From Techno Feudalism: What killed capitalism (Yanis Varoufakis, 2023) pp151-3
As mentioned at the start of the chapter, when the bottom fell out of Wall Street, China stabilised global capitalism by cranking up domestic investment to more than half of China’s national income, It worked, in that Chinese investment took up much of the global slack caused by Western commitment to austerity.” China’s international stature rose, and its accumulating dollar surpluses allowed Beijing, in addition to feeding Wall Street, to become a major investor in Africa, Asia, even in Europe through its famed Belt and Road Initiative. (There was a price, of course, for this sparkling new role: to elevate investment to such heights, Chinese workers’ share of the pie had to decline while Chinese rentiers, operating within China’s own FIRE sector, got seriously richer. Specifically, investment rose on the back of loans using as collateral Jand that China’s local authorities made available to developers. Thus, the post-2008 investment drive went hand in hand with the inflation of house and land prices across China.)
In the same way that cloud capital rose in the US on the back of central bank monies from the Fed, so the same occurred in China on the back of Beijing’s investment drive. Silicon Valley’s Big Tech soon discovered a mighty competitor: China’s Big Tech. Westerners underestimate it. We think of Baidu as a Chinese Google knock-off. Of Alibaba as an Amazon imitator. They are much more than that. Indeed, to grasp the enormity and nature of China’s Big Five cloudalist conglomerates —~ Alibaba, Tencent, Baidu, Ping An and JD. com – consider the following thought experiment.
Imagine if, in the West, we were to roll into one Google, Facebook, Twitter, Instagram and the version of Chinese-owned TikTok still available to American users, then include the applications that play the role that telephone companies used to: Skype, WhatsApp, Viber, Snapchat. Add to the mix ecommerce cloudalists like Amazon, Spotify, Netflix, Disney Plus, Airbnb, Uber and Orbitz. Lastly, throw in PayPal, Charles Schwab and every other Wall Street bank’s own app, Now we are getting close. Except there is more…
Unlike Silicon Valley’s Big Tech, China’s is directly bound into government agencies that make all-pervading use of this cloudalist agglomeration: to regulate urban life, to promote financial services to unbanked citizens, to link its people with state health care facilities, to conduct surveillance of them using facial recognition, to guide autonomous vehicles through the streets — and, outside of its borders, to connect Africans and Asians participating in China’s Belt and Road Initiative to its super cloud fief.
The key here is the seamless integration of communication, entertainment, ecommerce, foreign investments and much else with online financial services: the portal to cloud rent. As I write this sentence,’ WeChat, the mobile messaging app belonging to Tencent, has transmitted 38 billion messages in a single day. Its users did not have to exit the WeChat app to make a payment. While streaming music, scrolling social media, messaging their families, they are able to use the same app to send money to anyone in China, as well as to any of the millions outside of China who have downloaded WeChat and opened a yuan account with any number of China’s banks.
With this great leap into financial services, China’s cloudalists acquired a 360-degree view of their users’ social and financial life. If cloud capital is a produced means of behaviour modification, Chinese cloudalists have accumulated cloud capital beyond the wildest dreams of their Silicon Valley competitors who, by comparison, enjoy far less power per capita to accumulate cloud rent. American Big Tech has been doing what it can to catch up. But it is becoming worryingly apparent to America’s rulers that China’s cloudalists have already acquired a power that US cloudalists are struggling to emulate: the power stemming from a successful merger of cloud capital and finance — or cloud finance.
This is technofeudalism-with-Chinese-characteristics. Since its emergence, it was only ever going to be a matter of time before the geopolitical struggle for hegemony between the US and China would divide the world into two, conflicting, super cloud fiefs.
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