Yanis Varoufakis: Welcome to the age of technofeudalism

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UnHerd’s Freddie Sayers sits down with former Greek Minister of Finance Yanis Varoufakis.

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// TIMECODES //

00:00 – 00:40 – Introduction
00:40 – 08:50 – Yanis Varoufakis explains why he believes our freedom is under attack
08:50 – 18:15 – What is technofeudalism?
18:15 – 29:52 – Varoufakis explains his take on globalisation
29:52 – 30:33 – Why the UK should not be debating immigration
30:33 – 36:03 – Varoufakis tells us what his final take is
36:03 – 36:23 – Concluding thoughts

#UnHerd #YanisVaroufakis #Technofeudalism

Hello and welcome back to unheard I’m Freddy sers yanis varakis a regular I’m pleased to say on the unheard channel is an increasingly rare thing he is a figurehead of the left who actually enjoys talking with people he disagrees with his thinking is full of paradoxes it is always thought-provoking and

Interesting he’s an economist a one-time Finance Minister of Greece and the author most recently of techn feudalism what killed capitalism he’s here in the unheard Studio to tell us what that means welcome Janis thank you Freddy it’s very good to see you in analog form so I mentioned paradoxes there in the

Introduction one of them I think is that you are so much a man of the left and yet you talk a lot about Freedom you have described as a Libertarian in the past I believe a Marxist libertarian and one of the messages of this book seems

To be that our freedoms are under attack that we are less free than we used to be tell us about that well to begin with the way I understood the left growing up especially in my family which came from a very liberal left-wing tradition the idea that the left can be

Anything other than liberal was alien to me if you think about it the first trade unionists they left initially in the 19th century was all about emancipation free liberating people from the Yoke of drudgery and from poverty and from oppression and from the police uh so from the state Marx talked about the

Withering of the state he was not a statist by any stretch of the imagination now what Marxist did in his name later on is neither here nor there it’s like saying that Christ was responsible for the Spanish Inquisition so even you know take the the saf the first wave of feminism it

Was all about women’s lib Liberation Liberty it hasn’t ped out that way now uh so I stick to the original project which is all about having a conversation about how people can be free of all sorts of author authoritarianism whether it’s the power of capital the power of

The boss or the power of the state for that matter now regarding the book yeah we’ve got a new kind of authoritarianism coming in aided by technology give us a kind of overview of what that means you Freddy I have this the reason why I wrote this book was because I have this

Uh sensation this hunt I’ve had it now for seven eight years that we are living through times that can be compared to the 177s and here a liberal will um I think warm to the theme because I’m not choosing the 7 1970s at random 1776 Adam Smith’s Wealth

Of Nations that book together with the theory of moral sentiments that is the foundation for The Wealth of Nations heralded the beginning of capitalism the notion that federalism was being appended usurped overthrown by new Force the new force in smithstone was the market in uh Marxist terms it was

Capital it’s the same story it is a story of the commodification of land and labor which paved the way for the dark satanic meals of Burke the factories the shift of power away from those who owned land to those who owned Machinery Capital steam engines steam ships and electricity and telephone

Grids and therefore the shift from rent as the form in which wealth accumulation was taking place to profit in 1776 when Smith in Glasgow was writing his Epic book The Wealth of Nations if you looked around you saw fism everywhere you came here to London you looked at feudal power in the House

Of Lords in the House of Commons uh wherever you looked around the world it was feudalism but Smith was right that something was happening under the surface which was creating this great transformation in the words of carpani I feel that we are experiencing the same thing here now it’s not just

Capitalism transforming itself changing its colors this capitalism is always done with you know Henry Ford lat after the the second world war with the big conglomerates with advertising with marketing branding and all that now I fear feel even hope that we have another great transformation this time we are

Moving from uh uh a world in which economic activity social activity culture is driven by profit to a world in which again we go back to a form of rent but not rent that allows you access to the land but rent that allows you access to the new

Digital land which is the cloud which has been privatized there have been a new series of enclosures like the enclosures that spawned commodification of the land back in the 18th century now we have had the enclosures that privatized the internet created big Tech fused with Finance private equity and

Created the world which some people like you know my friend guy standing referred to as rer capitalism now we could have called the world we live in I could have called it rer capit capitalism but I think it would have been wrong in the same same way that it would have been a

Mistake in the 1770s to describe that great transformation into a new form of feudalism that you could have described as industrial feudalism it wouldn’t be wrong or Capital based feudalism but by dropping the word feudalism our minds concentrated on the enormity of the transformation of fism into something completely different which we Now

Understand as capitalism similarly I wanted to signal that this is no longer capitalism because the two pillars of capitalism have gone they are not in the epicenter markets and profits and this is what is surprising to me about your book that it feels nostalgic for capitalism it almost feels you are it’s

An elergy for the passing of proper capitalism and I think very similar arguments might be made by people who consider themselves on the right that true free markets are not in place that there is too much Monopoly it’s crony capitalism you hear this a lot and what

You’re saying is not that different do you do you accept that yes two points first if you’re truly a Marxist like I consider myself to be uh but not like you know in the tradition of the Marxist but in the tradition of Karl Marx himself and Fred freed Angel if you

Read the comments M first the first three pages are eulogy of capitalism it’s it’s a it could be um a brochure for globalization the way he describes the manner in which uh the bisi through the development of the means of production technology is battering down the Chinese walls of

Superstition what is that this is not a negative take on capitalism but Paradox which you used in your introduction for me is the essence of things to be able to understand uh to be able to to appreciate something and at the same time be fearful of it to

Be capable of understanding the the Triumph that is Eng involved in it because capitalism was a Triumph of humanity and at the same time it was a catastrophe the situation you describe now this move to what you call techn feudalism does feel like a negative it

It’s hard to find much in your book that is praising or optimistic about that new Dynamic is that fair so so tell us about that somehow the combination of a neoliberal or globalist economy um moving with computers and new technologies has created this kind of hard to identify Overlord tell us who is

It what is it and where should we direct our rage I don’t think we should have rage I think we should have a critical disposition right rage is not a good guide to anything okay um it’s natural to Fe rage and I feel rage often when I see gross injustices inequalities but we

Need to temper that otherwise we will not get anywhere uh look yes techn feudalism is worse than capitalism so it’s a negative sort of phase in human history but at the same time I’m perfectly capable of recognizing the human triumphs uh that are part and parel of techn fism take artificial intelligence

You everybody’s worried about artificial intelligence even the people who actually design it but it is a wonderful testimony to human creativity and to the human Spirit as we speak there are AI programs that are designing antibiotics that are killing superbugs that have escaped the capacity of the pharmaceutical companies and re human

Researchers uh so that’s to be celebrated at the same time we should be very worried about AI for reasons which I don’t need to explain everybody’s already worried about it but allow me to make before answering your question fully to go back to something you said earlier there are lot of liberals um

Smart Ones who look at the soo economic system that we now have and lament that it is not free market system and so on and that there is too much chronic capitalism and too many rers and uh too much Monopoly P power and all that

Uh my message to them is first that was always the case there was never such a thing as a free market capitalism uh it was in the imagination of Adam Smith regarding the baker the Brewer uh and the butcher um from very early on you know the moment you have Thomas ederson controlling

Everything from the Power Station to the lamp in your house that’s not a free market um that’s the first message the second message is that this is worse than you think techn vialism this is not simply concentrated Market power this is the demise of the market now I

Remember um when I was much much younger listening to Fred F haek give deliver a lecture at the LC he was quite elderly then but still very astute he came in there he was a brilliant lecture by the way I always liked ha even though I was ideologically opposed to him uh

Because he made me think and challenged people like myself enormously and in the most creative way so he comes in there he says he starts his lecture by saying you know yesterday I went to into a shop and I left that shop with an item that I didn’t know I

Wanted and that was his introduction his reface to the crique of socialist planning is if I don’t know what I want how can a socialist planner know what I want how can a human-made system know what I want in other words you cannot replace the market the market is not

Simply a mechanism as mainstream traditional Valkyrie academic economy say the mechanism for finding the right price to equilibrate demand and Supply no the market is more for a true libertarian like uh haek it is character building it allows you through interaction with the market to discover

Your true self and to become truly free now whether I existential purpose that’s yeah so whether I agree with haek or not entirely it’s not a matter now because the market is gone it’s finished it’s kaput today Alexa sits on your desk you train it to train you to train it to

Train you to train it to know you really very well so when Amazon recommends a book for me or any any any item bicycle you know when Spotify recommends music to me it’s spot on I want what it says I want it knows me right and this is not

The market this is what haek deplored a human construction that replaces the market that it’s an algorithm that belongs to Jeff Bezos that knows me knows what I want and Freddy what is absolutely mindboggling is that not only does it have the Capac to impress upon me what I

Should buy and to be right and also help shape my preferences after a while in my interaction with Alexa it shapes me I shape its view of me and it shapes me but it actually sells me the stuff directly bypassing every Market because amazon.com is a trading platform it’s

Not a market it’s not a market that Adam Smith margin it is not a market that high imagined it bypasses the market now Amazon does not produce the binoculars the music the the book H what happens is that it is a cond where some capitalist who produces the binocular

Bicycle the book whatever uh through Amazon reaches me and Jeff Bezos charges that capitalist 40% of the price that I pay that is a humongous rent I call it Cloud rent so a new form of Capital has sprung out it’s not like steam engines it’s not like in even very Advanced industrial

Robots which are produced means of production you produce those things to produce other stuff that’s capital as we understand it traditionally Alexa and all the paraphernalia involve the optic fiber cables the servers and all that which make up this what I call Cloud capital is a produced means of behavior modification

The purpose of which is to allow the owner of cloud Capital to extract gigantic rents from vassel capitalists the capitalists are now vassels to the technal Lords the people who own cloud masks or equivalent yeah um and not just that right because now we have Cloud Capital spread all over the world it’s

In Kenya it’s in it’s Indonesia China has a huge Cloud Capital fund base you know Alibaba 10 cent 10 cent is a company is a big Tech conglomerate Which is far more advanced than anything Silicon Valley has anything Silicon Valley is far more advanced than the equivalent American Cloud Capital so if you

Marginalize in society profits and you replace them with Cloud RS and markets and you replace them with his trading Cloud you don’t have capitalism anymore you you have a capitalist class you have a capitalist sector which produces the value which however is siphoned off by the owners of cloud Capital so Capital

Has spawned a mutation cap Cloud Capital which should worry left Wingers like me and liberals equally I think the diagnosis a lot of people would agree with in fact I think you could say that that mood that you described that sort of sense that there are these distant overlords and that

We’re being manipulated all the time is very widespread and is the energy behind movements on both the left and the right today but where people differ is what on Earth we can do about it you know always disconnected you know there there are conservatives who want to just de unplug

From The Matrix go back where if possible to the land that’s possible remove themselves yeah but that you know then this reminds me of the hippies in the 1960s who thought that they could uh Escape commercial Society let me throw a couple of ideas at you a lot I think

It’s fair to say that the techn feudalist blob monster what however we describe it is very Global in nature and that’s one of its particular new features as distinct from maybe earlier centu capitalism globalized well it’s become more and more so in over the over the preceding decades a big always it

Was always globalizing from the day one and marks in The Communist Manifesto let me repeat that describes globalization beautifully and this he did in 1846 so are you anti-globalist I’m an internationalist I don’t believe in borders uh I want free flow of people of goods uh uh of ideas but I’m anti-

Globalization because globalization is the opposite of internationalism but this I I must say this is one Parx let me let me explain this it’s not Paradox at all go and stand at the US Mexican border that’s globalization people cannot move you they jump packed against the fence right they kept out like uh

Vermin well many of them are coming in at this well as verman was squashed by the Border Police right by the border force uh goods are going in and out Capital travels completely freely human beings are behind defenses that’s not liberal and that is not internationalism that is globalization globalization is

Internationalization and the free flow of money and of Commodities that effectively result in uh the depletion of uh the industrial base in the United States in Europe in Britain and so on uh and uh the complete freedom of capital to move around it should be the other way

Around but so I think what I’d love you to do is explain to someone who is watching this and says I agree with yanice there is this Global monster of in flea International Capital combined with technology in a way that has become this hard to identify feudal Overlord

Which I don’t like I think a lot of people will be with you up to that point to which a lot of people will respond let’s reduce the scale in which we operate let’s try to resore some of our industry try to bring things back to a more national scale let’s care more

About borders not less about borders to try to bring the world back to something comprehensible where our Democratic levers actually have agency and that’s the our only hope to push back against these forces that are otherwise so vast we can’t understand them why are they wrong to have I hope that my book

Explains why this is an illusion because if I’m right that power is Shifting away from traditional industry from traditional Capital the Ral Capital to Cloud Capital you can resore the fading industrial terrestrial Capital but you cannot restore Cloud Capital Cloud Capital lives in the prover proverbial Cloud it cannot be

Impeded by borders let me give you an example right take uh electric cars Germany at the moment is going through a spasm of angst about de-industrialization now I don’t think that the German car industry is going to fade in terms of how many cars they produce they will continue producing in

The next 10 20 years the same number of cars as before their surpluses are going to shrink to almost non-existence because they no longer have the comparative advantage in fine engineering because the internal combustion engine they were very good at creating together with different differentials and GE boxes and all that

Right now the added value increasingly comes from the cloud let me put it this way um the moving parts of an electric car are very low in terms of value adage the the batter is what really matters The Battery Technology shifted to China the Germans have uh lost that battle

Because they never invested stupidly there’s been no investment in Germany in new technologies in the last 13 years uh they will keep producing cars they will be importing batteries maybe they will copycat byd batteries and so on but they will never be able to compete either with byd in China or with

Tesla why because increasingly the surpluses of el musk of Tesla come from the cloud come from the fact that you know when you’re driving Tesla around right Tesla knows where you’ve been what music you’ve been listening to what conversations you had more or less right and it is this uh

Cloud rent that um Tesla and M will be able to collect and byd why not Volkswagen because the Germans do not own cloud Capital none of the those Cloud companies are German they are not Global they are either Silicon Valley based or west coast of um sorry east

Coast of uh of China right um to understand that you need to understand how Cloud capital is becoming the main game so it’s too you know it’s the the horses have bolted um even if you return some of the productive capacity I I used to live in

Austin and I watched the um the Apple Factory being constructed just outside of Austin the one where all the MacBook Pros are being made now almost no workers in it it’s fully automized you’re not going to bring back jobs to the United States as a result of this kind of reassuring um

Today power stems from cloud Capital Cloud Capital cannot be restored So when you say to me that my last chapter in which I describe another another now another you know a techn democracy as opposed to techn feudalism uh maybe it’s not convincing uh but it’s I believe

More convincing than those who say let’s go back to traditional free markets traditional capitalism or social democracy social democracy is finished there’s no way you can have a Social Democratic um you know redistribution of power of income you know what Harold Wilson used to do what what was Harold

Wilson doing or Willie brand in Germany or BR Bruno KY in Austria he would sit the captains of industry at the table and also sit on the other side of the table the representative of du of the trade unions and negotiate forc them to negotiate and cut a deal a social

Contract whereby parts of the surplus of the industrialist would go to the workers and to the state to you know fund the NHS universities schools and so on how can you sit down Jeff basos with all of us on the other side who are producing for free you know capital for

Him Cloud capital for him through our engagement in amazon.com with Alexa and so on it’s simply not possible okay so there’s there’s two parts that I I really want to dig into before we let you go so the first is this alternative now because we have to sketch it out for

People otherwise everyone’s going to be wondering what on Earth you suggested so it’s a kind of ultra democracy powered by technology it seems to me where um for example within companies as you put it competing proposals are put to a vote where employee shareholders r rank each

Proposal in order of preference via an electronic ballot form sequential ballots Etc there are tokens for bonuses that you you award to your colleagues which seems like some kind of popularity contest it’s not a popularity contest I think denigrating it there’s a digital accounting unit called the cosmos to me

Actually reminded me of the Chinese system where there’s a kind of social credit where everyone is going to be ranking and rating each other’s perance the whole time I thought it was terrifying why why am I I’m terrified by the Chinese system myself I I will let you into a secret

Which I don’t mention in the book The ideas that I have about how a conglomerate could be working or a company a corporation could be working okay uh I didn’t conjure them up out of thin air in 20112 I worked for about a year and a year and a bit for a company

Just outside Seattle that employed 350 people and had a turnover of 1.2 billion very profitable company which operate along those lines every person who was hired had one vote horizontal totally horizontal flat management no management at all it was a video game company you enter there um

And you could choose your partners the project you would work on uh through the internet you invited people you had this idea you know who wants to work with me on that um you participated in all the decisions there was a implicit contract an implicit deal that um you would only

Vote for things you don’t know something about you just wouldn’t vote for everything because you didn’t have the time to uh so for instance when uh we wanted to two or three of us wanted a graphic designer with skills that we couldn’t find in the company we didn’t

Ask for permission the three of us put out a job advertisement uh we shortlisted people and then we invited everybody else whoever wanted to participate in uh you know through the internet watching the interviews or even asking questions themselves and at the end of the day

Everybody had the right to vote whom we should hire every got a minimum wage a basic income which was a large amount even you know the secretaries you know the janitors everybody was getting the same and then we would all together decide what chunk of our Revenue net revenue

Would go to bonuses which part would go to R&D which part would go to this to that and the other uh and then how were the bonuses distributed this was not a popularity contest it was far more significant than that and much more interesting than that so everybody got

100 brownie points and you could distribute them to other people depending on your assessment of their work and their contribution to the collective to the firm to The Cooperative because that’s what it was it was cooperative and you had an incentive to give brownly point to the people you thought were truly adding

Value to the company because your bonuses in the future and your salary and the success of the of of the corporation to which you are effectively a shareholder an equal shareholder depended depended on keeping the people who were adding more value to the company so it was not a popularity

Contest at all and in the end the the bonus slice was divided in proportion to the distribution of branding points that you got from other people to me it is filled and it worked brilliantly with the idealism which is common on more common on the left it’s not idealism you know

This is the most profitable per capita firm in the United States as we speak so I try in my books I try to populate them with ideas that do not just come out of the air uh now even if you think this is an extreme case but

This is an example of how you can you see I think no leaders I think we don’t need leaders borders we don’t need the the more kind of intuitive historic human structures that we’ve always had to are we liberals or are we not do we

Want do you really want bers I mean Once Upon a Time there were no passports the world was much a much better place when when Lord Byron went to Greece where he died or L Elgen for that matter he didn’t need a passport what was wrong with that you had a document identifying

Yourself and not even that um I think borders are a sign of failure of the human species so it’s very relevant right now because the UK is currently having a a lot of debate about immigration you shouldn’t be having this debate it is a misanthropic stupid debate and you have

A minister who should have been expelled from this country for having these ideas I mean she even challenged the you know the United Nations childood on refugees I mean this is this is this is well she said she suggested it might have been an out an outdated uh legal mechanism to

Resolve that dangerous and dangerous poor excuse of human nature that’s of yours the people who are very ashamed of her but the people who are anxious about this issue are are the people you are trying to look after they are people who my job is not is not to P to anxieties

That um are absolutely false consciousness examples look Freddy We Europeans exported hordes hordes of people we immigrated to the four cor corners of the universe of the universe of the planet huh we populated the Earth from Latin America to North America to Asia to Africa you know Millions usually

Armed as well right as imperialists we had no coms about that for a thousand years all that has happened is that we’re getting old demographically we are aging so you know migratory flows have reversed we need migrants the more the merrier uh the fact that our Social Democratic structures postwar are

Collapsing they’re collapsing independently of the migrants they’re collapsing for the reasons I’m I’m trying to explain uh the the foundation is not here anymore to have a nation state based um welfare state we need other ways of redistributing income the edifice of social democracy of the 1950s 60s and70s is

Being dismantled in any case people are not there why do people worry about the Romanians living next door to them it’s because the flats have been privatized they used to be Council houses and now they are being privatized and they and austerity together with laress for the finances through quanti vising has

Destroyed the foundation of the society even if you didn’t have a single Foreigner and you know all this angst and and and rage to use a word used earlier okay is being diverted as in the midw war period against the Jew the Muslim the Romanian the Brit the German

The Foreigner we must not tolerate that and we must never ponderer to that and say oh the solution is to erect taller fences no it is not those people who you don’t want to tolerate I I mean I would prefer the politicians I would I’m talking about

Voters who might have I tolerate every voter and I respect every voter but I engage in conversation with them whereas Miss bra is trying to poison the soul of everyone for her own very narrow interest of political survival of a government that is nasty evil and its

Life should be as as short as possible we don’t need to talk more about soel bra but the the central thrust which I’m struggling to get past here is that the global nature of the techn feudal overlords that you describe is so intrinsic to their power the fact

That they are invisible far away and this Cloud capital is is Untouchable and unidentifiable a lot of people are anxious about the world the scale of these structures having become too big and you know the immigration question in a way is literally the human face of that that overly large scale that people

Feel frightened about and there’s a big there’s an instinct to try and find ways to to operate at smallus that’s a complete illusion the I reject wholesale the notion that immigration is the human phase of globalization it’s not if Trump had his way and you build tall walls with zero immigration at all

Globalization would be strengthened globalization does not need immigration immigration human movement at all because the globalization of money of cloud capital and of Commerce what would your final message be to readers who are interested in your ideas about what they can actually do in their day-to-day life to try to improve

This situation what what what one thing do you think we can actually try to do well I’ll follow fall back to an old traditional idea that um a liberal should appreciate the idea that the only way of becoming um a liberal individual an autonomous person is through dialogue and through uh Clashing of

Interesting ideas that oppose one one another uh at the beginning you said that you that you find it strange that I’m a left Winger who likes to discuss with people who have different views well let me remind you that you know Marx began Life as a hegelian and what

Was hegel’s great contribution to the idea of uh social Evolution the idea that you have a thesis you have its antithesis the dialectic they clash and they produce a synthesis but that synthesis must be the result of our own rational autonomous thinking not that of an algorithm that is owned by Elon Musk

Or Jeff basos so people should go out there and have conversations absolutely you said we must never create safe spaces well I enjoyed our conversation today Janis stus thank you so much oh thank you our thanks to Janis for the conversation to you for tuning in which

Bits you agreed with which bits you strongly disagreed with you can share with us in the comments in the meantime see you next time this was unheard