IN FULL Yanis Varoufakis welcomes us to the age of Technofeudalism | Full interview
The Institute of Art and Ideas・2 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- Profits have been replaced by state money and massive rents retained by big Tech companies like Amazon, leading to a shift from capitalism to techn feudalism.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.
