards public investments.

16:36

Bankers favor big companies, hinder small investors.

  • Bankers did not give money to the little people due to austerity, instead giving it to big companies who did not invest, leading to a stock exchange rally.
  • Low interest rates resulted from excess liquidity and low investment, causing interest rates to fall.
  • Big Tech invested in real capital, creating Cloud capital after 2017.
  • Central Bankers faced challenges due to the power of big companies, leading to a negative feedback loop.
  • Central Bankers struggled to combat rising inflation due to Cloud capital's influence, creating a conundrum in policy-making.
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