[BrianC]

Is Capitalism Dead? Yanis Varoufakis Argues Capitalists are Now Vassals to 'Techno-Feudalists'
Greek economist/politician Yanis Varoufakis "was briefly Greek finance minister in 2015," remembers the Conversation. Now his new book asks the question, "What killed capitalism," with the title's first word providing an answer.

"Techno-feudalism."
Varoufakis argues that we no longer live in a capitalist society... "Today, capitalist relations remain intact, but techno-feudalist relations have begun to overtake them," writes Varoufakis. Traditional capitalists, he proposes, have become "vassal capitalists". They are subordinate and dependent on a new breed of "lords" — the Big Tech companies — who generate enormous wealth via new digital platforms. A new form of algorithmic capital has evolved — what Varoufakis calls "cloud capital" — and it has displaced "capitalism's two pillars: markets and profits".

Markets have been "replaced by digital trading platforms which look like, but are not, markets". The moment you enter amazon.com "you exit capitalism" and enter something that resembles a "feudal fief": a digital world belonging to one man and his algorithm, which determines what products you will see and what products you won't see. If you are a seller, the platform will determine how you can sell and which customers you can approach. The terms in which you interact, share information and trade are dictated by an "algo" that "works for [Jeff Bezos'] bottom line"...

Access to the "digital fief" comes at the cost of exorbitant rents. Varoufakis notes that many third-party developers on the Apple store, for example, pay 30% "on all their revenues", while Amazon charges its sellers "35% of revenues". This, he argues, is like a medieval feudal lord sending round the sheriff to collect a large chunk of his serfs' produce because he owns the estate and everything within it.

There is "no disinterested invisible hand of the market" here. The Big Tech platforms are exempted from free-market competition.

And in the meantime, users are unknowingly training their algorithms for them — so "In this interaction, we are all high-tech 'cloud serfs'... [T]he 'cloud capital' we are generating for them all the time increases their capacity to generate yet more wealth, and thus increases their power — something we have only begun to realise."
Approximately 80% of the income of traditional capitalist conglomerates go to salaries and wages, according to Varoufakis, while Big Tech's workers, in contrast, collect "less than 1% of their firms' revenues"... For Varoufakis, we are not just living through a tech revolution, but a tech-driven economic revolution. He challenges us to come to terms with just what has happened to our economies — and our societies — in the era of Big Tech and Big Finance.
https://theconversation.com/is-capitali ... -it-213992

[Plantagenet]

Access to the "digital fief" comes at the cost of exorbitant rents. Varoufakis notes that many third-party developers on the Apple store, for example, pay 30% "on all their revenues", while Amazon charges its sellers "35% of revenues". This, he argues, is like a medieval feudal lord sending round the sheriff to collect a large chunk of his serfs' produce because he owns the estate and everything within it.

Just about every business on earth has to either buy or rent land and buidlings for their offices, factories, and store to make and sell their products. I don't see why it's so unusual for a business to also rent space within Amazon to sell their goods using Amazon technology.

There is "no disinterested invisible hand of the market" here. The Big Tech platforms are exempted from free-market competition.

That isn't true at all. Take Amazon for instance.......have you ever shopped for something at Amazon and then looked for a cheaper price on-line? So have I---and that is free market competition. Just today I was looking at an item on Amazon and then I searched the internet and found a much cheaper price at another store. In fact---it was even easier then having to walk from store to store to compare prices. I could do it all just sitting at my desk computer.

And in the meantime, users are unknowingly training their algorithms for them —

What do you mean "unknowingly"? IN the real world everybody knows. At this point only idiots dont know that virtually every on line site has algorithms to track them and target them for future sale----unless they don't accept tracking and erase cookes on their computer.

Approximately 80% of the income of traditional capitalist conglomerates go to salaries and wages, according to Varoufakis, while Big Tech's workers, in contrast, collect "less than 1% of their firms' revenues"...

Big Tech workers are amoung the most highly paid people on earth, and big tech companies are highly profitable. That is what is known as a "WIN-WIN" situation.

Varoufakis....challenges us to come to terms with just what has happened to our economies — and our societies — in the era of Big Tech and Big Finance.

Sure....and what has happened is products have gotten cheaper for consumers, big tech workers make very salaries, and big tech investors have become wealthy.



That sounds like an amazing success story to me.....

Cheers!

[careinke]

Thanks for the article Brian.

I am familiar with Yanis Varoufakis works and economic theories. I read the whole article, it was well researched and generally correct, if not a little gloomy. I was happy to see micropayments mentioned in the article.

What he is not taking into account is Decentralized AI/Bots owned by individuals, and used by individuals to earn money depending on their value to the network. (determined by open source Algorithms).

Serendipitously, this morning, I watched a live youtube discussing this very thing. If you want to jump right to the Networked AI discussion Start around the 16 minutes mark. The discussion is a little geeky, but the guest is explaining to the host about the subject.

https://www.youtube.com/watch?v=2NN4d6H17Vg

I'm just starting my deep dive into decentralized AI. Still it's really, really, really, early for this disruptive technology with a small number of participants. That said, it has the fastest adoption rate the world has ever witnessed.

Peace

[theluckycountry]

If there is one constant about digital 'stuff', it's that it changes at a rapid rate. Amazon may be big today but in 5 years it might be AltaVista. Sure it has a head start, so what. I buy very little off amazon ( two purchases in 5 years) because mostly it sells crap chinese product. I'm more an ebay shopper, 60% and other online businesses 40%. Last week I spent $300 on ebay and $350 on a local parts suppliers website.

A neighbor buys a lot on Amazon, tools, 3D print gear, cloths. Honestly it's all garbage, especially the tools. Yes I know real tools are sold there but they are not promoted on Amazon like the in-house crap, the junk that is really profitable for Amazon. Amazon as far as I can tell is the go-to shop for the poverty stricken and the Brainless, much like costco or Aldi or Walmart. I would never shop at any of those, and not at Amazon anymore either after my last purchase.

Debating whether

Markets have been "replaced by digital trading platforms which look like, but are not, markets

is like debating whether fentanyl is a good recreational drug. The dumb ones will shoot it up all day long and those with a modicum of intelligence will go nowhere near it. Amazon etc may have a monopoly, but only with the useless eaters.

[Plantagenet]

Amazon.... mostly it sells crap chinese product.

If you mostly shop for "crap chinese product" on Amazon or other on-line sales sites then you will mostly buy "crap chinese product" on Amazon.

However, if you shop for other things then you can buy other things. For instance, my most recent Amazon purchase was a pair of hand made ski gloves sold direct from the Tyrol Mountains in Austria

I was traveling in Austria just a month ago and I can assure you it most definitely is NOT part of China.


FYI----Austria is NOT part of China

I think it's amazing that I can sit at my desktop computer at my cabin in Alaska and buy gloves direct from Austria or coffee direct from Java or ....as I did last winter.....a wonderfully heavy duty road ice chipping tool direct from the manufacturer in England.

Far from capitalism being dead, I think the internet has disintermediated capitalism so anyone in the world can now buy things directly from anybody else in the world. You don't get any more competitive and capitalistic than that!

Cheers!

[mousepad]

so anyone in the world can now buy things directly from anybody else in the world.

Yes, makes the world boring. You can get everything everywhere all the time. Hurray for globalization, the destroyer of local culture and identity.

[Pops]

Marketing, including distribution etc is something that is done in any system, socialists must get the potatoes and vodka to the proles as well. Capitalism by definition is simply private ownership of the means of production— as opposed to state ownership. In capitalism, production is achieved by renting labor at a discount and reselling the resulting product or service at a profit.

The whole point of capitalism is to get as close to holding a monopoly as one can without running afoul of whatever government bureaucracy there might be to prevent such from happening. If Amazon is too big it isn't Amazons fault, they are obviously doing capitalism right. That would be the governments' fault for being more beholden to Amazon's checkbook than it is to the public good.

Personally I like Amazon, Etsy, etc because I am quickly frustrated by the lack of local shopping since Walmart became so successful and gained a near retail monopoly in many neighborhoods. The problem with walmartization is they are so very good at stock control and merch turnover, They know exactly which 17 days of the year that corn candy sells best and those are the 17 days they have it on the shelf. Don't look for it the other 348 days because they have more profitable stuff in its place.

I generally don't live in large towns, let alone cities, and Amazon delivery is the best. If I can I shop around online to find the brand and model of whatever it is I want—then see if Amazon has that very model number. I've bought "good as new" returns that were rejected because of damaged packaging. I bought a bicycle trailer 50% of and couldn't figure out why it might have been returned as the box wasn't damaged or even opened, $150 is nothing to sneeze at.

[mousepad]

by renting labor at a discount

That is not entirely true. I know a many highly skilled engineers who are able to sell their services at a VERY high rate, often putting a small business at risk of going bankrupt paying for them.

If Amazon is too big it isn't Amazons fault, they are obviously doing capitalism right.

That might not be true. As companies get bigger they have a tendency to not play fair. Look at the many cases from intel, to microsoft, apple, google, walmart etc etc. All are or were entangled in some quagmire of abusing their market dominance. That ain't capitalism done right. That's abuse of power.

[ralfy]

"Revealed – the capitalist network that runs the world"

https://www.newscientist.com/article/mg ... the-world/

[theluckycountry]

Capitalism by definition is simply private ownership of the means of production— as opposed to state ownership.

Quite. But when the state is bribed by a huge corporation into giving it unfair advantages over it's smaller competition then it ceases to be capitalism and becomes crony capitalism.

Walmart is a classic example. They move into a town and buy cheap vacant land on the outskirts. The local council is basically bribed into allowing them in by promises of local employment etc. They get their land taxes deferred, they get special financing and the local government provides a lot of the needed infrastructure. Meanwhile the town center dies. Now there is this.

Big-box retailers’ new tactic to slash their taxes is the latest example of why cities are better off saying no to the boxes and cultivating Main Streets instead.

thanks to a new method that big-box stores are using to game the tax system, Marquette Township owed a $755,828.71 tax refund to the home improvement chain Lowe’s. Essential services like the library, the school district, and the fire department were on the hook to pay for it.

Marquette has been hit hard by a tactic that the country’s biggest retailers are using to slash their property taxes. Known as the “dark store” method, it exemplifies the systematic way that these chains extract money from local governments...
Marquette is one of the countless places that has bought into big-box economic development. Over the years, the township in the Upper Peninsula of Michigan spent millions extending water mains, law enforcement, and other infrastructure and services to its big-box commercial corridor along U.S. 41...

Then, less than two years later, Lowe’s flipped the script. The mega-retailer, which reports annual net sales of about $50 billion, went to tax court to appeal its property tax assessment. Marquette had pegged the taxable value of the store, which had just been built for $10 million, at $5.2 million. In front of the Michigan Tax Tribunal, an administrative court whose members are appointed by the state governor, Lowe’s won assessments that were, instead, $2.4 million in 2010, $2 million in 2011, and $1.5 million in 2012.

“We honestly thought there had been a mistake,” says Dulcee Atherton, the assessor for Marquette Township. “We had the building permits that said it was worth $10 million. We couldn’t believe the audacity, really.” What was worse was the methodology that Lowe’s, and the tax tribunal, had used to arrive at the lower figures...

https://ilsr.org/dark-store-tax-tactic- ... or-cities/

Some years back there were many stories exposing the fraud these stores employed on the web, but the big search engines filter them out now and the little engines typically just troll the Big ones so the information is buried. It's the internet of Lies and censorship. I made up my mind about all these big stores years ago, even the bricks and mortar ones are basically full of cheap junk, from the appliances to the clothes and all else, it's just garbage! But that's the world of peakoil isn't it. We need to cut costs and keep prices low and the only way to do that, And make a huge profit, is to sell junk you grandfather would laugh at.

There are still real stores out there selling quality merch but you have to hunt them down. Online and in person. Very few people could be bothered though, they just want to walk into an Ikea and buy a pretty lounge suite and don't care if it falls apart in 3 years.

[Pops]

Just to be clear, I don't endorse monopoly capitalism, I merely observe that in the US there is very little government effort toward anti competitive corporate behaviour since about 1970. Since reagan we've given the ownership every advantage. Fully half the population regularly votes to eliminate all regulation and taxation on corporations, even as far as blessing them with more human rights and personhood than they do entire races of actual humans.

Capitalism is alive and well. On the way down depopulation and degrowth will reveal the capitalists as feudalists by another name. Just ask Bill Gates about his quarter million acres of farmland.

[mousepad]

Fully half the population regularly votes to eliminate all regulation and taxation on corporations, even as far as blessing them with more human rights and personhood than they do entire races of actual humans.

I know. That stuff is crazy as shit. Half of the population is just dumb.
I see the same here in my state. More than half the population voted it's ok to kill babies. You can't make it up. Half the population is simply too dumb to exist.

[Pops]

More than half the population voted it's ok to kill babies.

Yes, perfect example of how the capitalists manipulate the populace.

Abortion became a tax issue when the party of small government (read: no tax/no regulation) adopted an antiabortion platform in 1976 to pander to traditionally Democratic catholics as part of the "Southern Strategy." Prior to that even republican delegates to the convention were only 40% "pro-life." Even Barry Goldwater. But with the right sales job it became a wedge that the ownership could use to make people vote against their own interests.

Obama was overrated I think. I did vote for him. But, he had good insight (or at least one similar to mine)

You go into these small towns in Pennsylvania and, like a lot of small towns in the Midwest, the jobs have been gone now for 25 years, and nothing's replaced them. And they fell through the Clinton administration and the Bush administration, and each successive administration has said that somehow these communities are gonna regenerate, and they have not.

"And it's not surprising then they get bitter, they cling to guns or religion or antipathy toward people who aren't like them or anti-immigrant sentiment or antitrade sentiment as a way to explain their frustrations."

Not that anybody here cares but this is exactly my explanation for the "crazy shit" on the right today. Who in their right mind thought those same people were actually excited about having Mitt Romney as president?

Rats in the alley and gangs on the street...
I dig McMurtry

[jato0072]

I wouldn't consider the Republican Party as far Right, but it doesn't help that the Chair of the Republican National Committee (RNC) Ronna McDaniel is Mitt Romney's niece. The Republican Party needs to be replaced by something actually Right Wing.

[ralfy]

Capitalism also involves public ownership, as seen in state capitalism. In addition, under private ownership, there's also ownership by workers, or cooperatives.

Most economies worldwide combine the three. In addition, they're also mixed, with public and private companies, and parts of market and planned economies.

Most important is that capitalism isn't only about ownership but what's done with it, which is to capitalize it. That's where the "capital" in capitalism comes from: the means of production are used to produce and pay for the means plus earn for the owners, which is profit.

[theluckycountry]

[quote="Pops"]

Obama was overrated I think. I did vote for him. But, he had good insight (or at least one similar to mine)
[quote]

He was a good orator. I could tell you anything you want to hear too. Then go behind your back and serve the corporations that have promised me (and my wife) millions just to stand up for an hour and speak to a group of rich people. Honestly pops, for say 5 million, I would betray you, nothing surer. And I like you and value your posts. We tend to underestimate the power of money on people who don't have a lot.

I stopped voting at age 24 when I figured that out, and in a nation where it is compulsory. There are many things compulsory that can be ignored to keep oneself a free person. That's the basis of that constitution and bill of rights isn't it. They are only rights if you reach out and take them.

[theluckycountry]

GDP Is a Tool of Politics, Not Economics Quarterly Journal of Austrian Economics 10/18/2017

A History of GDP measurement.

While the industrial revolution may have sparked an interest in national income accounting, ultimately political forces and world economic events shaped modern GDP. During the Great Depression, British economist Colin Clark and American economist, Simon Kuznets, were charged with producing national income accounts. Kuznets’ numbers showed an economy that had been cut in half between 1929 and 1932. President Roosevelt cited the figures in announcing the new recovery program and subsequently used supplemental figures for in budget proposals. According to Coyle, the GDP numbers validated FDR’s desire to act (p. 13).

Though Kuznets is credited with generating the first national income accounts, they did not reflect a method he desired to use. Kuznets wanted to create a measure that could be used to understand welfare, not simply output. He thought advertising, financial industries, speculative activities, subways, and certain types of expensive urban housing, among other things, including government spending ought not be included (p. 14). However, these original definitions of national income would show the economy shrinking if private output available for private consumption was used for government action.

...These methodological changes and simple revisions to previous GDP calculations can be the source of major political and economic events. As an example, Coyle cites the 1976 crisis in the UK. Chancellor of the Exchequer Denis Healey abruptly requested an emergency loan from the IMF. Upon a simple revision of the GDP numbers, Healey commented, “If we had had the right figures, we would never have needed to go for the loan.” Based on these comments, Coyle speculates: “Who knows whether Mrs. Thatcher would have won the same kind of election victory if her predecessors in power had not had to bring in the IMF?”

Austrians have long been critical of how increased government spending may very well stimulate the economy, and boost GDP numbers, but at the cost of malinvestment. Coyle explains a similar mechanism is at play in the financial sector:
...Hence, banks that take on more risk contribute more to GDP; Coyle points out that so far as GDP is concerned, more risk is counted like more growth. Therefore, current GDP methodology not only encourages malinvestment by only considering present spending, but also encourages malinvestment by favoring risky investments.

https://mises.org/library/gdp-tool-poli ... -economics

[jedrider]

I wouldn't consider the Republican Party as far Right, but it doesn't help that the Chair of the Republican National Committee (RNC) Ronna McDaniel is Mitt Romney's niece. The Republican Party needs to be replaced by something actually Right Wing.

So, "far right" is like Trump territory, "Far Fuhrer"?

I'm mentally renaming the U.S. 'Far Right' to 'Far Crazy' as of now. Thanks.

[Pops]

I've been voting for 50 years. Though it's long been obvious to me that our system was built to preserve the tyranny of the monied minority, I hold out hope we will continue improving our lot.

As I mentioned above, capitalists are merely modern feudal lords whose fief is denominated in dollars rather than acres. Their forefathers designed an anti-democratic senate, electoral college, lifetime SCOTUS based on blind luck, etc. They stacked the deck from the start against popular will, the Mob, their serfs, and continue fighting the majority to this day.

This is the obvious reason most "conservatives" (at least the current crop) proclaim to be constitutional Originalists. Of course they are, landed white men were the original constituency!

That club exclusive to landed white males (which obviously is owned by the Capitalists) lost it's exclusivity in the first half of the 20th century. The upper strata, the capitalists, the modern feudal lords, have since the 70's pandered to gun and bible toters to do battle against the Left, because for 50 yearas they had been losing thanks to newly enfranchised non-men and non-whites.

Today realization by regular white guys that voting for the aristocracy's agenda was getting them the same old result (offshoring, union busting, regressive taxation, lack of government services, wars, on and on) has combined with that backlash to bring us to the current "situation." Trump and now MAGA broadly presented a unique proposition, Burn-It-Down.

This is the time of turmoil, literally. The disillusioned rural and regular working guy is moving from his traditional home on the left, to the right where the southerners already went after the civil rights era. Not because he thinks government will begin to represent him, but merely out of spite, retribution. This is the realm of the no tax/ no regulation/ no government feudalist lords and they of course welcome these voters (serfs). Not sure how long the working guy will find the right beneficial. Maybe they don't care, burning it down is enough.

At the same time the educated upper middle class is abandoning it's station at the right hand of the GOP ownership where it's been since inception. It's moving to the left where the social democrats expect them to pay higher taxes. Again, not sure how that is going to work long term.

It will be interesting to see how the parties change their stated goals in the coming years. The Left will still focuses on civil rights I assume. The GOP no long publishes a platform but its obvious goal is still focused on killing government for the benefit of the feudalists.

I'll hand it to the GOP, they had an "autopsy" but rose from the dead like a zombie animated by fire and fury! LOL. Pretty remarkable actually.

[ralfy]

For the U.S., the two political parties work for the 10 pct of the population that own 70 pct of the country's total wealth.