Upstream - Technofeudalism w/ Yanis Varoufakis

Episode Date: January 14, 2025

Technofeudalism—you might already have some sense of what the term means, even if you haven’t sat down and unpacked it fully. A mode of production with one hand in the past and another the future���an updated form of feudal relations married to an advanced epoch of the productive forces that mark late capitalism—forces that we often associate with futuristic feats of technology. Except this is not some kind of techno-utopia—it’s really a dystopia.  Is capitalism over? Have we entered into a new mode of production defined by feudal relations and the technological forces of the algorithm? Did capitalism die, before our very eyes, in 2008? These are all questions that we tackle in today’s episode with a very special guest who’s written a book about all of this.  Yanis Varoufakis is a self-described anti-economist and author of many books. He was a member of Syriza and was Greece's Minister of Finance between January 2015 and July 2015, negotiating on behalf of the Greek government during the 2009-2018 Greek government-debt crisis. Since 2018, he has been Secretary-General of Democracy in Europe Movement 2025 (DiEM25) which is a left-wing pan-European political party he co-founded in 2016. His latest book is Technofeudalism: What Killed Capitalism, which we’ll be discussing in today’s episode.  Further Resources Technofeudalism: What Killed Capitalism, Yanis Varoufakis Another Now: Dispatches from an Alternative Present, Yanis Varoufakis Democracy in Europe Movement 2025 (DiEM25) "How to Be an Anticapitalist in the Twenty-First Century" by Erik Olin Wright Progressive International Make Amazon Pay Related Episodes: Socialism Betrayed w/ Roger Keeran and Joe Jamison Breaking Things at Work with Gavin Mueller Cover art: B. Mure Intermission music: "No State Solution" by Zombie Giuliani Upstream is a labor of love—we couldn't keep this project going without the generosity of our listeners and fans. Subscribe to our Patreon at patreon.com/upstreampodcast or please consider chipping in a one-time or recurring donation at www.upstreampodcast.org/support If your organization wants to sponsor one of our upcoming documentaries, we have a number of sponsorship packages available. Find out more at  upstreampodcast.org/sponsorship For more from Upstream, visit www.upstreampodcast.org and follow us on Twitter, Instagram, Facebook, and Bluesky. You can also subscribe to us on Apple Podcasts, Spotify, or wherever you listen to your favorite podcasts.

Ah Through this exposure to what Alexa does or Google Assistant does or Siri does, I started realizing that this is no longer capitalism. Because here you've got a fiefdom owned by man who is a capitalist. Jeff Bezos is a capitalist, there's no doubt about that. But the capital he owns is not a produced means of production, it's a produced means of behavior modification. So he's more like a feudal lord from the Middle Ages.

Because he doesn't produce anything Jeff Bezos doesn't care what you buy as long as you buy it off Amazon So essentially he's created a thieftum in which he has enclosed you, me, the producer of the elected bicycle booksellers, newsagents, newspapers millions of producers and millions of consumers We are all engaged in there. And at the same time, it's very interesting too, in getting you to engage with the platform

so that you replenish its cloud capital with your free labor. So you're a cloud surf. This is no longer capitalism. And ladies and gentlemen, welcome to Technofedalism. You are listening to Upstream. Upstream. Upstream. Upstream. A podcast of documentaries and

conversations that invites you to unlearn everything you thought you knew about economics. I'm Robert Raymond and I'm Della Duncan. Techno-feudalism. You might already have some sense of what that term means even if you haven't really sat down and unpacked it yet fully. A mode of production with one hand in the past and another in the future. An updated form of feudal relations married to an advanced epoch of the productive forces that mark late capitalism, forces that we often associate with futuristic feats of technology. forces that we often associate with futuristic feats of technology. Except this is not some kind of techno-utopia.

It's more of a dystopia. Is capitalism over? Have we entered into a new mode of production defined by feudal relations and the technological forces of the algorithm? Did capitalism die before our very eyes in 2008? These are all questions that we tackle in today's episode with a very special guest who's written a book about all of this. Yanis Varoufakis is a self-described anti-economist and author of He was a member of Syriza and was Greece's Minister of Finance between January of 2015 and July of 2015, negotiating on behalf of the Greek government during the 2009-2018 Greek government debt crisis.

Since 2018, he's been the Secretary General of the Democracy in Europe Movement 2025, or DM25, which is a left-wing pan-European political party he co-founded in 2016. His latest book is Technofutilism, What Killed Capitalism, which we'll be discussing in today's episode. But before we get started, Upstream is almost entirely listener funded. We could not keep this project going without your support. There are a number of ways in which you can support us financially. You can sign up to be a Patreon subscriber, which will give you access to bonus episodes at least one a month,

but usually more, usually bi-weekly, which means if you do become a Patreon subscriber, there will be an upstream episode available for you every week. It will also give you access to our entire back catalogue Patreon episodes, so you can find out more and subscribe at patreon.com to Through your support, you will be helping us keep Upstream sustainable and really helping to keep this whole project going. Socialist political education podcasts are certainly not easy to fund, so thank you in advance for the crucial support. Here's Della in conversation with Yanis Varoufakis. All right, welcome to Upstream. So happy to have you Yanis. Thanks for joining me. We love to start by having our guests introduce themselves. So how would you introduce yourself today? I used to be an academic until all hell broke loose in Wall Street and then my country Greece

went belly up. And then I graduated from being a decent second rate economist to being a first-class Greek economist in the middle of Greece's catastrophe. And then I became the finance minister of the most bankrupt state in Europe. And you know, the rest is politics. Yes. And Kate Raworth calls herself a renegade economist. And I do the same. I'm curious, do you identify as a renegade economist at all? No, I think I need to be a bit harsher than that because I'm older than you folks. I am an anti-economist economist.

I am the fifth columnist within the economics profession that is. I was lucky enough to get tenure in various departments as a, you know, established economist, but I always savored my role as the traitor within, the person within the Department of Economics that always advocated against economics, calling it pseudoscience, religion with equations. I would definitely agree with that. I love that. So in your most recent book, which we're focusing on today, Technofutilism, What Killed Capitalism. You're referred to as a libertarian Marxist, and I hadn't heard that term before. I'm wondering what does that term mean to you, and is that something you identify with? You see, I grew up like everyone from my generation

in the era of the Soviet Union. And for me, the Soviet Union was not communism. It was authoritarianism, it was a kind of industrial feudalism. It lasted as a communist society for a couple of years, after 1917, and then took the turn towards... I don't want to refer to it as a Stalinist, but as Noam Chomsky has aptly put it, it was a right-wing distortion, which led to a very authoritarian system. So by calling myself a libertarian Marxist or a libertarian communist, I want to hark back to the original ideas of Karl Marx, Friedrich Engels and many of the communists who gave their lives to the cause

and ended up in the gulag. But let me just make one more point. I consider Karl Marx to be a libertarian Marxist. Because for most of our audience who are not familiar with these debates, and this sad, very sad, and bad history, you hear the word communism immediately. You associate it. You identify the word communism immediately, you associate it, you identify it

with statism, the idea that you want the state to own everything and everything to be state controlled, right? As opposed to the market, as opposed to individual liberty, individual decision making and so on. Well, that's not Marx. Marx hated the state. He actually loathed it with a passion. In his softer moments when he was allowing himself to talk about a future communist society that would be worth fighting for and dying for. He talked about the withering of the state. For him, communism would only arrive when we don't need the state. So that's my point, that he was always a libertarian. And for me, the tragedy of the left has been that at the beginning of the 20th century, we drifted, and I say we as the left-wing movement, and I put everybody in it, the communist left, the social democratic left, we drifted from a situation where

we forgot what it was all about. In the 19th century, trade unionists, women's advocates, feminists and marxists were all about liberation. Remember the feminist movement initially was known as the women's lib, women's liberation, right? It wasn't about having quotas in Guantanamo Bay so that half of the torturers must be women. It was about liberating everybody from torture. Similarly with the left, with the communist left. It was all about liberating people, creating proper democracy at the workplace so that worker councils control the work so that you know we end the alienation of workers from the product of their labor and the fashion in which they make things, they manufacture things. But then we lost that, we lost the idea of

freedom and we started talking about something which means nothing to me like equality. Equality of bloody what? I mean if you have a disabled person they need more income in order to do what I do. So equality of what? Do you want to go back to this silly liberal idea of utility? No. We're talking about emancipation, liberating disabled people from the shackles of their wheelchair, from you know from not being able to move about, giving them the technologies that are necessary, or the medication which is necessary, whatever. So, I'm sorry this is a long answer,

but I feel very passionately about that, that we traded freedom for something that makes no sense, like equality or justice. I mean, Marx hated the word justice. There was this conference of trade unions in London and there was this guy called Sir Weston, I remember his surname, I don't even remember his first name, who came up and gave a very good speech about the importance of fair wages,

of fairness, of justice. And Marx got up and lambasted the poor guy. And he wrote a whole pamphlet called Wages, Prices and Profits against the citizen Western, because Marx's point is that there can be no such thing as a fair wage. The moment you have the differentiation between profits and wages, you have a differentiation of society between those who own

and those who don't own capital. So there can be no such thing as a fair wage. And forget the fairness. We need to be liberated from the shackles of capital, both as proletarians and as capitalists, because even the poor capitalists in a Hegelian dialectical Marxist sense are slaves to capital. We are all slaves to capital. We're like in the Matrix. We are all, you know, completely linked to the machine that exploits all of us, even if we think that we are, you know, on top of the pile. So that's my beef, my beef if you want.

I want us to retreat. And by the way, by ditching freedom and espousing something empty like equality or some airy fairy form of justice within capitalism, which is impossible, we effectively handed the concept of freedom over to the libertarians, who don't give a damn about freedom. They only care about the freedom of capital, of Elon Musk, of the conglomerates. You know, they talk about the freedom of the wolf, which is not necessarily the freedom of the lamb, it is the death of the lamb. So, let's retrieve freedom and let's be libertarian communists.

I love it. Thank you so much for that. And diving into the book, Technofutilism, one thing I appreciate about that book and also how you talk to your daughter about the economy, that book, is that you bring in your family. So I'd love for you to introduce your most recent book by starting with your dad, your father, and his question that he asked you at the end of his life. Well, the reason why I wrote a couple of books in which I address it, they're like long letters. One is to my daughter, the other one is to my father. The reason for that, Della, is because I'm a boring academic. And I've written many books for academic audiences that are

I've written many books for academic audiences that are impossible to read. They were just exercises in mental masturbation, right? I mean, as academics, we write for 20 people. And then when I needed, I felt the need as 2008 and the crash of Wall Street was approaching, which for me was the beginning of our postmodern 1930s, which we now experience, of course, with Trump, with what's happening in Europe, with wars all over the place. I had a need to communicate to a larger audience, and I just couldn't do it because I was used to writing in an academic language, which was so constipated that when my wife read something I wrote,

she said, come on, this is useless, can't you write for real people? But I didn't know how to. And what worked for me was to try to imagine that I am addressing my recalcitrant, rebellious 12 year old daughter who never wants to hear anything from me. So that's okay. And then once that book did well and I managed to develop the skills necessary to talk to real people, not academics, then when the idea of techno-fiddle-ism came to me, the idea that capitalism is finished and we don't even know it, which is of course a very audacious hypothesis, the hypothesis on which this book is based, I wanted to make sure that I don't lose

myself in you know in academic lingo again. So I was thinking I need to address it again to somebody. Who would it be? And I have to tell you that I started writing that book upon coming home from my father's funeral because it was very therapeutic to do it, to address this long letter to him, because he was the person who introduced him to capitalism at a ridiculously young age. And the question that you mentioned is when sometime in the early 90s, I think it was 1993, I believe, I was visiting Greece, I didn't live in Greece then, I was teaching in Australia at the time, and I was visiting Greece on the New Year's holidays,

and he asked me to help him connect his computer, an old computer, to the internet, to one of these clunky modems that we used to have in the early 1990s. So my father was quite advanced, he really wanted, and he did connect, and he used the internet and all that. And as I was connecting, when I connected it and he managed to get in to what was the very early stages of the internet, he turned around and he said, so remember this was a couple of years after the red flag was lowered from the Kremlin, after the collapse of communism. My father was a communist, accidentally, but nevertheless he was a communist. He said to me, following the defeat of communism and the total capitulation of socialism to

capitalism, to globalization, to financialization, to neoliberalism and so on. So my dad said, this thing, this internet, now that computers can talk to one another, does this mean that capitalism is going to die or is it going to get stronger? At the time I had no answer. But as the years passed, especially after 2013, 14, 15, with the rise of big tech and what I consider to be new, all singing, all dancing, absolutely novel form of capital, which I call cloud capital, then I had the answer to my dad. But unfortunately he had died.

So I decided to sit down and write him a letter as if he hadn't died. And that's the book. Yeah. And I love that approach. And I do find it very, yeah, like beautiful and poignant that it's this letter to your father and also helpful to understand as the reader. And so, yeah, when did you first become worried about the global transition to techno feudalism?

When did that idea dawn on you that we are no longer in capitalism, we're actually in something different and that it's quite concerning? And maybe how do we experience it or how might we recognize it so that people can kind of feel into where it is and how it's impacting us? It happened right when I finished my previous book that you mentioned. It was my previous book, but the previous book that you mentioned, talking to my daughter, the subtitle of that book was A Brief History of Capitalism. So, when I finished that book, and actually I was holding the fresh copy

that had just arrived in the mail from the publisher, I was pleased that it was there, that it was out, but I was at the very same time displeased by the fact that I felt that it was obsolete. I got this feeling that it is obsolete. I made the point in the preface to the new book that it felt as if I had written a book on Soviet communism in 1989. That is too late. It was already kaput, finished, collapsed. And I was writing a history of it. It felt like, you know, being an archaeologist.

And the reason why I felt that was because it was the time when I was doing some research, totally for no reason, I mean, just, you know, for research, for researchers' sake, on how the algorithms, particularly the algorithm in Amazon.com that powers Alexa, the interface that you have on your desk, if you get it, with which you converse with the internet via the algos of Jeff Bezos and Amazon. And I realized that this is a remarkable new machine, not technologically, because we've seen remarkable technologies all around us for such a long time.

If you go into, I remember visiting in Austin, Texas, the building site where in the end, Apple built the huge factory in which MacBook Pros are being produced. And I remember how struck I was by the fact that there were so very few workers, construction workers, because it was all done by robots. Robots were laying the cement, the cables, the plumbing, everything. There were, what, 20 workers where there should have been 5,000. So I don't mean that. What I saw in Austin was perhaps more impressive than Alexa. What is impressive about Alexa is what kind of capital it is interfacing with

and it's got nothing to do with any kind of capital humanity that's ever created in the past. So this is my answer to the second part of your question, a very pertinent part of your question. So how do you recognize that capitalism is now, maybe if I'm right, a thing of the past? Well, before I answer that question, it is crucial that I make a distinction between

capital and capitalism. My point is that capital is so dominant and it has mutated in ways that it has killed off its host, like a virus that kills off its host because it is too toxic, capital, because it is so successful and so triumphant in society, has killed off capitalism. It's vessel. It's host. Okay, I close the bracket there. So when I was interfacing with Alexa, I actually bought one of those damn things.

And I even have there, you can see, the Google Assistant, that can hear every word you're saying there. Like the NSA. And I realized that these machines are nothing like any other kind of capital good. I mean, by the way, let's define what the capital good is, in straightforward economic terms. Capital has nothing to do with money, by the way. Money is money.

Capital is produced means of production. Anything we have produced, not to use it, to consume it, but in order to put it to work, to produce something else. So a fishing rod is a piece of capital equipment, good, because you make a fishing rod in order to catch fish. A tractor you make not in order to drive it around town or the countryside, but to produce corn or to produce wheat. So every capital good in the history of humanity, from the moment we came back down from the trees or whatever, till now, you know, with industrial robots building factories or building Tesla cars or whatever,

they are all produced means of production. And there I was looking at this thing there, and I thought, you know, this thing there, it's a produced means, it's a machine that we have built, it's capital, but it's not a means of production. It has a completely different job, which, you know, no other capital equipment ever had in the history of humanity. And that is to modify our behavior. Now, behavioral modification has always been around. We were always interested in behavioral modification. Every preacher, poet, author, dramatist, musician, advertiser, politician, activist is in the business of modifying your

behavior, my behavior. That's what we want to do, that's what we're doing now. We're trying to impress people with ideas that will change their behavior. So we are all in the business of behavioral modifications. It's part of the wild beauty of humanity that we reflect into other people's eyes. We change, we try to modify them, they modify us. Behavioral modification is synonymous with humanity, there's nothing wrong with that. But this machine there is a produced means of behavioural modification and it appears to you as a slave. So essentially they give it to you, sell it to you, usually they give it to you, it's very very cheap,

they subsidise, they don't subsidize medicine but they subsidize these machines. Because you're instructed to do things like, you know, order me some milk from the supermarket or get me a ticket, a railway ticket or an airplane ticket or, you know, wake me up at six in the morning or play me some soothing music or whatever. So it's like your slave but it's not slave, because what it does do by sitting there, up there, on the shelf, is it invites you to train it, to know you. And at the second level, at the deeper level, it trains you to train it, to train you to train it better, you know, those loops take place, the better it understands you and the better advice it can give you on what to buy, on what book to read, on what music to listen to. Whenever Amazon suggests a book for me, it is always spot-on.

I always want to read it. And when I read it, I never regret it. Whereas when friends say, oh, you should read this book, Mostly. Mostly. It's a dud. Similarly with music. When Spotify suggests music to me, I never dislike it. I mean, not like it very much, or I may love it. So, once they... It's absolutely natural. Even if we know this is a stupid machine with an ulterior motive, Nevertheless, even when you know that, your cognizance of its malignancy or stupidity or mindlessness, nevertheless when something, something, you know, some entity gives you good advice, after a while you trust it. So the next time it says, you know what, you should buy this electric bicycle, you think okay, I'll buy it. Or the probability in statistical terms of buying it really goes through the roof,

even if you don't buy it, actually. Okay, so firstly, this is the very first time that you can have a dialectical relationship with the machine. You train it to train you to train it. That's number one. This is unique. Never happened before. Second, through this process it imputes desires into your head or your soul, wherever your desires live. That has never happened before, you know, advertisers could do it, preachers could do it, politicians could do it, your mom could do it, machines couldn't do it, now they can do it.

That's the second novelty of what I call cloud capital. The third novelty is, and that is stupendous, is that once you have that desire that it has put into you, it fulfills it directly. Up until recently, if some advertiser succeeded in convincing you that you really crave a Big Mac from McDonald's. And where you had to go to McDonald's to eat it, to buy it and eat it. Now, with these machines, once it convinces you you want this electric bike, you just say order, you just click and it comes. So it bypasses every market.

That's the third novelty. The fourth novelty is that if you think of it as a capital, this is the very first time that you and I, without being proletarians, okay assuming we're not proletarians, working in a factory building capital goods, we are building building capital goods, we are building that capital up. Because every time, what is the capital of Twitter, of X, of Facebook, of Instagram, of TikTok? What is the capital of those platforms, these cloud thieves as I call them in the book? It's our posts, our videos, our reviews, our activity.

This is what gives value to that. I mean, the code itself is nothing. Look at Blue Sky. Blue Sky is just as good as Twitter, if not better. Okay, but it's got what? 30 million people, the other one has a trillion people. I don't know, a billion people. So, and once you have thousands or millions of followers on Twitter,

you are not going to go to Blue Sky, or you may go there as well, but you are stuck in that. So I started... You asked me how did I feel that through this exposure to what Alexa does, or Google Assistant does, or Siri does, I started realizing that this is no longer capitalism. Because here you've got a fiefdom owned by man. Who is a capitalist? Jeff Bezos is a capitalist. There's no doubt about that. But the capital he owns is not a produced means of production.

It's a produced means of behavioural modification. So there he is. He's more like a feudal lord from the Middle Ages. Because he doesn't produce anything. You know, Henry Ford was a monopoly capitalist. He had managed to get rid of all the opposition, he bought newspapers like Elon Musk, or Jeff Bezos actually for that matter, not Elon Musk, but Jeff Bezos bought the Washington Post to carry favor and to have influence. Henry Ford bought newspapers in order to pressurize municipalities to rip up and rip out tramways and streetcars to replace them on the road with his tea

model, his model tea or whatever model he was producing. But so he wanted to sell you the product of his factory. Jeff Bezos doesn't care what you buy, as long as you buy it off Amazon. So essentially he's created a fiefdom in which he has enclosed you, me, the producer of the electric bicycle, booksellers, newsagents, newspapers, millions of producers and millions of consumers. We are all encased in there. There is a centrally planned top-down mechanism, cybernetic mechanism, called an algorithm that matches sellers to buyers with a

view to maximizing two things. First, the rent, it challenges the seller to be on that ground, you know, cloud thief, when it sells you a pair of binoculars or an electric bicycle. They get up to 30 or 40 percent. That's what Bezos gets. This is an equivalent of ground rent in feudalism, but I call it cloud rent. At the same time, it's very interesting too, in getting you to engage with the platform so that you replenish its cloud capital with your free labor. So you're a cloud surf. You're a peasant.

You're a digital peasant or cloud surf as I call it. So you asked me, I gave you a very long answer, but this was the process of thinking that led me to the suspicion initially before it became a working hypothesis that this is no longer capitalism. And, you know, ladies and gentlemen, welcome to techno-fidelism. You're listening to an Upstream Conversation with Yanis Varoufakis. We'll be right back. The nation's state is a tool of the ruling press Keep the workers down and dominate the masses Warfare is a puppet of the poor contestor Let the workers of the riches of due unrest

We are the children of the Earth Under the thought of the nation's focus It's a dependence and our gain Every living person must be free War, revolution, equal distribution Fuck the constitution We wanna know State solution We wanna know State solution We wanna know State Solution We wanna know State Solution We wanna know State Solution We wanna know We want to know state solutions, whoa! That was No State Solution by Zombie Giuliani. Now back to our conversation with Yanis Beroufakis.

Thank you for reminding us of what is capital and introducing this idea of cloud capital or what you call algorithmic cloud-based command capital. And I love that distinction between cloud capital and terrestrial capital. I found that helpful. I also found it fun that you got the phrase cloud capital, I think, inspired by a Star Trek episode. I love that idea. Yeah. And I also appreciated the parallels to feudalism, like you said, the serfs, the fiefs, but you also talked about the enclosure of the commons in the transition that you're describing from capitalism to techno feudalism. So maybe let's go there as to this isn't just a transition. Sometimes the transition in the 16th century from

feudalism to capitalism is called that, a transition, But you particularly use the word killed, right? You say, you know, techno feudalism killed capitalism. So give us a little bit of an understanding of what were the conditions and also the, yeah, the actors and the players that led to the, like, the killing of capitalism to now what we have, techno feudalism. Well, to begin with, let me make it clear that this is not a conspiracy theory. What is a conspiracy without conspirators? Or a crime without criminals? Because in precisely the same way that, you know, in the mid-18th century, when there was this transformational transition from feudalism to capitalism, no one planned it. Actually, no one wanted it.

Very few people wanted capitalism. If you had a referendum in England in the 1760s, 1780s, 1790s, when Adam Smith was writing his Wealth of Nations, and you asked people, do you want us to move from feudalism to capitalism? I think 99.9% will have said no, no bloody way. The king didn't want it, the bishops didn't want it, the lords didn't want it, the peasants didn't want it, maybe some merchants in Southampton or Bristol or London wanted it and some bankers. But you know, it was the 0.01%, right? So history does not need conspirators for a conspiracy. This is the beauty, the magic of history.

So what was it that brought about technofeudalism? Well, to begin with, I take a long while to come to Cloud Capital in the book because I need to tell the story first. The story I tell is the way that capitalism has always struggled to maintain itself, to maintain its vigor and how it produced a lot of gadgets and goodies but at the same time its own crisis and how the Great Depression was the result of the irrational exuberance of the financial sector in the 1920s, which itself was absolutely essential for the growth that we had in the 1920s, and how that led to the war and to the war economy and the Bretton Woods system,

which was a remarkable system. The golden age of capitalism is always the 1950s and 60s, but it's remarkable, is it not? And it is quite ironic that that was a kind of state-controlled, centrally planned capitalism. If you think that... I mean, young people don't believe me when I say this to them. That when I was born and until I was 25, the exchange rate between the Greek currency and the dollar was the same every day, didn't change once. The interest rates were always the same, 4%. No going up, no going down, nothing. How did that happen? Because they were taken out of the market process, they were state controlled by the American state primarily, right, along with its allies or lackeys in the International Monetary Fund

and the Bretton Woods system. Then, so in the book I explain how the centrally planned US designed system functioned and it functioned only as long as America was a surplus country. It had a trade surplus with the rest of the world because by having a trade surplus, it meant that, you know, the United States, your country sold more stuff to Europe and to Japan than it consumed. And therefore it dollarized Europe and Japan, it sent money through the Marshall aid plan, through loans, other forms of aid, but then it was sucking it back in with its net exports.

But that system collapsed when America became a deficit country in 1971, with the Nixon shock on the 15th of August of 1971. And then you had this audacious system where essentially the United States trade deficit became the linchpin of global capitalism. Global capitalism depended entirely on the American trade deficit, which is, you know, crazy the thing of, because what was happening essentially was the greater the deficit the trade deficit of the United States The more it generated demand for German factories Japanese factories Chinese factories later And who was paying for this deficit? Well the Japanese German Chinese capitalists who were sending because they were collecting dollars, right?

I mean they were selling stuff to the United States and what were they collecting? IOUs that had the dollar sign on them. Because that's what the dollar is. It's American federal government issued IOU with the dollar sign on it. And it comes in various shades of green. And so if you're Japanese and you get a wall of dollars, what do you do with it? You have to take it to New York. To buy what? American debt? To buy some shares that you're allowed to, not many.

Think of what's happening with the US still now. The Japanese are not even allowed to buy that. And of course a lot of real estate in Miami, in New York City, in California, and so on and so forth. So essentially, the trade deficit of the United States indirectly through this loophole, this is a recycling loophole, does two things. It funds the United States to be a superpower, militarily, because through the Chinese capitalists and the Japanese capitalists and the German capitalists and the Saudi capitalists it becomes US bonds.

So effectively, it allows the American ruling class not to pay taxes and still fund the states through the loans that they get, the expanding deficit and debt that the foreign capitalists buy and a lot of real estate. So this is why the United States is an entire economy, doesn't produce anything anymore. Other people produce stuff and they send the stuff and their money to the United States to remain a military superpower. Okay, but that is a very topsy-turvy, very lopsided, increasingly unstable system. Because you need an increasing deficit. Think about it.

You need an increasing deficit to maintain the hegemony of the United States. And that meant a number of things. It meant the deregulation of Wall Street. Because if Wall Street plays this role of recycling other people's money into the American state and the American rentier market, rentier sector, then you've got to let Wall Street rip. You have to let it do whatever the hell it wants. That's deregulation. And deregulation required an ideology. That ideology was neoliberal.

Maybe neoliberalism is not new, it's not liberal, it's not interesting, it's terrible economics, it's disgusting philosophy. It's a philosophy to kill yourself by leaving it. And yet it dominated. Why? Because Wall Street needed it as an ideological cloak. To do what? To take the money from the rest of the world and to recycle it in the United States. And of course if you give Wall Street bankers a few billion every day to play with,

even for five minutes, they will find ways of placing bets with it. These are the derivatives, the weapons of mass financial destruction, as Warren Buffett described them. And, you know, by 2007 there were mountains quantities of these derivatives and just planet Earth was not big enough for them, so they crashed. And then you had the moment of truth. For me 2008 was for capitalism that which 1991 was for Soviet communism. The end. But of course the bankers were saved because Barack Obama betrayed the American people and he said yes we can and what he actually meant was not yes we can support the victims of the Wall Street bankers,

of those criminals. No, no, no. We can impose austerity on everybody in order to reflow the finances, to save the Wall Street bankers. That's what... And he was of course followed by the Bank of England, the European Central Bank, the Bank of Japan, the Bank of Sweden, the Bank of Switzerland. So you had all these Western Central Banks printing, between 2009 and

now 35,000 billion dollars. 35,000 billion dollars which is the same thing as 35 trillion. But it's better to call it 35,000 billion. People understand it better. And they gave it to the financiers. So you have austerity for the many and lots of money, state money, minted money by the state, in the hands of the financiers. Now the financiers don't want the money itself, they want to lend it to big business. That's how they make their money. The financier's great nightmare is to have money and not to lend it. But big business looked at the people out there and saw an impecunious mass and thought as if I'm going to invest for them. They will not be able to buy

whatever high-end product they produce. So they took the money and went to Wall Street. General Motors took the money from the Fed and went to Wall Street and bought General Motors shares. from the Fed and went to Wall Street and bought General Motors shares. Shares went up, the salaries and bonuses of the directors are linked to the share price. They did really very well, they bought more real estate. So real estate prices went even further up. But that's not investment. That's not investment in jobs, in technology, in green energy,

in everything society needs. The only capitalists who invested in capital, capital goods and machines, were the big tech brotherhood. You know, the Jeff Bezos and the Bill Gates and, you know, the Zuckerbergs and so on. And that's how, in combination with the steady privatization of what used to be the Internet Commons, because the Internet used to be a Commons, when I was connected to the Internet, it was a commercial free zone, a capitalism free zone.

People interacted, it was a gift exchange. It was like a primordial world. It was beautiful. And then it's steadily being privatized by Big Tech, and Big Tech gets trillions from our central banks in order to build up their cloud capital. So the cloud capital that they have with which they control our minds and our spirit, we paid for it. They didn't even pay for it themselves. It was money from our states.

Now, I can't blame them. I'm not blaming them. I'm not in the business of moralizing, I'm simply describing what happened and I'm insisting there's no conspiracy here. The central bankers had no idea that they were funding techno-fiddleism, no idea. They were simply responding the way central bankers respond. I mean what was the reason, why did JP Morgan create the Fed? JP Morgan created the Fed in order to bail out the bankers. That's what he created. So that's what they do. Central bankers, they cherish supposedly their independence, but their independence is from the demos, from the people, not from the bankers.

They are highly dependent, utterly dependent, 100%, 1000% dependent on the bankers' fortune. So they do what the bankers say. So the central banks funded the bankers, and this is the beauty of unintended consequences. In the end, they funded techno-fidels. Yes, and another way that you describe it is as a drama, which I loved. You talk about a story, a saga of the US-American global minotaur

with the props of big finance, big tech, neoliberalism, industrial scale inequality and atrophied democracies. And then you add in the 2008 crash and then this socialism for the financiers or the bankers and the austerity for the rest of us and then leading to techno feudalism as you described. And so what are you noticing are the impacts now that we had that death of capitalism as you say in 2008? How is it impacting us individually? And I know you talk about this and you give a great phrase you say, you know, are we now homo techno feudalists?

And also, how is it impacting global systems and what you call the new Cold War? So tell us about the impacts of techno-feudalism as we're seeing them thus far. Well, there are many different layers, many different impacts, but I'll just focus on three. The first one is at the level of our own personhood. The idea of the liberal individual is done, finished. The idea that you are a sovereign agent, that you are the author of your own desires, preferences, whims, whatever, vices, virtues, that's gone.

Because now we know that these machines are very good at implanting into our heads through an automated process, not through interaction with other human beings. The desires that are functional to the interests of Jeff Bezos and Mark Zuckerberg. That's number one. The loss of the liberal individual. But also there's another dimension of that loss which affects younger people much more than people of my generation. And I noticed that when talking to students of mine, once upon a time, I mean 10 years ago, 12 years ago, the subconscious angst that they have

when they participate in social media. Because deep down, often subconsciously, they realize that whatever they put out there is going to come back and haunt them. Because, you know, when they apply for their dream job at Google, let's say, right? Their social media profile is going to be scrutinized. Now, they know that subconsciously. So every time they are at home and they put something on Instagram or on TikTok or on Snapchat, whatever,

they feel an urge which is innate, comes from within, from their soul. Because their soul is predicting that they are going to be judged by employers on what they do at home. They have to curate themselves, their brand, which means that that's the end of leisure, that's the end of autonomy, that's the end of fun. And it simply puts your professional life, your life as a proletarian, it completely links it with almost every moment that you spend. Because let's face it, young people spend most of the time on their screens. That's one level, okay? The loss of the liberal individual.

The second one is the loss of social democracy, of the new deal, gone, finished. Why? Because you know the new deal in America and social democracy in Europe was all about the state playing the role of the go-between, capital and labor, or industrial capital, not all any kind of capital, industrial capital and labor. So Roosevelt or Billy Brown to the Chancellor of Germany in the late 60s, early 70s, Harold Wilson, the Prime Minister, the Labour Prime Minister, Social Democrat Prime Minister of the United Kingdom, their job was this, to sit around a large table,

the captains of industry, the trade unionists, to cut a deal. So a chunk of the profits of the industrialists would go to the state, to fund hospitals, schools, or go to workers directly in the form of wages and better terms. How can you sit around the table with Jeff Bezos on one hand, and the precariat who have bullshit jobs on the other because of techno-fidelism? You just simply can't, even if you want to. Even if you are really well-intentioned as president or want to, even if you are really well intentioned as a president or a prime minister or whatever. So that's the second loss, the second dimension. That dimension is enhanced further by the fact that the crisis in the labor market, the crisis of capitalism, is getting worse, far worse.

Capitalism always produces crisis. But under the Confederalalism these crises are more frequent and deeper. Why? Because back in the days of pure terrestrial capital, I use it since you like the term, conventional capital, for most conglomerates around 80% of their revenue was paid out in the form of salaries and wages, general electric, had a large wage bill, lots of employees and so on, you know, about out of every hundred dollars he made, 80 was paid, it was a cost of labor, including top managers and so on. Well, with Facebook it's one percent. You know, Jeff Bezos and Mark Zuckerberg and the rest keep almost 99 percent of the proceeds,

which means that this money comes out of the circular flow of income, which means it comes out of aggregate demand. So aggregate demand is much lower. So either the Fed doesn't do anything and then you simply have a very tepid economy or the central bank prints even more money in order to replenish the money that the cloud elitists, the owners of cloud capital have taken out of the economy. But then you have inflationary pressures, which are always asymmetrical. They attack poor people far more. Inflation always attacks the poor people, the poor more than it attacks the middle class or the upper middle class. So even if you don't have one of those, if you don't have a phone at all, let's say you have an old Nokia phone, which is not connected to the internet, right?

It makes a difference because you live in that society which is so much buffeted by the techno feudal relations of production. And finally, the last dimension that I want to mention is the new Cold War between the United States and China. To cut a very long and sad and worrying story short, it is my hypothesis, and I explain this in the penultimate chapter of the book, that the New Cold War is entirely due to cloud capital. I don't believe, please don't believe the idea that Taiwan is suddenly a major issue, it never was an issue, why is it an

issue now? I mean the Chinese have not changed their view of Taiwan. They consider it to be a province of China. And from Nixon, who went to China, to last few years ago, all American presidents accepted that. It's still official American policies. So suddenly Taiwan has been elevated to the pantheon of reasons why America and China will go to war. I don't buy that. I don't think you should buy it either. The idea that China is building up its military. Yeah, okay, you know what? I will start worrying

about that when I see Chinese Navy ships patrolling between, you know, international waters just outside San Diego and Los Angeles. All I see is American vessels patrolling outside Shenzhen and Shanghai. Or when I see a Chinese military base being built up in Tijuana facing San Diego. I'm not going to see that and you are not going to see it, so let's not worry about it. So why is suddenly the United States, suddenly from 2017, that's something Trump started, but then Biden turbocharged. Why are we seeing the United States wage war, trade war, the world of propaganda against China? And this is completely one side. The Chinese simply want to trade.

They don't want any of this. They don't want to be hegemons. This is their tragedy. The Chinese Communist Party is not like the Soviet Communist Party that wanted to expand. They wanted to take over Angola and Africa and so on. No, the Chinese want to trade with Africa. They don't want to do regime change anywhere in the world. They're not interested at all. They just want to sell stuff. So why is America doing it? Well, the reason is, if I'm right in my hypothesis, that ownership of cloud capital affords you, if you own a lot of it, exorbitant power. Then who owns cloud capital and therefore has this exorbitant power? The United States and China. This is a clash of the two piles of cloud capital.

And in particular, and that's how I will end this other long answer, Washington DC is very worried about one thing. The one thing they want to preserve is the hegemony of the dollar, the monopoly that the United States enjoys over international transactions. The Chinese don't want to dispute that monopoly. They didn't want to because most of their savings are in dollars. Why would they want to undermine? It's like you having all your savings in gold and wanting to undermine the price of gold. That would be crazy. So they

don't want to do it except that they have created the technology for international payments that are frictionless, free, exactly the opposite of all the clunky payments of the dollar payment system which is based on Wall Street that wants to tax you, to charge you for every transaction you ever make, even when you make your own account. So they are very worried that the Chinese are going to steal their monopoly of the payment system. I think this is why we have this new Cold War, which may end up as a thermonuclear disaster. Yeah. And thank you for spelling out the impacts on all of those levels. And I want to turn now at the end, this last question towards, you know, what is your vision of an alternative? What alternative are you

fighting for? And you talk about how your dad, his idea was a luxurious liberal communism. I was also thinking about maybe perhaps are you interested in a techno communism or a Luddite communism? I know those are other ideas. And also just to say that your book, Another Now, for folks listening, that's a beautiful depiction of this alternative that you are fighting for. But I'm curious about that alternative that you're hoping for or fighting for. And then how do we get there? And I want to bring in Eric Olin Wright. He wrote a great book and also a paper called How to Be Anti-Capitalist Today, where he

says there's four ways we can be anti-capitalist. We can smash capitalism, which is like revolution and Marxist-Leninism, tame capitalism, like, you know, organizing unions, that kind of thing, escaping capitalism, like creating islands of alternatives, and then eroding capitalism. So creating things like worker co-ops or you know land trust things that are alternative forms within capitalism that erode it. So I'm curious if we if we bring both those questions together, what is that alternative that you're hoping for you're fighting for? And then what is the pathway there? What is what is the

best way? Is it smashing techno feudalism? If so, what does that mean? Is it taming, escaping, eroding, or something else? Well, to begin with, you can't tame it. It's untameable. The idea of taming capitalism or techno-feudalism today is the social democratic idea. I've already said that this is a bunk, gone. It's not an option. We don't have that option. Look at the Democrats in the United States. They've gone to ground. Look at the social democrats in Europe. Finito. They've become, you know, just servants, vassals of cloud capital and capital and terrestrial capital. You count the scapers. We've been trying since the mid 19th century with Robert Owen, if you remember, and sometimes they succeeded in creating little communes. And not so little. Some of them were quite large,

based on cooperative economic democratic means of coexisting, but these things die. Capitalism and capital is too toxic, it corrodes its borders and at some point it destroys these enclaves of socialism or democracy or whatever you may call it. So for me, the number one option that you mentioned, to smash it. If we don't smash it, it will smash humanity. Already we have, maybe we're past the point of no return regarding climate catastrophe. I'm not sure that even if we had a successful rebellion around the world

and took over the means of production, terrestrial capital, cloud capital, and put it to work in the right direction, I'm not sure. I don't know. I'm not ruling it out. But I'm not sure that we have enough time to reverse the environmental catastrophe which we're facing. So we don't have time to mess around with trying to escape, with trying to tame. It can't be tamed, we can't be escaped, smash the bloody thing before it smashes us. A couple more words on this. The first one concerns how. How do you do that? Well, we need to move beyond the monoculture of resistance of the 19th century.

I mean, I have huge respect for what the trade unions were doing in the 19th century and then in the 20th century, because, you know, just imagine being a miner or a worker in a steel factory and organizing in the United States, in Chicago, in wherever. It must have been hell, because, you know, the chances of success were minuscule, more or less zero. And the chances of being beaten up, your family starving, were 100%. And there was a good chance of dying as well, of being killed. And yet they did. They did unionize. So I have huge respect.

But what I don't respect, what I don't appreciate, is the cost-benefit analysis. Enormous personal costs for collective action and almost no benefit. We need to reverse that and to do that we need to use cloud capital. So we need to combine financial engineering attacking the toxic derivatives of the companies that have the greatest effect, negative effect on society. We need to organize boycotts, consumer boycotts to coincide with worker strikes in the traditional trade unionist fashion. These must be our means to organize internationally, to use the fact that capital is global in order for our actions to be global. This is why I'm involved in something we call the Progressive International and the hashtag make Amazon pay campaign, for instance,

just as a pilot scheme for what I'm referring to as these techno-rebellions, techno-forms of resistance. But talking about vision, and because we have very little time left, let me go back to something I said before. Star Trek. What is Star Trek? It is a depiction of libertarian communism. And for those who are not familiar with Star Trek, let me simply say that it is very clear.

There is no wage labor. Technology has reached the point where nobody needs actually to work, to produce material things. Material things are produced automatically by replicators. And we all get an opportunity, as Max said, in the German ideology, to be fishing in the morning, cultivating a garden in the afternoon, reading poetry in the early evening, and going to the theatre at night. So, there you are.

You asked me for a vision. The alternative, as I've said a number of times, the alternative to Star Trek is a matrix. The dystopia of the machines that turn us from their masters into their slaves. You've been listening to an upstream conversation with Giannis Varoufakis, a self-described anti-economist and author of many books. Since 2018, he's been Secretary General of the Democracy in Europe Movement 2025, or DiEM25, which is a left-wing pan-European political party he co-founded in 2016. His latest book is Techno-Feudalism, What Killed Capitalism?

Please check the show notes for links to any of the resources mentioned in this episode. Thank you to Zombie Giuliani for the intermission music, and to Buru & Mure for the cover art. Upstream theme music was composed by me, Robbie. Upstream is almost entirely listener funded. We could not keep this project going without your support. There are a number of ways in which you can support us financially. You can sign up to be a Patreon subscriber, which will give you access to bonus episodes, at least one a month, but usually more, at patreon.com forward slash upstream podcast. You can also make a tax deductible recurring donation or a one-time donation on our website upstreampodcast.org

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