Many commentators have predicted the end of capitalism, but Yanis Varoufakis goes one step further than most commentators have previously done. In his book Technofeudalism he argues that capitalism is dead and that we are moving into a new wave of history.Capitalism is dead! That is the message of Yanis Varoufakis’ new book.
Written as a letter to his late father, the book looks at historical change throughout the last 4,000 years. He briefly looks at how the Iron Age led to the emergence of cities and societies and how this generated the development of an economic structure we now know as feudalism (of course, people at the time didn’t call it feudalism!). He looks at how industrial development at the beginning of the Eighteenth Century saw the development of capitalism. People at the time did not know this as capitalism, but that was what it was and how it came to be called by writers such as Karl Marx.
In essence, feudalism was based on rent. The powerful owned the land, the source of wealth, and everyone else, in one way or another, paid rent. Capitalism was a system based on profit. Varoufakis argues that we have now moved beyond this to a system where we are all working (often for free) for, paying for, and following the small group who own the technology which controls our world. In other words, we are back to paying rent!
What was significant about capitalism is that it allowed people with money and power to acquire capital. Capital was the ability, not just to manufacture, but to control and the system was built on control. Firstly, through the Enclosure Acts in England which removed people from land and forced them to sell their labour and secondly, through a range of means which meant that power could be held using mechanisms that controlled labour.
So far, so good. Except that capitalists were greedy. They attempted to control more and more and their greed led to the financial disaster of 1929. A combination of the New Deal and the Second World War led to the control of capital so that there could be no repeat of the Wall Street Crash.
At the end of the Second World War Bretton Woods (1944) created a global arrangement whereby governments controlled businesses and banks and directed them in how to behave. Wealth for most increased and there was greater equality than there had previously been. This is a period of great American culture. Indeed, Varoufakis describes the control of global finance as equivalent to that dreamed of by communists.
At the end of the Vietnam War there was a seeming choice to be made, or so it seemed: freedom or fairness. “The moment people believed they had to choose between freedom and fairness, between an iniquitous democracy and miserable state-imposed egalitarianism, it was game over for the left.” Varoufakis then basically tells the story which I have somewhat crudely been repeating for several years. Capitalists objected to the control which was being exercised by governments and there was the development of neoliberalism (which is neither new of liberal) which argued for removal of controls on capital. Reagan and Thatcher were only too willing to
