Capitalism has mutated into something far more sinister | Yanis Varoufakis

When people say, "I will upload something to the cloud." Well, the cloud is a metaphor for this machinery that is all over the face of the earth, deep

inside our oceans. It's machinery. So,

why is this different to capitalism?

I'm going to tell you a story, my story regarding not what will happen but what has already happened when we were

otherwise occupied not sufficiently um observant of what was actually occurring.

The book on which this story is going to be founded is called technofudalism and the title or actually the subtitle um which has created a lot of anger

especially amongst my fellow left-wingers. Uh the subtitle is what

left-wingers. Uh the subtitle is what killed capitalism because you know we left wingers we thought that we came to this world in order to overthrow

capitalism. So there comes Verufaki

capitalism. So there comes Verufaki saying to other left-wingers that you know what capitalism has already been overthrown. And that didn't go down well

overthrown. And that didn't go down well with my fellow leftist Marxists. But

I'm not here to please. I'm here to express that which I really do believe is happening to us. And it is a very serious moment in history. Of course,

you may very well say and you would be right that every generation, every author, all of us, we would like to feel that we are on the cusp of a great transformation. And you know this is a

transformation. And you know this is a delusion that everybody has suffered.

All generations think that they were the generation when big things happened. But

I do fear and think that our generation was unlucky enough to be on the cusp of such a great transformation. So what am I going on about?

Wherever we look, wherever we look, we witness the triumph of capital. capital

has steamrolled over the trades unions movement uh civil rights movements,

labor governments, social democracy, liberalism, even neoliberalism because come to think of it, you know, the 2008 crisis and everything that followed after that was a complete defeat of

neoliberalism. Neoliberalism was

neoliberalism. Neoliberalism was supposed to be the creed that the market knows best. Well, we saw what happens

knows best. Well, we saw what happens when you leave it to the market.

everything came crashing down and you had you know the great and the good the governments of the west reationalizing

or nationalizing in 2008 2009 more sectors than Lenny ever did. So capital

triumphed to such an extent. Its triumph was so

deep and so thunderous that it actually mutated like a toxic virus which um

kills the host that keeps it alive.

The mutation of capital that I want to talk to you about today has already killed a host which is capitalism. So this is a great

capitalism. So this is a great contradiction. Capital has never been

contradiction. Capital has never been more powerful than it is today. But it

has been so powerful that it killed its host capitalism. And what came in its

host capitalism. And what came in its place?

My view, my hypothesis is that a new system of producing, distributing values and power has sprung up and the best way

I can describe it is by this term technoidalism which is not a very pleasant term but then it's not a pleasant reality and therefore I don't think we need pleasant words by which to

describe it. So let me get down to the

describe it. So let me get down to the nitty-gritty of it. I referred before to this great transformation. Well, the

previous great transformation took place in this country. It was the industrial revolution, was it not? It was the great transformation, the great transition

from feudalism to capitalism. It was a mind-boggling event in human history. It

beguard the modern world as we know it with all its ills and all its great uh aspects.

What was that great transformation all about?

Under feudalism, you know that very well. You don't need me to say it, but

well. You don't need me to say it, but just to establish some common ground.

Under feudalism, all power sprang from land ownership.

If you owned land, substantial parts of land, then you had political power, economic power, discursive power, cultural power. Power was one thing.

cultural power. Power was one thing.

There was no such thing as a division between political power and economic power. If you owned land, then you had

power. If you owned land, then you had political power and you had economic power. And if you didn't have political

power. And if you didn't have political power or economic power, that meant you didn't own any land. So the great cathedrals wherever you look at across

Europe in Britain, they were the result of accumulated ground rent. So if you had property, if

ground rent. So if you had property, if you had land, you also owned essentially the communities that lived on that land.

You had the political power to send the sheriff in and collect at the end of the harvest uh your share. That's your

ground rent. If there were artisans working in your thftdom in your estate, you charge them for the right to be

working and producing on your estate. So

land was the source of power and wealth was accumulated ground rent.

All the cathedrals, the castles, the house of commons were all built on the basis of rent that came from property rights of a land. Okay, that's fudalism.

What happened with the great transformation? I'm not going to go into

transformation? I'm not going to go into an analysis of how the transformation took place because then we would need another two such sessions for that. But

with capitalism, the source of power shifted from ownership of land to ownership of machines.

And wealth sprang not from ground rent anymore but it sprang from profits. So

with the industrial revolution, the first industrial revolutions, the first industrial revolution, it was the ownership of the steam engines, the railways. Later with the second

railways. Later with the second industrial revolution, it was the electricity grids and the telegraph poles and the telephone systems. and then later on with the vertically

integrated mega firms like Henry Fords or Westing Houses and so on.

So when we talk about capitalism, what do we mean? We mean a system where power

we mean? We mean a system where power comes from owning the machines that allow you to retain a residual after

you've paid off your workers, your um banker for the loans you've taken out, the landlord who owns the land that you pay ground rent. What you retain is the

profit and that profit is the source of all power under capitalism. It is this transformation from land and rent to

machinery and profit that created the modern world that created the hegemonic power of the United States. say today

my point now in this talk and in this book is that something quite remarkable has happened to capital

in the last 15 years 10 to 15 years this is the mutation I was referring to before allow me to put it simply

capital pre-existed capitalism by 10 20,000 years. What's capital again? It's

20,000 years. What's capital again? It's

machinery.

So you fashion, you forge a plow and a tool. Why do you want a plow if you're a farmer? Because you

want not to use it as a um an ornament, but you want to put it to use to plow the earth to produce corn or wheat. So

the plow, the steam engine, the industrial robot today, they are all examples of capital goods, pieces of capital in the sense that they are

produced means of production. Things we

produce not because we want them to use them as such, but only to produce something else. Produced means of

something else. Produced means of production. A hammer, a plow, a tractor,

production. A hammer, a plow, a tractor, a steam engine, an industrial robot.

These are all produced means of production.

Not this.

What lives in here? And not just in here in my phone or your tablet or your laptop, but also in the cell towers that

allow for this to beworked with Google, with Meta, with Amazon, with Facebook and so on. the optic fiber cables that

are crisscrossing the earth, the oceans, the ocean bed, the server farms. If you go into a server farm owned by Amazon or by Microsoft, it is mindboggling. I

don't know whether you've ever seen anything like that. I remember visiting in um um somewhere between Washington

State and Idaho uh inside the guts of a mountain a Microsoft server farm that was one and a half kilometers long underground

so that it it would be kept cool, you know, with minimal electricity. And it

was just like being in a in a James Bond movie. something between being in a

movie. something between being in a James Bond movie and in a factory lots of servers very few workers all automated of course but it's machinery

right so when people say I will upload something to the cloud well the cloud is a metaphor for this machinery that is all

over the face of the earth deep inside our oceans it's machinery so why is this different to capitalism well Because this machinery that I just

described allow me to call it cloud capital to distinguish it from the steam engines, the plows, the industrial robots that are produced means of

production. Now what does this do? What

production. Now what does this do? What

does Google do? What does Amazon do?

What does Uber do? What does Airbnb do?

Well, using all this machinery, it allows for the owner of this machinery to engage us using the

machinery.

Now, this is quite spectacular per se.

Think about it.

Up until now, your relationship with capital, our relationship with capital was always mediated via the market. So

you wanted to buy a car made by Henry Ford, you had to go to the dealership, you you would buy the car. You never see the capital goods that built it, the

production lines, unless you visited a factory. But you didn't have to visit a

factory. But you didn't have to visit a factory, right? So your relationship

factory, right? So your relationship between you and Henry Ford's capital was mediated via the market. You had an

advertiser who managed to convince you to your detriment that you needed to buy to buy to eat a Big Mac through a you know one of these McDonald's

advertisements. So when that happened

advertisements. So when that happened all you had to do was go to the McDonald's to get the Big Mac. So again,

you have to go through the retail shop through the marketplace.

But what does Amazon do? Something very,

very different.

Has anyone of you seen one of these Alexa machines that Amazon provides you with uh Amazon Prime? It sits on your desk. You give it orders. You say to it,

desk. You give it orders. You say to it, "Alexa, um, tell me a story or play some music or switch off the lights or what book should I buy?" And when it says you

should buy not a book by Varuakis but by you know Malcolm Rifkin or somebody else and well

bringing everything together you know um that machine behaves as if it is your servant your slave but it isn't it is an

interface it's a portal to the cloud capital that belongs to Jeff Jeff Bezos Right? And what happens is it receives

Right? And what happens is it receives all these instructions and questions from you and because it isworked with

all the rest of the machinery that I described before, it gets to know you and then it finds ways

of asking you questions that help you train it better to train you to train it better to know you. And at some point it starts giving you advice. I don't know

about you, but when Spotify suggests music for me to listen to, I always like it. Sometimes I love it.

Whereas when my best friends recommend music to me, I usually don't like it.

The machine knows me better than my friends do.

Same with Amazon and books. Amazon has

never recommended to me a book which I didn't enjoy reading.

Why? Because of this dialectical process. I train it to train me to train

process. I train it to train me to train it to train me to know me better. Once

it knows me and it starts giving me advice which hits you know the right spot, the right nerve then it has won my

trust. Subconsciously I trust it you

trust. Subconsciously I trust it you know it has given me good advice before better than my friends. So I trust it.

So through this dialectical process when I say okay Alexa um or I type in or Siri not just Alexa right all these machines

work in exactly the same way. When I

type in electric bicycle and it comes up with a list of three or four these will be good for you. I will buy it but I won't buy it from a marketplace. I

could just click and the electric bicycle is going to magically appear at my doorstep. So think about it.

my doorstep. So think about it.

Amazon resembles a cloud fifdom where there are lots of buyers, lots of sellers. It

looks like a market but it is not because there's no degree of decentralization. There's nothing like

decentralization. There's nothing like you know you can't talk to other buyers.

You cannot talk to sellers. You cannot

choose the sellers. It's a relationship between you and the algorithm, Alexa. So

the algorithm has a name, right? So you

feel that it is like another human being, but it's not. It's an algo, right? And this algo does, let me just

right? And this algo does, let me just summarize everything I've said so far.

It does the following. It trains you to train it to input desires into your soul and then satiates those desires

bypassing every market. And why does he do that? Because Jeff Bezos collects 40%

do that? Because Jeff Bezos collects 40% of the price you pay for the electric bicycle. He hasn't produced the electric

bicycle. He hasn't produced the electric bicycle. He takes it from the

bicycle. He takes it from the capitalists who produce the electric bicycle using proletarian labor and so on and so forth, right? But the profits

most of them most of them the bulk of the profits are siphoned off the traditional capital owner and that goes

to the owner of the cloud capital who is not producing anything. So now we have a new form of capital that is not a produced means of production but it is a

produced means of behavior modification.

That is no longer capitalism. Welcome to

Technofudalism.

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