Tgk1946's Blog

From Techno Feudalism: What killed capitalism (Yanis Varoufakis, 2023) pp179-85

Why can’t technofeudalism be tamed by politics in the same way Capitalism was restrained, at least for a while, by social democratic governments?

Social democrats were able to make a difference during time when power was vested in old-fashioned industrial cap, ital, They acted as referees between organised labour and the captains of manufacturing industry, metaphorically (and occasionally literally) sitting them around a table, forcing them to compromise. The result was, on the one hand, improved wages and conditions for the workers and, on the other hand the diversion of a chunk of industry’s profits to pensions hospitals, schools, unemployment insurance and the arts But as power shifted from industry to finance after the death of Bretton Woods in 1971, European social democrats and American Democrats alike were lured into a Faustian bar. gain with the bankers of Wall Street, the City of London, Frankfurt and Paris. The bargain was crude and simple: social democrats in government freed bankers from the shackles of regulation: ‘Go crazy! Regulate yourselves,’ they told them. In return, financiers agreed to hand over the crumbs from their substantial table, in the form of a small portion of their gargantuan gains from rabid financialisation, to fund the welfare state.°

In Homeric terms, the social democrats had become the era’s lotus eaters, As they gorged themselves on financialisation, they became intellectually soft and morally complicit in its practices, Its honeyed juice lulled them into the belief that what had once been risky was now riskless, that this magic goose would always lay golden eggs, and if those eggs could be used to finance the welfare state, then whatever else the goose did could be justified. And so, when in 2008 financial capital came crashing down, they lacked both the mental tools and the moral values to tell the bankers: ‘Enough! We may save the banks but not you.’ Hence, the lethal combination of socialism-for-bankers and austerity-for-almost-everyone else, described in Chapter 4, that stagnated our economies while funding the rise of the cloudalists.

In the old days, social democrats had a degree of power over the industrialists because they had the backing of the trades unions and could threaten painful regulation. Today, cloudalists do not fear powerful unions because cloud proles are too weak to form them and cloud serfs do not even consider themselves producers. As for regulation, that has worked by putting a lid on prices or by breaking up cartels. In the Age of Cloud Capital, cloudalists feel safe in the thought that neither makes any sense. Price regulation is irrelevant when the services that consumers need to be protected from are either free or the cheapest on the market already.° As for breaking them up, as President Theodore Roosevelt did to Rockefeller when he broke up Standard Oil and other cartels, that was only possible in the old days of terrestrial capital. Standard Oil comprised petrol stations, refineries and fuel transport systems strewn all over North America. Breaking it up into regional oil companies, and encouraging these to compete with one another, was politically hard but technically dead easy. But how does one break up Amazon, Facebook, PayPal or, indeed, Tesla today?

Cloudalists know they can destroy any third-party developer (i.e, vassal capitalist), eking out a living on their cloud fief, who dares to contact one of their users (i.e. cloud serfs) without first paying a cloud rent.’ They know they can treat their users however they like — when did anyone last decline the terms and conditions of a software update? ~because of the hostages they are holding: our contacts, friends, chat histories, photos, music, videos, all of which we lose if we Switch to a competing cloud fief. And they know that there is little that government can do to stop them. Unlike national phone companies, which our national governments force to charge the same rates when calling customers of competing companies, how can they force Twitter to share the backlog of all your tweets, photos and videos with, say Mastodon?®

Even worse, they see that the ideological tide favors them. When you were still a young man, the political left maintained a belief in objective truth and a commitment to constructing new institutions in the service of redistributing incomes, wealth and power for the higher purpose of improving the human condition. Marxists, like yourself, went even further, arguing for revolution because they were convinced by the righteousness of their ethical code, the scientific foundation of their social theory, not to mention the belief that they were working towards a desirable end of history~a luxurious liberal communism in which all systemic exploitation and conflict has vanished. Even though the social democrats increasingly distanced themselves from, and denigrated, the Marxist perspective, much of what they accomplished drew strength from those Marxist convictions. The social democratic agenda was presented as a way to achieve the same things the Marxists advocated — such as universal health care and free education — but without ditching markets, capitalism and, importantly, without the drabness of Soviet communism, the secret police, the gulag.

From today’s vantage point, it is fascinating to recall that to counter the left’s conviction it was the political right back then which embraced a form of relativism, cautioning against the moral certainties of social democrats, anti-Vietnam War demonstrators, civil rights campaigners, feminists, and arguing that things are more complicated, less black and white, than the unwashed hippies and their older communistic fellow travellers assumed. But once the red flag was lowered over the Kremlin in 1991, signalling the defeat of the global left, the tables turned entirely. Suddenly, it was the tight that embraced unalloyed truths and non-negotiable virtues: the same reactionaries who had questioned that all peoples had a universal right to statehood or democracy became converts to their imposition {albeit selectively) at gunpoint.’ The right presented its own new take on the ‘end of history’: not socialism, ushering in shared property and radical equality, but liberal democracy, free markets and possessive individualism. Meanwhile, the left obliged the right by abandoning all certainty and embracing the relativism that the right had just shed: the principle that we all have the right to be free from the extractive power of others transmuted into the principle that no one perspective is worth more than any other. Underlying this transformation of the left was, of course, the West’s de-industrialisation, which fragmented the labouring classes, a process that technofeudalism continues to this day, When the working class was still relatively homogenous, a relatively solid class consciousness allowed it to put at least a degree of pressure on social democratic governments, Today, class struggle has been replaced by so-called ‘identity politics’, Tragically, the drive to protect racial, sexual, ethnic and religious minorities and for reparative justice suits just fine people in power who like to appear socially liberal. They enthusiastically embed those causes in their language as long a they only pay lip service to them and do little of substance to protect minorities from the systemic causes of their Oppression, Moreover, this discursive espousal of identity politics allows people in authority to do nothing about the economic and political extractive power that is increasingly intertwined with cloud capital. As for the alt-right, nothing could have pleased them more. They recognise in identity politics a golden opportunity to capitalise on the in-group defensive, tribal and racist feelings it arouses in white voters.

On this new political stage, social democracy is impossible. We no longer have capital on the one side and labour on the other, allowing a social democratic government to Play referee and force the two sides into a compromise. Instead we have a centre and an alt-right both in thrall to a new ruling class, the cloudalists, whose rise to power they have enabled, while the left is preoccupied with a civil war on the definition of ‘woman’, on the hierarchy of oppressions and all the rest. Meanwhile, no one speaks for the cloud proles, the cloud serfs, the vassal capitalists, what is left of the traditional proletariat-precariat, the victims of climate change, the masses that technofeudalism stifles and imprisons in its cloud fiefs.

To revive the original idea of social democracy, and indeed of the liberal individual, two things are essential. First, we must discard the myth that the old left—right distinction is obsolete. As long as we live in an Empire of Capital that rules over, and ruthlessly exploits, humans and the planet, there can be no democratic politics that is not rooted in a leftist agenda of overthrowing it. Second, we must fundamentally reconfigure what that means and how it can be achieved in the world of technofeudalism, where that empire is built on cloud capital, with all of the new, fiendishly complex class structures and conflicts that it engenders.

If this sounds hard and complicated, let me offer a simpler formulation. After the war, Marxism confidently offered a threatening Truth, the angst-ridden right went relativist, and social democracy got its chance. Following Marxism’s great defeat if 1991, Marxist Truth perished, Liberal Truth made a someback, and social democracy died, After capitalism’s 1008 Waterloo and the rise of technofeudalism, liberals, social democrats and the alt-right are fighting over whatever scraps of power the cloudalists will let them have. Today, our future depends on recovering the confidence to unveil a Truth consistent with our technofeudal condition. It will not be sufficient. But it is necessary.